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+{"id": "1e94c68957a0-0", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "IN THE HIGH COURT OF JUDICATURE AT PATNA\n                  Civil Writ Jurisdiction Case No.1091 of 2013\n                                        With\n                      Interlocutory Application No. 1572 of 2013\n                                         In\n                  Civil Writ Jurisdiction Case No. 1091 of 2013\n===========================================================\n1. Maheshwar Mandal S/O Late Bachchi Mandal\n2. Sanjay Mandal S/O Maheshwar Mandal, both resident of Village Sahebganj, P.S., P.O. and Anchal- Narpatganj, Subdivision- Forbesganj, District Araria .... .... Petitioners Versus\n1. The State of Bihar\n2. Divisional Commissioner, Purnea\n3. Land Reforms Deputy Collector, Forbesganj, Araria ..... ..... Respoondents 1st Party\n4. Smt. Jashoda Devi, wife of Gosain Mandal, resident of Village Sahebganj, P.S., P.O. and Anchal- Narpatganj, Subdivision- Forbesganj, District Araria .... .... Respondent 2nd Party =========================================================== Appearance :\nFor the Petitioners      :      Mr. Yogendra Mishra &\n                                Mr. Uma Kant Tiwary,\n                                Mr. Binod Kumar, Advocates\nFor Respondent No. 4 :          Ms. Kumari Ritambhara, Advocate\nFor the State            :      Mr. Lalit Kishore, PAAG with\n                                Mr. Piyush Lall, AC to PAAG\n                                Mr. Ram Kishore Singh, AC to AAG 7 &\n                                Mr. Syed Hussain Majeed, AC to AAG 7\n                                Ms. Shashi Priya Pathak, AC to AAG 7", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-1", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "Ms. Shashi Priya Pathak, AC to AAG 7\n=========================================================== <span class=\"hidden_text\" id=\"span_1\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> CORAM: HONOURABLE THE CHIEF JUSTICE And HONOURABLE MR. JUSTICE ASHWANI KUMAR SINGH C.A.V JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE)", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-2", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "12. 24.06.2014 This Petition under Article 226 of the Constitution has been filed by a father and the son Maheshwar Mandal and Sanjay Mandal to challenge the order dated 27th December 2011 made by the Competent Authority-cum-Deputy Collector Land Reforms, Forbesganj, Araria in B.L.D.R. Act Case No. 91 of 2011-12 in exercise of power conferred by the Bihar Land Disputes Resolution Act, 2009 (hereinafter referred to as \"the Act of 2009\"). The petitioners have also challenged the constitutional validity of the Act of 2009.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-3", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "One Jashoda Devi, the respondent no. 4, wife of one Gosai Mandal approached the Competent Authority under the Act of 2009 for a declaration that she is the owner of the disputed parcels of land (hereinafter referred to as \"the suit land\") and that she is entitled to the possession of the suit land. She complained that the petitioners herein had forcibly dispossessed her. She, therefore, be put in possession of the suit land. The case was contested by the writ petitioners. According to them, the suit land was part of the lands inherited by the petitioner no. 1 and his brothers from their father Bachchi Mandal. It was the ancestral property inherited from the original owner Babujan Mandal. The sons of Bachchi Mandal were the joint owners of the land. The plaintiff, Jashoda Devi was the wife of one of the brothers. She claimed title over the suit land through a sale purportedly made by the late Bachchi Mandal on 22nd December 1995. According to the <span class=\"hidden_text\" id=\"span_3\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> petitioners, the said sale was later on cancelled on 29th February 1996. The land continued to be the joint property of the six brothers and was partitioned amongst them on 12th April 2009 under a partition deed.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-4", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "The Competent Authority-cum-Deputy Collector Land Reforms, Forbesganj (hereinafter referred to as \"the Competent Authority\") held that the deed of cancellation of sale was not a valid document and that the plaintiff, Jashoda Devi was the lawful owner of the suit land. In view of the said finding, the Competent Authority issued direction to the petitioners to handover possession of the disputed parcels of land to the plaintiff, Jashoda Devi, the respondent no. 4 herein. The said order of the Competent Authority has been confirmed by the Divisional Commissioner, Purnea Division, Purnea on 8th August 2012 in Land Dispute Appeal No. 69 of 2012. Therefore, this Petiton. \n\n Learned advocate Mr. Yogendra Mishra has appeared for the petitioners. He has assailed the provisions contained in the Act of 2009. He has submitted that the provisions contained in the Act of 2009 divest the Civil Court of its function of adjudicating the question of title over the land. The Act of 2009 also confers unfettered and unbridled power upon the Competent Authority. Mr. Mishra has strenuously urged that the State legislature has no authority to confer power upon the executive to adjudicate civil disputes which is traditionally conferred upon the Civil Court under the Code of Civil Procedure. In support of his submission, he has relied upon Section 9 of the Code of Civil Procedure and a Full Bench judgment of this Court in the matter of Nand Kumar Rai & Others Vs. State of Bihar & Others [AIR 1974 Patna 164]. \n\n The Petition is contested by the State Government.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-5", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "The Petition is contested by the State Government. \n\n Learned advocate Mr. Ram Kishore Singh has appeared for the State Government. He has relied upon Entry 18 of the State List of Schedule VII to the Constitution of India, the Bihar Tenancy Act, 1885 and the judgment in the matter of Smt. Basmati Devi Vs. Smt. Anju Kumari [2012 (3) PLJR 214]. He, however, concedes that in the present case the Competent Authority has exceeded his jurisdiction.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-6", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "In view of challenge to the constitutional validity of the Act of 2009, we have heard learned Principal Additional Advocate General, Mr. Lalit Kishore on behalf of the State Government. Mr. Lalit Kishore has contested the challenge to the constitutional validity of the Act of 2009. He has taken us through the various provisions of the Act of 2009. He has submitted that the Act empowers the Competent Authority to enforce the rights conferred by or accrued under the six enactments mentioned in Schedule I to the Act of 2009. The power vested in the Competent Authority is, therefore, required to be read as confined to the enforcement of the rights conferred by or accrued under the aforesaid six enactments alone; and if so read, none of the provisions of the Act of 2009 can be said to be unconstitutional. Mr. Lalit Kishore has submitted that the petitioners have not challenged a particular provision/s of the Act of 2009, but the challenge is general and vague. He has submitted that unless the State legislature lacks the legislative competence to make the enactment, the enactment cannot be said to be unconstitutional. He has further submitted that to challenge any provision as unconstitutional one has to establish contravention of the provisions contained in the Constitution. In the present case it is not the case of the petitioners that any of the provisions contained in the Act of 2009 is unconstitutional in any manner. Mr. Lalit Kishore <span class=\"hidden_text\" id=\"span_7\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> has next submitted that the provisions contained in the Act of 2009 are specific and unambiguous. Such provisions are required to be interpreted as they are. The rule of construction of legal provisions does permit reference to the preamble of the enactment, but no provision can be", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-7", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "of construction of legal provisions does permit reference to the preamble of the enactment, but no provision can be held to be ultra vires the preamble of the enactment. Mr. Lalit Kishore has meticulously taken us through each provision particularly Section 4 and various clauses under Sub-section (1) of Section 4 of the Act of 2009.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-8", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "In support of his submissions, Mr. Lalit Kishore has relied upon the judgments of the Hon\u201fble Supreme Court in the matters of M/s Burrakur Coal Co. Ltd. Vs. The Union of India and Others {AIR 1961 Supreme Court 954, Mohan Lal Vs. Kartar Singh and Others {1995 Supp (4) Supreme Court Cases 684, Union of India Vs. Elphinstone Spinning and Weaving Co. Ltd. and Others {(2001)4 Supreme Court Cases 139} and Shiv Kumar Chadha Vs. Municipal Corporation of Delhi and Others {(1993) 3 Supreme Court Cases 161}. \n\n In the matter of M.s Burrakur Coal Co. Ltd. (supra) the very issue of interpretation of statute was the subject matter of consideration by the Constitutional Bench of the Hon\u201fble Supreme Court. The Hon\u201fble Court held, \"it is one of the cardinal principles of construction that where the language of an Act is clear, the preamble must be disregarded though, where the object or meaning of an enactment is not clear, the preamble may be resorted to explain it. ... We cannot, therefore, start with the preamble for construing the provisions of an Act, though, we would be justified in resorting to it, nay, we will be required to do so, if we find that the language used by Parliament is ambiguous or is too general though in point of <span class=\"hidden_text\" id=\"span_9\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> fact Parliament intended that it should have a limited application.\"", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-9", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "In the matter of Mohan Lal (supra) a similar provision for summary enquiry by collector was the subject matter of challenge before the Hon\u201fble Supreme Court. The Hon\u201fble Court observed, \"Though the enquiry is summary it is judicial in nature. .... Therefore, merely because the Collector acting under section 43 has to make a summary enquiry, it cannot be said that he can decide only simple questions as regards the nature of possession and not those questions which are complicated but have a bearing on the nature of possession.\" \n\n In the matter of Union of India (supra) challenge was directed to the Textile Undertakings (Taking Over of Management) Act, 1983. The Court observed, \"There is always a presumption that the legislature does not exceed its jurisdiction and the burden of establishing that the legislature has transgressed constitutional mandate, such as those relating to fundamental rights is always on the person who challenges its vires\". The Hon\u201fble Court further held, \"The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions.\" \n\n In the matter of Shiv Kumar Chadha (supra) challenge was against the bar imposed upon the Civil Court to entertain matters under the Delhi Municipal Corporation Act, 1957. \n\n Learned advocate Ms. Kumari Ritambhara has appeared for the respondent no. 4-plaintiff. She has supported the orders of the authorities below.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-10", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "True, the petitioners have not raised a specific challenge <span class=\"hidden_text\" id=\"span_11\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> to a particular provision/s. The challenge to the constitutional validity of the Act of 2009 is too general and vague. The sole reliance is placed on the Full Bench judgment in the matter of Nand Kumar Rai & Others (supra). Mr. Yogendra Mishra appearing for the petitioners has failed to establish that any of the provisions of the Act of 2009 is unconstitutional; nor it is the plea of Mr. Mishra that the Act of 2009 has been enacted by the State legislature without the legislative competency. Nevertheless, I do feel that there are certain provisions in the Act of 2009 which, strictly speaking though are not unconstitutional, do require reading down. \n\n As the Act of 2009 is under challenge before us, we shall first examine the objects and reasons of the Act of 2009 and its provisions.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-11", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "The preamble of the Act of 2009 reads as under :-\n \"WHEREAS, in the State of Bihar, disputes relating to record of rights, boundaries, entries in revenue records, unlawful occupation of raiyati land and forcible dispossession of allottees and settlees of public land, generate problems and cause unnecessary harassment to bona fide allotees/settlees, raiyats or occupants;\n WHEREAS, such disputes with respect to raiyati land or public land allotted in favour of different classes of allottees are unnecessarily occupying major space of Civil Courts and Hon'ble High Court and which should otherwise have been resolved by the Revenue Authorities, who may be better equipped to deal with such disputes having regard to their continued presence in the field offices and their expertise in <span class=\"hidden_text\" id=\"span_13\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> Revenue Administration, WHEREAS, in larger public interest it is deemed necessary to provide for effective and speedy mechanism to resolve such disputes which give rise to major turbulence if not addressed immediately and effectively;\n AND, WHEREAS, it has been found in analysis of data relating to nature of disputes that they mostly appertain to matters connected with the Record of Rights, partition of jamabandi, forcible dispossession of allottees/raiyats, boundary disputes etc. and in this context, the administration of the following Acts is involved:\n                  (1)     The Bihar Land Reforms Act, 1950,\n                  (2)          The Bihar Tenancy Act, 1885,\n                  (3)     The Bihar Privileged Persons Homestead Tenancy\n                          Act, 1947,\n                  (4)          The Bihar Bhoodan Yagna Act, 1954,", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-12", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "(4)          The Bihar Bhoodan Yagna Act, 1954,\n                  (5)      The Bihar Land Reforms (Fixation of Ceiling and\n                          Acquisition of Surplus Land) Act, 1961,\n (6) The Bihar Consolidation of Holdings and Prevention of Fragmentation Act, 1956, AND, WHEREAS, different forums and procedures have been provided for the resolution of disputes under the above referred Acts and it is considered expedient to provide a uniform and common forum, procedure and mechanism which would achieve the objective of effective, efficacious and speedy resolution of disputes.\"", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-13", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "Section 2 of the Act of 2009 defines various terms and phrases used in the Act. Clause (a) defines, \"\"Competent Authority\" shall be the Deputy Collector Land Reforms or any officer assigned to discharge the function and duties of the Deputy Collector Land Reforms in the Sub-division\". Clause (d) defines, \"\"Land\" connotes Government land, raiyati land, with structure, if any\". Clause (e) thereof defines, \"\"Allotted Land or Settled Land\" connotes the land which is allotted or settled or on which raiyati rights have accrued under any of the Acts mentioned in Schedule-1 of this Act\". Clause", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-14", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "(f) thereof defines, \"\"Allottee or Settlee\" connotes the person with whom land has been settled by the competent authority or the person who has acquired raiyati rights over the land, under any of the Acts contained in Schedule-1 of this Act\". Clause (g) thereof defines \"\"Raiyat\" connotes a raiyat as defined under the provision of the Bihar Tenancy Act, 1885\". Section 3 of the Act of 2009 gives the Act of 2009 overriding effect over the procedure prescribed under (i) The Bihar Land Reforms Act, 1950, (ii) The Bihar Tenancy Act, 1885, (iii) The Bihar Privileged Persons Homestead Tenancy Act, 1947, (iv) The Bihar Bhoodan Yagna Act, 1954, (v) The Bihar Land Reforms (Fixation of Ceiling and Acquisition of Surplus Land) Act, 1961, (vi) The Bihar Consolidation of Holdings and Prevention of Fragmentation Act, 1956. Section 4 thereof provides for the jurisdiction of the Competent Authority. Sub-section (1) thereof empowers the Competent Authority, interalia, to resolve the disputes arising out of", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-15", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "(a) Unauthorised and unlawful dispossession of any settlee or allottee from any land or part thereof, settled with or allotted to him under any Act contained in Schedule-1 of this Act by issuance of any settlement document/parcha by a Competent <span class=\"hidden_text\" id=\"span_17\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> Authority; (b) Restoration of possession of settled/ allotted land in favour of legally entitled settlee/ allottee or his successors/heirs, upon adjudication of unauthorized and unlawful dispossession; (c) Threatened dispossession of a legally entitled settllee/allottee; (d) Any of the matters enumerated in\n (a), (b) and (c) above appertaining of raiyati land; (e) Partition of land holding; (f) Correction of entry made in the Record of Rights including map/survey map; (g) Declaration of the right of a person; (h) Boundary disputes; (i) Construction of unauthorized structure; and (j) Lis pendens transfer. Sub-section (3) thereof imposes specific bar upon the Competent Authority in respect of the fresh rights of allottee/settlee or a raiyat which is not yet determined and is required to be determined in accordance with the provisions contained in any of the aforesaid six enactments. Sub-sections (2) to (5) thereof read as under :-\n \"(2) The Competent Authority shall not have jurisdiction to review or reopen any finally concluded and adjudicated proceeding under any of the Act contained in Schedule-1. The Competent Authority shall exercise his authority for resolving the dispute brought before him on the basis of any final order passed by any of the authorities empowered to do so in the Acts contained in Schedule-1 of this Act.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-16", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "(3) The Competent Authority shall not have jurisdiction to adjudicate any fresh rights of allottee/settlee or a raiyat which is not yet determined and is required to be determined in accordance with provisons contained in any of the <span class=\"hidden_text\" id=\"span_19\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> Acts contained in Schedule-1:\n Provided that where rights of allottee/settlee or raiyat are already determined under any of the Acts contained in Schedule-1, the Competent Authority shall have jurisdiction to entertain cases appertaining to matters enumerated in sub- section (1). \n\n (4) Notwithstanding anything contained in sub- section (2) and (3) hereinabove, if no provision is made in any of the Acts contained in Schedule-1 for determination of rights of allottee/ settlee or raiyat and claimed right is yet to be determined, it shall be open to the Competent Authority to finally determine such right. \n\n (5) The Competent Authority, wherever it appears to him that the case instituted before him involves complex question of adjudication of title, he shall close the proceeding and leave it open to parties to seek remedies before the competent Civil Court.\"", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-17", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "Section 5 of the Act confers certain powers of Civil Court upon the Competent Authority. Section 6 of the Act provides, \"in all cases of civil nature, concerning a land or a portion thereof, and in which one of the parties to the case is an allottee or settlee under Section-2 of the Act, the State shall be a necessary party\". Section 7 of the Act enjoins the Competent Authority to dispose of all cases summarily in accordance with the Act and Rules framed thereunder. Section 9 of the Act provides for expeditious resolution of disputes. Section 12 of the Act empowers the Collector to exercise power of supervision and control over the <span class=\"hidden_text\" id=\"span_21\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> Competent Authority. Section 15 of the Act enjoins the Competent Authority to execute its orders. Section 16 of the Act confers power, interalia, of attachment of the standing crop upon the Competent Authority. It is apparent that the Act of 2009 has been enacted with a laudable purpose of giving quick relief to the allottees and settlees who have earned a right or to whom a right has accrued under any of the aforesaid six enactments. That is why Section 3 of the Act of 2009 gives that Act overriding effect over the procedure prescribed under any of the said six enactments. Thus, in my view, the scope and ambit of the Act of 2009 is limited and is circumscribed to the extent of enforcement of rights conferred by or accrued under the aforesaid six enactments. In other words, it is an enactment for execution of the orders made under the above referred six enactments. This intention is reinforced by Sub-section(2) of Section 4 of the Act of", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-18", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "This intention is reinforced by Sub-section(2) of Section 4 of the Act of 2009 insofar as it expressly provides, \"Competent Authority shall exercise his authority for resolving the dispute brought before him on basis of any final order passed by any of the authorities empowered to do so under the Acts contained in Schedule-1 of the Act\". Similarly, Sub-section (3) thereof expressly prohibits the Competent Authority from exercising its jurisdiction to adjudicate any fresh rights of allottee or settlee or a raiyat not yet determined under any of the aforesaid six enactments. Thus, the legislative intent to confine the Act of 2009 to execution of the orders made under the aforesaid six enactments is clear and unambiguous. Having thus circumscribed the powers of the Competent Authority under the Act of 2009, the mischief has crept in in Sub-sections (4) & (5) of Section 4 of the Act of 2009. The said Sub-section (4) of Section 4 of the Act of 2009 enables the <span class=\"hidden_text\" id=\"span_23\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> Competent Authority to determine the rights of allottees or settlees or raiyats which are not yet determined. Similarly, Sub-section (5) of Section 4 of the Act of 2009 confers a discretionary power upon the Competent Authority either to adjudicate complex questions of title himself or to allow the parties to seek remedy before the Civil Court. But for Section 4(4) of the Act of 2009, the Competent Authority is not vested with power of adjudication under any of the other provisions of the Act of 2009. The Act which is designed to execute the orders made or to enforce the rights accrued under", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-19", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "The Act which is designed to execute the orders made or to enforce the rights accrued under any of the aforesaid six enactments, has been converted into a substantive or adjudicating enactment by Section 4(4) of the Act of 2009. The power of adjudication conferred under the aforesaid Sub- sections (4) & (5) of Section 4 of the Act of 2009 are largely misused. The power, which is confined to the disputes in relation to the allottees or settlees or raiyats, is exercised in respect of any dispute including the complex issues of title. Though there is no express bar against the jurisdiction of the Civil Court, the said sub- sections practically take away the jurisdiction of the Civil Court to entertain and adjudicate the disputes relating to the title to the land.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-20", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "It is apparent that the Act of 2009 has been enacted with an intention to give immediate relief to the allottees and the settlees whose rights are crystallized under any of the six enactments mentioned in Schedule-1 to the Act of 2009. It is, therefore, necessary that any person approaching the Competent Authority under the Act of 2009 must have a right settled or accrued to him or her under any of the aforesaid six enactments. In other words, the plaintiff has to be the allottee or a settlee of the land under any of the aforesaid six enactments and seeks enforcement of a right crystallized in favour of the plaintiff or accrued to the plaintiff <span class=\"hidden_text\" id=\"span_25\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> under any of the aforesaid six enactments. It is such a claim alone which can be entertained by the Competent Authority under the Act of 2009. This opinion of mine is corroborated by Section 6 of the Act which makes it mandatory that in all such cases the State Government shall be a necessary party. The preamble of the Act is clear and discloses the intention of the legislature in enacting the Act of 2009. It says, \"disputes with respect to raiyati land or public land allotted in favour of different classes of allottees...........\". Preamble of the Act of 2009 further refers to disputes in relation to, \"the Record of Rights, partition of jamabandi, forcible dispossession of allottees/ raiyats, boundary disputes etc.\" In context of the above referred six enactments, Section 3 of the Act of 2009 gives the overriding effect to the Act of 2009 in respect of the procedure prescribed in the above referred six enactments", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-21", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "to the Act of 2009 in respect of the procedure prescribed in the above referred six enactments This seemingly unfettered and unbridled power of adjudication has been misused by the Competent Authority to resolve disputes of title to the land which traditionally are required to be resolved by a Civil Court. In the present case, the respondent no. 4, the plaintiff, asserted her right to land under a sale deed. Neither she is an allottee nor a settlee nor does the dispute arise from any right crystallized or accrued under any of the aforesaid six enactments. The Competent Authority has clearly exceeded his jurisdiction and has usurped the jurisdiction of the Civil Court.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-22", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "Incongruity in legislative drafting of sub-sections (3) & (4) of Section 4 of the Act of 2009 is evident. But then, that is the way the legislature functions. On one hand Sub-section (3) of Section 4 of the Act of 2009 expressly debars the Competent Authority from adjudicating any fresh rights of allottee, settlee or a <span class=\"hidden_text\" id=\"span_27\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> raiyat which is not determined or which is required to be determined in accordance with the provisions contained in any of the aforesaid six enactments. On the other hand, in stark contradiction, sub-section (4) of Section 4 of the Act of 2009 enables the Competent Authority to finally determine the rights of allottee, settlee or raiyat not yet determined. It is this sub-section (4) which is the mischief monger. Although it refers to the rights of allottee, settlee or raiyat, the broad language used by the legislature is largely misused to usurp the power not conferred by the Act of 2009 and to determine the rights claimed by the persons other than allottee, settlee or raiyat and the rights claimed outside any of the aforesaid six enactments. This wide amplitude granted under sub- section (4) calls for intervention by this Court and reading down of the sub-section (4) to bring it in consonance with the other provisions of the Act of 2009.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-23", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "Similarly, sub-section (5) of Section 4 of the Act of 2009 also is a mischief monger. Once jurisdiction of the Competent Authority is confined to the execution of the orders made or enforcement of rights accrued under any of the aforesaid six enactments, sub-section (5) of Section 4 of the Act of 2009, by necessary implication, allows the Competent Authority to entertain matters not arising out of the aforesaid six enactments and issues invoking complex questions of adjudication of title. The complex issues of title can never be decided in a summary proceeding envisaged by the Act of 2009. The said sub-section (5) also has the tendency to convert the power of execution of orders into the power of adjudication. The said sub-section (5) also requires to be read down to bring it in consonance with the other provisions contained in the Act of 2009. \n\n A Full Bench of this Court in the matter of Nand Kumar Rai (supra) had the occasion to examine the constitutional validity of Section 109 of the Bihar Tenancy Act, 1885 as it stood after its amendment under the Act 6 of 1970. It appears that under the said amendment the legislature barred the jurisdiction of the Civil Court in respect of any application or suit concerning the preparation or publication of record or rights or settlement of rent or preparation of Settlement Rent Roll or for alteration of any entry in any such record or for the determination of the incidents of any tenancy.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-24", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "The said enactment was challenged on the ground that it was a fraud on the legislative power of the State and was enacted in colourable exercise of that power and that the impugned provisions were arbitrary. The Bench held that clause (d) of sub-section (1) and sub-section (2) of Section 109 of the Act introduced by Bihar Act 6 of 1970 were constitutionally invalid. The said clause (d) of sub- section (1) and sub-section (2) of Section 109 of the Act barred the jurisdiction of the Civil Court in the following terms :-\n \"(d) for declaration of title to or recovery of possession of or confirmation of possession over any holding or tenancy or part thereof in which correctness of any entry in any such record or roll is expressly or impliedly challenged or in which determination of incidents of any tenancy is involved. \n\n (2) Suit for declaration of title to or recovery of possession of or confirmation of possession over any holding or tenancy or part thereof, in which correctness of any entry in any record-of-rights or <span class=\"hidden_text\" id=\"span_31\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> Settlement Rent roll is expressly or impliedly challenged or in which determination of incidents of any tenancy is involved may be instituted before the Collector or any Revenue Officer specially empowered by the State Government by notification in this behalf who shall dispose of the suit in the prescribed manner.\"", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-25", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "The Bench held, \"It is difficult to conceive how complicated title suits would be speedily and summarily disposed of by Revenue Courts and how the under-raiyats would be benefited thereby. I can take judicial notice of the fact that a large number of title suits have been filed throughout the State of Bihar wherever Revisional Survey operations have taken place. I am also aware that the number of Civil Courts is too small to dispose of such large number of title suits. I am, however, also aware of the fact that the number of Revenue Courts is also not sufficient, rather too small to dispose of such a large number of complicated title suits. They will be simply unable to decide them unless they technically choose to literally dispose of the suits by any means; no Court by a judicial approach will be above to dispose of such a large number of suits. I am, however, not concerned with the wisdom behind this legislation. I am concerned merely with its constitutional validity. In procedural matter suits of lighter vein have been allowed to be brought to the High Court and complicated suits <span class=\"hidden_text\" id=\"span_33\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> are to be finally disposed of by the Revenue authorities. I also do not see any justification for making a distinction between title suits for declaration of title and possession and suits of other types such a partition or mortgage suits.\"", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-26", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "In my opinion, a similar mischief is found in the Act of 2009 where the competent authority is allowed to entertain and summarily decide the rights which are not crystallized under any of the aforesaid six enactments and to entertain and decide complex issues of title to the land under sub-sections (4) & (5) of Section 4 of the Act of 2009. The Act of 2009 is clear and explicit insofar as its scope and ambit are concerned. It is repeatedly emphasized that the Act of 2009 has been enacted for enforcement of a right conferred by or accrued under the above referred six enactments. It would not be out of place to note that all the above referred six enactments relate to land reforms and are pretty old. The said Acts are in force for more than fifty years. Most of the issues must have been settled by now. It may be only residuary matters which may still require to be adjudicated/enforced. No claim to a property or a dispute relating to a property can be entertained or decided by the Competent Authority under the Act of 2009 to resolve disputes other than the ones arising from the above referred six enactments.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-27", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "In my opinion, clause (e) of Sub-section (1) of Section 4 of the Act of 2009 which reads, \"Partition of land\" has to be read as the dispute relating to the land allotted or settled under any of the above referred six enactments and the claim made by an allottee/ a settlee or a Raiyat. The said clause (e) will not cover each and every issue relating to any land and the partition between the co-sharers, <span class=\"hidden_text\" id=\"span_35\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> co-parceners, joint owners etc. of such land. Similarly, clause (g) of Sub-section (1) of Section 4 of the Act of 2009 which provides for \"Declaration of the right of a person\" also requires to be read down. Again the right referred to in the said clause (g) has to be a right conferred by or accrued under any of the aforesaid six enactments and none other. \u201eA person\u201f would mean an allottee/ a settlee of a land or a Raiyat as defined in clause (f) of Section 2 of the Act of 2009. No person other than an allottee/ a settlee or a Raiyat can have an access to the remedy under the Act of 2009. Clause (i) of Sub-section (1) of Section 4 of the Act of 2009 which refers to \"Construction of unauthorized structure\" should also be read down to mean the construction of unauthorized structure on the land of a Raiyat allotted or settled under any of the above referred six enactments and no other land or structure. Clause (j) of Sub- section (1) of Section 4 of the Act of 2009 is clearly outside the purview", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-28", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "(1) of Section 4 of the Act of 2009 is clearly outside the purview of the any of the above referred six enactments. The principle of lis pendence transfer is necessarily applicable to a civil litigation. If at all, its reference in the Act of 2009 would necessarily mean the transfer of the land of a Raiyat or a settlee allotted or settled under any of the aforesaid six enactments pending the adjudication under the concerned Act. In our opinion, the power of the Competent Authority under the Act of 2009 cannot be read to be wide enough to enfold in its embrace all kinds of disputes relating to any land.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-29", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "In my opinion, Sub-section (4) of Section 4 of the Act of 2009 brings a complete anachronism as it has the effect of encompassing in its folds any real or imaginary right an allottee or a settlee or a Raiyat can claim which is not conferred by any of the aforesaid six enactments. That would necessarily mean that the <span class=\"hidden_text\" id=\"span_37\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> rights which are not conferred by or accrued under the above referred six enactments also can be adjudicated by the Competent Authority under the Act of 2009. This wide power conferred upon the Competent Authority is unbridled, unfettered and unguided. As we have seen on the facts of the present case that they are grossly abused. It is not possible to save the said Sub-section (4) of Section 4 of the Act of 2009 by employing the principle of harmonious interpretation. The said Sub-section (4) requires to be held to arbitrary and to that extent unconstitutional. \n\n Sub-section (5) of Section 4 of the Act of 2009 empowers the Competent Authority to allow the parties to approach the Civil Court for adjudication of complex issues of title. Although the said Sub-section (5) is directory, should be read as mandatory. It shall be the duty of the Competent Authority to refer the complex issues of adjudication of title to the concerned Civil Court having jurisdiction to entertain and adjudicate such disputes.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-30", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "For the aforesaid reasons, this Petition is allowed. Clauses (e), (g), (i) and (j) of Sub-section (1) of Section 4 of the Act of 2009 are read down to the extent indicated hereinabove. Sub- section (4) of Section 4 of the Act of 2009 is held to be arbitrary and ultra vires Article 14 of the Constitution and unconstitutional to that extent. The said Sub-section (4) of Section 4 is, therefore, quashed. Sub-section (5) of Section 4 of the Act of 2009 will be read as mandatory provision as indicated hereinabove. \n\n The impugned order dated 27th December 2011 made by the Competent Authority-cum-Deputy Collector Land Reforms, Forbesganj in B.L.D.R. Act Case No. 91 of 2011-12 is quashed and set aside. Consequently, the appellate order made on 8th August 2012 made by the Divisional Commissioner, Purnea in Land <span class=\"hidden_text\" id=\"span_39\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> Dispute Appeal No. 69 of 2012 stands quashed. The B.L.D.R. Act Case No. 91 of 2011-12 filed before the Competent Authority-cum- Deputy Collector Land Reforms, Forbesganj is dismissed. The respondent no. 4 will bear the costs throughout. \n\n It is clarified that this order shall not preclude the respondent no. 4, the plaintiff, from asserting her right to the disputed parcels of land before the Civil Court. \n\n Interlocutory application stands disposed of.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-31", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "Interlocutory application stands disposed of. \n\n (R.M. Doshit, CJ) As per Ashwani Kumar Singh, J I have had the privilege and advantage of perusing the judgment of Hon\u201fble the Chief Justice. Since Hon\u201fble the Chief Justice has extensively dealt with the facts and law involved in the matter, I need not repeat the same. \n\n I fully concur with the view of Hon\u201fble the Chief Justice with regard to Sub-sections (1) and (4) of Section 4 of The Bihar Land Disputes Resolution Act, 2009 (for short \u201ethe Act of 2009\u201f). The Hon\u201fble Chief Justice has held that the Act of 2009 is an enactment for execution of the orders made under the six enactments referred to in the preamble and schedule-I of the Act of 2009. she has further held that but for Section 4 of the Act of 2009, the Competent Authority is not vested with the power of adjudication under any of the other provisions of the Act of 2009, and the Act which is designed to execute the orders made under the aforesaid six enactments, converts the Competent Authority into an adjudicating Court by dint of Section 4 of the Act of 2009. I am in <span class=\"hidden_text\" id=\"span_41\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> complete agreement with the aforesaid view of Hon\u201fble the Chief Justice. I also agree with the view that Sub-section (5) of Section 4 of the Act mandatorily requires the Competent Authority to allow the parties to approach the Civil Court for adjudication of complex issues of title.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-32", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "However, I am unable to resist from adding some of my own observations in the context of the provisions of Sub-section (5) of Section 4 of the Act of 2009. Sub-section (5) of Section 4 of the Act of 2009 reads as follows :\n \"(5) The Competent Authority, wherever it appears to him that the case instituted before him involves complex question of adjudication of title, he shall close the proceeding and leave it open to parties to seek remedies before the competent Civil Court\". \n\n The group of words \"complex question of adjudication of title\" which form part of the sentence in Sub-\n section (5) of Section 4 of the Act of 2009 has been used as a phrase in the said provision. While incorporating the aforesaid group of words as a phrase in Sub-section (5), the legislature itself says that all cases involving issues of title per se involve complex questions and which cannot be decided in a summary proceeding, being the ambit and scope of the Act of 2009, and thus under all circumstances where issues relating to title arise would have to be mandatorily closed by the Competent Authority. \n\n In other words, the said phrase occurring in sub-section (5) of Section 4 of the Act of 2009 envisages that no sooner than a question of adjudication of title which is inherently a complex one is involved, the Competent Authority is required to invariably close the proceeding. The word \u201ecomplex\u201f has not been used in <span class=\"hidden_text\" id=\"span_43\"> Patna High Court CWJC No.1091 of 2013 (12) dt. 24 .06.2014</span> contradistinction to the word \u201esimple\u201f.", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "1e94c68957a0-33", "Titles": "Maheshwar Mandal & Anr vs The State Of Bihar & Ors on 24 June, 2014", "text": "In above view of the matter, I am of the considered opinion that Sub-section (5) of Section 4 of the Act of 2009 strictly forbids the Competent Authority to entertain matters involving questions of adjudication of title. I am of the view that the Competent Authority, irrespective of nature of cases involving issues of title, is bound to close the proceedings for want of jurisdiction and leave it open to the parties to seek remedies before the competent Civil Court. \n\n In the result, subject to the aforesaid observations of mine, I fully agree with the findings and conclusions arrived at by Hon\u201fble the Chief Justice in the matter. \n\n (Ashwani Kumar Singh, J.) AFR Manish/Sanjeet", "source": "https://indiankanoon.org/doc/154031036/"}
+{"id": "32be51b91e2b-0", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "IN THE HIGH COURT OF JUDICATURE AT PATNA\n                    MA No.38 of 2004\n   1.SRI ASHOK GOENKA son of late Kedarnath Goenka and\n   Proprietor M/S Premier Synthetics, Patna, resident\n   of Mohalla Laxmi Bhawan, Munger, P.S.Kotwali Town,\n   District Munger, at present residing at B-9,\n   Greater Kailash, New Delhi\n   2.M/S Premier Synthetics, Kumaharar, P.S.Sultanganj\n     Town, District Patna, represented through its\n     Proprietor Sri Ashok Goenka son of late\n     Kedarnath Goenka, residing at B-9, Greater\n     Kailash, New Delhi-Defendants 1 set- Appellants\n                  (in both the appeals)\n                          Versus\n   1.Chandra Bhushan Singh son of Permanand Singh\n   2.Manoj Kumar Rai son of Sri Permanand Singh\n     Both resident of village Bishunpur, P.S.Akhilpur\n     District Patna--Plaintiffs- Respondents 1st set\n   3.Smt. Gulabia Devi W/o Sri Rambabu Rai\n   4.Smt.Fulpatia Devi W/o Sri Jagat Rai\n   5.Smt.Malwa Devi W/o Sri Niranjan Rai\n     All resident of village Purana Punnapur, P.S.\n  Akhilpur, District Patna-Defendants II set-", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-1", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "-----Respondents II set\n                  (in M.A.No.38 of 2004)\n   1.Sri Sukhnandan Rai son of late Ganga Bishun Rai\n     resident of Haripur Colony, Digha, P.S.Digha Town\n     District Patna\n   2.Smt.Neelam Devi D/o late Ram Prasad Yadav,\n     resident of village Bishunpur, P.S.Akhilpur,\n     District Patna\n     At present residing at Mohalla Digha, P.S.Digha\n  Town, District Patna-Plaintiffs, Respondents Ist set\n   3.Smt.Gulabia Devi W/o Sri Rambabu Rai\n   4.Smt.Fulpatia Devi W/o Sri Jagat Rai\n   5.Smt.Malwa Devi W/o Sri Niranjan Rai\n  All resident of village Puranapunnapur, P.S.Akhilpur\n  District Patna---Defendants IIset,Respondents II set\n\n                 (in M.A.No.39 of 2004)\n                          ------\n For the Appellants in both the appeals :M/S S.S.Dwivedi,Sr.Advocate Praveen Kumar,Advocate Arunjay Kumar,Advocate For Respondents 1 & 2 in both the appeals :M/S Devendra Kr.Sinha,Sr.Advocate Nikesh Sinha,Advocate For Respondents 3-5 in both the appeals :Mr.Manoj Kr.Ambastha,Advocate\n -------\n\n17. 15.9.2009 In both these Miscellaneous Appeals identical issues arise on practically the same set of facts and therefore with the consent of the parties the matters have been heard together and are being disposed of by this common order at the stage of admission itself.", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-2", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "M.A.No.38/04 is directed against the order dated 24.11.2003 passed by the Ist Sub- Judge, Danapur in Title Suit No.24 of 2003 by which he has allowed the petition dated 17.4.2003 filed by the plaintiffs-respondents Ist Set under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure and directed that the defendants-appellants shall not make attempt to dispossess the plaintiffs from the disputed land till the disposal of the suit. \n\n M.A.No. 39 of 2004 is also directed against the order dated 24.11.2003 passed in Title Suit No. 19 of 2003 by which also a petition dated 17.4.2003 under the same provisions has been allowed in the same terms. \n\n The defendants-appellants and the defendants-respondents II set nos. 3 to 5 are common in both the appeals. \n\n Both the suits had been filed by the plaintiffs-respondents nos. 1 and 2 in the respective appeals for a direction upon the defendants-appellants to execute a registered sale-deed in favour of the plaintiffs in respect of Schedule-I property and if the defendants fail to do so within the time fixed by the court the sale-deed be executed and registered through the process of the court and according to law conveying absolute title to the plaintiffs. The further relief sought for in the suit is for restraining the defendants by an order of ad-interim injunction from executing and registering the sale-deed in favour of any other persons with respect to the suit land and in any manner disposing of the land or creating any encumbrance thereon detrimental to the interest of the plaintiffs till disposal of the suit and confirm the possession of the plaintiffs over the suit land.", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-3", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "The defendant-appellant no.2 and defendant-appellant no.1 are the firm and proprietor of the said firm which is the owner of the suit land in both the cases. \n\n The case of both the sets plaintiffs was that the defendants-appellants had entered into an agreement with them and executed in both the cases an agreement for sale on 27.3.2002 for the sale of the respective suit lands and as per the terms and conditions of the agreement for sale 5 kathas of land in each of the case would be sold at the rate of Rs.63,000/- per katha and the total consideration money comes to Rs.3,15,000/-, out of which the plaintiffs in each case have already paid the advance money of Rs.2,50,000/- at the time of execution of the agreement and the balance amount of Rs.65,000/- was to be paid at the time of registration of the suit land. It was asserted that the defendants-appellants gave possession of the suit land to the respective plaintiffs. It was further agreed that the sale-deed would be executed and registered in between 27.3.2002 and 31.1.2003. However, the request by the plaintiffs for such registration was not paid heed to and even the legal notice sent on 16.12.2002 in each of the cases had no effect and the defendants-appellants failed and neglected to perform their part of contract and hence the suit was filed.", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-4", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "The defendants-appellants appeared in the suits and filed their written statements in which, inter alia, apart from raising the plea of maintainability it was alleged that the agreement for sale is most fabricated, sham, without consideration and a document prepared by means of practicing fraud. The statement regarding payment of the amount of Rs.2,50,000/- in each of the cases was denied as concocted and further stand taken is that the agreement for sale could not have been executed in view of the amendment made in the Registration Act and such a document could not be a legal document in the absence of registration. \n\n The plaintiffs thereafter filed the aforesaid petitions dated 17.4.2003 under Order 39 Rules 1 and 2 read with Section 151 CPC with the prayer for ad-interim injunction restraining the defendants from executing and registering the sale-deed in favour of any other persons with respect to the suit land or in any manner disposing of the land or dispossessing the plaintiffs from the suit land. It was alleged in the injunction petition that after receiving the summons in the suit on 22.3.2003 the defendant-appellant no.2 had executed and registered a sale-deed for the suit land on 24.3.2003 in favour of the defendants-respondents nos. 3 to 5. Show cause to the said injunction petitions was filed on behalf of the defendants-appellants in which the fact of having entered into an agreement for sale with the plaintiffs was denied and further stated that the land in question had been sold to the defendants- respondents nos. 3-5 who were the bonafide purchasers and have been put in actual physical possession over the suit land. \n\n The learned trial court, however, upon hearing the parties passed the aforesaid impugned orders in the terms as mentioned above.", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-5", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "Learned counsel for the appellants submits that the unregistered agreement for sale dated 27.3.2002 under which the plaintiffs-respondents claim part performance having been put in possession of the suit land is barred by the provisions of Section 17(1-A) of the Registration Act read with Section 53A of the Transfer of Property Act. It is contended that on the basis of the said unregistered agreement for sale no plea regarding part performance could have been raised by the plaintiffs-respondents or entertained by the court below as the same is completely barred under the provisions of Section 17(1-A) of the Registration Act which has been inserted into the said Act by Act 48 of 2001. It is thus urged that the court below could not have taken into account any claim of possession on behalf of the plaintiffs on the basis of any clause contained in the said unregistered agreement for sale and granted any relief on the basis of the same. \n\n Learned counsel further submits that even otherwise the law is well established that an agreement for sale does not create any interest in the property but only entitles a party to bring a suit claiming the equitable right of purchase on the basis of Section 53A of the Transfer of Property Act and thus the order of injunction cannot travel beyond the scope of the said Section. It is argued that the rights under Section 53A can only be utilized for the purpose of protecting the defendants' possession and he cannot be permitted to claim any title on the basis of such provision. \n\n In support of the said proposition learned counsel relies upon a decision of a learned Single Judge of this Court in the case of Fool Kumari Devi vs. Krishna Deo Upadhya & anr. : 1998(1) PLJR 262, in paragraph-7 of which it has been held as follows :", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-6", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "\"7. An order of injunction restraining the defendant in a suit for specific performance of contract from making repairs or construction on the suit premises, as may be necessary, does not fall in any of the three categories. It is well established that an agreement to sale does not create any interest in the property. It only provides a cause of action to him to bring a suit claiming an equitable right of purchase based on Section 53A of the Transfer of Property Act. The order of injunction, therefore, cannot travel beyond the scope of Section 53A of the said Act. It is well settled that the right conferred by Section 53A is a right available to the defendant to protect his position. The defendant cannot claim any title on the basis of the provisions contained therein. As is said sometimes, the right under Section 53A is to be used as a shield but not as a sword.\"", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-7", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "It is further submitted by learned counsel that since legal title in the suit land continues in favour of the appellants from the very beginning the same could not have been given to the plaintiffs and the plaintiffs being further debarred from raising the plea of part performance in view of the amended provisions of Registration Act it was not open to the court to issue an order which virtually amounts to accepting such plea of the plaintiffs. It is contended that in such circumstances neither law permits such an order nor the question of balance of convenience or irreparable loss can be held to be in favour of the plaintiffs. In support of the same he relies upon a decision of a Division Bench of this Court in the case of Kalyanpur Lime Works Ltd. vs. the State of Bihar and another : AIR 1951 Patna 226, in paragraph-10 of which it has been held as follows :", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-8", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "\"10. We have also been addressed on the question whether the appellant can be sufficiently compensated by money in respect of any loss suffered before specific performance of the contract. The learned Advocate General has drawn our attention to S.12, Expln. And Ss. 54 and 56, Specific Relief Act. He has also drawn our attention to S.19, Specific Relief Act, which says that any person suing for the performance of a contract may also ask for compensation for its breach, either in addition to or in substitution for such performance. Personally, I do not see any reason why the appellant cannot be compensated by money for any loss he may suffer, provided the appellant is entitled to compensation in addition to specific performance, under the law, as to which I express no opinion at this stage. If, as I have already stated, there is no question of stopping the quarrying operations during the pendency of the suit for specific performance, the question of compensation will remain whether an order of injunction is or is not passed. It cannot surely be urged that in a suit for specific performance the plaintiff is entitled to ask, during the pendency of litigation, that the defendant in whom the legal title still vests should be restrained from using the property. If the plaintiff were so entitled, then in a suit for specific performance the defendant would be required to vacate the property which he had contracted to sell or lease. That surely cannot be the law.\"", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-9", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "Learned counsel for the appellants has vehemently argued that there is no factual basis for the court below to come to the conclusion that the plaintiffs were in possession over the land in question and the reliance upon Clause 5 of the alleged agreement for sale for the said purpose was completely uncalled for and barred by the newly amended provisions of the Registration Act. It is submitted that further reliance upon an order passed in 144 Cr.P.C. proceeding shows that the decision is perverse as no issue of possession has been or could have been decided in the said proceedings. Similarly no reliance could have been placed on certain criminal cases filed by the plaintiffs against the defendants-respondents nos. 3 to 5.", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-10", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "Learned counsel for the respondent nos. 3 to 5 has supported the stand of the appellants on the aforesaid grounds and further sought support from a decision of this Court in the case of Ramashish Rai vs. Baijnath Mishra & 11 another : 1998(3) PLJR 862, in paragraph-5 of which it has been laid down as follows :", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-11", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "\"5. Be that as it may, admittedly, the plaintiff's case is that there was an oral agreement to sell of the suit land and on payment of consideration money the plaintiff was put in possession. There is no dispute that a suit for Specific Performance of Contract can be filed on the basis of oral agreement. The question for consideration in this case is whether the plaintiff has a legal right to restrain the defendant from alienating the suit land by obtaining an order of temporary injunction. It is well settled that an agreement to sell creates a right in personam and it does not create any right in the property. An agreement to sell gives a right to the proposed purchaser to bring a suit for specific performance of contract to sell but he cannot claim any interest in the property till his suit for specific performance is decreed. Learned counsel appearing for the petitioner placed reliance on a judgment delivered by me which is reported in 1998(2) PLJR 120 (Lallan Prasad vs. Parmeshwar Singh). The ratio decided by me in that judgment does not help the petitioner rather it totally goes against the petitioner. In the said judgment this Court observed:-", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-12", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "\"I have heard learned counsel for the parties and have gone through the orders passed by both the courts below. In my opinion, both the courts below have committed serious illegality and material irregularity in granting temporary injunction in the facts and circumstances of the case. The courts below have over- looked the settled principles of law that an agreement to sell creates right in personam and it does not create any right in property. An agreement to sell gives a right to the proposed purchaser to bring a suit for specific performance of contract to sell but he cannot claim any interest in the property till his suit for specific performance is decreed. In the case of Jiwan Dass vs. Narain Dass (AIR 1981 Delhi, 291) it has been held by a Division Bench that an agreement to sell creates a right in personam and not in the estate such right created against a vendor to obtain specific performance can ultimately bind any subsequent transferee till, therefore, a decree of specific performance is obtained the vendor or a purchaser from him is not entitled to full enjoyment of the property even if a decree for specific performance of contract is obtained and no sale deed is actually executed, it cannot be that any interest in the property is passed. Consequently, temporary injunction cannot be granted till sale deed is executed on the basis of decree of specific performance of contract to prevent the transferee under the sale deed from enjoying possession.\"", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-13", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "Learned counsel for the respondent nos. 1 and 2, on the other hand, submits that the court below has rightly granted injunction in view of the fact that subsequent to the filing of the suit the registered sale-deed was executed in favour of the respondent nos. 3 to 5 on 24.3.2003 and an attempt was made to dispossess the plaintiffs from the suit land. It is further submitted by him that the fact of possession having been handedover to the plaintiffs is clearly mentioned in Clause 5 of the agreements for sale both dated 27.3.2003 in favour of the plaintiffs of both the cases. According to learned counsel apart from what was stated in Clause 5 the court below has also rightly relied upon S.144 Cr.P.C. proceedings and other criminal cases filed by the plaintiffs against the respondent nos. 3 to 5 when an attempt was made to dispossess them as supported by evidence as indicated by the plaintiffs. It is further submitted by learned counsel for the plaintiffs-respondents that the appellants have sold their lands to respondent nos. 3 to 5 and they cannot claim any further interest in the matter and it is not open to them to challenge the injunction order by filing these appeals.", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-14", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "In support of the aforesaid stand learned counsel relies upon a decision of the Supreme Court in the case of Ashwinkumar K.Patel vs.Upendra J.Patel and others : AIR 1999 SC 1125, paragraphs 11 and 12 of which are quoted below :\n \"11. A reading of the judgment of the trial Court shows that though the agreement of sale executed in favour of the plaintiff was, according to the said Court, invalid because of its being in breach of the Tenancy Act still, in view of the compromise decree and the subsequent admission of the defendants 1 to 14 and report of the Court Commissioner in special suit No. 293 of 1996, the trial Court held that plaintiff was in \"permissive possession\" as this was accepted by the owners. It held that a possessory right was sufficient to permit the plaintiff to have an order of temporary injunction in his favour. \n\n 12. Therefore, without going into the validity of the agreements executed by the owners in favour of the plaintiff or defendants 15 to 28, or the validity of the sale deed executed by defendants 15 and 28, we are of the view that the trial Court was right in coming to the conclusion that the plaintiff has made out a prima facie case. The trial Court has given several reasons for the grant of temporary injunction and, in our view, the two reasons given by the High Court were, on the facts, not sufficient to warrant a remand.\"\n Learned counsel relies upon paragraphs 4 and 5 of a Division Bench decision of the Calcutta High Court in the case of Sm. Muktakesi Dawn and others vs. Haripada Mazumdar and another: AIR 1988 Calcutta 25, for the proposition that an injunction restraining pendente lite transfer can be granted in such suits so as to preserve the property in status quo during the pendency of the suit.", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-15", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "I have considered the rival submissions of the parties and the materials on the record. It is evident from the impugned orders that the court below has not at all taken into account the effect of Section 17(1-A) of the Registration Act, 1908 as inserted by the amending Act 48 of 2001. The said provision is quoted below :\n \"S.17(1A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related laws (Amendment) Act, 2001 and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said section 53A.\"", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-16", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "It is evident from the said provision that any document containing contracts to transfer for consideration, any immoveable property for deriving the benefit under Section 53A of the Transfer of Property Act must be registered if it has been executed after the commencement of the Amending Act of 2001 and in case such document is not registered on or after such commencement it will have no effect for the purpose of invoking the doctrine of part performance under Section 53A. The doctrine of part performance protecs the right of a transferee of an agreement for sale if he has been put in possession or continues in possession in part performance of the contract or has done some act in furtherance of the contract. Prior to the amending Act of 2001 a party could claim the benefit of such possession on the basis of the doctrine of part performance even if the agreement for sale was not registered but the same has now been specifically debarred by the amending Act. That being the position, it is not open to the courts of law to permit any such plea of possession or right to continue in possession on the basis of any unregistered document. In the present matter despite the legal provision being to the contrary, by the impugned orders of injunction the court below has put a stamp of legality over the alleged possession claimed by the plaintiffs on the basis of an unregistered agreement for sale dated 27.3.2002. The same is clearly not permissible under the law.", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-17", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "Even otherwise this Court does not find that apart from the said Clause 5 of the unregistered agreements for sale there was any material before the court on the basis of which it could have come to the conclusion regarding the plaintiffs being in possession over the suit land. Thus the finding of prima facie case in favour of the plaintiffs- respondents is perverse being based on practically no material on the record apart from the reliance upon the unregistered documents which is impermissible after the Amendment Act 48 of 2001. \n\n Even otherwise as has been laid down by this Court in the case of Fool Kumari Devi(supra) no title could have been claimed by the plaintiffs on the basis of the mere agreements for sale which only entitle them to approach the court for further relief of specific performance of contract but such agreements for sale did not create any interest in the property in their favour which they can use to injunct the owner of the land so far as the right and title over the suit land is concerned. \n\n The reliance placed by learned counsel for the plaintiffs-respondents on the decision of the Supreme Court in Ashwinkumar K.Patel's case (supra) is of no avail as in the said case the suit was between two sets of purchasers; one directly from the owners of the land and other from the alleged power of attorney holder from the owners but in the said case the clear stand of the owners of the land was that they have put the plaintiff in possession and in the said circumstances the Apex Court held that such possessory right would entitle the plaintiff to an injunction as against the other purchaser of the land who has no possession over the land.", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "32be51b91e2b-18", "Titles": "Sri Ashok Goenka & Anr vs Chandra Bhushan Singh & Ors on 15 September, 2009", "text": "So far as the case of Sm. Muktakesi Dawn (supra) is concerned the only issue decided therein is that an injunction restraining the pendente lite transfer can be granted in an appropriate case where relief for specific performance is sought. There can be no dispute with the said proposition. However, in the present matter the subsequent sale has already been made through a registered deed of sale by the appellants in favour of respondents nos. 3 to 5. \n\n Thus, on a consideration of the entire facts and circumstances of the case, this Court is clearly of the view that the impugned orders dated 24.11.2003 passed in Title Suit No. 24/03 and Title Suit No. 19/03 cannot be sustained being contrary to the law of the land apart from there being no factual basis for the grant of injunction in such terms and the same are accordingly set aside. The appeals are allowed. \n\n However, considering the fact that the plaintiffs would be put to serious difficulties and inconvenience if there is any further sale of the properties in dispute the appellants and the respondents nos. 3 to 5 are restrained from making any further sale of the properties in question. \n\n It is pointed out by learned counsels that both the suits are at the stage of hearing and two witnesses have already been examined in Title Suit No. 24/03 while the other case is ready for examination of the witnesses. In the said circumstances, the learned court below is directed to proceed expeditiously in the matters and dispose of both the title suits within a period of six months from today. \n\n\n (Ramesh Kumar Datta,J.) spal/", "source": "https://indiankanoon.org/doc/44290554/"}
+{"id": "c542667f83fa-0", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "IN THE HIGH COURT OF JUDICATURE AT PATNA\n                          LPA 681 of 2010\n 1.Mt. Prabhawati widow of Late Madan Mishra, resident of village-\n   Pathakauli, P.S. Bagaha, District West Champaran\n2. Kamlawati Devi @ Kalawati Devi wife of Chhedi Singh\n3. Geeta Devi wife of Anirudh Singh\n   Both resident of Village- Narainpur, P.S. Bagaha, District West\n   Champaran\n4. Manorama Devi, wife of Ashok Kumar Singh, resident of village\n   Narainpur, P.S. Bagaha, District West Champaran\n5. Gayatri Devi wife of Surendra Kumar Rai, resident of Village\n   Rampur Tutulia, P.S. Shikarpur, District West Champaran\n6. Dhruva Prasad son of Late Beni Madhava Sah, resident of Village\n   Pathakauli, P.S. Bagaha, District West Champaran\n7. Indu Devi wife of Ram Equibal Tiwary, resident of village\n   Narainpur, P.S. Bagaha, District West Champaran\n8. Nathuni Yadava sonof Hari Charan Yadava, resident of village\n   Narainpur, P.S. Bagaha, District West Champaran\n9. Shree Narain Pathak, sonof Late Ramji Pathak\n10.Ravi Shanker Pathak, son of late Hari Shanker Pathak\n11.Vijay Prakash Pathak @ Vijay Pathak, son of late Rajendra Pathak\n12. Nag Narain Pandey sonof late Radha Kishun Pandey\n    All resident of village Pathakauli, P.S. Bagaha, District West\n    Champaran", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-1", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "Champaran\n13.Jagdish Rao son of Bishwanath Rao, resident of Village\n    Dumawalia, P.S. Bagaha, District West Champaran\n14. Abhay Narain Pathak son of late Ramakant Pathak\n15. Sheo Sagar Pathak son of Kamakhya Pathak\n     Both resident of village Pathakauli, P.S. Bagaha, District West\n     Champaran\n16. Gunjan Pathak son of Radheshyam Pathak, resident of village\n     Pathakauli, P.S. Bagaha, District West Champaran.\n17. Krishna Mohan Pandey son of Sri Niwas Pandey\n18. Sunil Pathak @ Sunil Kumar Pathak sonof Sadhu Saran Pathak\n    Both resident of village Pathakauli, P.S. Bagaha, District West\n    Champaran.\n19. Dhruva Pandit, son of Late Bihari Pandit, resident of village\n    Narainpur, P.S. Bagaha, District West Champaran.\n20. Umakant Pathak sonof late Kapildeo Pathak, resident of village\n    Pathakauli, P.S. Bagaha, District West Champaran\n                            2", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-2", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "21. Hari Shanker Pandey son of Gena Pandey, resident of village\n    Pathakauli, P.S. Bagaha, District West Champaran\n22. Paras Nath Tiwary son of Deo Sharan Tiwary, resident of Village\n    Dumawalia, P.S. Bagaha, District West Champaran\n                                                    ......... Appellants\n                                 Versus\n1. The State of Bihar\n2. The Collector, West Champaran, Bettiah\n3. The District Land Acquisition Officer, Bettiah\n4. The Sub-Divisional Officer, Bagaha, District West Champaran\n                                                 ........... Respondents\n                                  With\n                         L.P.A. No.749 of 2010\n1. Musmat Jashoda Devi wife of Late Sudama Yadav, resident of\n   Village Pathakauli, P.S. Bagaha, District West Champaran\n2. Manorma Devi wife of Mohan Prasad Sah, resident of village\n   Narainpur, P.S. Bagaha, District West Champaran.\n3. Ramashanker Pathak son of Late Triveni Pathak, resident of Village\n   Pathakauli, P.S. Bagaha, District West Champaran\n4. Ramawati Devi wife of Lal Saheb Pandey, resident of Village\n   Pathakauli, P.S. Bagaha, District West Champaran\n5. Amarnath Pathak son of Late Kapil Dev Pathak, resident of Village\n   Pathakauli, P.S. Bagaha, District West Champaran\n6. Rameshwar Tiwary son of Tarkeshwar Tiwary, resident of Village\n   Narainpur, P.S. Bagaha, District West Champaran", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-3", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "Narainpur, P.S. Bagaha, District West Champaran\n7. Brajnarain Shukla son of late Jagdeo Shukhla, resident of village\n   Narainpur, P.S. Bagaha, District West Champaran\n8. Sabita @ Amarpati Devi wife of Brajnarain Sukhla, resident of\n   village Narainpur, P.S. Bagaha, District West Champaran\n9. Indu Singh wife of S.P. Singh, resident of Village Narainpur, P.S.\n    Bagaha, District West Champaran\n10. Nirmalendu Pandey son of late Nathnu Pandey, resident of village\n   Pathakauli, P.S. Bagaha, District West Champaran\n11.Dhruvnarain Yadav, son of Rogi Yadav, resident of village\n    Pachhgawa, P.S. Bagaha, District West Champaran.\n12.Chandrabhushan Pathak son of Data Trey, resident of village\n   Pathakauli, P.S. Bagaha, District West Champaran\n13.Rinki Devi wife of Lal Saheb Pandey, resident of Village\n   Pathakauli, P.S. Bagaha, District West Champaran\n14. Ghanshyam Choudhary son of late Ram Lagan Choudhary, resident\n   of village Pathakauli, P.S. Bagaha, District West Champaran\n                                                  ....... Appellants\n                                 Versus\n1. The State of Bihar\n                                    3", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-4", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "2. The Collector, West Champaran, Bettiah\n       3. The District Land Acquisition Officer, Bettiah\n       4. The Sub-Divisional Officer, Bagaha, District West Champaran\n                                                      ........... Respondents\n\n\n       For the Appellants    : Mr. Manan Kumar Mishra, Sr. Advocate\n       (in both the appeals) : M/s Veshwajeet Mishra, Awanish Kr. Pandey\n       For the State         : Mr. Lalit Kishore, Addl. Advocate General I\n                              Mr. Rabindra Kr. Priyadarshi, AC to AAG I\n\n                                       Order\n\n6   24.11.2011 Both the appeals have been heard analogous as facts and issues are common. The instant Letters Patent Appeals under clause 10 of the High Court of Judicature at Patna are preferred against the order dated 23.3.2010, passed both in C.W.J.C.No.8653 of 2009 and C.W.J.C. No.4817 of 2010, whereby the learned Single Judge rejected the prayer of the appellants for quashing the notification issued under section 4, declaration under section 6, making of an Award dated 1.4.2009 under section 11, as well as award notices issued under section 12(2) of the Land Acquisition Act (hereinafter referred to as \u201ethe Act\u201f) in Land Acquisition Case No.9/2007-08.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-5", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "2. The relevant facts necessary for disposal of the appeals in short are as follows. The appellants are raiyats of lands situated in Village Pokharbhinda and Domwalia in Bagha Sub Division in the district of West Champaran, detailed in Annexure-2A of the writ petition. In view of anarchy prevailing in the region, Bagha Sub Division has been upgraded as police district. The Superintendent of Police, Bagha, vide his letter no.374 General, dated 14.3.2000, addressed to the District Magistrate, West Champaran, made a request for making available suitable land for construction of police line at Bagha. The Anchal Adhikari, Bagha, began search enquiry vide Case No.1/2000-01, and submitted his proposal regarding availability of 26.40 acres of land in Village Domwalia, Thana No.145, and an area measuring 15.87 acres of land in Village Pokharbinda, Thana no.147, both falling within Bagha P.S. (vide his letter no.364 dated 14.7.2000), to the S.D.O. Bagha. The S.D.O., Bagha, forwarded the proposal to the District Land Acquisition Officer, Bagha, which was numbered as L.R. Case No.2/2002-", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-6", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "03. The proposal finally reached the office of the Commissioner, Tirhut Division, for administrative approval. The Commissioner pointed certain defects and referred the matter to the Collector, West Champaran, for rectification. The Collector in his turn endorsed the file to the Circle Officer, Bagha, for making necessary rectification. The Anchal Adhikari, Bagha, the L.R.D.C. Bagha, the S.D.O.,Bagha, along with D.I.G. Police, Tirhut Range, Muzaffarpur, visited the site whereafter a new proposal was mooted for acquisition of 12.04 acres of land in village Domwalia appertaining Thana No.145, and 33.04 acres in Village Pokharbinda, of Thana no.147. The Anchal Adhikari, Bagaha forwarded the proposal. The case record was processed and placed in the office of the Commissioner, Tirhut Division, on 8.7.2003. On 24.2.2004, the Superintendent of Police, Bagha, made a requisition to the Collector, West Champaran, to acquire 45.05 acres of land on urgent basis in village Pokharbinda and Domwalia, detailed in Appendix 1, with further request vide details contained in Appendix II, to dispense with enquiry under section 5A of the Act, and to obtain necessary order of the State Government under section 17(4) of the Act. The requisitions along with its Appendixes were considered by the Land Acquisition Officer, West Champaran, on 3.9.2006, and Collector, West Champaran, on 27.9.2006. The Collector approved the draft of the notifications under sections 4 and 6, which too was forwarded by the Commissioner, Tirhut Division, vide his recommendation dated 4.11.2006 to the Director,", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-7", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "Tirhut Division, vide his recommendation dated 4.11.2006 to the Director, Land Acquisition, under letter no.4999, dated 13.11.2006, for due consideration and taking approval of the Government. The matter was placed before the Government, and the Minister being satisfied gave approval to the proposal of acquisition under section 17(4) of the Act for construction of police line on 2.2.2007. Pursuant to approval of the acquisition by the State Government in terms of sub-section (4) of Section 17 of the Act, the follow-up notification under section 4 thereof, dated 9.2.2007, and declaration under section 6, dated 13.2.2007, for acquisition of 45.05 acres of land were published. The declaration under section 6 was also published in two newspapers, namely, Aaj and Farooqui Tanzeem. Both notification under section 4, and declaration under section 6, were published in the District Gazette on 15.3.2007. The Collector also caused and got published the substance of acquisition at local level on 30.3.2007.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-8", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "3. The Collector on 25.4.2007, vide letter no.48 requested the Commissioner, Tirhut Division to seek government\u201fs approval for taking possession of the land in question in terms of section 17(1) of the Act. The Commissioner forwarded the request to the Director, Land Acquisition, vide his letter no.2710, dated 20.6.2007, for obtaining necessary approval of the Government. The Director, Land Acquisition, placed the matter before the Government and the Hon\u201fble Minister accorded approval on 4.7.2007. The Collector, West Champaran, was instructed to take immediate possession under letter no.1605, dated 11.7.2007, which finds place at page 88C of the Land Acquisition file. After ascertaining the value of the land, the Collector approved the Award on 31.3.2009 in L.A. Case No.9 of 2007-08. On 16.6.2009, the Collector issued notices under section 12(2) of the Act calling upon the appellants and other land-holders to receive the compensation amount. The District Land Acquisition Officer took possession of the land on 29.7.2009, and handed over the same to the Dy. S.P. (Hqr), Bagha, for construction of police line which the appellants have controverted.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-9", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "4. The appellants submit that the impugned land acquisition proceeding is in the teeth of various provisions of the Act. They state that there was no legal and valid ground to invoke the provisions of sections 17(1) and 17(4) of the Act to dispense with the provisions under section 5A of the Act. The proceedings commenced in the year 2000-01, and notification and declaration under sections 4 and 6 of the Land Acquisition Act were issued in the year 2007, hence there was no urgency in the matter and as such invocation of section 17(4) was totally unjustified. The appellants state that the State Government was required to consider the need to dispense with the enquiry under section 5-A inspite of existence of an urgency or unforeseen emergency. There is need for application of the mind by the appropriate government on the issue, but in the instant case the Minister has merely put his signature approving invoking of emergent provisions under section 17(4) of the Act. In support of their submissions, the appellants have relied upon decisions in the case of Union of India & Ors Vs Mukesh Hans, reported in 2004 SC 4307, Essco Fabs Private Limited & anr Vs State of Haryana & anr, reported in (2009) 2 SCC 377, Anand Singh & anr Vs State of U.P. & Ors reported in (2010)XI SCC 242. The appellants state that the impugned award is time-barred in view of section 11-A of the Act, and the whole proceeding lapsed, as the award was not prepared within a period of two years of declaration under section 6 of the Act. The appellants submit that the declaration under section 6 was published in the newspaper on 13.2.2007, and in the district gazette on", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-10", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "published in the newspaper on 13.2.2007, and in the district gazette on 16.3.2007. The local publication of the award was made on 30.3.2007.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-11", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "5. They further state that it is evident from perusal of Section 11A of the Land Acquisition Act and the decision of the Hon\u201fble Apex Court in the case of Kunwar Pal Singh Vs State of U.P., reported in (2007)5 SCC 85, and other cases that the award is to be made within two years from the last mode of declaration of award under section 6(2) of the Act. \n\n6. They submit that the last mode of declaration of award was made on 30.3.2007, with its local publication. The award made on 1.4.2009 is after a lapse of 2 years. The appellants submit that the aforesaid facts would clearly show that the award has not been prepared within two years and the entire land acquisition proceedings had lapsed. In support of their submissions, the appellants have relied upon decisions in the case of Kunwar Pal Singh (supra), Ashok Kumar & Ors Vs State of Haryana & anr, reported in (2007)3 SCC 470 and Mohan & anr Vs State of Maharashtra & Ors, reported in 2007(2) PLJR 163 SC.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-12", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "7. The appellants also submit that no possession worth the name under section 17(1) of the Act or 80% compensation was paid which was necessary for taking possession under section 17(1) of the Act. The appellants state that the learned Single Judge while hearing the writ petition have passed the interim order on 25.7.2009, restraining the respondents from dispossessing the petitioners. However, in complete violation of the order, the respondents have claimed to have taken possession on 29.7.2009 on paper, though in fact as per the appellants, the possession is still with them. They state that so called taking-over of possession on 29.7.2009 would not be valid possession in the eyes of law. \n\n8. The appellants next contended that prior approval of the government was taken by the Collector before making an award, hence the so-called award is illegal and without jurisdiction and no-nest in the eyes of law. In support of their submissions, the appellants have relied upon the decision in the case of Krishnandan Prasad Singh Vs State of Bihar & anr, reported in 2001(3) PLJR 50. \n\n9. The appellants lastly contend that the impugned action was visited with malafide as the respondents could have utilized over 12 acres of land of Kaisre Hind lying in the near vicinity. They submit that the factum of extremely low valuation has not been even touched by the learned Single Judge.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-13", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "10. Mr. Lalit Kishore, learned Addl. Advocate General No.1, submits that the Bagha Sub-Division in West Champaran is very vulnerably situated, surrounded partially by forests which provides easy hide-out to the miscreants both in the forest and across the Nepal. In order to meet such an alarming situation, the Bagha Sub-Division has been upgraded into a police district with posting of an officer of the rank of Superintendent of Police. He submits that maintenance of public order is a constitutional obligation of the government as provided under Entry 1 and 2 of List II, of the 7th Schedule of Constitution of India. He submits that the government after considering the requisition of Superintendent of Police, Bagha, the recommendation of the Collector, West Champaran, the Commissioner, Tirhut Division, the Director, Land Acquisition, and on being satisfied approved acquisition under section 17(4) of the Land Acquisition Act, dispensing requirement of giving notice under section 5-A of the Act. Similarly after considering the proposal of various authorities, the government granted approval to take possession under section 17(1) of the Act. He submits that the acquisition under section 17(1) and 17(4) of the Act is a matter of subjective satisfaction and it is better left to the discretion of the government. It is merely to be seen whether all materials were placed before the government or not and the decisions are not malafide and based on no material. In support of his submission, the State has relied upon decisions in the case of First Land Acquisition Collector & Ors Vs Nirodhi Prakash Gangoli & anr, reported in (2002)4 SCC 160. He submits that the award under section 11 was made on 31.3.2009, within two years of declaration under section 6 of the Act. According to him, the award was filed in the", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-14", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "of declaration under section 6 of the Act. According to him, the award was filed in the Collector\u201fs office on 1.4.2009, and the notice for payment under section 12(2) of the Act was made on 25.5.2009 and 16.6.2009, and thereafter symbolic possession was taken on 29.7.2009. He thus submits that section 3A of Section 17, which requires tendering of payment of 80% of the compensation for land acquired, was duly complied with. He lastly submits that many land owners have already received their compensation. He submits that the action of the government is not accentuated with malafide, but rather steps for acquisition has been taken in great public interest in view of the anarchy and turbulent situation prevalent in Bagha Sub Division.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-15", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "11. The appellants in reply submitted that mere saying that there was urgency would not be sufficient in absence of valid ground for the same. The police line was sought to be constructed only 1 \u00bd K.M. away from town which would cause inconvenience to the residents particularly the ladies. He submits that noting of the Deputy Secretary or the Director, Land Acquisition, do not refer to section 17(4) or dispensation of enquiry under section 5A of the Act. This shows that the Hon\u201fble Minister was not apprised of all necessary and relevant facts and there has been no proper application of mind. The so-called possession was taken before handing over the award money and even in case where possession is taken under section 17(1), the award has to be prepared within two years. \n\n12. We have heard learned counsel for the parties, and perused the records of land acquisition proceeding which had also been perused and referred in detail by learned Single Judge in the impugned order. One of the issues raised by the appellants is that the award is barred by section 11-A of the Act. The provision is quoted hereinblow:\n \"11-A. Period within which an award shall be made- (i) The Collector shall make an award under Section 11 within a period of two years from the date of the publication of the declaration and if no award is made within that period, the entire proceedings for the acquisition of the land shall lapse. \n\n Provided that in a case where the said declaration has been published before the commencement of the Land Acquisition (Amendment) Act, 1984, the award shall be made within a period of two years from such commencement\".", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-16", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "13. The appellants have asserted that the last mode of declaration under section 6 was made on 30.3.2007, and award was made on 1.4.2009 beyond the period of two years and as such the entire land acquisition proceeding lapsed. The appellants in support of their submissions have referred to decisions reported in Kunwar Pal Singh (supra), Ashok Kumar (supra), Mohan (supra), Eugenio Misquita & Ors Vs State of Goa & Ors reported in (1997) 8 SCC 47. \n\n14. The case reported in Mohan &another (supra) is on different issues, wherein the Hon\u201fble Apex Court was considering the jurisdiction of the District Judge to hear appeal against order passed by the Land Acquisition Judge/ Subordinate Judge in matters of compensation under the Act. In the other decisions relied upon by the appellants, the issue under section 17(1) and 17(4) was not under consideration vis-\u00e0-vis under section 11A of the Act. It is being respectfully stated that in the above mentioned cases, the Apex Court was not considering the land acquired under emergent provisions. The Apex Court in the circumstances held that the award has to be made within two years of publication of declaration under section 6 of the Act in view of Section 11-A.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-17", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "15. On the other hand, the Hon\u201fble Apex Court in the case of Awadh Bihari Yadav and Ors Vs State of Bihar & Ors heard analogous with Sita Ram Gope & Ors Vs State of U.P. & Ors, reported in (1995) 6 SCC 31 held that section 11-A does not apply to cases of acquisition under section 17. In view of the decisions of Hon\u201fble Apex Court on the point, we hold that the limitation under section 11A would not come into play where acquisition is made under section 17(1) and 17(4) of the Land Acquisition Act. Even assuming that the award was made after two years, the same would not lapse in view of pronouncement of the Hon\u201fble Apex Court referred to above in the case of Awadh Bihari Yadav (supra).", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-18", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "16. The contention of the appellants is that there was no legal and valid ground for invoking section 17(1) and 17(4) of the Act and dispensation of provisions under section 5A of the Land Acquisition Act. There was no extra-ordinary urgency for invoking section 17(4), as the proceeding was initiated in the year 2000-01, and notification under section 4 and declaration under section 6 were made in the year 2007. It was mandatory that the State Government was to further consider the need for dispensing with section 5-A, in spite of existence of unforeseen emergency. The appellants have placed strong reliance in case of Mukesh Hans (supra). In the aforesaid case, the Hon\u201fble Apex Court observed that right to representations and hearing contemplated under section 5A are very valuable right of a person whose property is sought to be acquired and he should have an appropriate opportunity for persuading the authorities that the acquisition of his property should not be made. The Hon\u201fble Court further observed that sub-section (4) of Section 17 requires the appropriate Government to further consider the need of dispensing with section 5-A of enquiry inspite of existence of unforeseen emergency. The appellants have also referred to the case of Anand Singh (supra). In the aforesaid case, the Hon\u201fble Apex Court observed that urgency provision of section 17 to eliminate enquiry under section 5-A should be invoked only in cases of real emergency. The Government should apply its mind to the factum of urgency and should be able to justify that urgency is based on consideration, which has a reasonable nexus with the purpose for which it is to be exercised. Mere use of phraseology of urgency in notification is not enough. The Hon\u201fble Apex Court further observed that pre-notification and post- notification delay would have material bearing on the issues, particularly when", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-19", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "further observed that pre-notification and post- notification delay would have material bearing on the issues, particularly when no material justifies invoking urgency provision necessitating elimination of an enquiry by the government. In case of Babu Ram Vs State of Haryana, reported in (2009) X SCC 115, the Hon\u201fble Apex Court exercised that great care have to be taken by the authority before resorting to section 17(4) of the Act that there was an urgency of such nature which could brook no delay whatsoever.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-20", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "17. It would appear that the Superintendent of Police, Bagha, made a revised requisition dated 24.2.2004, requesting the Collector, West Champaran, to acquire 45 acres of land in village Pokharbhinda and Dimwalia, detailed in Appendix I of the requisition. A further request was made to dispense with enquiry under section 5-A of the Act vide Appendix II and to obtain approval of the State Government under section 17(1) of the Act for immediate taking of suitable possession of lands to establish a police line to check unruly situation prevailing in the area. The requisition was considered by the Land Acquisition Officer, West Champaran, on 3.9.2006, and by the Collector, West Champaran, on 27.9.2006, while approving the draft of the notification under section 4 and declaration under section 6. The Draft notification was forwarded to the Commissioner on 4.11.2006, who after considering the same forwarded it to the Director, Land Acquisition, under letter no.4999, dated 13.11.2006, for obtaining the appropriate approval of the Government. The Minister before whom all the material facts were placed, approved the notification/declaration. Similarly, on the request of the Collector, West Champaran, contained in letter no.48, dated 25.4.2007 (at page 51/C of file), as well as the Commissioner dated 20.6.2007, the government granted permission to take possession of the land. In the case of First Land Acquisition Collector (supra), the Hon\u201fble Apex Court observed that acquisition under section 17(1) and 17(4) is a matter of subjective satisfaction and the matter regarding urgency is to be left to the discretion of the government and it is only to be seen whether all materials were placed before the government. In case of Anand Singh", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-21", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "is only to be seen whether all materials were placed before the government. In case of Anand Singh (supra), the Hon\u201fble Apex Court was examining acquisition for Housing colony. In the instant case, it is respectfully stated that the acquisition was being made for establishing a police line for combating anarchy perpetrated by different gangs operating under the cover of forest as well as recluse to the bordering Nepal. The emergent provision was invoked for the security and safety of the people of the area and the State.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-22", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "18. All such materials beginning from requisition made by the Superintendent of Police, Bagha to the recommendation of the Commissioner, Tirhut Division, and Director, Land Acquisition, were placed before the government which approved the same. In view of the emergent situation arising in Bagha, invoking of section 17(4) in the facts and circumstances of the case was not unjustified. \n\n19. The appellants also contended that neither possession was taken pursuant to order under section 17(4), nor 80% compensation amount was paid. It would appear from Annexure-5 series that notice for payment of compensation was tendered on 8.6.2009 & 16.6.2009, under section 12(2) calling upon the appellants and others to receive compensation amount and only thereafter symbolic possession was taken after following due procedure. Thus, the argument of the appellants that 80% of the compensation amount was not tendered, prior to taking possession is unfounded. On the other hand, it was contended by the learned Addl. Advocate General No.1 that many land owners whose lands were acquired had come forward and received compensation. \n\n20. The appellants have contended that the government could easily have taken over 12 acres of Kaisre Hind land, situated in the nearby vicinity. What land would be suitable for establishing a police line is to be best left on the administrative and executive side, as they are the best person to judge the suitability, until it is shown that the action is perverse and arbitrary. \n\n21. The appellants next contended that the acquisition is manifest with malafide as it was done at the behest of a powerful local leader. It is apparent that the lands of many persons have been acquired and it has not been specifically contended whether the local leader bore malice against all the land holders and the accompanying cause for holding such malice.", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "c542667f83fa-23", "Titles": "Mt.Prabhawati & Ors vs The State Of Bihar & Ors on 24 November, 2011", "text": "The appellants have also contended that the factum of compensation has not been considered by the authorities as well as by the learned Single Judge. This court is of the view that the government should reconsider the aspect of quantum of compensation with interest as lands which in case of majority of the land-holders, can be the only source of their livelihood. The State Government would also reconsider the case of quantum of compensation with interest as well of those land-holders who have already received the award amount. \n\n 21. With the aforesaid observations and directions, these appeals are dismissed. \n\n\n (S.P. Singh,J) I agree S.K. Katriar,J (S.K. Katriar,J) KHAN", "source": "https://indiankanoon.org/doc/814453/"}
+{"id": "a5ef268abef8-0", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "IN THE HIGH COURT OF JUDICATURE AT PATNA\n                                      Letters Patent Appeal No.2 of 2014\n                                                       In\n                                 Civil Writ Jurisdiction Case No. 4270 of 2006\n                  ======================================================\n Md. Nizamuddin, Advocate, Ex - Government Pleader, Patna, son of Late Moizul Haque, Resident of Sharf Apartment, Flat No. 105, Frasar Road, Police Station - Gandhi Maidan, District - Patna .... .... Appellant Versus\n 1. The State of Bihar. \n\n 2. The Secretary, Law Deptt., Govt. of Bihar, Patna. \n\n 3. The Secretary, Finance Deptt., Govt. Of Bihar, Patna. \n\n 4. The Collector, Patna. \n\n .... .... Respondents ====================================================== Appearance :                  For the Appellant        :   Mr. Nawal Kishore Singh,\n                                                          with\n                                                Mr. Binay Kumar &\n                                                Mr. Manoj Madhav, Advocates", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-1", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "For the Respondent/s     :\n                                       Mr. Lalit Kishore, PAAG &\n                                       Mr. Ajay Behari Sinha, S.C.-19\n                                                   with\n                                       Mr. Suryakant Kumar,\n                                       A.C. to S.C.-19\n ====================================================== CORAM: HONOURABLE MR. JUSTICE I. A. ANSARI and HONOURABLE MR. JUSTICE SAMARENDRA PRATAP SINGH CAV ORDER (Per: HONOURABLE MR. JUSTICE I. A. ANSARI) 10 15-05-2014 This Letters Patent Appeal has arisen out of the judgment and order, dated 11.09.2013, passed in C.W.J.C.No.4270 of 2006, whereby the writ petitioner- appellant's application, made under Article 226 of the Constitution of India, seeking issuance of appropriate writ or writs commanding the respondents to pay the admitted dues/fees of the petitioner-appellant for the work, which the petitioner- <span class=\"hidden_text\" id=\"span_1\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> appellant had done, in his capacity as the then Government Pleader, Civil Court, Patna, stands rejected. \n\n 2. We have heard Mr. Nawal Kishore Singh, learned counsel for the appellant, and Mr. Lalit Kishore, learned Principal Additional Advocate General, appearing for the State.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-2", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "3. The facts, which have given rise to the present appeal, may, in brief, be set out as under:\n (i) The appellant herein, as petitioner, in CWJC No.4270 of 2006, was appointed, on 23.08.1996, as a Government Pleader for the Civil Court, Patna, and conducted cases, on behalf of the State Government, in the civil courts accordingly. When the bills, which the petitioner-appellant had raised and submitted, for payment, to the Collector, Patna, were turned down by the respondents, the appellant came to this Court, as a petitioner, with an application, made under Article 226 of the Constitution of India, seeking, as already indicated above, issuance of writ or writs commanding the respondents to make payment of the appellant's dues/fees. \n\n (ii) The respondents opposed the writ petition. While, however, opposing the writ petition, it was not the case of the respondents that the appellant had not discharged his duties and performed his functions as the Government Pleader in the cases, <span class=\"hidden_text\" id=\"span_3\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> wherein bills were raised by the appellant. The dispute was, in fact, confined to the question as to what would be the basis for payment of the fees of a Government Pleader at Patna.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-3", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "(iii) It has been the contention of the appellant that he ought to be paid his fees in terms of the provisions of Rule 426 of the Civil Court Rules of the High Court of Judicature (hereinafter referred to as \"the Rules\"); whereas the respondents' contention has been that the payment to the Government Pleader depends on the conditions of appointment of an Advocate, as a Government Pleader, read with the fees, which a Government Pleader is entitled to receive in terms of Rule 118 embodied in the Bihar Practice and Procedure Manual, 1958. \n\n (iv) As the learned single Judge could not bring the parties concerned to a reconciliation, it was observed in the order, dated 11.09.2013, aforementioned, that since there was a dispute as to what rates would govern the claim of the fees of a Government Pleader, the dispute raised by the writ petitioner involved disputed questions of fact, which required taking of evidence, both oral as well as documentary, and, hence, it would be civil court of competent jurisdiction, which can declare the law applicable to the case and adjudicate upon the disputed questions. With the grounds, as indicated hereinbefore, the writ <span class=\"hidden_text\" id=\"span_5\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> petition has been dismissed on 11.09.2013. Aggrieved by the dismissal of his writ petition, the petitioner is, in appeal, before us, as the appellant.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-4", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "4. Resisting the writ petition, at the very threshold, Mr. Lalit Kishore, learned Principal Additional Advocate General, has submitted that this appeal is misconceived inasmuch as the exercise of power by a High Court, under Article 226 of the Constitution of India, is discretionary in nature and if a single Judge declines to exercise jurisdiction under Article 226 of the Constitution on the ground that the writ petition involves disputed question of facts, a letters patent appeal may not, ordinarily, be entertained inasmuch a writ appeal is really not a statutory appeal preferred against the judgment and order of an inferior to the superior court; such an appeal is, rather, an intra- court appeal and, in such an appeal, a Division Bench would not interfere with an order of single Bench unless there is a patent error or the judgment is against established or settled principle of law. This apart, points out by the learned Principal Additional Advocate General, in a given case, if two views are possible and a view, which is reasonable and logical, has been taken by a single Judge, the other view would not be adopted by the Division Bench and it is the view, taken by a single Judge, which <span class=\"hidden_text\" id=\"span_7\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> should, normally, be allowed to prevail. It is the contention of the learned Principal Additional Advocate General that since the writ petition has been dismissed on the ground that the writ petition involves disputed question of facts and, therefore, a writ proceeding is not an appropriate proceeding, this issue may not be overridden in appeal.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-5", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "5. We are wholly in agreement with the principle governing the ambit of power exercisable in Letters Patent Appeal and reiterate that a writ appeal is really not a statutory appeal preferred against the judgment and order of an inferior to the superior Court. An intra-court appeal in a High Court, from one Court to another, is really an appeal from one Bench to another Bench and it is for this reason that a writ cannot be issued by one Bench of the High Court to another Bench of the High Court. \n\n 6. Thus, unlike an appeal, in general, a writ appeal is an appeal on principle and, that is why, unlike an appeal, in an ordinary sense, such as, a criminal appeal, where the whole evidence on record is examined anew by the appellate Court, what is really examined, in a writ appeal, is the legality and validity of the judgment and/or order of the single Judge and it can be set aside or should be set aside only when there is a patent <span class=\"hidden_text\" id=\"span_9\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> error or an error on the face of the record or the judgment is against the established or settled principle of law and/or the findings reached are wholly against the materials on record or without considering any relevant material on record. If two views are possible and a view, which is reasonable and logical, has been taken by a single Judge, the other view--howsoever appealing such a view may be to the Division Bench--would not normally be allowed to supersede the view taken by a single Bench. In other words, the view, taken by the single Judge, should, ordinarily, be allowed to prevail.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-6", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "7. Hence, the judgment of the learned Single Judge, impugned in the present appeal, cannot be completely ignored and this Court has to consider the judgment and order in the proper perspective and if this Bench, sitting as an appellate Bench, is of the view that the decision has been arrived at by the learned Single Judge without any material error of fact or law, then, the judgment, in question, should be allowed to prevail. \n\n 8. In the case at hand, however, we find that the dispute is essentially of interpretation of the law inasmuch as there was no dispute that the appellant had performed the functions of the Government Pleader in the cases, wherein he had raised his bills. The dispute was with regard to the question as to what would be <span class=\"hidden_text\" id=\"span_11\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> the legal basis for payment of the fees of a Government Pleader, in Civil Courts, including the Civil Court, at Patna. \n\n 9. Since the basic question, which arose in the writ petition, was pure question of law, we are of the view that merely because a question has been reached as to what would be the appropriate law in a given set of facts, it cannot be held that such a question shall be regarded as a disputed question of fact; rather, as indicated hereinbefore, what was really in dispute was the correct application of law to the given set of facts. \n\n 10. We may, however, hasten to point out that the question whether a writ petition at all lies if the undisputed bill of a Government Pleader or an Advocate is not paid has been answered in the affirmative in the writ petition.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-7", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "11. Even the proposition that admitted bills of a Government Pleader must be directed, in a writ petition, made under Article 226 of the Constitution, to be paid, has been seriously resisted by the learned Principal Additional Advocate General by referring to, and relying upon, the decision of the Supreme Court in Improvement Trust v. S.Tejinder Singh Gujral [1995 Supp(4) SCC 577]. \n\n 12. Coming to the merit of the present appeal, it is important to bear in mind that Mr. Nawal Kishore Singh, learned <span class=\"hidden_text\" id=\"span_13\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> counsel, appearing on behalf of the appellant, has submitted that it has been the practice that the fee of the Government Pleader, conducting cases, in the Civil Courts, at Patna, is paid in terms of Rule 426 of the Rules and since, in the past, there had been instances of making of payment of the bills of Government Pleader, in the Civil Court, at Patna, on the basis of Rule 426 of the Rules, the learned single Judge ought not to have dismissed the writ petition; rather, the writ petition ought to have been allowed, with direction to make payment, as had been sought for by the appellant herein, in his writ petition, as writ petitioner, particularly, when the learned single Judge has taken the view that Government can be directed by High Court, by invoking extra-ordinary jurisdiction of the High Court, under Article 226 of the Constitution of India, to make payment of the admitted bill of an Advocate. \n\n 13. Let us, now, determine the merits of the rival submissions made before us.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-8", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "14. We notice, as has been pointed out by the learned Principal Additional Advocate General, that the appellant was appointed as a Government Pleader, vide letter, dated 23.08.1996, issued under the signature of the Secretary to the Government of Bihar, Law Department. This appointment letter <span class=\"hidden_text\" id=\"span_15\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> shows, as has rightly been pointed out by the learned Principal Additional Advocate General, that the letter of appointment stated to the effect that the appointment had been made for a period of 3 (three) years on retainership fees of Rs.250/- and, apart from retainership fees of Rs.250/-, the appellant, as Government Pleader, would receive professional fees in terms of Bihar Practice and Procedure Manual, 1958. \n\n 15. It is also not in dispute that by various Circulars, issued from time to time, the retainership fee as well as daily fees for appearance of a Government Pleader, in the districts of Bihar, has been enhanced from time to time by the State Government. Some of the fee enhancements, which form part of the record of the writ petition as annexures, may, now, be noticed.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-9", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "16. By Circular/Letter, dated 01.10.1996, issued under the signature of the Secretary to the Government of Bihar, Law (Judicial) Department, the retainership fee of the Government Pleaders was enhanced to Rs.300/- from earlier sum of Rs.250/- and, accordingly, the daily fee, for appearance, was also raised to Rs.90/- from Rs.60/-. This was followed by another Circular/Letter, dated 02.09.2000, whereunder the retainership fee for the Government Pleader was raised to Rs.500/- and the daily fee, for appearance, was accordingly raised to Rs.150/-. <span class=\"hidden_text\" id=\"span_17\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Thereafter, vide Circular/Letter, dated 14.08.2008, the retainership fee was raised to Rs.1,500/- and the daily fee, for appearance, was raised to Rs.300/-. By yet another Circular/Letter, dated 2.3.2010, the retainership fee was enhanced to Rs.3,000/- and the daily fees, for appearance, was increased to Rs.500/-. \n\n 17. Thus, various Circulars/Letters, which have been issued by the State Government from time to time, indicate increase in the retainership fee and also in the daily fee for appearance of the Government Pleader at the district level. In this regard, no distinction has been made between the Government Pleader, appointed for the Civil Court, at Patna, and a Government Pleader appointed for the Civil Courts in the other districts of the State of Bihar.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-10", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "18. The terms and conditions of appointment of the present appellant, vide appointment letter, dated 23.08.1996, aforementioned, clearly show that the contract/engagement of the appellant, as Government Pleader, was to be governed by terms of the retainership fee and the daily fee, which may be fixed by the Government, and also by what is incorporated in Bihar Practice and Procedure Manual, 1958. The acceptance of appointment, as a Government Pleader, by an Advocate binds <span class=\"hidden_text\" id=\"span_19\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> him by the terms of his appointment, which includes his retainership fee as well as his daily fee. \n\n 19. The appointment of the appellant, therefore, in the present case, would be governed by the terms and conditions of his appointment as a Government Pleader and the terms and conditions would include application of Bihar Practice and Procedure Manual. Conversely speaking, the appellant cannot claim retainership fee and/or daily fee contrary to, or inconsistent with, the terms and conditions embodied in the letter of appointment, dated 23.08.1996, aforementioned, unless the terms and conditions of his appointment are impugned by the appellant, which the appellant has, admittedly, not impugned. The respondents, therefore, cannot, in the light of the terms and conditions of appointment, be directed to pay to the appellant retainership fee and/or daily fee contrary to the terms and conditions incorporated in the appellant's letter of appointment.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-11", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "20. The appellant's letter of appointment, dated 23.08.1996, aforementioned clearly shows that his fees would be governed, apart from the terms of appointment, by the provisions of Bihar Practice and Procedure Manual, 1958, and it is Rule 118 of Bihar Practice and Procedure Manual, which, according to the respondents, is applicable to the present case. Rule 118 of Bihar <span class=\"hidden_text\" id=\"span_21\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Practice and Procedure Manual is, therefore, reproduced below :\n\n \"118. Scale of fees in Legal Remembrancer's Office.--The following scale of fees has been adopted in the office of the Legal Remembrancer:--\n                                                            Rs.        Rs.\n                              Drawing plaints and written\n                              statements and memoranda\n                              of appeals.                   5     to   85\n                              Setting appeals ...      ...      5     to   85\n                              Do-petitions    ...      ...      5     to   85\n                              Opinion         ...      ...      5     to   85\n                              Compromise ...           ...      20 to      85\n                              Consultation ...        ...       20 to      85\n                              Motion ...        ...      ...       ...        85\"\n\n 21. There is no dispute before us that Rule 118 embodies the scale of fee payable to a Government Pleader by the office of the Legal Remembrancer. The payment, which is required to be made in terms of Rule 118, is in addition to the contracted fees, which a Government Pleader is entitled to receive in terms of his letter of appointment.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-12", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "22. Let us, now, consider Rule 426 of the Rules. This Rule reads as under :\n \"426. (i) The advocates' and pleaders' fees shall be in the discretion of the Court. \n\n The following scale of advocates' and pleaders' fees shall ordinarily be allowed to the successful party--\n _____________________________________ Amount or value of the claim fee decreed or dismissed _____________________________________ Not exceeding Rs.5,000 ...5 per cent to 10 per cent. \n\n Exceeding Rs.5,000 but not exceeding Rs.20,000 ...5 per cent to 10 per cent on Rs.5,000 and 2 per cent to 3 per cent on the balance. \n\n Exceeding Rs.20,000 but not exceeding Rs.50,000 ... As above on Rs.20,000/-\n and 1 per cent to 2 per cent on the balance.\n                        Exceeding Rs.50,000        ... As above on Rs.50,000\n                                                     and \u00bd per cent, to 1 per\n                                                     on       the      balance\"\n _____________________________________________ Provided that the minimum fee to be allowed shall be Rs.10 in contested cases and Rs.5 in uncontested cases. For the purpose of this proviso, suits tried together may be regarded as one suit, unless the Court otherwise directs.\"\n 23. While considering the applicability of Rule 426 of the Rules, it needs to be noted that this Rule has been framed by Patna High Court in exercise of its rule-making power under Section 122 of the Code of Civil Procedure.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-13", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "24. What is, however, of immense importance to note, while analyzing the intent and import of Rule 426, is that Rule 426 makes it clear that the scale of fees, indicated therein, shall, ordinarily, be allowed to the successful party. The use of expression \"shall, ordinarily, be allowed to the successful party\" is in tune with Section 35 of the Code of Civil Procedure, which embodies the provisions with regard to payment of cost. \n\n 25. It is imperative, therefore, that Section 35 of the Code <span class=\"hidden_text\" id=\"span_25\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> of Civil Procedure be, now, taken note of. Section 35 of the Code of Civil Procedure, which embodies the provision of cost, reads as under :\n                                 \"35.      Costs--(1)       Subject     to    such\n                            conditions      and     limitations   as   may    be\n prescribed, and to the provisions of any law for the time being in force, the costs of and incident to all suits shall be in the discretion of the Court, and the Court shall have full power to determine by whom or out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid. The fact that the Court has no jurisdiction to try the suit shall be no bar to the exercise of such powers. \n\n (2) Where the Court directs that any costs shall not follow the event, the Court shall state its reasons in writing.\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-14", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "26. From a bare reading, as a whole, of the provisions, embodied in Section 35 of the Code of Civil Procedure, what clearly transpires is that ordinarily, a Court shall allow cost and if the cost is not allowed, the Court shall assign its reasons in writing. In other words, cost shall be allowed, ordinarily, to the successful party in a civil court and it is, therefore, imperative that when a civil court does not allow cost, it assigns its reasons, <span class=\"hidden_text\" id=\"span_27\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> in writing, therefor. \n\n 27. In consonance with the provisions of Section 35 of the Code of Civil Procedure, Rule 426 of the Rules, too, lays down that ordinarily, successful party shall be given the decree for the Advocates' fees and the scale of the Advocates' fees shall be what has been mentioned in Rule 426 of the Rules. \n\n 28. Logically interpreted, Rule 426 of the Rules conveys that while granting decree, the Court shall, ordinarily, allow to the successful party decree for the Advocate's fees, in the form of cost, on the scale, which has been mentioned in Rule 426. \n\n 29. The cost, which is given by a civil court, includes the fees of the Advocate and, therefore, the fee is allowed to be incorporated in the decree. More explicitly speaking, a decree for the Advocates' fee is a part of the cost payable to a decree-holder by the judgment-debtor.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-15", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "30. Hence, if a suit, filed against the State, is decided in favour of the plaintiff, the plaintiff will receive Advocates' fee in terms of Rule 426. If the Government wins a suit, the court may allow cost including the fee of the Government Advocate. The fee to be included, as a cost of an Advocate, in a decree, will include not only a Government Pleader, but also an Advocate specially engaged. While drawing the decree for the Advocates' <span class=\"hidden_text\" id=\"span_29\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> fees, the civil court is required to bear in mind the fees, which may have been fixed by the Government for its appointed Advocates as Government Pleaders. \n\n 31. There is no dispute before us that the Government Pleaders, all over the State, have been receiving payments in terms of their letters of appointment of the kind, which the petitioner-appellant holds, coupled with the provisions contained in the Bihar Practice and Procedure Manual, 1958. It is only in the Civil Court, at Patna, that the controversy has arisen with regard to the fee of a Government Pleader inasmuch as Government Pleader, in the Civil Courts, at Patna, had, in some cases, in the past, received fees in terms of the provisions of Rule 426 of the Rules.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-16", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "32. In the light of the discussions, which we have held above, there can be no escape from the conclusion, and we do conclude, that the fee payable to a Government Pleader, in the State of Bihar, shall be governed by the terms of his appointment and also by Rule 118 of the Bihar Practice and Procedure Manual, 1958, and that Rule 426 of the Rules deals with the power of the courts to pay fee of a Government Pleader and empowers the civil courts to include in a decree, while allowing a decree, Government Pleader's fee, as cost, and if question arises <span class=\"hidden_text\" id=\"span_31\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> as to what would be the fee of a Government Pleader, the civil court is required to bear in mind the terms and conditions of the appointment of the Government Pleader. Merely because a Government Pleader had received, in the past, fee by applying Rule 426 of the Rules, would not, in the light of the discussions held above, permit a Court to issue a direction to make payment to the Government Pleader, in the Civil Court, at Patna, when such a direction would be palpably against the law governing the rights/obligations of the parties to the writ petition.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-17", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "33. Coming to the question as to whether a writ petition, in the facts and circumstances of the present case, was entertainable, we may point out that Improvement Trust v. S.Tejinder Singh Gujral (supra) is case, wherein the High Court had allowed the writ petition filed by an Advocate for recovery of his professional fees from his client. The Supreme Court, in emphatical terms, laid down, in Improvement Trust v. S. Tejinder Singh Gujral (supra), that no writ petition can lie for recovery of an amount under a contract and the High Court was clearly wrong in allowing the petition. The Supreme Court further pointed out, in Improvement Trust v. S.Tejinder Singh Gujral (supra), that there is no separate law for Advocates, and when they seek recovery of an amount under a contract. <span class=\"hidden_text\" id=\"span_33\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span>\n\n 34. We would come to the question as to whether a contractual amount, if admitted, has to be, in every case, directed to be paid in a writ petition made under Article 226 of the Constitution of India a little later; suffice it, however, to point out that in the case at hand, the dispute was with regard to the application of the appropriate provisions of law. The willingness of the respondents to make payment, in terms of the letter of appointment of the appellant, as a Government Pleader read with Bihar Practice and Procedure Manual has never been in dispute.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-18", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "35. We are, therefore, clearly of the view that the writ petition, in the present case, was entertainable. What was in dispute was the determination of the appropriate provisions of law applicable to the facts of the present case and we have, therefore, decided per force the question of law with the conclusions as have been reached above. \n\n 36. Reverting to the question as to whether a contractual amount, if admitted, has to be, in every case, treated as recoverable by filing a writ petition under Article 226 of the Constitution of India, it may be pointed out that this question brings us to yet another vital question and the question is: whether every breach of governmental obligation to pay its dues, under a contract, falls outside the purview of Article 226 ? <span class=\"hidden_text\" id=\"span_35\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span>", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-19", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "37. To put a little differently, the question is: Will the constitutional remedy of Article 226 never be available against a State even if the State refuses to carry out its contractual obligations with ulterior motives, mala fide, irrationally, arbitrarily, unreasonably, unfairly, whimsically or when the State, demonstratively discriminates, while making payment of its dues? Shall the writ court withdraw its hand resignedly and helplessly by saying that a writ of mandamus is a public law remedy and no writ of mandamus would be issued to any State directing it not to discriminate or act irrationally, arbitrarily, unreasonably, unfairly, whimsically, mala fide or with ulterior motives, while refusing or omitting to make payment of its dues arising out of contracts? Can a breach of contract ever give rise to any constitutional obligation of the State to make payment of its dues? Made it clear a Three Judge Bench, in Radhakrishna Agarwal v. State of Bihar, reported in MANU/SC/0053/1977:[1977]3 SCR 249, that every breach of contract by the State or by its officers is not a breach of public duty, for, such a proposition would make every breach of contract by the State or its agents subject of interference by the High Court in its extra-ordinary jurisdiction under Article 226 and, hence, remedy of a writ of mandamus cannot be had for <span class=\"hidden_text\" id=\"span_37\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> every breach of contract. The relevant observations made, in this regard, in Radhakrishna Agarwal (supra) run thus:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-20", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "\"Learned Counsel contends that in the cases before us breaches of public duty are involved. The submission made before us is that, whenever a State or its agents or officers deal with the citizen, either when making a transaction or, after making it, acting in exercise of powers under the terms of contract between the parties, there is a dealing between the State and the citizen which involves performance of \"certain legal and public duties\". If we were to accept this very wide proposition, every case of a breach of contract by the State or its agents or officers would call for interference under Article 226 of the Constitution. We do not consider this to be a sound proposition at all.\"\n 38. What is, now, of immense importance to note is that the case of Radhakrishna Agarwal (supra) was a case of 'pure and simple' breach of contract. In such cases of breach, remedy of payment of damages is available to the person, who suffers alleged breach of contract. It is in such fact situation that the law with regard to invoking of the High Court's extraordinary jurisdiction, under Article 226 was discussed in Radhakrishna Agarwal (supra). The law, laid down in Radhakrishna Agarwal (supra) cannot, therefore, be extended to cases, which are not <span class=\"hidden_text\" id=\"span_39\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> cases of mere breach of contract, but much more than that. This is clear from the fact that in paragraph 2 of Radhakrishna Agarwal (supra),the Supreme Court observed:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-21", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "\"...Primarily, the case of the petitioners is that of a breach of contract for which the State would be liable, ordinarily, to pay damages if it had broken it.\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-22", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "39. What emerges from the above discussion is that the remedy, available under Article 226, is an extraordinary remedy and is not intended for the purpose of declaring private rights of the parties. For the purpose of enforcing contractual rights and obligations, the remedy of filing of a civil suit is available to the aggrieved party and, hence, a High Court will not exercise its prerogative writ jurisdiction to enforce such contractual rights or obligations. A writ or direction in the nature of mandamus would not, therefore, lie to enforce private rights or contractual rights or obligations or even to avoid such obligations or rights. Contracts, which are non-statutory, and the rights, which are purely contractual and governed only by the terms of the contract, cannot be enforced by any writ or order under Article 226 of the Constitution of India. There is formidable array of authorities, which may be referred to in this regard. See Lekhraj Sathramdas Lalvani v. N.M. Shah, Deputy Custodian-Cum- <span class=\"hidden_text\" id=\"span_41\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Managing Officer, Bombay MANU/SC/0010/1965: [1966]1SCR120; Radhakrishna Agarwal v. State of Bihar (supra); Divisional Forest Officerv. Biswanath Tea Co. Ltd. MANU/SC/0045/1981 : [1981]3SCR662 ; State of Haryana v. Jage Ram AIR 1980 SC 2018; Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. v. Sipahi Singh MANU/SC/0060/1977: [1978]1SCR 375 ; Bareilly Development Authority v. Ajai Pal Singh MANU/SC/0058/1989:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-23", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "Development Authority v. Ajai Pal Singh MANU/SC/0058/1989: [1989]1SCR743; Life Insurance Corporation of India v. Escorts Ltd. MANU/SC/0015/1985 : 1986(8)ECC189 ; and Kulchinder Singh and Ors. v. Hardayal Singh Brar and Ors. MANU/SC/0507/1976:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-24", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "(1976)IILLJ204SC.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-25", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "40. Before proceeding further, what may be noted is that a writ of mandamus is a public remedy and this remedy lies, when a public authority fails to perform the duty entrusted to it by law. In other words, a writ of mandamus is issued against a person, who has a legal duty to perform, but has failed or neglected to do so. Distinguishing a case, wherein a public duty of a State is sought to be enforced, and a case, wherein a contractual obligation of a State is sought to be enforced, Professor Wade, in his well-known treatise, 'Administrative <span class=\"hidden_text\" id=\"span_43\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Law', makes it clear that while a public duty is enforceable by the public law remedy of a writ of mandamus, a contractual duty is enforceable, as a matter of private law, through the avenues of civil courts. The observations made, in this regard, by Professor Wade read thus:\n \"..A distinction which needs to be clarified is that between public duties enforceable by mandamus, which are usually statutory and duties arising merely from contract. Contractual duties are enforceable as matters of private laws by the ordinary contractual remedies, such as damages, injunction, specific performance and declaration. They are not enforceable by mandamus, which in the first place is confined to public duties and secondly is not granted where there are other adequate remedies.\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-26", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "41. What, now, needs to be noted is that howsoever thin and subtle may be, there is, indeed, a real and definite line of demarcation not only between a public wrong and a private wrong, but also between a public law remedy and private law remedy. Article 226 is pre-eminently a public law remedy and is not, generally, available as a remedy against private wrongs. Resort to Article 226 can be had to enforce various rights of the public or to compel the public or statutory authorities to discharge their public duties and/or to act, in the realm of their <span class=\"hidden_text\" id=\"span_45\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> public function, within the bounds of law. The remedy under Article 226 can, no doubt, be availed of even against a private body or person; but the scope of the writ of mandamus is limited to enforcement of public duty. In minimum possible words, but with extreme exactitude, clarified the Supreme Court, in Binny Limited and Anr. v. V. Sadasivan and Ors. reported in MANU/SC/0470/2005 : (2005)IIILLJ738SC, the position of law, in this regard, in these words:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-27", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "\"29. Thus, it can be seen that a writ of mandamus or the remedy under Article 226 is pre- eminently a public law remedy and is not generally available as a remedy against private wrongs. It is used for enforcement of various rights of the public or to compel public/statutory authorities to discharge their duties and to act within their bounds. It may be used to do justice when there is wrongful exercise of power or a refusal to perform duties. This writ is admirably equipped to serve as a judicial control over administrative actions. This writ could also be issued against any private body or person, specially in view of the words used in Article 226 of the Constitution. However, the scope of mandamus is limited to enforcement of public duty. The scope of mandamus is determined by the nature of the duty to be enforced, rather than the identity of the authority against whom it is sought.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-28", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "If the private body is discharging a public function and the denial of any right is in connection with the public duty imposed on such body, the public law remedy can be enforced. The duty cast on the public body may be either statutory or otherwise and the source of such power is immaterial, but, nevertheless, there must be the public law element in such action.\"\n See also Kamala Kanta Kalita (Dr.) and Ors. v. Assam Cricket Association and Ors., reported in MANU/GH/0693/2006 : 2006 (1) GLT 528. \n\n\n 42. Thus, in the face of succinctly laid down position of law with regard to the issuance of a writ of mandamus under Article 226, what one has to bear in mind is that in a case of private wrong, in order to invoke the writ jurisdiction under Article 226, two conditions must be satisfied, namely-(i) the identity of the person, against whom the writ is sought, as a person or body, which is amenable to writ jurisdiction, and (ii) the nature of duty, which is sought to be enforced, is a public duty or has an element of public interest. In a given case, one may, perhaps, ignore the first prerequisite, namely, the identity of the person or body as a person or body amenable to writ jurisdiction, but the second prerequisite, as indicated <span class=\"hidden_text\" id=\"span_49\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> hereinbefore, cannot be ignored, for, in the absence of public interest or in the absence of breach of public duty or in the absence of any public wrong having been committed, no recourse to Article 226 is possible.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-29", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "43. What also needs to be cautiously noted is that a constitutional or statutory duty is a public duty and enforceable by a writ of mandamus. To put it differently, the rights and duties go hand-in-hand. When a right is given to a person by a State, the State casts upon itself a duty to enforce such a right. Logically, therefore, when a person is given fundamental right by the Constitution, a duty rests on the State to ensure that the person realizes his fundamental rights. In a given case, therefore, if a person, aggrieved by a breach of contract, shows that though the breach is in the realm of a contract, the duty, sought to be enforced, is a constitutional or statutory duty, the remedy of a writ of mandamus may not be refused, for, it is the constitutional obligation of the High Court, under Article 226, to enforce the constitutional and statutory duties of the State and its instrumentalities.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-30", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "44. The writ petition, which has given rise to the present appeal, essentially raises a demand for payment of dues and seeks <span class=\"hidden_text\" id=\"span_51\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> a writ, in the nature of mandamus, forcing the State to pay its dues. Apart from the fact that whether or not the present petitioner is entitled to receive the dues, as claimed, is in itself in dispute, the question raised is as to whether such a demand can be raised at all in a writ petition and be enforced by a writ to be issued in the nature of mandamus. Is it possible to recover unpaid dues, arising out of a contract, by invoking writ jurisdiction merely because of the fact that one of the parties to the contract is a State. That a writ petition, under Article 226, will not lie for mere recovery of an amount due and payable, under a contract, by the Government, is clear from the decision, in Improvement Trust, Roper v. S. Tejinder Singh Gujral and Ors. reported in 1995 Suppl. (4) SCC 577, wherein the Supreme Court has held, in no uncertain words, thus:\n No writ petition can lie for recovery of an amount under a contract. The High Court was clearly wrong in allowing and entertaining the writ petition.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-31", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "45. However, the principle that in an appropriate case, writ jurisdiction can be invoked even to enforce a contractual obligation of the State or its instrumentality was made clear by the Supreme Court, in K.N. Guruswamy v. State of Mysore MANU/SC/0006/1954: [1955]1 SCR 305, wherein the Supreme <span class=\"hidden_text\" id=\"span_53\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Court held that when a party, interested in a contract, claims that he has not received the same treatment and has not been given a chance as someone else, he is entitled to maintain a petition under Article 226.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-32", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "46. Close on the heels of the decision of the Supreme Court in K.N. Guruswamy (supra) is the decision, in DFO, South Kheri v. Ram Sanehi Singh, reported in MANU/SC/0450/1970: AIR 1973 SC 205. This was a case in which it was contended, on behalf of the appellant, before the Supreme Court, that since the dispute arose out of the terms of the contract and the DFO, under the terms of the contract, had the authority to modify any action taken by the subordinate forest authority, remedy of the respondent lay in instituting an action in the civil court and that the writ petition was not maintainable. Turning down this plea, the Supreme Court held that the impugned order had been passed by a public authority modifying the order of the subordinate forest officer without giving the respondent any opportunity of having his say in the matter and since, by the order so passed, the respondent had been deprived of a valuable right, it cannot be said that a petition under Article 226 would not be maintainable merely because of the fact that the source of right of the respondent is traceable to a contract, which <span class=\"hidden_text\" id=\"span_55\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> is not statutory in nature. The relevant observations of the Supreme Court, in Ram Sanehi Singh (supra) run thus:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-33", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "\"We are unable to hold, that merely because the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must resort to a suit and not to a petition by way of a writ. In view of the judgment of this Court in K.N. Guruswamy's case MANU/SC/0006/1954: [1955]1 SCR 305 there can be no doubt that the petition was maintainable, even if the right to relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested with statutory power.\"\n 47. From the decision in Ram Sanehi Singh (supra) what clearly surfaces is that even when there is a breach of contract, a writ petition under Article 226 is maintainable if the administrative order passed by a public authority, in breach of the terms of the contract, is against the principles of natural justice. Clearly, therefore, when a State decides not to pay the dues of a contractor mala fide, with ulterior motives or arbitrarily or when the State avoids payment of the dues of a contractor mala fide, with ulterior motives or arbitrarily or when the State discriminates, while making payment of the dues of the <span class=\"hidden_text\" id=\"span_57\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> contractors, such a decision of the State not to pay or such an act of the State of not paying its dues cannot be said to be wholly beyond the reach of Article 226, for, what the contractor, in such a case, would be asking the writ court to do is to force the State to act in accordance with its constitutional obligation by adhering to the letter and spirit of Articles 14 and 21.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-34", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "48. In fact, it was made clear by the Supreme Court, speaking through Krishna Iyer, J. in Kulchinder Singh and Ors. \n\n              v.         Hardayal                 Singh   Brar     and          Ors.\n\n              MANU/SC/0507/1976:(1976)IILLJ                204   SC,     that   writ\n\n jurisdiction cannot be invoked to enforce the terms of a contract merely because the contract involves a State, a statutory body or a public body, but statutory duty or sovereign and public function of a State can, indeed, be enforced by a writ court. The relevant observations made, in Kulchinder Singh (supra) proceed thus:\n\n \"...The writ petition, stripped of embroidery and legalistics, stands naked as a simple contract between the State and the society.... At its best, the writ petition seeks enforcement of a binding contract but the neat and necessary repellent is that the remedy of Article 226 is unavailable to enforce a contract qua State.... What is immediately relevant is not whether the respondent is State or public authority but whether what is enforced is a statutory duty or <span class=\"hidden_text\" id=\"span_59\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> sovereign or public function of a public authority. Private law may involve a State, a statutory body, or a public body in contractual or tortious actions, but they cannot be siphoned off into the writ jurisdiction.\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-35", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "49. I may, now, refer to the case of Life Insurance Corporation of India v. Escorts Ltd. (supra), wherein a Constitution Bench held that though the field of constitutional law, administrative law and public law has forged ahead of the law in England, uninhibited by the technical rules, which have hampered the development of the English Law, and though every action of the State or an instrumentality of the State must be informed by reason and that, in appropriate cases, actions, uninformed by reason, may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution, Article 14 cannot be construed as a charter for judicial review of all State actions and to call upon the State to account for its actions in its manifold activities by stating reasons for such actions. The Constitution Bench made it clear, in Escorts Ltd.(supra), that if the action of the State is political or sovereign in character, the court will keep away from it. The court will not debate academic matters or concern itself with the intricacies of trade and commerce. If the action of the State <span class=\"hidden_text\" id=\"span_61\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> is related to contractual obligations or obligations arising out of tort, the court may, not, ordinarily, examine it unless the action has some public law character attached to it. The Constitution Bench further made it clear, in Escorts Ltd.(supra), that broadly speaking, the court will examine actions of the State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field, though the difficulty will lie in demarcating the frontiers between the public law domain and the private law field. Made it, however, explicit the Supreme Court, in Escorts Ltd.(supra), that it is impossible to draw the line, with", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-36", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "Supreme Court, in Escorts Ltd.(supra), that it is impossible to draw the line, with precision, between the frontiers of the public law domain and the private law field and that the question must be decided, in each case, with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged, when performing the action, the public law or private law character of the action and a host of other relevant circumstances. Cautioned, however, the Constitution Bench, in Escorts Ltd., that Article 14 cannot be used as a charter for judicial review of all actions of the State.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-37", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "The relevant observations made, in this regard, in Escorts Ltd. (supra), read as follows:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-38", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "101. It was, however, urged by the <span class=\"hidden_text\" id=\"span_63\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> learned Counsel for the company that the Life Insurance Corporation was an instrumentality of the State and was, therefore, debarred by Article 14 from acting arbitrarily. It was, therefore, under an obligation to state to the court its reasons for the resolution once a rule nisi was issued to it. If it failed to disclose its reasons to the court, the court would presume that it had no valid reasons to give and its action was, therefore, arbitrary. The learned Counsel relied on the decisions of this Court in Sukhdev Singh; Maneka Gandhi;\n International Airport Authority; and Ajay Hasia. The learned Attorney General, on the other hand, contended that actions of the State or an instrumentality of the State which do not properly belong to the field of public law but belong to the field of private law are not liable to be subjected to judicial review. He relied on O'Reilly v. Mackman (1982) 3 All ER 1124; Davy v. Spelthonne (1983) 3 All ER 278; I Congress del Partido (1981) 2 All ER 1064; R. v. East Berkshire Health Authority (1984) 3 All ER 425; and Radhakrishna Agarwal and Ors. v. State of Bihar MANU/SC/0053/1977 :", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-39", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "[1977]3SCR249. While we do find considerable force in the contention of the learned Attorney General it may not be necessary for us to enter into any lengthy <span class=\"hidden_text\" id=\"span_65\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> discussion of the topic, as we shall presently see. We also desire to warn ourselves against readily referring to English cases on questions of constitutional law, administrative law and public law as the law in India in these branches has forged ahead of the law in England, guided as we are by our Constitution and uninhibited as we are by the technical rules which have hampered the development of the English Law. While we do not, for a moment, doubt that every action of the State or an instrumentality of the State must be informed by reason and that, in appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226or Article 32 of the Constitution, we do not construe Article 14 as a charter for judicial review of State actions and to call upon the State to account for its actions in its manifold activities by stating reasons for such actions.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-40", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "102. For example, if the action of the State is political or sovereign in character, the court will keep away from it. The court will not debate academic matters or concern itself with the intricacies of trade and commerce. If the action of the State is related to contractual obligations or obligations arising out of the tort, the court may not ordinarily examine it <span class=\"hidden_text\" id=\"span_67\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> unless the action has some public law character attached to it. Broadly speaking, the court will examine actions of State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field. The difficulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances. When the State or an instrumentality of the State ventures into the corporate world and purchases the shares of a company, it assumes to itself the ordinary role of a shareholder, and dons the robes of a shareholder, with all the rights available to such a shareholder. There is no reason why the State as a shareholder should be expected to state its reasons when it seeks to change the management, by a resolution of the company like any other shareholder.\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-41", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "50. From the above observations made in Escorts <span class=\"hidden_text\" id=\"span_69\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Ltd. (supra) it becomes clear that though Article 14 cannot be used as a charter for judicial review of all actions of the State and that every action of the State in contractual field may not, ordinarily, be examined by a writ court, the fact remains that there is no absolute bar to the exercise of writ jurisdiction under Article 226. Whether a High Court will exercise such a jurisdiction or not is a question, which must be decided in each case on the basis of its own facts, though, generally, the High Court will not entertain if the action of the State does not have any element of public interest involved. The question as to whether a High Court would interfere or not would depend, in the light of the decision of the Apex Court, in Escorts Ltd. (supra), on the nature of the action, which is impugned in the writ petition; but the exercise of writ jurisdiction is not possible without determining the distinction between public law and private law character of the duty, sought to be enforced, and a host of other relevant circumstances.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-42", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "51. Closely following the decision of the Constitution Bench, in Escorts Ltd. (supra), is the case of Dwarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay reported in MANU/SC/0330/1989 :", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-43", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "[1989]2SCR751. In this case, the appellant, M/s. Dwarkadas & <span class=\"hidden_text\" id=\"span_71\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Sons, had been a tenant on a portion of a land of the respondent Corporation, namely, Bombay Port Trust, for over 40 years, Bombay Port Trust having been constituted as a statutory corporation under the Major Ports Act. The structures, standing on the said land, were used as a part of a rice mill. Pursuant to a Town Planning Scheme of 1957, the plots were reconstituted and the port trust framed a policy to let out the reconstituted plot to the person, who was in occupation of the major portion of the plot. In terms of this policy, the trust initiated eviction proceeding against the appellant by giving them one month's notice sometime in October 1977. As the appellant had not vacated the said structures, the trust instituted a suit in December 1977, in the small causes court. The appellant pleaded mala fide and favouritism and also that the one month notice was bad in law. The trial court dismissed the suit on the ground of improper notice and did not enter into the question of mala fide. When the appellate court reversed the decision upholding the validity of the notice and also held that the question of mala fide or arbitrariness was not relevant for the eviction proceeding, a writ petition under Article 227 was filed in the High Court. As the High Court concurred with the decision of the appellate <span class=\"hidden_text\" id=\"span_73\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> court, the matter was carried to the Supreme Court.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-44", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "52. In its decision, in Dwarkadas Marfatia and Sons (supra), a Three Judge Bench of the Supreme Court, having taken note of Rampratap Jaydayal v. Dominion of India reported in MANU/MH/0096/1953: AIR 1953 Bom 170 and Escorts Ltd. (supra), held that though the field of letting and eviction of tenants is, normally, governed by the Rent Act and port trust is statutorily exempted from the operation of the Rent Act on the basis of its public/government character, legislative assumption or expectation, as noted in the observations of Chagla, CJ in Rampratap Jaydayal, cannot make such conduct a matter of contract pure and simple and that these corporations must act in accordance with certain constitutional conscience and whether they have so acted, must be discernible from the conduct of such corporations. The Supreme Court clarified, in Dwarkadas Marfatia and Sons(supra), that it is not correct to suggest that in the light of the decision in Radhakrishna Agarwal(supra), a State's contractual dealings do not ever fall under public law domain and is not subject to judicial review. The court, in Dwarkadas Marfatia and Sons(supra), also clarified that even the Constitution Bench decision, in Escorts Ltd. (supra), does not <span class=\"hidden_text\" id=\"span_75\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> wholly exclude State's all actions, in contractual matters, from the court's power of judicial review.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-45", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "53. The Apex Court further made it clear, in Dwarkadas Marfatia (supra), that every action/activity of the trust, which is a State within the meaning of Article 12, must be subject to Article 14 and must be reasonable and taken only upon lawful and relevant grounds of public interest and whenever there is arbitrariness in the State's action, Article 14 springs in and judicial review strikes such an action down. Making its views emphatic, the Supreme Court further made it clear, in Dwarkadas Marfatia(supra), that whatever be the activity of the public authority, it should meet the test of Article 14 and that the decision in Escorts Ltd. (supra), if read properly, does not detract from the aforesaid principles. \n\n 54. The observations made, in this regard, by the Supreme Court, in Dwarkadas Marfatia and Sons (supra), read as under:\n\n \"22. Our attention was drawn to the observations of this Court in Radhakrishna Agarwal and Ors. v. State of Bihar and Ors. MANU/SC/0053/1977 : [1977]3SCR249..", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-46", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "Reliance was also placed on the observations of this Court in Life Insurance <span class=\"hidden_text\" id=\"span_77\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Corporation of India v. Escorts Ltd. and Ors. 1985 Suppl. (3) SCR 909 in support of the contention that the public corporations' dealing with tenants is a contractual dealing and it is not a matter for public law domain and is not subject to judicial review. However, it is not the correct position. The Escorts' decision reiterated that every action of the State or an instrumentality of the State, must be informed by reason. Indubitably, the respondent is an organ of the State under Article 12 of the Constitution. In appropriate cases, as was observed in the last mentioned decision, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution. But it has to be remembered that Article 14 cannot be construed as a charter for judicial review of State action, to call upon the State to account for its actions in its manifold activities by stating reasons for such actions.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-47", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "23. The contractual privileges are made immune from the protection of the Rent Act for the respondent because of the public position occupied by the respondent authority. Hence, its actions are amenable to judicial review only to the extent that the State must act validly for a discernible <span class=\"hidden_text\" id=\"span_79\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> reason, not whimsically for any ulterior purpose. Where any special right privilege is granted to any public or statutory body on the presumption that it must act in certain manner, such bodies must make good such presumption while acting by virtue of such privileges. Judicial review to oversee if such bodies are so acting is permissible.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-48", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "24. The field of letting and eviction of tenants is normally governed by the Rent Act. The port trust is statutorily exempted from the operation of Rent Act on the basis of its public/government character. The legislative assumption or expectation as noted in the observations of Chagla, CJ in Rampratap Jaidayal's case cannot make such conduct a matter of contract 'pure and simple'. These corporations must act in accordance with certain constitutional conscience and whether they have so acted, must be discernible from the conduct of such corporations. In this connection, reference may be made to the observations of this Court in S.P. Rekhi v. Union of India , reiterated in M.C. Mehta and Anr. v. Union of India and Ors. MANU/SC/0092/1986 : [1987]1SCR819, wherein at p. 148, this Court observed:\n It is dangerous to exonerate corporations <span class=\"hidden_text\" id=\"span_81\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> from the need to have constitutional conscience; and so, that interpretation, language permitting, which makes governmental agencies, whatever their mien, amenable to constitutional limitations must be adopted by the court as against the alternative of permitting them to flourish as an imperium in imperio.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-49", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "25. Therefore, Mr. Chinai was right in contending that every action/ activity of the Bombay Port Trust which constituted \"State\" within Article 12 of the Constitution in respect of any right conferred or privilege granted by any statute is subject to Article 14 and must be reasonable and taken only upon lawful and relevant grounds of public interest. Reliance may be placed on the observations of this Court in E.P. Royappa v. State of Tamil Nadu MANU/SC/0380/1973 : (1974)ILLJ172SC ; Maneka Gandhi v. Union of India MANU/SC/0133/1978 : [1978]2SCR621 ; Ramana Dayaram Shetty v. International Airport Authority of India and Ors. MANU/SC/0048/1979 :\n (1979)IILLJ217SC ; Kasturi Lai Lakshmi Reddy v. State of J&K and another, MANU/SC/0079/1980 : [1980]3SCR1338 ; and Ajay Hasia v. Khalid Mujib Sehravardi and Ors. etc. MANU/SC/0498/1980 :\n (1981)ILLJ103SC . Where there is arbitrariness in State action, Article 14 springs in and judicial review strikes such an action down. Every action of the Executive Authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, it should meet the test of Article 14. The observations in paras 101 and 102 of the Escorts' case, read properly, do not detract from the aforesaid principles.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-50", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "27. We are inclined to accept the submission that every activity of a public authority, especially in the background of the assumption on which such authority enjoys immunity from the rigours of the Rent Act, must be informed by reason and guided by the public interest. All exercise of discretion or power by public authorities as the respondent, in respect of dealing with tenants in respect of which they have been treated separately and distinctly from other landlords on the assumption that they would not act as private landlords, must be judged by that standard. If a governmental policy or action even in contractual matters fails to satisfy the test of reasonableness, it would be unconstitutional. See the observations of this Court in Kasturi Lai Lakshmi Reddy and <span class=\"hidden_text\" id=\"span_85\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Ramana Dayaram Shetty v. International Airport Authority of India and Ors. MANU/SC/0048/1979 :(1979)IILLJ217SC .\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-51", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "55. What is also necessary to note, in the case of Dwarkadas Marfatia(supra), is that this was a case, where the relationship between the parties to the dispute, being that of landlord and tenant, was essentially contractual in nature, yet the Supreme Court held that such a dispute is not wholly outside the purview of Article 226, for, a State's action, even under contractual relationship, has to withstand the tests of Article 14. Though to evict or not to evict a tenant is a decision governed by contractual relationship of landlord and tenant, the fact remains that while taking the decision to evict a tenant, State or public body, as the landlord, must take the decision in the public interest and while taking such a decision, State or public body cannot act arbitrarily, unreasonably, whimsically, capriciously or with ulterior motives nor can a State or public body, while taking such a decision, discriminate between one tenant and another and must, therefore, act according to 'constitutional conscience'.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-52", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "56. If the decision in Dwarkadas Marfatia(supra), is carefully read, it becomes more than abundantly clear that <span class=\"hidden_text\" id=\"span_87\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> though at the first blush, the decision in Radhakrishna Agarwal (supra), appears to have laid down that the remedy of every breach of contract lies in civil suits and writ jurisdiction would never be applicable to enforce even constitutional obligations of the State in contractual matters, the later decision of the Apex Court in Dwarkadas Marfatia (supra) clearly shows that having considered the decision in Radhakrishna Agarwal (supra) and also the Constitution Bench decision in Escorts Ltd. (supra), it has clearly held that there is no absolute bar to the exercise of jurisdiction under Article 226 in a contractual matter, particularly, when the act or conduct of the State or its instrumentality is challenged on the anvil of Article 14. It is also clear from Dwarkadas Marfatia (supra), that a writ court will enforce even a contractual obligation of the State if the breach of obligation by the State fails to satisfy the test of reasonableness under Article 14, for, in such a case, what the writ court would be enforcing is the constitutional duty of the State, though such a duty might have arisen in the realm of contractual obligation. It has been further made clear, in Dwarkadas Marfatia (supra), that even in contractual matters, the State's action must be reasonable, lawful and 'on relevant ground of public interest'.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-53", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "57. What emerges from the above discussion is that when a writ petition is filed alleging breach of contractual obligation by the State or its instrumentality, the High Court shall determine whether the writ petitioner is merely demanding to enforce his contractual rights or he has raised some important questions of law and/or constitutional issues. If he aims at merely enforcing his contractual rights and raises no important question of law or constitutional issue, writ jurisdiction will not be invoked; but if the writ petitioner raises a constitutional issue, there is no absolute bar to the exercise of jurisdiction under Article 226 even in a contractual matter. This position of law was made clear in Life Insurance Corporation of India v. Asha Goel reported in (2001) 2 SCC 160, wherein the court observed as under:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-54", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "\"10. Article 226 of the Constitution confers extraordinary jurisdiction on the High Court to issue high prerogative writs for enforcement of the fundamental rights or for any other purpose. It is wide and expansive. The Constitution does not place any fetter on exercise of the extraordinary jurisdiction. It is left to the discretion of the High Court. Therefore, it cannot be laid down as a general proposition of law that in no case <span class=\"hidden_text\" id=\"span_91\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> the High Court can entertain a writ petition under Article 226 of the Constitution to enforce a claim under a life insurance policy. It is neither possible nor proper to enumerate exhaustively the circumstances in which such a claim can or cannot be enforced by filing a writ petition. The determination of the question depends on consideration of several factors like, whether a writ petitioner is merely attempting to enforce his/her contractual rights or the case raises important questions of law and constitutional issues, the nature of the dispute raised; the nature of inquiry necessary for determination of the dispute, etc. The matter is to be considered in the facts and circumstances of each case. While the jurisdiction of the High Court to entertain a writ petition under Article 226 of the Constitution cannot be denied altogether, courts must bear in mind the self-imposed restriction consistently followed by High Courts all these years after the constitutional power came into existence in not entertaining writ petitions filed for enforcement of purely contractual rights and obligations which involve disputed questions of facts. The courts have consistently taken the view that in a case where for <span class=\"hidden_text\" id=\"span_93\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> determination of the dispute raised, it is necessary to inquire into the facts for determination of which it may become necessary", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-55", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "the dispute raised, it is necessary to inquire into the facts for determination of which it may become necessary to record oral evidence, a proceeding under Article 226 of the Constitution is not the appropriate forum. The position is also well settled that if the contract entered between the parties provides an alternate forum for resolution of disputes arising from the contract, then the parties should approach the forum agreed by them and the High Court in writ jurisdiction should not permit them to bypass the agreed forum of dispute resolution. At the cost of repetition it may be stated that in the above discussions we have only indicated some of the circumstances in which the High Courts have declined to entertain petitions filed under Article 226 of the Constitution for enforcement of contractual rights and obligations; the discussions are not intended to be exhaustive. This Court from time to time disapproved of a High Court entertaining a petition under Article 226 of the Constitution in matters of enforcement of contractual rights and obligations particularly where the claim by one party is contested by the other and adjudication of the dispute requires inquiry into facts. We <span class=\"hidden_text\" id=\"span_95\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> may notice a few such cases--Mohd. Hanif v. State of Assam MANU/SC/0370/1969 : [1970]2SCR197 ; Banchhanidhi Rath v. State of Orissa MANU/SC/0652/1971 : AIR1972SC843 ; Rukmanibai Gupta v. Collector, Jabalpur MANU/SC/0002/1980 : AIR1981SC479 ; Food Corporation of India v. Jagannath Dutta 1993 Suppl. (3) SCC 635; and State of H.P. v. Raja Mahendra Pal MANU/SC/0227/1999 :", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-56", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "v. Raja Mahendra Pal MANU/SC/0227/1999 : [1999]2SCR323 .", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-57", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "11. The position that emerges from the discussions in the decided cases is that ordinarily the High Court should not entertain a writ petition filed under Article 226 of the Constitution for mere enforcement of a claim under a contract of insurance. Where an insurer has repudiated the claim, in case such a writ petition is filed, the High Court has to consider the facts and circumstances of the case, the nature of the dispute raised and the nature of the inquiry necessary to be made for determination of the questions raised and other relevant factors before taking a decision whether it should entertain the writ petition or reject it as not maintainable. It has also to be kept in mind that in case an insured or nominee of the deceased insured is refused relief merely on the ground that the claim relates to <span class=\"hidden_text\" id=\"span_97\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> contractual rights and obligations and he/she is driven to a long drawn litigation in the civil court it will cause serious prejudice to the claimant/other beneficiaries of the policy. The pros and cons of the matter in the context of the fact situation of the case should be carefully weighed and appropriate decision should be taken. In a case where claim by an insured or a nominee is repudiated raising a serious dispute and the court finds the dispute to be a bona fide one which requires oral and documentary evidence for its determination then the appropriate remedy is a civil suit and not a writ petition under Article 226 of the Constitution. Similarly, where a plea of fraud is pleaded by the insurer and on examination is found prima facie to have merit and oral and documentary evidence may become necessary for determination of the issue raised, then a writ petition is not an appropriate remedy.\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-58", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "58. Moreover, when a writ court finds that the refusal to extend constitutional remedy of Article 226 to enforce a contractual right or obligation would drive a person, knocking at the doors of a writ court, to a long drawn litigation in the civil court causing serious prejudice to the person seeking relief <span class=\"hidden_text\" id=\"span_99\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> against the State, the writ court may not, according to Asha Goel (supra), decline to interfere in such a matter and hence, reminds the Supreme Court, in Asha Goel (supra), thus:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-59", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "\"The pros and cons of the matter in the context of the fact situation of the case should be carefully weighed and appropriate decision should be taken.\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-60", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "59. From the law, as laid down in Asha Goel (supra), it becomes transparent that when non-interference by a writ court would drive a person to a long drawn civil litigation causing serious prejudice to him, the writ court's interference is not only desirable, but even necessary. As a corollary to this proposition of law, one can safely say that when a contractor's dues are admitted by a State and the fact situation of a given case satisfies the writ court that asking the contractor to take recourse to the civil court would cause serious prejudice to the contractor, the writ court should step in. For instance, a contractor, whose dues are admitted but not paid by the State, approaches a writ court with the plea that his son is a terminal case of cancer and the State's breach of its contractual obligation of not paying its dues is not only unfair and unreasonable, but may even threaten his son's survival and existence, the High Court may, in the absence of <span class=\"hidden_text\" id=\"span_101\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> any plausible explanation offered by the State for non- payment of the admitted dues, invoke its extraordinary jurisdiction under Article 226 to remedy the wrong, though such a wrong may have arisen out of the State's omission to discharge its contractual obligation, for, the High Court, in such a case, would not be merely enforcing the contractual obligation of the State, but also the State's constitutional obligation to act with reasonableness and fairness as envisaged by Article 14 and not to act in breach of the mandates thereof, which may have the effect of extinguishing the life of one of its citizens, though Article 21 guarantees that the State would act, with greatest of promptitude, in protecting the lives of its citizens against its own unreasonable and unfair actions.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-61", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "60. From the decision in Asha Goel (supra), what emerges is that ordinarily, a High Court should not entertain a writ petition, under Article 226, for mere enforcement of claims under a contract of insurance; however, the Constitution having not placed any fetters on the exercise of extraordinary jurisdiction by the High Court under Article 226, it is in the discretion of the High Court to interfere or not to interfere in a contractual matter. No exercise of discretionary power can be <span class=\"hidden_text\" id=\"span_103\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> unfettered, unguided, unsettled or arbitrary, and, hence, the position of law, on a given subject, should not be completely unforeseen and legal decisions must have some standards or parameters in order to enable the people at large to know as to what the position of law, on a given subject, is. Considered thus, exercise of jurisdiction under Article 226 cannot be unfettered or arbitrary. However, it is not possible to enumerate exhaustively the circumstances in which a writ application even in contractual matter would lie, for, exercise of jurisdiction would depend upon a considerable number of factors, such as, the question as to whether the writ petitioner is merely attempting to enforce his or her contractual rights or has raised important questions of law or constitutional issues, the nature of the dispute raised and the nature of enquiry necessary for determination of the dispute, etc. In short, exercise of jurisdiction would depend on the facts and circumstances of each given case. While jurisdiction of the High Court to entertain a writ petition, under Article 226, cannot be denied altogether, the courts must bear in mind the self-imposed restrictions constitutionally followed by the High Courts not to, ordinarily, entertain writ petitions for enforcement of purely contractual rights and obligations, <span class=\"hidden_text\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-62", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "entertain writ petitions for enforcement of purely contractual rights and obligations, <span class=\"hidden_text\" id=\"span_105\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> particularly, when determination of such questions necessitates taking of oral evidence or when the parties had agreed to resolve their disputes, arising out of the contract, in the alternative forum selected by them.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-63", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "61. We, now, turn to the case of Kumari Shrilekha Vidyarthi and Ors. v. State of U.P. and Ors., reported in MANU/SC/0504/1991: AIR 1991 SC 537. While considering the case of Kumari Shrilekha Vidyarthi (supra), what may be borne in mind is that it was a case in which the Government of Uttar Pradesh terminated, with the help of a general order, appointments of all the Government Counsel in all the districts of the State of Uttar Pradesh with effect from 28.02.1990 and directed preparation of fresh panel to make appointments in place of existing incumbents irrespective of the fact whether the term of the incumbent had expired or was subsisting. Validity of this action of the State was challenged by way of a number of writ petitions. In the backdrop of these facts, a Two Judge Bench of the Supreme Court, speaking through J.S. Verma, J. (as His Lordship then was), posed the question as to whether guarantee of non- arbitrariness, which is basic to the rule of law under Article 14, stands excluded from the State's action in contractual <span class=\"hidden_text\" id=\"span_107\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> field. In answer to this momentous question, the court made it clear, in Kumari Shrilekha Vidyarthi (supra), that the Constitution does not envisage or permit unfairness in State actions in any sphere of its activity. Leaving no room open for doubt, the Apex Court held, in Kumari Shrilekha Vidyarthi (supra), that it would be alien to the constitutional scheme to accept the argument of exclusion of Article 14 in contractual matters. The court,", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-64", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "the constitutional scheme to accept the argument of exclusion of Article 14 in contractual matters. The court, however, hastened to add that the scope and grounds on which judicial review would be permissible in contractual matters may be a different matter, but contractual matters cannot be wholly excluded from the purview of judicial review. Drawing the distinction between the contracts to which the State is a party, and the contracts to which the private parties are involved, the court, in Kumari Shrilekha Vidyarthi (supra), pointed out that while private parties are concerned with their personal interest, the State, while exercising its powers and discharging its functions, acts indubitably for public good and in public interest, for, the impact of every State action is also on the public interest and this factor alone is sufficient to import, at least, the minimal requirements of public law obligations even in the actions of the State in contractual matters. The court also pointed out in <span class=\"hidden_text\" id=\"span_109\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Kumari Shrilekha Vidyarthi (supra),that though the scope of judicial review in respect of disputes, falling within the domain of contractual obligations, may be limited, the fact remains that to the extent that a challenge is posed on the ground of violation of Article 14 by alleging that the impugned action is arbitrary, unfair or unreasonable, the mere fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-65", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "14. To this extent, reiterated the court, in Kumari Shrilekha Vidyarthi (supra), the obligation of a State is of a public character and that contractual obligation cannot divest the person aggrieved of the guarantee under Article 14 of non- arbitrariness at the hands of the State in all its actions.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-66", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "62. Symbolizing the nature of character of the State, when it enters into contractual relationships, the Supreme Court made it clear in Kumari Shrilekha Vidyarthi (supra) that the State cannot be attributed the split personality of Dr. Jekyll and Mr. Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold, while entering into a contract, and, thereafter, casting off its garb of a State and adorn the new robe of a private body during the <span class=\"hidden_text\" id=\"span_111\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> subsistence of the contract enabling it thereby to act arbitrarily subject only to the contractual obligations and the remedies flowing from it. The requirement of Article 14 being the duty to act fairly, justly and reasonably, there is nothing, observed the court, in Kumari Shrilekha Vidyarthi (supra), which militates against the concept of requiring the State always so to act, even in contractual matters. Drawing strength for the conclusion so reached from the decision in Dwarkadas Marfatia (supra) the court, in Kumari Shrilekha Vidyarthi (supra), further held that if the State is unable to produce materials to justify its action as fair and reasonable, burden on the person, alleging arbitrariness, must be held to have been discharged and the scope of judicial review, howsoever limited in contractual matters, must remain open to ensure that State action is not vitiated by the vice of arbitrariness.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-67", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "63. In Kumari Shrilekha Vidyarthi (supra), the court also took the view that even assuming that it is necessary to import the concept of presence of some public element in a State action, in the realm of contractual obligations, to attract Article 14, the fact remains that the ultimate impact of all actions of the State or a public body <span class=\"hidden_text\" id=\"span_113\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> being on public interest, requisite public element is also present in contractual matters. Held, therefore, the court, in Kumari Shrilekha Vidyarthi (supra), that it finds it difficult and unrealistic to exclude from the purview of judicial review the State actions in contractual matters after the contract has been made, in order to test the validity of the actions of the State on the anvil of Article 14. The relevant observations, made at paras 21, 22, 23, 24, 28, 29, 30 and 33 in Kumari Shrilekha Vidyarthi (supra), are reproduced herein below:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-68", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "\"21. The Preamble of the Constitution of India resolves to secure, to all its citizens, justice, social, economic and political and equality of status and opportunity. Every State action must be aimed at achieving this goal. Part IV of the Constitution contains 'Directive Principles of State Policy' which are fundamental in the governance of the country and are aimed at securing social and economic freedoms by appropriate State action which is complementary to individual fundamental rights guaranteed in Part III for protection against excesses of State action, to realise the vision in the Preamble. This being the philosophy of the Constitution, can it be said that it contemplates exclusion of Article 14 non-arbitrariness which is basic <span class=\"hidden_text\" id=\"span_115\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> to rule of lawfrom State actions in contractual field when all actions of the State are meant for public good and expected to be fair and just? We have no doubt that the Constitution does not envisage or permit unfairness or unreasonableness in State actions in any sphere of its activity contrary to the professed ideals in the Preamble. In our opinion, it would be alien to the constitutional scheme to accept the argument of exclusion of Article 14 in contractual matters. The scope and permissible grounds of judicial review in such matters and the relief which may be available are different matters but that does not justify the view of its total exclusion. This is more so when the modern trend is also to examine the unreasonableness of a term in such contracts where the bargaining power is unequal so that these are not negotiated contracts but standard form contracts between unequals.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-69", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "22. There is an obvious difference in the contracts between private parties and contracts to which the State is a party. Private parties are concerned only with their personal interest whereas the State while exercising its powers and discharging its functions acts indubitably, as is expected of <span class=\"hidden_text\" id=\"span_117\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> it, for public good and in public interest. The impact of every State action is also on public interest. This factor alone is sufficient to import at least the minimal requirements of public law obligations and impress with this character the contracts made by the State or its instrumentality. It is a different matter that the scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes. However, to the extent, challenge is made on the ground of violation of Article 14 by alleging that the impugned act is arbitrary, unfair or unreasonable, the fact that the dispute also falls within the domain of contractual obligations would not relieve the State of its obligation to comply with the basic requirements of Article 14. To this extent, the obligation is of a public character invariably in every case irrespective of there being any other right or obligation in addition thereto. An additional contractual obligation cannot divest the claimant of the guarantee under Article 14 of non-arbitrariness at the hands of the State in any of its actions.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-70", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "23. Thus, in a case like the present, if it is shown that the impugned State action is arbitrary and, therefore, violative of Article 14 of the Constitution, there can be no impediment in striking down the impugned act irrespective of the question whether an additional right, contractual or statutory, if any, is also available to the aggrieved persons.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-71", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "24. The State cannot be attributed the split personality of Dr. Jekyll and Mr. Hyde in the contractual field so as to impress on it all the characteristics of the State at the threshold while making a contract requiring it to fulfil the obligation of Article 14 of the Constitution and thereafter permitting it to cast off its garb of State to adorn the new robe of a private body during the subsistence of the contract enabling it to act arbitrarily subject only to the contractual obligations and remedies flowing from it. It is really the nature of its personality as State which is significant and must characterize all its actions, in whatever field, and not the nature of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for examining the validity of its act. The requirement of Article 14 being the duty to act fairly, justly and reasonably, there is <span class=\"hidden_text\" id=\"span_121\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> nothing which militates against the concept of requiring the State always to so act, even in contractual matters. There is a basic difference between the acts of the State which must invariably be in public interest and those of a private individual, engaged in similar activities, being primarily for personal gain, which may or may not promote public interest. Viewed in this manner, in which we find no conceptual difficulty or anachronism, we find no reason why the requirement of Article 14 should not extend even in the sphere of contractual matters for regulating the conduct of the State activity.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-72", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "28. Even assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, we have no hesitation in saying that the ultimate impact of all actions of the State or a public body being undoubtedly on public interest, the requisite public element for this purpose is present also in contractual matters. We, therefore, find it difficult and unrealistic to exclude the State actions in contractual matters, after the contract has been made, from the purview of judicial review to test its validity on the anvil of Article 14.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-73", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "29. It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional. See Ramana Dayaram Shetty v. International Airport Authority of India MANU/SC/0048/1979 : (1979)IILLJ217SC and Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir MANU/SC/0079/1980 : [1980]3SCR1338 . In Col. A.S. Sangwan v. Union of India 1980 Suppl. SCC 559 : 1981 SCC (L&S) 378 while the discretion to change the policy in exercise of the executive power, when not trammelled by the statute or rule, was held to be wide, it was emphasized as imperative and implicit in Article 14 of the Constitution that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone, irrespective of the field of activity of the State, has long been settled. Later decisions of this Court have reinforced the foundation of this tenet and it would be <span class=\"hidden_text\" id=\"span_125\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> sufficient to refer only to two recent decisions of this Court for this purpose.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-74", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "30. In Divarkadas Marfatia and Sons v. Board of Trustees of the Port of Bombay MANU/SC/0330/1989 : [1989]2SCR751 , the matter was re-examined in relation to an instrumentality of the State for applicability of Article 14 to all its actions. Referring to the earlier decisions of this Court and examining the argument for applicability of Article14,, even in contractual matters, Sabyasachi Mukharji, J. (as the learned Chief Justice then was), speaking for himself and Kania, J. reiterated that: (SCC p. 304, para 22) \"every action of the State or an instrumentality of the State, must be informed by reason...actions uninformed by reasons may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution\". Ranganathan, J. did not express any opinion on this point but agreed with the conclusion of the other learned judges on the facts of the case. It is obvious that the conclusion on the facts of the case could not be reached by Ranganathan, J. without examining them and this could be done only on the basis that it was permissible to make the judicial review. Thus, Ranganathan, J. also applied that <span class=\"hidden_text\" id=\"span_127\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> principle without saying so. In view of the wide ranging and, in essence, all pervading sphere of State activity in discharge of its welfare functions, the question assumes considerable importance and cannot be shelved. The basic requirement of Article 14 is fairness in action by the State and we find it difficult to accept that the State can be permitted to act otherwise in any field of its activity, irrespective of the nature of its functions when it has the", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-75", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "act otherwise in any field of its activity, irrespective of the nature of its functions when it has the uppermost duty to be governed by the rule of law. Non- arbitrariness, in substance, is only fair play in action. We have no doubt that this obvious requirement must be satisfied by every action of the State or its instrumentality in order to satisfy the test of validity.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-76", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "33. No doubt, it is true, as indicated by us earlier, that there is a presumption of validity of the State action and the burden is on the person who alleges violation of Article 14 to prove the assertion. However, where no plausible reason or principle is indicated nor is it discernible and the impugned State action, therefore, appears to be ex facie arbitrary, the initial burden to prove the arbitrariness is discharged shifting onus on the State to justify its action as fair and reasonable. If the State is unable to <span class=\"hidden_text\" id=\"span_129\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> produce material to justify its action as fair and reasonable, the burden on the person alleging arbitrariness must be held to be discharged. The scope of judicial review is limited as indicated in Dwarkadas Marfatia case to oversee the State action for the purpose of satisfying that it is not vitiated by the vice of arbitrariness and no more. The wisdom of the policy or the lack of it or the desirability of a better alternative is not within the permissible scope of judicial review in such cases. It is not for the courts to recast the policy or to substitute it with another which is considered to be more appropriate, once the attack on the ground of arbitrariness is successfully repelled by showing that the act which was done, was fair and reasonable in the facts and circumstances of the case. As indicated by Diplock, LJ in Council for Civil Services Union v. Minister of Civil Service (1984) 3 All ER 935 the power of judicial review is limited to the grounds of illegality, irrationality and procedural impropriety. In the case of arbitrariness, the defect of irrationality is obvious.\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-77", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "64. What emerges from the observations, made in Kumari Shrilekha Vidyarthi (supra),is that even after having <span class=\"hidden_text\" id=\"span_131\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> entered into a contract, the State cannot act arbitrarily, unreasonably or unfairly merely because of the fact that its actions are in the realm of a contract.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-78", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "65. Yet another decision is the case of ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd., reported in MANU/SC/1080/2003: (2004) 3 SCC 553. In this case, the fourth respondent entered into a contract with a State owned corporation of Kazaksthan on 26.08.1993. As per the original agreement, payment, for the product (tea) exported, was to be made by the Kazak Corporation by barter of goods mentioned in the schedule to the said agreement within 120 days of the date of delivery by the exporter. The agreement also provided that such payment to be made by Kazak Corporation shall be guaranteed by the Government of Kazaksthan. By a modified agreement, it was agreed between the parties that if the contract of barter of goods could not be finalized for any reason, then, Kazak Corporation would pay the exporter for the goods received by it, in US dollars, within 120 days from the date of the delivery. After having entered into the contract, the respondent concerned assigned a part of the said contract to ABL Corporation Ltd. on the same terms on which it had <span class=\"hidden_text\" id=\"span_133\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> received the contract from Kazak Corporation. On a direction issued by the Reserve Bank of India that the risk, arising out of the export of the tea made by the appellant, shall be guaranteed, the appellant approached Export Credit Guarantee Corporation of India Ltd. to insure risk of payment of consideration involved in the said contract of export. Pursuant to the request so made, the Export Credit Guarantee Corporation of India Ltd. issued a comprehensive policy covering the risk. On the failure of the Government of Kazaksthan to fulfil its guarantee, the appellants made a claim on", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-79", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "of the Government of Kazaksthan to fulfil its guarantee, the appellants made a claim on the first contract of payment without first consulting it and it had, therefore, no obligation to compensate the appellants for the loss suffered by it. Having failed to make the first respondent adhere to the contract of insurance, the respondent concerned filed a writ petition. Though the learned Single Judge of Calcutta High Court issued a writ, the Division Bench reversed the order on the ground that the case involved disputed questions of fact, which was not adjudicable in a writ proceeding under Article 226. It was in these factual scenario that the case came up before the Supreme Court, wherein the first respondent's submission, in effect, was thus:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-80", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "\"7. Ms. Indira Jaising, learned senior <span class=\"hidden_text\" id=\"span_135\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> Counsel appearing for the first respondent, submitted that on facts and circumstances of this case, a writ petition was not maintainable nor can it be construed as an appropriate remedy. She pointed out that the subject matter is a dispute arising out of a contract and is not a matter falling under the purview of administrative law. According to her, the doctrine of fairness and reasonableness applies only in the exercise of statutory or administrative actions of a State and not in the exercise of a contractual obligation and issues arising out of contractual matters will have to be decided on the basis of the law of contract and not on the basis of the administrative law. It was her argument that at the most in matters involving statutory contracts where action of the State involves a public duty, a writ may lie but in the instant case, the contract was neither a statutory contract nor the duty of the first respondent under the contract had any public law element involved in it. According to the learned Counsel, this contract was a negotiated contract and not a standard form contract. She also supported the finding of the appellate bench of the High Court that the facts involved in the case are all disputed facts requiring evidence to be led, therefore, <span class=\"hidden_text\" id=\"span_137\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> the appropriate remedy could only be a suit. Hence, the impugned judgment did not call for any interference.\"", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-81", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "66. Having noted the above submissions made on behalf of the respondents, the Supreme Court held that one of the questions that falls for consideration is whether a writ petition under Article 226 of the Constitution of India is maintainable to enforce a contractual obligation of the State or its instrumentality.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-82", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "67. Responding to the question posed above, the Supreme Court has held in ABL International Ltd. (supra), that the question as to whether a writ petition under Article 226 is maintainable to enforce a contractual obligation of the State is no more res integra. Points out the court in ABL International Ltd. (supra), that as early as, in K.N. Guruswamy (supra), the Supreme Court had already held that a person interested in a contract has a right to receive the same treatment and is entitled to be given the same chances as anybody else. Referring to the observations made in K.N. Guruswamy (supra), the court, in ABL International Ltd. (supra), has also pointed out that in K.N. Guruswamy (supra), the court has held that on a given set of facts, if the action of a <span class=\"hidden_text\" id=\"span_139\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> State is found to be arbitrary even in a matter of contract, a writ court is, depending upon the facts of the case, empowered to grant relief under Article 226.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-83", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "68. Having taken note of the case of Ram Sanehi Singh (supra), which followed K.N. Guruswamy (supra), and also Gujarat State Financial Corporation v. Lotus Hotels Pvt. Ltd. reported in MANU/SC/0036/1983 : AIR 1983 SC 848 , which followed Ramana Dayaram Shetty v. International Airport Authority of India reported in MANU/SC/0048/1979 : (1979)IILLJ217SC and, then, having referred to the case of Escorts Ltd. (supra), the court, in ABL International Ltd. (supra), has pointed out that the decision in Escorts Ltd. (supra), does not lay down, as a rule, that in matters of contract, the courts' jurisdiction under Article 226 stands wholly ousted. On the contrary, points out the Supreme Court in ABL International Ltd. (supra), the Constitution Bench's use in Escorts Ltd. of the words 'court may not, ordinarily, examine it unless the action has some public law character attached to it' indicates that in a given case, on the existence of the required factual matrix, a remedy under Article 226 will be available. \n\n\n\n 69. Having noted various judicial pronouncements with regard to maintainability of writ petitions aimed at enforcing contractual obligations of the State or its instrumentality and having discussed the law on the subject, the Apex Court, in para 27 of ABL International Ltd. (supra), culled out the legal principles governing maintainability of such a writ petition in the following words:\n\n \"27. From the above discussion of ours, following legal principles emerge as to the maintainability of a writ petition:\n (a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-84", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "(b) Merely because some disputed questions of facts arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule. \n\n (c) A writ petition involving a consequential relief of monetary claim is also maintainable.\"\n 70. From what has been culled out above, there remains no manner of doubt that in an appropriate case, the remedy, under Article 226, would be available to enforce <span class=\"hidden_text\" id=\"span_143\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> contractual obligations of the State, its instrumentality and all public bodies. \n\n\n 71. Having discussed the law on the subject and taking into account the facts in ABL International Ltd. (supra), the Court finally observed, at para 53, thus:", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-85", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "\"53. From the above, it is clear that when an instrumentality of the State acts contrary to public good and public interest, unfairly, unjustly and unreasonably, in its contractual, constitutional or statutory obligations, it really acts contrary to the constitutional guarantee found in Article 14 of the Constitution. Thus, if we apply the above principle of applicability of Article 14 to the facts of this case, then we notice that the first respondent being an instrumentality of State and a monopoly body had to be approached by the appellants by compulsion to cover its export risk. The policy of insurance covering the risk of the appellants was issued by the first respondent after seeking all required information and after receiving huge sums of money as premium exceeding Rs. 16 lacs. On facts we have found that the terms of the policy do not give room to any ambiguity as to the risk covered by the first respondent. We are also of the considered opinion that the <span class=\"hidden_text\" id=\"span_145\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> liability of the first respondent under the policy arose when the default of the exporter occurred and thereafter when Kazaksthan Government failed to fulfil its guarantee. There is no allegation that the contracts in question were obtained either by fraud or by misrepresentation. In such factual situation, we are of the opinion, the facts of this case do not and should not inhibit the High Court or this Court from granting the relief sought for by the petitioner.\" \n\n (Emphasis supplied)", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-86", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "(Emphasis supplied)\n\n 72. From the above observations made in para 53, what emerges is that when the State or its instrumentality acts contrary to public good, public interest, unfairly, unjustly and unreasonably in the realm of its contractual obligations, arising out of even non-statutory contract, it really acts contrary to the constitutional guarantee given under Article 14 and, in an appropriate case, when this guarantee is found to have been denied, remedy under Article 226 would be available to undo the wrong done by the State and to command the State to pay its unpaid dues, which it is, under its contractual obligation, bound to pay, but has unfairly, unjustly and unreasonably refused to pay. <span class=\"hidden_text\" id=\"span_147\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span>\n\n 73. Logically, therefore, so long as the decision, in ABL International Ltd. (supra), holds the field, there can be no manner of doubt that when the State acts contrary to public good and public interest or unfairly and unjustly or unreasonably, even in the realm of its contractual obligations, the constitutional guarantee, given in Article 14, would be attracted. Consequently, therefore, even in the case of contractual obligations, if the action of the State does not withstand the tests of Article 14, the constitutional remedy of Article 226 would be available to the aggrieved person. Conversely speaking, no writ under Article 226 will lie for mere enforcement of contractual obligations of the State unless State's action is shown to be against public good and public interest or unfair or unjust, unreasonable, arbitrary or discriminatory or in denial of guarantee of equality enshrined under Article 226.", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "a5ef268abef8-87", "Titles": "Md. Nizamuddin vs The State Of Bihar & Ors on 15 May, 2014", "text": "74. Having decided the applicability of the law, we direct that the petitioner-appellant's dues shall be calculated in accordance with law, as has been decided above, and the payment shall be made to the petitioner-appellant by the respondents within a period of three months from today. \n\n 75. In the result, and for the reasons discussed above, <span class=\"hidden_text\" id=\"span_149\"> Patna High Court LPA No.2 of 2014 (10) dt. 15-05-2014</span> this appeal partly succeeds and the impugned order, dated 11.09.2013, passed, in C.W.J.C. No.4270 of 2006, shall, accordingly, stand set aside and modified to the extent as indicated above. \n\n 76. With the above observations and directions, this Letters Patent Appeal shall stand disposed of. \n\n 77. In the facts and circumstances of the present case, we refrain from granting any cost.\n\n\n\n                                                     (I. A. Ansari, J)\n\n\n                                           (Samarendra Pratap Singh, J)\n\nPNM/     AFR", "source": "https://indiankanoon.org/doc/173691638/"}
+{"id": "0eea247304c0-0", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "IN THE HIGH COURT OF JUDICATURE AT PATNA\n      CIVIL WRIT JURISDICTION CASE NO.8317 OF 2009\n======================================================\nM/S ADITYA BIRLA TELECOM LTD., A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT ADITYA BIRLA CENTRE, A-WING, 4TH FLOOR, S. K. AHIRE MARG, WORLI-MUMBAI-400030, AND ITS REGIONAL/BIHAR SERVICE AREA OFFICE AT FIRST FLOOR SUMITRA SADAN BUILDING, BORING CANAL ROAD, NEAR BORING ROAD CROSSING, POLICE STATION SRIKRISHNAPURI, DISTRICT PATNA THROUGH ITS AUTHORIZED SIGNATORY, SHREEKANT, SON OF SHRI K.P. SHARMA, RESIDENT OF 301, KUMARSHAIL APARTMENT, BORING ROAD, POLICE STATION SHREE KRISHNA PURI, DISTRICT PATNA .... .... PETITIONER/S VERSUS\n1. THE STATE OF BIHAR THROUGH THE PRINCIPAL SECRETARY ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR, SECRETARIAT, PATNA\n2. THE JOINT SECRETARY, ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR, SECRETARIAT, PATNA\n3. THE ENGINEER-IN-CHIEF - CUM - ADDITIONAL COMMISSIONER - CUM - ADDITIONAL SECRETARY, ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR, SECRETARIAT, PATNA\n4. THE EXECUTIVE ENGINEER, NEW CAPITAL DIVISION, ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR, PATNA", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-1", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "5. THE EXECUTIVE ENGINEER, ROAD CONSTRUCTION DEPARTMENT, ROAD DIVISION, GOVERNMENT OF BIHAR, SAMASTIPUR\n6. THE EXECUTIVE ENGINEER, PATNA CITY ROAD DIVISION, GULZARBAGH, ROAD CONSTRUCTION DEPARTMENT, PATNA\n7. THE EXECUTIVE ENGINEER, NATIONAL HIGHWAY DIVISION, GAYA .... .... RESPONDENT/S ====================================================== WITH CIVIL WRIT JURISDICTION CASE NO.13483 OF 2009 ======================================================\n1. M/S BHARTI AIRTEL LTD., A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE SITUATED IN NEW DELHI AND ONE OF ITS BRANCH OFFICES SITUATED AT 4TH FLOOR, UDAY BHAWAN, MARWARI AWAS GRIH, FRASER ROAD, P.S.- KOTWALI, DISTT.- PATNA THROUGH ITS AUTHORIZED SIGNATORY, HITESH KUMAR SINGH, SON OF SRI NILMOHAN SINGH, RESIDENT OF 15, AJAY-NILAYAN APARTMENT, NAGESHWAR COLONY, P.S.- BUDHA COLONY, 2 / 21 TOWN AND DISTRICT PATNA .... .... PETITIONER/S VERSUS\n 1. THE STATE OF BIHAR THROUGH THE PRINCIPAL SECRETARY ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR, SECRETARIAT, PATNA\n 2. THE JOINT SECRETARY, ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR, SECRETARIAT, PATNA", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-2", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "3. THE ENGINEER-IN-CHIEF - CUM - ADDITIONAL COMMISSIONER - CUM - ADDITIONAL SECRETARY, ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR, SECRETARIAT, PATNA\n 4. THE EXECUTIVE ENGINEER, NEW CAPITAL DIVISION, ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR, PATNA\n 5. THE EXECUTIVE ENGINEER, ROAD CONSTRUCTION DEPARTMENT, ROAD DIVISION, GOVERNMENT OF BIHAR, SAMASTIPUR\n 6. THE EXECUTIVE ENGINEER, PATNA CITY ROAD DIVISION, GULZARBAGH, ROAD CONSTRUCTION DEPARTMENT, PATNA .... .... RESPONDENT/S ====================================================== WITH CIVIL WRIT JURISDICTION CASE NO.7394 OF 2009 ====================================================== M/S RELIANCE TELECOM LIMITED, A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT H-BLOCK, FIRST FLOOR, DHIRUBHAI AMBANI KNOWLEDGE CITY, NAVI MUMBAI-400710 AND HAVING ITS CIRCLE OFFICE AT 7TH/8TH FLOOR, KASHI PLACE, NEW DAKBUNGLOW, PATNA-800001 THROUGH ITS CONSTITUTED ATTORNEY NAMELY RANJEET K. GURTOO, SON OF P.N. GURTOO HAVING PATNA ADDRESS AS M/S RELIANCE TELECOM LTD, 7TH/8TH FLOOR, KASHI PLACE, NEW DAKBUNGLOW, PATNA-800001 .... .... PETITIONER/S VERSUS\n 1. THE STATE OF BIHAR THROUGH THE PRINCIPAL SECRETARY ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR, SECRETARIAT, PATNA", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-3", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "2. THE JOINT SECRETARY, ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR, SECRETARIAT, PATNA\n 3. THE EXECUTIVE ENGINEER, PATNA CITY ROAD DIVISION, GULZARBAGH, ROAD CONSTRUCTION DEPARTMENT, PATNA\n 4. THE EXECUTIVE ENGINEER, ROAD DIVISION, DEHRI-ON-SONE, ROAD CONSTRUCTION DEPARTMENT, DEHRI-ON-SONE\n 5. THE EXECUTIVE ENGINEER, ROAD CONSTRUCTION DEPARTMENT, ROAD DIVISION, SAMASTIPUR .... .... RESPONDENT/S 3 / 21 ====================================================== WITH CIVIL WRIT JURISDICTION CASE NO.12493 OF 2009 ======================================================\n 1. VODAFONE ESSAR SPACETEL LIMITED, A PUBLIC LIMITED COMPANY DULY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT C-48, OKHLA INDUSTRIAL AREA, PHASE-II, NEW DELHI-110020 AND ITS BRANCH OFFICE AT 4TH FLOOR, MAHARAJA KAMESHWAR COMPLEX, FRASER ROAD, PATNA-800001", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-4", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "2. VODAFONE ESSAR SOUTH LIMITED, A PUBLIC LIMITED COMPANY DULY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT C-48, OKHLA INDUSTRIAL AREA, PHASE-II, NEW DELHI-110020 AND ITS BRANCH OFFICE AT 4TH FLOOR, MAHARAJA KAMESHWAR COMPLEX, FRASER ROAD, PATNA-800001 BOTH ARE DULY REPRESENTED THROUGH THEIR CONSTITUTED ATTORNEY SRI RANJAN KUMAR, SON OF SRI V. N. SINGH, RESIDING AT 171-A/2, NEW PATLIPUTRA, G. D. MISHRA PATH, POLICE STATION PATLIPUTRA, DISTRICT PATNA .... .... PETITIONER/S VERSUS\n 1. THE STATE OF BIHAR THROUGH ITS CHIEF SECRETARY, PATNA\n 2. THE ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR THROUGH ITS PRINCIPAL SECRETARY, NEW SECRETARIAT, OFF. BAILEY ROAD, PATNA\n 3. THE PRINCIPAL SECRETARY, DEPARTMENT OF ROAD CONSTRUCTION, GOVERNMENT OF BIHAR, NEW SECRETARIAT, OFF BAILEY ROAD, PATNA\n 4. THE JOINT SECRETARY TO THE GOVERNMENT OF BIHAR, ROAD CONSTRUCTION DEPARTMENT, NEW SECRETARIAT, PATNA\n 5. THE EXECUTIVE ENGINEER, ROAD DIVISION, BHAGALPUR\n 6. THE EXECUTIVE ENGINEER, ROAD CONSTRUCTION DEPARTMENT, ROAD DIVISION, BETTIAH .... .... RESPONDENT/S ====================================================== WITH CIVIL WRIT JURISDICTION CASE NO.9169 OF 2009 ======================================================", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-5", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "1. VODAFONE ESSAR SPACETEL LIMITED, A PUBLIC LIMITED COMPANY DULY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT C-48, OKHLA INDUSTRIAL AREA, PHASE-II, NEW DELHI-110020 AND ITS BRANCH OFFICE AT 4TH FLOOR, MAHARAJA KAMESHWAR COMPLEX, FRASER ROAD, PATNA-800001 4 / 21", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-6", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "2. VODAFONE ESSAR SOUTH LIMITED, A PUBLIC LIMITED COMPANY DULY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT C-48, OKHLA INDUSTRIAL AREA, PHASE-II, NEW DELHI-110020 AND ITS BRANCH OFFICE AT 4TH FLOOR, MAHARAJA KAMESHWAR COMPLEX, FRASER ROAD, PATNA-800001 BOTH ARE DULY REPRESENTED THROUGH THEIR CONSTITUTED ATTORNEY SRI RANJAN KUMAR, SON OF SRI V. N. SINGH, RESIDING AT 171-A/2, NEW PATLIPUTRA, G. D. MISHRA PATH, POLICE STATION PATLIPUTRA, DISTRICT PATNA .... .... PETITIONER/S VERSUS\n 1. THE STATE OF BIHAR THROUGH ITS CHIEF SECRETARY, PATNA\n 2. THE ROAD CONSTRUCTION DEPARTMENT, GOVERNMENT OF BIHAR THROUGH ITS PRINCIPAL SECRETARY, NEW SECRETARIAT, OFF. BAILEY ROAD, PATNA\n 3. THE PRINCIPAL SECRETARY, DEPARTMENT OF ROAD CONSTRUCTION, GOVERNMENT OF BIHAR, NEW SECRETARIAT, OFF BAILEY ROAD, PATNA\n 4. THE JOINT SECRETARY TO THE GOVERNMENT OF BIHAR, ROAD CONSTRUCTION DEPARTMENT, NEW SECRETARIAT, PATNA\n 5. THE EXECUTIVE ENGINEER, NEW CAPITAL ROAD DIVISION, ROAD CONSTRUCTION DEPARTMENT, PATNA\n 6. THE TOWN COMMISSIONER, MUZAFFARPUR MUNICIPAL CORPORATION, MUZAFFARPUR", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-7", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "7. THE EXECUTIVE OFFICER, NAGAR PARISHAD, BUXAR .... .... RESPONDENT/S ====================================================== Appearance :\n (In CWJC No.8317 of 2009) For the Petitioner/s : Mr. Y. V. Giri, Sr. Advocate Mr. Rajeev Ranjan Prasad, Advocate Mr. Ashish Giri, Advocate Mr. Akash Chaturvedi, Advocate For the Respondent/s : Mr. P. K. Verma, AAG V Mr. S. R. Saran, AC to AAG V (In CWJC No.13483 of 2009) For the Petitioner/s : Mr. S.D.Sanjay Mr. Gautam Kejriwal Mr. Sushila Agrawal For the Respondent/s : Mr. P. K. Verma, AAG V Mr. S. R. Saran, AC to AAG V (In CWJC No.7394 of 2009) For the Petitioner/s : Mr. Y. V. Giri, Sr. Advocae Mr. Anil Kumar Jaiswal, Advocate Mr. Ashok Giri, Advocate For the Respondent/s : Mr. P. K. Verma, AAG V Mr. S. R. Saran, AC to AAG V 5 / 21 (In CWJC No.12493 of 2009) For the Petitioner/s : Mr. Rajeev Ranjan Prasad, Advocate Mr. Nilanjan Chatterjee, Advocate Mr. Raghwendra Kumar Singh, Advocate For the Respondent/s : Mr. P. K. Verma, AAG V Mr. S. R. Saran, AC to AAG V (In CWJC No.9169 of 2009) For the Petitioner/s :", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-8", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "Mr. Rajeev Ranjan Prasad, Advocate Mr. Nilanjan Chatterjee, Advocate Mr. Raghwendra Kumar Singh, Advocate For the Respondent/s : Mr. P. K. Verma, AAG V Mr. S. R. Saran, AC to AAG V ====================================================== CORAM: HONOURABLE JUSTICE SMT. SHEEMA ALI KHAN CAV ORDER 14 21-03-2013 These batch of writ applications have been filed challenging the Government resolution dated 28.03.2008 by which a decision has been taken by the State Government through the Road Construction Department to levy Rs.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-9", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "5,000/- per kilometer per year as land usage charges for allowing the petitioners to lay underground optical fibre cables on the lands belonging to the State Government. \n\n The Government of India formulated a new telecom policy in the year 1994 aimed at giving highest priority to the development of telecom services in the country in conformity and in furtherance of Government of India\u201fs Economic Policy. The mobile cellular telecommunication essentially requires laying down the optical fibre cables as per network planning for ensuring that signal of adequate length is available to all users and as such, the Government of India granted licenses under Section 4 of the India Telegraph Act, 1885 giving permission 6 / 21 to the companies in the said business to lay down underground telecom cable. The Government of India, Ministry of Road Surface Transport came out with a circular dated 29th September, 2000 whereby they provided mobile guidelines for streamlining the provisions of right of way to telecom service licensees and also to the infrastructure providers. This document has been annexed in almost all the writ applications. The mobile guidelines have been formulated, keeping in view the object of creating a robust telecommunication infrastructure with adequate bandwidth at affordable rates and in order to promote Development and Proliferation of Information Technology, Electronic Governance, E-Commerce, convergence of Information, Communication and Entertainment sectors so as to improve the state of economy, enhance the quality of life of the citizens and to ensure development of urban and rural areas with equity throughout the country. This document has recommended the broad guidelines under which right of way permissions may be granted to licensed telecom operators and registered infrastructure for laying telecom cables, ducts under, over, along, across, in or upon a property vested in or under the control or management of a local authority or of any other person including public authority, public corporation, autonomous body, State Government or Central Government in their respective licensed service area 7 / 21 during the pendency of their licence.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-10", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "Initially, when permission was granted to the petitioners\u201f companies to lay down the optical fibre cables, a resolution was passed on 11.07.2005 vide memo no. 4564(S) me, giving certain directions to the companies which were utilizing the right of way on the lands which belong to the Road Construction Department. Laying down of optical fibre cables essentially required that the earth/road had to be dug up at various points so that the optical fibre cables could be installed underground. The Government gave certain directions regarding the manner in which the companies should act for restoring the land/road to its original form, directing the companies to pay a certain cost so that the Road Construction Department can reconstruct the roads and restore them. It may be mentioned here that the Government of India has presently exempted the mobile companies from any charge with respect to usage of land belonging to the National Highway. \n\n In the State of Bihar, the Petitioners\u201f Companies were permitted to lay down the optical fibre cables without any demand for usage of the land. While doing so, the Road Construction Department vide memo no. 575(E) me, dated 05.02.2002 addressed a letter to the M/s Reliance Telecom and others by different memo numbers, which gave them permission to lay down optical fibre cables. As per the letter, 8 / 21 which is contained in Annexure-A to the counter affidavit, which speaks of the development in the field of telecommunication and the Government\u201fs intention to frame a policy regarding laying down of optical fibre cables. It specifically states that the Petitioners\u201f Companies are being granted temporary permission with the condition that once the State Government frames the policy, the Petitioners\u201f Companies would be bound by the said policy and would have to act and accept the provisions of the said policy. Accordingly, the Petitioners\u201f Companies were allowed to lay down their optical fibre cables.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-11", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "In pursuance of the aforesaid permission, a resolution was taken by the State Government issued vide letter no. 4501(S) dated 28.03.2008, wherein the State Government has stated that since the telecom companies have developed, grown and established themselves as business enterprises, they no longer come under the category of being granted a subsidy as such they would have to pay Land Usage Charges at the rate of Rs. 5000/- per kilometer per year. Subsequent to the issuance of this letter, notices were issued individually to all the stake holders, which is under challenge on various grounds, which are as follows:- 1. Whether the land usage charges is a rent or not? \n\n 2. Whether the land usage charge is impost if not rent? \n\n\n 9 / 21\n\n 3. Whether any impost in nature of tax, fees, cess can be levied without any authority of law merely on executive orders? \n\n 4. Whether the said impost is not on the usage of land, but on laying of optical fibre cables, which is governed under entry 31 read with entry 96 and 97 of the Union List in the 7th Schedule? \n\n 5. Whether even if assuming that the State has power to demand such impost, whether the same is bad in law on ground of there being no reason to justify the rates so imposed by it? \n\n All these issues have been amalgamated in the judgment.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-12", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "All these issues have been amalgamated in the judgment. \n\n I shall begin with the power of the State Government to demand Land Usage Charge for utilization of its land by companies/individuals. It has been argued that the Union Government has the power to enact laws with respect to Post and Telegraph; telephones, wireless, broadcast and other like forms of communications under Entry 31 of Schedule-VII of the Constitution. It is further being argued that it is the Union Government, under Entry 96, has the power to charge fees in any matter under the Union List, as such, the State Government could not have raised the demand asking for Land Usage Charge. In this context, it is also argued that the demand is by way of 10 / 21 tax/fees/impost and as such, it can only be demanded or charged from a company/individual if there is a corresponding law enacted by the State Government which allows it to make such a demand. Admittedly, the State Government has not taken the help of any law enumerated regarding the said demand.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-13", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "At the outset, it is quite obvious and requires no citation of any case to point out that the State Government has not made any law or granted any license under the topics covered by Entry 31 in the 7th Schedule of the Union List, rather if at all, it would come under Entry 18 of the State List, which reads as \"Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization\", which are the subject matters for which the State Government has the power to take decisions, legislate and issue policies with regard to the administration and management of land which belongs to the State Government or any of its local bodies. Thus, there should be no confusion regarding this aspect of the matter and the State is well within its rights to take a policy decision regarding the lands belonging to it. \n\n The next question that has been argued is that the demand of Rs. 5000/- per kilometer per year for land 11 / 21 usage is by way of a tax. In this context, I would like to first begin by making a distinction between a lease and a license and a fee and a tax. It has been argued that the said demand would come within the definition of a tax/license/fee.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-14", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "In the case of Associated Hotels Of India Ltd vs R. N. Kapoor [AIR 1959 SUPREME COURT 1262], the Supreme Court has distinguish between a license and a fee. One R. N. Kapoor filed an application before the Rent Controller, New Delhi, alleging that he was a tenant of the spaces in the cloak rooms under the Hotel (appellant) and asking that standard rent might be fixed in respect of them. The Hotel opposed the application, contending that the Act did not apply and no standard rent could be fixed. Section 11 of the Delhi Rent Control Act defines \"premises\" as any building or part of a building which is or is intended to be let separately.............. but does not include a room in a dharamsala, hotel or lodging house.\" It was contended that a room in a hotel need not necessarily be a bed room, but may be for example be a dining room, a beauty parlour etc. It has been argued that such spaces provide amenities to the persons to use the hotel and, therefore, are part of the hotel. The Apex Court held that there is a mark distinction between a lease and the license.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-15", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "Section 105 of the Transfer of Property Act 12 / 21 defines a lease of immovable properties as transfer of a right to enjoy such property made for a certain time in consideration for a price paid or promised. Under Section 108, the licensee is entitled to be put in possession of the property, a lease is, therefore, a transfer of an interest in the land. The interest transfer is called a lease hold interest. On the other hand, Section 52 of the Indian Easement Act defines a licence as \"Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence.\" The Apex Court laid down the following propositions. \n\n \" (1) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the form ;\n (2) the real test is the intention of the parties-whether they intended to create a lease or a licence;\n\n (3) if the document creates an interest in the property, it is a lease; but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence; and (4) if under the document a party gets exclusive 13 / 21 possession of the property, prima facie, he is considered to be a tenant; but circumstances may be established which negative the intention to create a lease.\"", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-16", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "Thus, in the present case, it cannot be said that the State Government had granted a license to the Petitioners\u201f Companies nor can it be lawfully said that they had leased the properties as the Companies did not come into exclusive possession over the lands that were utilized or are to be utilized by them.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-17", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "Another judgment which would be relevant for the purposes of explaining what is a tax or fee is the case of Commissioner, Hindu Religious Endowments, Madras vs. Lakshmindra ThirthSwamiar, [AIR 1954 SC 282]. The facts of this case are not very relevant for the purposes of the present dispute. The power of the State Government to enact laws on subject of religious and charitable endowments which is covered by Entry 28 of List-III, Schedule-VII of the Constitution was not under challenge, the challenge was to the demand of an annual contribution contained in Section 76 of the Charitable Endowment Act which was invoked at the time when the matter was taken up. It was argued that the provisions was amounting to a tax as Section 76 of the Act empowered the Government to charge the amount that they were required to pay by way of the salaries, pensions and other remuneration to the 14 / 21 Commissioner, Deputy Commissioners, Assistant Commissioners and other officers of the religious institutions employed for the purposes of this Act including the expenses incurred by the Area Committees. The Apex Court has referred to the definition of tax by Lathan, C.J. of the High Court of Australia in Matthews v. Chicory Marketing Board [60 C.L.R. 263, 276]. A \"tax\", according to the learned Chief Justice, \"is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered\". The main essence of a tax is that it is compulsorily payable, it is imposed by a statutory body without the tax payer consent and the payment is enforceable by law. It does not confer any special benefit to any particular individual i.e. to say there is no element of quid pro quo between the taxpayer and the public authority. A fee, on the other hand, is generally defined to be a charge for a special service rendered to individuals by some", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-18", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "the other hand, is generally defined to be a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service. The distinction between a tax and a fee, lies primarily in the fact that a tax is levied as part of common burden while a fee is payment for special benefit or privilege.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-19", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "Counsel also refers to the judgment of Gupta Modern Breweries vs. State of J &K and Others [(2007) 6 SCC 15 / 21 317]. The Excise Commissioner under rule 17 of the Jammu & Kashmir Distillery Rule sought to impose charges on account of salary of Excise Department staff which were to be recovered from the management to the extent of 50 per cent of the total expenditure. In several decisions, such as CCE vs. Chhata Sugar Co. Ltd. [(2004) 3 SCC 466, The Apex Court has held that the stand of the concern authority that they were rendering services by deputing staff for the purposes of ensuring proper manufacture cannot be held to be a fee as there is no quid pro quo between the fee charged and the services rendered. This case referred to really does not help the Petitioners\u201f Companies except that it highlights the differences between a tax and a fee. It is obvious that in the present case, the demand of Land Usage Charge cannot come within the ambit of a tax or a fee.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-20", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "The decision cited by the Counsel for the Petitioners\u201f Companies, which I may merely mention in passing would not be applicable in the facts of this case as they deal with the imposition of tax and fees, are, Consumer Online Foundation and Others vs. Union of India and Others [(2011) 5 SCC 360], Commissioner of Income Tax, Udaipur. Rajasthan vs. McDowell and Company Limited [(2009) 10 SCC 755], Bholanath Gupta and Others. Vs. the State of Bihar and Another [1975 BBCJ 397], Bimal Chandra Banerjee vs. State of Madhya Pradesh [AIR 1971 SC 517], 16 / 21 Shree Digvijay Cement Co. Ltd. And another vs. Union of India and another [AIR 2003 SC 767]. All these cases have been cited for the propositions that the power to impose tax or fee can only be exercised under any law authorizing such levy and not by the executive power of the State. Especially, Counsel has referred the case of Union of India and another vs. Association of Unified Telecom Service Providers of India and other [(2011) 10 SCC 543. The relevant facts are that the licenses granted to the service providers stipulated a license fee, which was payable by the service providers within a stipulated time. The licensees defaulted during the period 1994 to 1999, in payment of license fee and made a representation to the Government of India, Ministry of Telecommunications for relief against the license fee for the survival of the telecom industry. The Government of India considered their representations and offered a new package. There were disputes regarding the terms of the license, which was referred to the Tribunal for adjudication. The points that were considered by the Supreme Court in this judgment do not cover any part of the issues raised by the petitioners in these cases. The findings of the Apex Court that only the Central", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-21", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "issues raised by the petitioners in these cases. The findings of the Apex Court that only the Central Government and no other has a right to carry telecommunication activities cannot be doubted. In the present cases, the licenses have been granted by the Central Government. The State Government is not taking 17 / 21 any fee for grant of license; rather the demand is with respect to usage of land belonging to the Road Construction Department or the local authorities. It is also clear that the State Government is not making a demand of any tax as Land Usage Charge cannot come within the purview of a tax.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-22", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "It is next argued that there is no statutory law under which the term \"Land Usage\" would be included. It is submitted that even if it is argued that the State is the landlord and it is charging rent, then it should be under the provisions of the law laid down under which the State can demand a rent. An attempt has been made to refer to the Acts governing the field with respect to the power of the State Government to charge any form of tax, fee, rent for the usage of land to indicate that the State Government has no authority by an executive action to demand the Land Usage Charge. Referring to the provisions of the Bihar Tenancy Act, it has been submitted that the Act came into being to consolidate certain enactments relating to the law of landlord and tenant. The regulations earlier regarding the subject matter stood only in favour of the Zamindars and Tenure holders, which had nothing in it to safeguard the interests of tenants who were nothing but tenants at will. The Act sought to bring into existence \"the occupational right and fixation of fair and equitable rent\" and to 18 / 21 regularize the status of raiyats after the Zamindari rights were abolished. Under the Bihar Tenancy Act, sub-Section (3) of Section 3, the tenant has been defined as a person who holds land under another person and is, or but for a special contract would be liable to pay rent for that land to that person. Sub-section (4) of Section defines a landlord which mean \" a person immediately under the tenant under whom a tenant holds, and includes the Government.\" Rent mean whatever is lawful payable or deliverable in money or kind be a tenant to his landlord on account of use or occupation of the land held by the tenant. It has been submitted that the Bihar Tenancy Act defines in detail the manner in which the landlord or for that matter a proprietor may charge for the land. It may be noted that the Bihar Tenancy Act", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-23", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "that matter a proprietor may charge for the land. It may be noted that the Bihar Tenancy Act refers to the right of the raiyat as well as the under-raiyat of land and the State Government charges a rent under the Act from the tenant or an under-raiyat for occupation of the land. In the present case, the provision of the Bihar Tenancy Act would not be applicable as the State Government is not charging the \"rent\" within the meaning of the Bihar Tenancy Act from the Petitioners\u201f Companies. The demand under the Bihar Tenancy Act would not make the demand illegal by virtue of not being covered under the Act. The application of the Bihar Tenancy Act is in different circumstances and for different purposes.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-24", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "19 / 21 There is no dispute about the fact that the State Government or the agencies under it are the owners or in other words the landlords and anyone seeking to derive any benefit from the lands owned by the State Government must pay under the general law. The demand is raised depending on the purpose for which the land is being utilized. Obviously, the Acts such as the Bihar Building (Lease, Rent and Eviction) Control Act, 1982 would not be applicable under a situation such as this. \n\n The introduction and expansion of telecommunication services and facilities have grown up in the last decade or two, have facilitated easy communication and access to information. The requirements to facilitate smooth functioning of the modern telecommunication system require certain measures which were not envisaged 20 years back. There can be no doubt that use of a facility confers a benefit to the persons who is using the said facility, naturally such benefits cannot come for free either for the beneficiaries or the providers of such facilities. The Government in these extraordinary circumstances is not required to frame laws, rather it would appear that Land Usage Charge is a type of a rent demanded by the Government for conferring certain benefits to the users. The outcome of the facility i.e. providing telecommunication is for the benefit of the public at large.", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "0eea247304c0-25", "Titles": "Vodafone Essar Spacetel Ltd.&A vs The State Of Bihar & Ors on 21 March, 2013", "text": "20 / 21 Simply put \u201erent\u201f is compensation for the use of land. In this particular case, the Government has taken a policy decision to impose rent which is charged for use of street by Telegraph Companies. The term \u201erental\u201f is properly applied to the charge imposed by a city (in this case the Government) on a telegraph company for the privilege of using the street, allies, and public places of the city, graduated by the amount of such use; for it is not a privilege of licence tax, the amount paid for not being graduated by the amount of business, no sum fixed for the privilege of doing business, it is more in the nature of a charge for use of property belonging to a town, city and the like. \n\n It may be noted here that the petitioners in these cases were issued a letter that they would be allowed to use the lands belonging to the Government in whatever department, subject to framing of a policy. The petitioners utilized the lands with their eyes and ears open understanding the impact of the said letter, and, therefore, they cannot be heard to say that the policy framed is de hors the law. \n\n Referring to the submission on behalf of the petitioners that there are no fixed criteria that the amount charged is excessive is a stand, which can be redressed by the petitioners if they are so advised by approaching the concerned department. On this ground, the Court cannot 21 / 21 hold that the policy framed by the Government charged for use of the roads is beyond the scope of the powers of the State Government. \n\n In the result, these writ applications are dismissed. \n\n\n (Sheema Ali Khan, J) Prabhakar Anand/-", "source": "https://indiankanoon.org/doc/198757445/"}
+{"id": "8c79d10f2daa-0", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "IN THE HIGH COURT OF JUDICATURE AT PATNA\n                                CWJC No.3483 of 2007\n      1.   Phuljharia Devi, w/o Late Munka Rai.\n      2.   Bhola Rai, S/o Late Munka Rai.\n                     Both   resident   of   Mohalla-Paharpur,   P.S.-\n                     Gardanibagh, Town and district-Patna.\n                                         ............................................ Petitioners\n                                       Versus\n      1.   The State of Bihar through the Collector, Patna.\n      2.   The Police Employees House Construction Society Ltd.,\n           through   its   Secretary,   Anisabad,   P.S.-Gardanibagh,\n           District-Patna.\n      3.   The Secretary, Police Employees House Construction\n           Society Ltd. Anisabad, P.S.-Gardanibagh, District-Patna.\n                                         ............................................ Respondents\n      For the Petitioner   :   Mr. Anurag Shukla, Advocate\n      For the State        :   Mr. Lalit Kishore, A.A.G.-III.\n      For the Society      :   Mr. K.K. Upadhyay, Advocate.\n                            P R E S E N T\n                   HON'BLE JUSTICE MIHIR KUMAR JHA\n                               -----------\n5. Mihir Kr. Jha, J. In this writ application the two petitioners claiming to be the land owners have prayed for the following relief:", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-1", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "\"A    writ    of    Mandamus        or    any     other\n                                   appropriate          writ        or       order     or\n                                   direction      be    issued       commanding        the\n respondent authorities to pay to the petitioner the balance of due compensation for their lands, which were acquired by the State of Bihar for the benefit of the respondent society, at the rate determined by this Hon\u201fble Court and affirmed by the Hon\u201fble Supreme Court.\"", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-2", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "It is the case of the petitioners, as projected with full sincerity by Mr. Anurag Kumar Shukla, learned counsel for the petitioners, that the piece of land belonging to the husband of petitioner no.1 was acquired way back by the State of Bihar for the benefit of Police Employees House Construction Society (hereinafter referred to as \u201ethe Society\u201f) way back in the year 1977-78 under the provisions of Land Acquisition Act (hereinafter referred to as \u201ethe Act\u201f). The award under section 11 of the Act was prepared in the name of petitioner no.1 and the land holders including petitioner no.1 had thereafter sought reference under section 18 of the Act leading to institution of L.A.Case No. 73/1982. The award given by the Land Acquisition Judge in the aforesaid L.A.Case was also made subject matter of several first appeals and they were disposed of by a common judgment dated 3.2.1994 in F.A.No. 121/1985 whereby and whereunder the award given by the Land Acquisition Judge was modified fixing rate of compensation at the rate of Rs. 4400/- per katha besides payment of some additional statutory amount in terms of the Act. It is not in dispute that the State of Bihar had also taken the matter to the Apex Court by filing S.L.P.No. 14886-938 of 1995 (Civil Appeals No. 2889-2941 of 1997) and they were disposed of by a common order dated 12.4.1997 affirming the judgment of this Court dated 3.2.1994 in its entirety.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-3", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "It is the case of the petitioner no.1 that in terms of the judgment of this Court as affirmed by the Apex Court she was entitled for payment of Rs. 4,45,161.16 paise (principal amount Rs. 1,17,069.81 paise and interest as on 3.4.2000 Rs. 3,28,091.35 paise), but on an impression created by the Society, respondent no.3, that the amount payable to them was only Rs. 3,57,450/- they had accepted a cheque of Rs. 3,57.450/-, whereafter the execution case pending before the Execution Court was withdrawn. \n\n The petitioners, therefore, have claimed that by fraudulent action of respondent no.3 society they were deprived of payment in terms of the judgment of this Court and were forced to accept the payment of lesser amount which led them looser of a sum of Rs. 87,711.16 paise. Thus, the whole case of the petitioners is that this Court should now direct the respondents to pay the petitioners the balance of compensation of Rs. 87,711.16 paise with interest as they were/ are still entitled for full payment of Rs. 4,45,161.16 paise, an amount payable under the order of this Court in terms of judgment in F.A. No. 121/1985.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-4", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "In this case two separate counter affidavits have been filed, one by respondent no.1 the State of Bihar and the other by the Society, respondent no.3. From the reading of the counter affidavit of the State it would appear that a preliminary objection has been taken that since the petitioners had in terms of the agreement between them and respondent no.3 society accepted the payment through cheque dated 15.3.2001 for a sum of Rs. 3,57,450/- and had withdrawn the execution case No. 10/1996, they cannot be permitted to now raise this issue after a period of six years and that too by filing a writ petition. The State somehow has also tried to put up a picture that while it was taking steps for arranging the funds of the society for payment of compensation in terms of the award as modified by this Court and affirmed by the Apex Court, the petitioners by their own action having entered into the negotiation with the society respondent no.3 had accepted the payment and as such, there would be no liability for the State to make payment of compensation. \n\n Respondent no.3, on the other hand, in its counter affidavit has taken a plea that after the judgment of the Apex Court an agreement was arrived into between the petitioners and the respondent society and in terms of the agreement the payment of Rs. 3,57,450/- was made to the petitioners. It is the case of the respondent society that the petitioners having undertaken in the said agreement that after receiving payment of Rs. 3,57,400/- they shall have no claim grievance against the judgment debtors i.e. Respondents and its being acted upon in letter and spirit cannot be permitted to raise much less re-open the issue for payment of compensation.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-5", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "The respective stands in the pleadings of the parties, therefore, lead to the first and foremost question as to whether this writ petition for payment of amount of award under the Act after disposal of execution case in the Court below is maintainable? \n\n Since the plea of alternative remedy was raised by the respondents by way of a Preliminary objection, this Court has to note the submission of Mr. Lalit Kishore, learned Addl. Advocate General No.III, who has submitted that the provisions of the Act being self contained, would stand as a bar to the remedy under Article 226 of the Constitution of India would for payment of compensation under the Act. In this respect he has relied on the provisions of section 53 of the Act which makes the Code of Civil Procedure applicable to the proceedings under the Act. Taking a clue from section 53 of the Act learned counsel has proceeded that once the award is made under section 18 of the Act and gets confirmed in appeal in terms of section 54 of the Act, the remedy for the land holder to claim the amount of compensation under award is only by way of execution of the award which is a decree in terms of section 26(2) of the Act. It is, thus, the submission of the learned AAGIII that if there is any iota of evidence of fraud as pleaded by the petitioners for claiming payment of balance amount of award, the remedy for the petitioners would be under section 47 of the Code of Civil Procedure (C.P.C.) read with its Order 23. In nut shell the submission of the learned counsel is that the petitioners ought to have moved the same executing court and having elected a forum of the executing court they cannot be allowed to change it by now taking recourse to the remedy under Article", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-6", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "226. In this context reliance was placed by him on the judgment of the Apex Court in the case of Swetamber Sthanakwasi Jain Samiti vs. Alleged Committee of Management Sri R.J.I. College, Ara, reported in (1996) 3 SCC 11 and the Division Bench judgment of this Court in the case of Sachidanand Roy & ors. vs. the State of Bihar & ors., reported in 1998(1) PLJR 889, as also in the case of Abijit Ganguly vs. Sri Md. Jalaluddin, reported in 1997(2) PLJR 1007. It was finally submitted by the learned AAGIII that in a given situation, the petitioners could have also availed the remedy under section 48 C.P.C. and in any event there would be no limitation for impeaching the order of the executing court with regard to disposal of the execution case without payment of full amount of award. In this context he has placed reliance on a judgment of Privy Council in the case of Oudh Commercial Bank Ltd., Fyzabad vs. Thakurain Bind Basni Kuer & ors., reported in AIR 1939 P.C. 80.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-7", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "Rebutting the aforementioned submissions of the learned AAG III Mr. Shukla has submitted that the payment of award being part of a fundamental right guaranteed under Article 31 of the Constitution as was available in the year 1977-78 in view of acquisition of the land made in that period, there would be no waiver of fundamental right and to support himself he would place reliance on the judgment of the Apex Court in the case of Olga Tellis & ors. vs. Bombay Municipal Corporation & ors., reported in AIR 1986 S.C. 180. He has also placed reliance on paragraph 79 of the judgment of the Apex Court in the case of Minerva Mills Ltd. & ors. vs. Union of India & ors., reported in AIR 1980 S.C. 1789 and the judgment of the Apex Court in the case of M.P.State Agro Industries Development Corporation vs. Jahan Khan, reported in AIR 2007 S.C. 3153. He has also placed strong reliance on a judgment of Full Bench of Andhra Pradesh High Court in the case of Bhimidipati Annapoorna Bhavani vs. The Land Acquisition Officer, Peddapuram & ors., reported in AIR 2005 A.P. 365 as also another judgment of the Apex Court in the case of Kamleshwar Prasad vs. Pradumanju Agarwal, reported in 1997(2) PLJR 86 (S.C.).", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-8", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "In the opinion of this Court the preliminary objection raised by the Respondents as pressed by the learned Addl. Advocate General No. III must be upheld that the present writ application seeking enforcement of an award under the Act is not maintainable. The reasons for the same are quite simple. As noted above, in the submission of the learned AAGIII there is a complete mechanism for payment of compensation after acquisition of land of the land holder by the State for public purposes or for a company. Such mechanism includes reference to a civil court on the quantum of compensation and making of an award by the civil court after considering the evidence of the parties which in terms of section 26(2) of the Act is a decree. Section 26 of the Act reads as follows:\n \"26. Form of awards.-(1) Every award under this Part shall be in writing signed by the Judge, and shall specify the amount awarded under clause first of sub-section (1) of section 23, and also the amounts (if any) respectively awarded under each of the other clauses of the same sub- section, together with the grounds of awarding each of the said amounts. (2) Every such award shall be deemed to be a decree and the statement of the grounds of every such award a judgment within the meaning of section 2, clause (2) and section 2, clause (9) respectively, of the Code of Civil Procedure, 1908.\"", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-9", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "The moment such an award is deemed to be a decree and the Civil Procedure Code is made applicable to the proceedings of the Act in terms of section 53 thereof, there would be hardly any scope for the petitioners to contend that a person aggrieved against any portion of the award or its execution would be entitled to maintain a writ petition. There being statutory remedy available in terms of the Act through the aegis of the Civil Court, the petitioners cannot be heard to say that they may have still a remedy under Article 226 of the Constitution after the execution case has been dropped on payment of amount of award under execution. This is precisely what has been decided by the Apex Court in the case of Swetamber Sthanakwasi Jain Samiti (supra) wherein the Apex Court noticing that the suit filed by the Samiti was pending before the Civil Court had held that a writ petition against an order of interim injunction and rejection of prayer for impleadment of a party was not maintainable and the order of the High Court allowing the writ petition was unsustainable. The relevant portion of the aforesaid judgment which would be directly applicable to the facts of the present case reads as follows:", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-10", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "\" ... ... Though the jurisdiction of the High Court under Article 226 of the Constitution is not confined to issuing the prerogative writs, there is a consensus of opinion that the High Court will not permit this extraordinary jurisdiction to be converted into a civil court under the ordinary law. When a suit is pending between the two parties the interim and miscellaneous orders passed by the trial court against which the remedy of appeal or revision is available cannot be challenged by way of a writ petition under Article 226 of the Constitution of India. Where the civil court has the jurisdiction to try a suit, the High Court cannot convert itself into an appellate or revisional court and interfere with the interim/ miscellaneous orders of the civil court. The writ jurisdiction is meant for doing justice between the parties where it cannot be done in any other forum\".", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-11", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "Here also position is somewhat the same. There is no dispute that the petitioners after finality of the award and the rate as determined by this Court and affirmed by the Apex Court had levied execution payment of amount in Execution Case No. 10/1996 and the executing court by an order dated 20.7.2001 had recorded that:", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-12", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "^^ fMdzhnkj dh vksj ls fnukad 2-2-2001 dks nkf[ky vkosnu i= lapkfyr dj fMdzhnkj ds fon~ vf/koDrk fuosnu djrs gSa fd muds iw.kZ fcdk, jkf\"k dk Hkqxrku ejhmu la0&2 }kjk dj fn;k x;k gS rFkk fMdzhnkj dk vc fdlh ejhmu ds fo:) dksbZ laca/k ugha jg x;k gsS A vr% mUgsa bl ckn dks okil ysus dh vuqefr nh tk; A lquk rFkk vfHkys[k dk vcyksdu fd;k A fMdzhnkj dk vc fdlh ejhmu ds fo:) dksbZ cdk;k ugha jg x;k gS rFkk fMdzhnkj bl btjk; okn dks okil ysuk pkgrs gsaS A vr% fMdzhnkj dh izkFkZuk Lohd`r dh xbZ A ckn iw.kZ Hkqcrku esa fMdzhnkj }kjk okil fy, tkus ds dkj.k [kkfjt fd;k x;k A ** It has to be noted that this order is now being said to be a fraudulent order as the petitioners claiming to be illiterate person are said to be misled by the society. It would be, however, difficult to accept even this submission because the agreement between the society and petitioner no.1, on record in the counter affidavit of the society, not only takes note of the entire history of the land acquisition as also the rate of enhancement of the award given by the civil court but also its modification by this Court and affirmance by", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-13", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "enhancement of the award given by the civil court but also its modification by this Court and affirmance by the Apex Court in the preamble of the agreement and under the relevant portion of the agreement it was clearly mentioned that irrespective of the claim of the decree holder she had settled the matter outside the court by arriving at the compromise by accepting payment of Rs.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-14", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "3,57,450/-. The agreement dated 30th January, 2001 being somewhat significant and in fact having a direct bearing to the issue involved in this writ application needs to be quoted hereinbelow:\n \"BEFORE NOTARY PATNA SADAR PATNA AGREEMENT This agreement made and entered into at Patna this 30th day of month of January 2001 between Smt. Fuljharia Devi, W/o Munaka Rai and Bhola Rai, S/o Munaka Rai of Paharpur, P.S. Gardanibagh, District Patna, hereinafter referred to as DECREE HOLDER in L.A. Execution Case No. 10 of 1996 (which expression shall, unless excluded by or repugnant to the context mean and include his heirs, administrators, assigns, legal representatives and/or successors-in- interest) of the ... FIRST PARTY.\n AND POLICE EMPLOYEES CO-OPERATIVE HOUSE CONSTRUCTION SOCIETY LTD., Gandhi Vihar, Anisabad, Patna (Regd. No.20/ Patna, dated 23rd December, 1996) through its Secretary, Sri Krishnadeva Prasad Sinha resident of A-14 Gandhi Vihar, P.S. Gardanibagh, District Patna hereinafter referred to as the INTERVENOR, JUDGMENT DEBTOR NO.2 in L.A. Execution Case No. 10 of 1996 (which expression shall, unless it be repugnant to the context or meaning thereof mean and include its administrators, legal representatives, assigns nor nominee or nominees or successors-in-interest of ... SECOND PARTY.                    Whereas\n(A)        The      decree           holder        solemnly", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-15", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "(A)        The      decree           holder        solemnly\naffirms and declares that an area of 46.795 acres, of land in village PAHARPUR, P.S. Phulwari, District Patna has been acquired by the State of Bihar for the Police Employees Co- operative House Construction Society Ltd., Patna (hereinafter referred to as the Society) for the construction of houses of Police Employees.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-16", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "(B) AND whereas total land meaning approximately 1.08 Acre i.e. 34.56 Kathas at Mauza Paharpur, Plot Nos. 366, 367, 373, 385, 386, 405, 407, 434, 435 P.S. Gardanibagh, District Patna is involved in this case. \n\n(C) AND whereas the Decree Holder Covenant that the aforesaid land was in his exclusive possession with absolute right, title and interest in the year. \n\n(D) AND whereas the collector under Land Acquisition Act categorized 35.420 acres of land as Class \u201eKa\u201f Block and rest of 11.35 acres of land as class \u201eKha\u201f Block. The compensation for class \u201eKa\u201f land was fixed at the rate of Rs. 66,434/- per acre equivalent to Rs. 2075/- per katha whereas the compensation for class \u201eKha\u201f land was fixed at the rate of Rs. 64,000/- per acres, equivalent to Rs.2000/- per Kathas. (E) AND whereas the Decree Holder applied for Reference under section 18 of the Land Acquisition Act. \n\n(F)      AND        whereas          by     the       impugned\njudgment        and       awards          dated    15.1.1991\nthe learned special Land Acquisition Judge II, Patna has enhanced the compensation amount to Rs. 6,500/- per Katha.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-17", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "(G) AND whereas of the State of Bihar has filed F.A.No. 148 of 1985 against the judgment of enhancing the compensation of acquired land. The aforesaid appeal has partly been allowed by the Hon\u201fble High Court vide order dated 3.2.1994 by which the Hon\u201fble High Court reduced the compensation for the land acquired from 6,500/- per Katha to Rs. 4,400/- . \n\n(H) AND whereas the State of Bihar has filed S.L.P.No. 14886 to 14939 in the Hon\u201fble Supreme Court of India against the payment of additional compensation under section 23(IH) of the Land Acquisition Act vide order dated 14.7.1995 and the Hon\u201fble Supreme Court has allowed the aforesaid S.L.P. \n\n(I) AND whereas the Police Employees House Construction Society Ltd. was one of the party in the aforesaid First Appeal and S.L.P.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-18", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "(J) AND whereas the Police Employees House Construction Society Ltd. filed a petition under Order 1 Rule 10 of C.P.C. in L.A.Ex.Case No. 10 of 96 and Hon\u201fble L.A. Judge II, Patna has made necessary party on 25.1.2001. NOW THIS WITNESSETH AND IS HEREBY AGREED AND DECLARED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:-\n1. The Decree Holder and Police Employees House Construction Society Ltd. has compromised the case outside court and the parties have agreed to settle the dispute on payment of Rs.3,57,450.00             through          account           payee\ncheque          in     the    name       of     the      Decree\nHolder irrespective of the claim of the Decree Holder. On payment of the said amount the Decree Holder will have no claim with the judgment Debtor No. 1 and 2 (The State of Bihar through Collector Patna and the Police Employees House Construction Society Ltd. \n\n2. That the decree Holder will receive the consideration amount for the aforesaid L.A.Ex.Case No. 10 of 1996, and on such receipt the Decree Holder and his legal heirs shall have no further claims and they shall not further demand any interest in future. \n\n3.        The        Decree        Holder       agree        and\nundertake              that         he        shall        file\nwithdrawal petition in the court of Sub Judge II, Patna after receiving an amount of Rs. 3,57,450.00 from Police Employees House Construction Society Ltd. \n\n4. That the Decree Holder agree and undertake that after receiving the said amount i.e. Rs. 3,57,450.00 shall also have no grievance from the Judgment Debtors.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-19", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "5. The Police Employees House Construction Society Ltd. also agree that the matter has already been compromised outside the court and he has agreed to pay through account payee cheque a sum of Rs. 3,57,450.00 to the Decree Holder.                   SCHEDULE I\n DESCRIPTION            OF      LAND      UNDER      THIS\nAGREEMENT.\nKhata No. Plot No.                       Area\n     153            367                  0.14\n     200            373                  0.10\n     202            386                  0.22\n     254            405                  0.09\n                    407                  0.08\n     200            434                  0.10\n                    435                  0.05\n     175            366                  0.07\n     202            385                  0.23\n                                         1.08\n                              i.e.34.36 Kathas\nIn witness whereas the parties hereto have set and subscribed their respective hands on the day month and year aforesaid. \n\nAbove written in presence of the witness. \n\n Sd/- Illegible Signature of Decree Holder Witnesses Sd/- Illegible Signature of J.D.No.2 Police Employees House Construction Society Ltd. \n\n Through its Secretary.\"", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-20", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "Through its Secretary.\" \n\n (underlining for emphasis) This Court has purposely quoted the entire agreement in extenso and underlined relevant portion to emphasis that whatever was stated before the executing court on 20.7.2001 by filing an application on 2.2.2001 was a natural fall out of the aforementioned agreement dated 30.1.2001. In presence of the aforementioned agreement followed by the order of the executing court dated 20.7.2001, it would be thus very difficult for this Court to accept the story of either fraud or misrepresentation which has been made the only basis by the petitioners to file this writ application. To this Court it appears that the petitioners have subsequently become wiser after six years receiving full and final payment only for filing of this writ petition for claiming additional amount which they had voluntarily given up in terms of the compromise petition. It has to be noted that the signature thereon of both the petitioners and the thumb impression with attestation of petitioner no.1 with attestation of petitioner no.2 in presence of two witnesses and the signature and thumb impression on all the pages of the agreement on a stamp paper purchased on 21.12.2000 for the purpose of writing an agreement can hardly even leave a scope for introduction of story of fraud. In that view of the matter, it appears to this Court that the petitioners are shy in approaching or taking resort to the remedy under section 47 C.P.C. which lays down as follows :\n \"47. Questions to be determined by the court executing decree.- (1) All questions arising between the parties to the suit in which the decree was passed, or there, representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the court executing the decree and not by a separate suit.\" \n\n Thus if in terms of Section 47 C.P.C.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-21", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "the petitioners had any grievance even after alleged discovery of fraud on account of the proceedings of general body of committee dated 25.2.2001 (Annexure 1 to the writ application), they had to approach the said executing court which had passed the order on 20.7.2001 dismissing the execution case on recording the satisfaction of the decree. This Court must hasten to add that even the proceedings of the general body does not improve the case of the petitioners as even there the issue of compromise with the landholders including the petitioners has been clearly mentioned as would appear from the following relevant text thereof:", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-22", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "^^ Hkw&vtZu lEcaf/kr 53 eqdnes loksZPp U;k;ky; ls fu'ikfnr gks pqds gSa vkSj mlesa vf/kdka\"k esa lc&tt \u00bc2\u00bd]iVuk ds U;k;ky; esa fMdzh dh jkf\"k dh olwyh ds fy;s Hkw&Lokfe;ksa }kjk btjk;okn nkf[ky fd;s x;s gSa A iwoZ dh dk;Zdkfj.kh lfefr;ksa us bl Js.kh ds 22 eqdneksa esa t;?kks'k dh jkf\"k vius Lrj ls fglkc dj Hkw&vtZu dk;kZy; esa tek dj nh gS A buesa 19 eqdneksa esa t;?kks'k jkf\"k dk Hkqxrku fMdzh /kkfj;ksa dks ugha gqvk gS vkSj 3 eqdneksa esa xyr O;fDr;ksa }kjk t;?kks'k dh jkf\"k U;k;ky; ls fudky fy;k x;k gS A blds fo:) vlyh fMdzh /kkfj;ksa us flfoy fjfHktu nk;j fd;k gS A orZeku lfefr us fuEufyf[kr btjk;okn esa fnukad 03-4- 95 rd loksZPp U;k;ky; }kjk fu/kkZfjr lwn dh jkf\"k tksM+ dj fMdzh /kkfj;ksa ls le>kSrk fd;k gS vkSj", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-23", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "/kkfj;ksa ls le>kSrk fd;k gS vkSj t;?kks'k dh jkf\"k dk Hkqxrku ys[kkns;", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-24", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "psdksa }kjk fd;k gS A bl lEcU/k esa fMdzh /kkfj;ksa ls ,djkjukek gqvk vkSj mlds ckn psd izkIr dj muyksxksa us lc tt \u00bc2\u00bd iVuk ds U;k;ky; esa btjk;okn okilh ds fy;s vkosnu ns fn;k gS A ;s vkosnu U;k;ky; dh Lohd`fr gsrq yfEcr gS A btjk;okn la0 ,okMhZ dk uke lqygukesa dh jkf\"k 1- [email protected] Jh yfyr jk; la0 58]360-00 2- [email protected] Jherh Qqy>fj;k nsoh la0 3]57]450-00 3- [email protected] Jh pfUnzdk jk; la0 58]360-00 blds vfrfjDr 28 eqdnes ,sls gSa ftuesa lc&tt \u00bc4\u00bd iVuk ds U;k;ky; ls HkwLokfe;ksa ds i{k esa fMdzh gks x;h gS A muesa ljdkj dh vksj ls mPp U;k;ky; esa vihy nk;j dh x;h gS A bl Js.kh ds 11 eqdneksa esa fnukad 16-12-2000 dh dk;Zdkfj.kh dh cSBd esa lfpo dks Hkw&vtZu okn lEcU/kh btjk; ds lqygukes ds fy;s fn\"kk&funsZ\"k fn;s x;s Fks A mu funsZ\"kksa ds", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-25", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "fn;s x;s Fks A mu funsZ\"kksa ds vkyksd esa lfpo us lkr fMdzhnkjksa ls lqygukesa dh ckrphr dh vkSj bldh lwpuk dk;Zdkfj.kh dks fnukad 27-01-2001 dks nh rFkk dk;Zdkfj.kh us fnukad 28-01-2001 dh cSBd esa lqyg djus dk fu.kZ; fy;k A ijUrq tc fnukad 31-01-2001 dks fMdzh/kkjh lqygukesa ds fy;s vk;s rks muds le{k ;g \"krZ j[kh xbZ fd lqygukes dh jkf\"k dk psd mUgsa ckn dh frFkh esa fn;k tk;xk A bl ij rhu mijksDr fMdzh/kkjh ckn dh rkjh[k dk psd ysus ds fy, lger gks x, vkSj muls lqygukek dj fy;k x;k ijUrq rhu fMdzh/kkjh dk dguk Fkk fd og okn okilh lEcU/kh ;kfpdk nk;j djrs le; gh mlh rkfj[k dk psd ysaxs A v/;{k }kjk lger ugha gksus ij muls lqygukesa dk djkj VwV x;k A ,d fMdzh/kkjh dh vksj ls dgk x;k fd psd cukdj lfefr ds vf/koDrk ds ikl j[k fn;k tk; vkSj tc eqdnek okilh dk U;k;ky; dk vkns\"k gks tk; rks mUgsa psd", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-26", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "dk vkns\"k gks tk; rks mUgsa psd fn;k tk; A v/;{k us bl vuqjks/k dks ;g dgrs gq;s vLohdkj dj fn;k fd ml ds\"k ls lEcfU/kr lnL;ksa esa dqN ds ikl vfHkof)Zr jkf\"k cdk;k gS ,slh gkyr esa psd fuxZr ugha fd;k tk ldrk A bl izdkj lfefr yxHkx 2]00]000]00 :Ik;s ds ykHk ls oafpr gks xbZ vkSj Hkfo'; esa lqygukesa dk ekxZ Hkh can gks x;k A ** From the reading of the aforementioned proceedings of the Committee, which was in form a report to the general body, it would appear that not only in the case of the petitioners but in the case of all other land holders similar agreement seeking to compromise on the issue of the payment of amount of compensation was arrived at between the society and the concerned land holders and therefore, it would be difficult for this Court to accept the story of fraud played by the society only against the petitioners. In the circumstances, the very plea of the petitioners for reopening the whole issue of payment of further compensation having been found to be wholly false and frivolous the prayer in writ application is even otherwise fit to be rejected.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-27", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "While doing so this Court must also accept the submission of the learned counsel for the respondents who has rightly placed his reliance on two Division Bench judgments of this Court that the writ Court cannot convert itself into a civil court for entertaining purely civil matter and that forum of civil court once elected cannot be abandoned in midstream for availing the remedy under Article 226 of the Constitution. \n\n This Court in fact after discussing a large number of judgment of the Apex Court as also this Court in the case of Sachidanand Roy (supra) had held as follows:\n \"Therefore, in the opinion of this Court, under the principle of doctrine of election, once a forum is elected by a litigant, without getting that remedy exhausted or withdrawn on a reasonable ground, he cannot switch on at his own sweet- will or whims during the pendency of that proceeding to any other forum particularly remedy under Article 226 of the Constitution cannot be resorted to\".\n In fact this Court also in the case of Abijit Ganguly (supra) has also clearly held that the writ Court cannot be converted into a civil court for entertaining purely civil matter and in fact filing of a writ petition where a remedy under the C.P.C. before the civil court is available would amount to abuse of the process of Court. As a matter of fact this Court in Abijit Ganguly\u201fs case (supra) has also put a note of caution on the duty of the lawyers which is cast upon them in advising their clients in right prospective. This Court can do no better but to quote on the following apt passages of the judgment on the issue in the case of Abijit Ganguly (supra):", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-28", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "\"4. In our considered opinion, the appellant has abused the process of the law. This Court cannot be converted into a civil court for entertaining such matters. The Apex Court in a decision in the case of Durga Prasad vs. Naveen Chandra and others, reported in JT 1996(3) S.C. 564, has held that the procedures prescribed under the Code of Civil Procedure cannot be bypassed and that in such matter writ petition is not maintainable. \n\n         5.    In       the    case        of    Dr.       Buddhi   Kota\n         Subbarao             vs.     Mr.K.          Parasaran        and\n others, reported in JT 1996(7) S.C. 265, the Apex Court has observed that no litigant has a right to unlimited drought on the Court time and public money by filing false and frivolous petitions invoking the extraordinary jurisdiction of the Court under Article 226 of the Constitution, which is a discretionary one in order to get his affairs settled in the manner as he wishes. Easy access to justice should not be misused as a licence to file misconceived or frivolous petitions.\n 6. In the instant case admittedly after the judgment and decree dated 9.12.1996 passed by the lower court, the appellant could have vindicated his grievance by taking the recourse to the provisions of Section 96 of the Code of Civil Procedure by filing an appeal; but instead of that, he has filed writ petition.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-29", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "7. In this regard we may also observe that an onerous duty is cast upon the counsel in such matters to advise their clients in the right perspective. In this regard we are reminded of the observations made by the Apex Court in the case of \"In Re Sanjiv Datta, Deputy Secretary Ministry of Information and Boardcasting\" reported in 1995(3) SCC 619, that legal profession is a solemn and serious occupation. It is a noble calling and all those who belong to it are its honourable members. The legal profession is different from other professions in that what the lawyers do, affects not only an individual but the administration of justice which is the foundation of the civilized society. Both as a leading member of the intelligentsia of the society and as a responsible citizen, the lawyer has to conduct himself as a model for others both in his profession and in his private and public life. The Apex Court has also observed that \"Of late, we have been coming across several instances which can only be described as unfortunate both for legal profession and the administration of justice. It becomes, therefore, our duty to bring into the notice of the members of the profession that it is in their hands to improve the quality of the service they render both the litigant public and to the courts, and to brighten their image in the society\". It has further been held by the Apex Court that \"the society has a right to expect of him such ideal behaviour. It must not be forgotten that the legal profession has always been held in high esteem and its members have played an enviable role in public life. The regard for the legal and judicial systems in this country is in no small measure due to the tireless role played by the stalwarts in the profession to strengthen them. If the profession is to survive, the judicial system has to be vitalized.\"", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-30", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "8. Therefore, frivolous and misconceived petitions should not be filed invoking extraordinary jurisdiction of writ Court.\" \n\n (Underlining for emphasis) At this stage this Court also must take into account somewhat a plea in desperation raised by the learned counsel for the petitioner while equating the right to receive payment of compensation under the Act to be fundamental right and thus, the maintainability of the writ petition on the ground that there would be no waiver for the fundamental right. This Court would find that the payment of amount of compensation under the Act is a statutory right under the Act and not a fundamental right in true sense of term because after deleting the provisions of Article 31, the legislature has made provision under Article 300A of the Constitution which itself lays down that no person shall be deprived of his property save by the authority of law. \n\n              It    has       to    be        noted      that       this   was\n\ninserted       by       the     Constitution                 (Forty-fourth", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-31", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "inserted       by       the     Constitution                 (Forty-fourth\n\nAmendment) Act, 1978 with effect from 20.6.1979 whereas the award of the petitioners became final that the order of the Apex Court in the year 1995 and the order of the executing court in the year 2001. In that view of the matter, the provisions of the Land Acquisition Act itself were sufficient to deny the alleged right to property of the petitioners and as such, the reliance placed on the judgment of the Apex Court in the case of Olga Tellis (supra) or in the case of M.P.State Agro Industries Development Corporation (supra) is wholly misplaced. It has to be noted that while Olga Tellis\u201fs case was relating to under Articles 14 and 19 of the Constitution pertaining to rights of equality to others who were sought to be evicted by Mumbai Municipal Corporation and in the case of M.P.State Agro (supra) the issue involved was pertaining to Article 16 where the service of a permanent employee of the Corporation was dispensed with without following the principles of natural justice. This Court in fact would also find no applicability of the judgment in the case of Kamleshwar Prasad (supra), inasmuch as in paragraph no.3 the Apex Court had made it clear that it was under special facts and circumstances of the case that the Apex Court had not interfered under Article 136 against an order of Allahabad High Court entertaining a writ petition in a decree of eviction. Such judgment/order of the Apex Court in the opinion of this Court being totally one under Article 142 of the Constitution rendered in the peculiar facts of a particular case and for doing complete justice between the parties are not law laid down in terms of Article 141 of the Constitution of India and cannot be used as a binding precedent.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-32", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "The reliance placed by the learned counsel for the petitioner on a Full Bench judgment of Andhra Pradesh High Court in the case of Bhimidipati Annapoorna (supra) is also somewhat misplaced inasmuch as in that case it was found that where the amount of compensation, finally determined had not been paid, a person must first resort to the alternative efficacious remedy of taking out execution and when despite taking out execution proceedings, if there is any delay caused on the part of authorities, resort can be had to filing of a writ petition. This Court, therefore, must hold that Andhra Pradesh High Court had only reiterated the settled principle of law that the existence of an alternative remedy by itself would not be a bar for maintaining a writ petition and in fact when the land holders were already finding themselves to have been frustrated in their legitimate expectation to have received their amount of compensation even after levying of the execution case, due to frivolous objection of the State, the writ Court under Article 226 of the Constitution could definitely come to the rescue of such land holders. No such case however has been made out by the petitioner before this Court inasmuch as the execution proceedings levied by them have been finally disposed of and in view of their prayer before the executing court as noted in the order dated 20.7.2001. The petitioners now allege fraud on the part of the society and are thereby indirectly questioning the order passed in the execution proceeding. For doing so the petitioners definitely have a remedy under section 47 of the Code of Civil Procedure and that is how this Court would find that the ratio of the Full Bench Judgment of Andhra Pradesh High Court in the case of Bhimidipati Annapoorna (Supra) would not be applicable in the facts of this case.", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "8c79d10f2daa-33", "Titles": "Phuljharia Devi & Anr vs The State Of Bihar & Ors on 18 September, 2009", "text": "This Court in fact is fully satisfied that if in the long drawn proceedings of determination of compensation of more than 26 years the petitioners had accepted the amount of compensation by reaching to a compromise outside the court by sacrificing certain amount of interest only for being paid the balance amount of Rs.3,57,450/-, their claim for payment of remaining amount of interest of Rs. 87,711.16 paise on the ground of alleged fraud and/or misrepresentation of respondent no.3 the Society is wholly untenable either on fact or in law. It is always open for a decree holder to reach to a compromise during the pendency of the execution proceedings and the petitioners having made such a compromise with their open eyes cannot now resile from that situation and at least cannot take recourse to the filing of a writ petition alleging fraud on the part of the Society. \n\n That being so, this Court must hold that the writ application filed by the petitioners is wholly misconceived and the same must be and is hereby dismissed. \n\n Though this Court was initially tempted to award an exemplary cost against the petitioners for filing this frivolous writ petition but then taking into account the social status of the petitioners and their ignorance of law as also some misconceived advice given to them for filing this writ petition, this Court would make no order as to costs. \n\n\n (Mihir Kumar Jha,J.) Patna High Court Dated the 18th September, 2009 Surendra/", "source": "https://indiankanoon.org/doc/49275886/"}
+{"id": "9ec57d95b2f8-0", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016                              1\n\n\n\n\n                       IN THE HIGH COURT OF JUDICATURE AT PATNA\n                             Civil Writ Jurisdiction Case No.8216 of 2013\n                   ======================================================\n                   1. MD. ANZAR S/OLATE WALI MOHAMMAD R/O VILLAGE- RATANPURA, P.S.\n                   MORO, DISTRICT- DARBHANGA THROUGH MD. QAMRUZZAMA, S/O LATE\n                   WALI MOHAMMAD, R/O VILLAGE- RATANPURA, P.S. MORO, DISTRICT-\n                   DARBHANGA HOLDING POWER OF ATTORNEY\n\n                                                                 .... .... PETITIONER/S\n                                                VERSUS\n                   1. MD. MANZAR ALI @ KALI S/O LATE ZAINUL ABEDIN R/O VILLAGE-\n                   RATANPURA, P.S. MORO, DISTRICT- DARBHANGA, THROUGH MD. MAZHAR\n                   ALI @ GORE, S/O LATE ZAINUL ABEDIN, R/O VILLAGE- RATANPURA, P.S.-\n                   MORO, DISTRICT- DARBHANGA HOLDING POWER OF ATTORNEY", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-1", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": ".... .... RESPONDENT/S\n                   ======================================================\n                   Appearance :\n                   For the Petitioner/s :   Mr. Sukumar Sinha-Sr. Advocate\n                                            Mr. Abinash Kumar-Advocate\n                   For the Respondent/s   : Mr. Najmul Hoda-Advocate\n                                            Mr. Md. Ataul Haque-Advocate\n                   ======================================================\n                   CORAM: HONOURABLE MR. JUSTICE ADITYA KUMAR TRIVEDI\n                   ORAL ORDER04 09-05-2016 Heard learned counsel for the petitioner as well as learned counsel for the respondent. \n\n 2. Petitioner is the defendant. A suit for Specific Performance of Contract Act has been filed at the end of the respondent/ plaintiff wherein after appearance of defendant/ petitioner, a petition has been filed on his behalf before the learned lower Court in terms of Order-VII, Rule-11 of the C.P.C. asking for rejection of the plaint in the background of presence of Section 17(1-A) of the Registration Act stating that the document purported to be in support of activities governed under Section 53(A) of the T. P. Act, requires registration. As the present suit has been filed on the basis of alleged unregistered deed of <span class=\"hidden_text\" id=\"span_1\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 2</span> agreement, hence no suit under banner of Section 53(A) of the T. P. Act (Part Performance) is permissible, whereupon plaint is fit to be rejected. \n\n 3. The learned lower Court after hearing both the parties has rejected the prayer by the order impugned. Hence this petition.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-2", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "4. In order to substantiate his plea, the learned counsel for the petitioner has submitted that after amendment of the Section 17 of the Registration Act, Section 17 (1-A) has been introduced in order to put safeguard upon the interest of the proposed transferor from being duped, impersonated, cheated, deceived and further, for that purpose registration of the document has been made compulsorily. Once, there happens to be intention of the legislature to have the act performed in particular way in order to justify or accrual of a particular right, then in that event, that act is to be exercised in same manner to achieve such right and so, the document unless and until being registered one, would not give any substantive or legal right to the plaintiff to draw a suit for Specific Performance of Contract. Further, in order to substantiate such plea, relied upon Ashok Goenka vs. Chandra Bhushan Singh and Others reported in 2010(1) P.L.J.R. 317 as well as Gurbachan Singh v. Raghubir Singh reported in A.I.R. <span class=\"hidden_text\" id=\"span_2\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 3</span> 2010 Punjab and Haryana 77. So, submitted that the order impugned passed by the learned lower Court happens to be bad and is accordingly, fit to be set aside. \n\n 5. Per contra, it has been submitted on behalf of learned counsel for the respondent that in terms of Section 53(A) of the T. P. Act, the transferor is found duly forbidden to raise such plea and on account thereof, he is precluded in getting any sort of relief in terms of Section 17(1-A) of the Registration Act.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-3", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "6. Before adjudicating upon the order impugned, certain factual events is to be taken note of. There happens to be no controversy with regard to the admitted status of the land under dispute to be mortgaged property and for that, plaintiff happens to be the mortgagee while the petitioner/ defendant happens to be the mortgagor. The land was given in possession of respondent/ plaintiff and so, basically it happens to be an usufructuary mortgage. As the petitioner/ defendant was unable to pay the mortgaged amount on account thereof, both the parties entered into negotiation, which was finalized on a particular consideration amount and in token thereof, deed of agreement was prepared and as, the petitioner/ defendant failed to execute the sale deed within the stipulated period, attracted institution of the instant suit under the banner of Specific Relief Act. \n\n\n 7. In the aforesaid factual aspect, now the relevant law having applicability over the aforesaid dispute is to be taken note of.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-4", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "8. The first one happens to be the T. P. Act relating to transfer of the immovable property. Section 5 of the T.P. Act defines the transfer of property:-\n 5. \u2015Transfer of property\u2016 defined.- In the following sections \u2015transfer of property\u2016 means an act by which a living person conveys property, in present or in future, to one or more other living persons, [Inserted by Act 20 of 1929, S.6] and one or more other living persons; and \u2015to transfer property\u2016 is to perform such act.\n Inserted by Act 20 of 1929, S.6 [In this section \u2015living person\u2016 includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.]", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-5", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "9. The second important Section is Section 53(A) of the T.P. Act:-\n \u2015Inserted by Act 20 of 1929, S.16 [ 53A. Part <span class=\"hidden_text\" id=\"span_4\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 5</span> performance-53A. Part performance Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract:\n Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.\u2016", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-6", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "10. And the third one is the sale in terms of Section 54 of the T. P. Act:-\n \"54. \"Sale\" defined \"Sale\" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Sale how made: Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, <span class=\"hidden_text\" id=\"span_5\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 6</span> can be made only by a registered instrument. In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property. \n\n Contract for sale: A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.\n It does not, of itself, create any interest in or charge on such property.\u2016\n\n 11. Now, comes to the another event and that happens to be Section 17 of the Registration Act whereunder document so enlisted therein have been identified to be properly registered for the purpose of its due acknowledgement. For better appreciation Section 17 is quoted below:-", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-7", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "\"17. Documents of which registration is compulsory:-\n (1) The following documents shall be registered. if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866 (XX of 1866) or the Registration Act, 1871 (VIII of 1871) or the Indian Registration Act, 1877 (III of 1877) or this Act came or comes into force, namely:-\n (a) instruments of gift of immoveable property;\n (b) other non-testamentary instruments which purport or operate, create, declare, assign, limit or extinguish, whether in present or in future any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;\n (c) non-testamentary instruments which <span class=\"hidden_text\" id=\"span_6\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 7</span> acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and\n (d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent; The Registration Act 1908 6", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-8", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "(e) non -testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property:\n Provided that the State Government may, by order published in the Official Gazette, exempt from the operation of this sub - section any lease executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rent reserved by which do not exceed fifty rupees.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-9", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "(f) agreement relating to the Deposit of title deeds, where such deposit has been made by way of security for the repayment of a loan or an existing or future debts ;\n (g)sale certificate issued by any competent officer or authority under any recovery Act ;\n (h) irrevocable Power of Attorney relating to transfer of immovable property in any way, executed on or after the commencement of the Registration (Maharashtra Amendment) Act, 2010. \n\n (I-A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53A of the Transfer of property Act, 1882 shall be registered if they have been executed on or after the commencement of the Registration and other related laws (Amendment) Act, 2001 and is such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said section 53A.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-10", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "(2) Nothing in clauses (b) and (c) of sub - section (1) applies to - :\n (i) any composition - deed; or\n (ii) any instrument relating to shares in a Joint Stock Company, not withstanding that the <span class=\"hidden_text\" id=\"span_7\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 8</span> assets of such Company consists in whole or in part of immovable property; or\n (iii) any debenture issued by any such Company, and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immovable property except in so far as it entitles the holder of the security afforded by a registered instrument whereby the Company has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property, or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or\n (iv) any endorsement upon or transfer of any debenture issued by any such Company; or\n (v) any document \u2015any document other than the documents specified in sub-section (1- A)\u2016not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards, to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or\n (vi) any decree or order of a Court except a decree or order expressed to be made on a compromise and comprising immovable property other than that which is the subject- matter of the suit or proceeding ; or\n (vii) any grant of immovable property by the State Government ;or", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-11", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "(vii) any grant of immovable property by the State Government ;or\n (viii) any instrument of partition made by a Revenue - officer; or\n (ix) any order granting a loan or Instrument of collateral security granted under the Land Improvement Act, 1871, (XXV of 1871) or the Land Improvement Loans Act, 1883 (XIX of 1883); or The Registration Act 1908 7\n (x) any order granting a loan under the Agriculturists Loan Act, 1884 (XII of 1884) or under the Bombay Non -Agriculturists Loans Act 1928, or instrument for securing the repayment of a loan made under either of those Acts; or (x-a) any order made under the Charitable Endowments Act, 1890 (VI of 1890), vesting any property in a Treasurer of Charitable Endowments or divesting such Treasurer of any property; or* The state amendment w.e.f. 1/4/2013.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-12", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "(xi) any endorsement on a mortgage - deed <span class=\"hidden_text\" id=\"span_8\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 9</span> acknowledging the payment of the whole or any part of the mortgage - money, and any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage; or\n (xii) any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue officer. [Explanation:- A document purporting or operating to effect a contract for the sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest\n - money or of the whole or any part of the purchase money.] (3) Authorities to adopt a son, executed after the first day of January 1872 and not conferred by a will shall be registered.\n 12. Section 49 of the Registration Act, which has got pivotal role in deciding the issue is also to be taken note of and is quoted below:-\n \u201549. Effect of non-registration of documents required to be registered.--No document required by section 17 Added by Act 21 of 1929, S. 10. [or by any provision of the Transfer of Property Act, 1882 (4 of 1882)], to be registered shall--\n (a) affect any immovable property comprised therein, or\n (b) confer any power to adopt, or\n (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-13", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "Added by Act 21 of 1929, S. 10. [Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance <span class=\"hidden_text\" id=\"span_9\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 10</span> under Chapter II of the Specific Relief Act, 1877 (3 of 1877) Now see the Specific Relief Act, 1963, The words \u2015or as evidence of part performance of a contract for the purposes of section 53-A of the Transfer of Property Act, 1882\u2016 omitted by Act 48 of 2001, S. 6 (w.e.f. 24.09.2001).[***] or as evidence of any collateral transaction not required to be effected by registered instrument.] State Amendment Uttar Pradesh: In section 49,--\n (i) in the first paragraph, after the words \u2015or by any provision of the Transfer of Property Act, 1882\u2016 insert the words \u2015or of any other law for the time being in force\u2016,\n (ii) substitute clause (b) as under: \u2015(b) confer any power or create any right or relationship, or\u2016,\n (iii) in clause (c), after the words \u2015such power\u2016, insert the words \u2015or creating such right or relationship\u2016,", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-14", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "(iv) in the proviso, omit the words \u2015as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or\u2016. [Vide Uttar Pradesh Act 57 of 1976, sec. 34 (w.e.f. 1-1-1977)].\u2016", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-15", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "13. At the present moment, another act, Specific Relief Act 1963 is also to be looked into. As per Section 10 of the Specific Relief Act, the following criteria have been perceived wherein Specific Performance of Contract is found enforceable for better appreciation, the same is quoted below:-", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-16", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "\u201610. Cases in which specific performance of contract enforceable.--Except as otherwise provided in this Chapter, the specific performance of any contract may, in the discretion of the court, be enforced--\n (a) when there exists no standard for ascertaining actual damage caused by the non- performance of the act agreed to be done; or\n (b) when the act agreed to be done is such that compensation in money for its non- performance would not afford adequate relief. Explanation.--Unless and until the contrary is proved, the court shall presume--\n (i) that the breach of a contract to transfer immovable property cannot be adequately relieved by compensation in money; and\n (ii) that the breach of a contract to transfer movable property can be so relieved except in the following cases:--\n (a) where the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market;\n (b) where the property is held by the defendant as the agent or trustee of the plaintiff.\u2016 ***************************** \u201512. Specific performance of part of contract.--\n (1) Except as otherwise hereinafter provided in this section the court shall not direct the specific performance of a part of a contract. (2) Where a party to a contract is unable to perform the whole of his part of it, but the part which must be left unperformed by only a small proportion to the whole in value and admits of compensation in money, the court may, at the suit of either party, direct the specific performance of so much of the contract as can be performed, and award compensation in money for the deficiency.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-17", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "(3) Where a party to a contract is unable to perform the whole of his part of it, and the part which must be left unperformed either--\n (a) forms a considerable part of the whole, <span class=\"hidden_text\" id=\"span_11\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 12</span> though admitting of compensation in money; or\n (b) does not admit of compensation in money, he is not entitled to obtain a decree for specific performance; but the court may, at the suit of other party, direct the party in default to perform specifically so much of his part of the contract as he can perform, if the other party--\n (i) in a case falling under clause (a), pays or has paid the agreed consideration for the whole of the contract reduced by the consideration for the part which must be left unperformed and a case falling under clause\n (b), 1[pays or had paid] the consideration for the whole of the contract without any abatement; and\n (ii) in either case, relinquishes all claims to the performance of the remaining part of the contract and all right to compensation, either for the deficiency or for the loss or damage sustained by him through the default of the defendant.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-18", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "(4) When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the court may direct specific performance of the former part.\n Explanation.--For the purposes of this section, a party to a contract shall be deemed to be unable to perform the whole of his part of it if a portion of its subject matter existing at the date of the contract has ceased to exist at the time of its performance.\u2016\n 14. The status of the plaintiff is found duly acknowledgeable under Section 15 of the Act. Sections 20, 21 and 22 are the relevant provisions guiding the power of the Court and <span class=\"hidden_text\" id=\"span_12\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 13</span> for better appreciation those Sections are quoted below:-", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-19", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "\u201520. Discretion as to decreeing specific performance.--\n (1) The jurisdiction to decree specific performance is discretionary, and the court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a court of appeal. (2) The following are cases in which the court may properly exercise discretion not to decree specific performance:--\n (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage over the defendant; or\n (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non- performance would involve no such hardship on the plaintiff; or", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-20", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance. Explanation 1.--Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Explanation 2.-- The question whether the performance of a contract would involve hardship on the defendant within the meaning of clause (b) shall, except in cases <span class=\"hidden_text\" id=\"span_13\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 14</span> where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract. (3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-21", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party. \n\n 21. Power to award compensation in certain cases.--\n (1) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach, either in addition to, or in substitution of, such performance. (2) If, in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly. \n\n (3) If, in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly. \n\n (4) In determining the amount of any compensation awarded under this section, the court shall be guided by the principles specified in section 73 of the Indian Contract <span class=\"hidden_text\" id=\"span_14\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 15</span> Act, 1872 (9 of 1872). \n\n (5) No compensation shall be awarded under this section unless the plaintiff has claimed such compensation in his plaint: Provided that where the plaintiff has not claimed any such compensation in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just, for including a claim for such compensation. Explanation.--The circumstance that the contract has become incapable of specific performance does not preclude the court from exercising the jurisdiction conferred by this section.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-22", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "22. Power to grant relief for possession, partition, refund of earnest money, etc.-- (1) Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908 (5 of 1908), any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for--\n (a) possession, or partition and separate possession, of the property, in addition to such performance; or\n (b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or 1[made by] him, in case his claim for specific performance is refused. \n\n (2) No relief under clause (a) or clause (b) of sub-section (1) shall be granted by the court unless it has been specifically claimed: Provided that where the plaintiff has not claimed any such relief in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief.\n (3) The power of the court to grant relief <span class=\"hidden_text\" id=\"span_15\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 16</span> under clause (b) of sub-section (1) shall be without prejudice to its powers to award compensation under section 21.\u2016", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-23", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "15. Furthermore, one another enactment, the Indian Contract Act is also to be taken note of at the present moment. As per Section 10 of the Act, following agreement have been identified as a contract:-\n \u201510. What agreements are contracts.--All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. --All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.\"\n Nothing herein contained shall affect any law in force in 1[India], and not hereby expressly repealed, by which any contract is required to be made in writing 2or in the presence of witnesses, or any law relating to the registration of documents.\u2016", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-24", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "16. After parallel scrutiny of those relevant Sections as indicated above, it is evident that there happens to be specific requirement in terms of Section 54 of the T.P. Act to have registration of document for the purpose of effectuating sale having the consideration amount more than Rs.100. Side by side, it is apparent from Section 54 of the T. P. Act itself, that <span class=\"hidden_text\" id=\"span_16\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 17</span> agreement to sell does not create any interest in or charge on such property. When no interest in terms of agreement for sale is found duly acknowledgeable, then in that event, registration is not all found necessary, and that happens to be reason behind that neither under Section 53(A) nor under Section 54 of the T.P. Act, amendment has been made in consonance with the amendment having been made under Registration Act whereunder under Section 17, Sub-section (1-A) has been introduced.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-25", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "17. Now, there should be parallel scrutiny of Section 17(1-A) as well as Section 49 of the Registration Act. As per Section 17(1-A) of the Registration Act, it has been mandated that the document relating to contracts to transfer for consideration any immovable property, is to be registered, and if not registered, its effect relating to part performance as envisaged under Section 53(A) of the T.P. Act would be worthless. However, if it is taken together with proviso of Section 49 of the Registration Act, it is evident that the unregistered deed of contract is found admissible with regard to the suit having filed in accordance of Specific Relief Act. That means to say, some sort of demarcation is found in terms of Section 53(A) of the T.P. Act, as well as Specific Relief Act. So, it has become crystal clear from the aforesaid analysis that gust of Section 53(A) of the T.P. Act is an event <span class=\"hidden_text\" id=\"span_17\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 18</span> which visualizes before execution of sale as per Section 54 of the T. P. Act while desirability of application of Specific Relief of Contract Act is to coerce the party through process of the Court to follow up the terms so agreed amongst them under the banner of lawful contract. And that happens to be reason behind having presence of proviso of Section 49 of the Registration Act.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-26", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "18. Part performance is an event preceding sale whereunder delivery of possession is given and the incidence of delivery of possession is only accountable, in case, the document is registered while specific performance of contract is an outcome of an agreement having arrived in between the parties whereunder one could bring a suit for performance in terms of contract arrived in between the parties and for that purpose, handing over possession of immovable property is not a condition precedent. So, from analytical approach of the relevant law, it is evident that handing over the property in pursuance of agreement will be considered only on the basis of having the document registered, while for the purpose of launching a suit under Specific Performance of Contract, no such barrier is found in terms of Proviso 49 of the Registration Act. Therefore, both have got two distinct identity and commands two different sphere. Furthermore, be ascertained after due adjudication. \n\n\n 19. In Suraj Lamp and Industries Private Limited (2) through Director vs. State of Haryana and another reported in (2012) 1 SCC 656, it has been held:-\n \"16. Section 54 of TP Act makes it clear that a contract of sale, that is, an agreement of sale does not, of itself, create any interest in or charge on such property. This Court in Narandas Karsondas v. S.A. Kamtam and Anr. (1977) 3 SCC 247, observed:\n \u201532. A contract of sale does not of itself create any interest in, or charge on, the property. This is expressly declared in Section 54 of the Transfer of Property Act.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-27", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "See Rambaran Prosad v. Ram Mohit Hazra [1967]1 SCR 293. The fiduciary character of the personal obligation created by a contract for sale is recognised in Section 3 of the Specific Relief Act, 1963, and in Section 91 of the Trusts Act. The personal obligation created by a contract of sale is described in Section 40 of the Transfer of Property Act as an obligation arising out of contract and annexed to the ownership of property, but not amounting to an interest or easement therein.\" \n\n 33. In India, the word `transfer' is defined with reference to the word `convey'. The word `conveys' in section 5 of Transfer of Property Act is used in the wider sense of conveying ownership. \n\n 37. ...that only on execution of conveyance ownership passes from one party to another....\" \n\n 17. In Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra [2004 (8) SCC 614] this Court held:\n \"10. Protection provided under Section 53A of the Act to the proposed transferee is a shield only against the transferor. It disentitles the transferor from disturbing the possession of the proposed transferee who is put in possession in pursuance to such an agreement. It has nothing to do with the ownership of the proposed transferor who remains full owner of the property till it is legally conveyed by executing a registered sale deed in favour of the transferee. Such a right to protect possession against the proposed vendor cannot be pressed in service against a third party.\"", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-28", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "18. It is thus clear that a transfer of <span class=\"hidden_text\" id=\"span_20\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 21</span> immoveable property by way of sale can only be by a deed of conveyance (sale deed). In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immoveable property can be transferred. \n\n 19. Any contract of sale (agreement to sell) which is not a registered deed of conveyance (deed of sale) would fall short of the requirements of sections 54 and 55 of TP Act and will not confer any title nor transfer any interest in an immovable property (except to the limited right granted under section 53-A of TP Act). According to TP Act, an agreement of sale, whether with possession or without possession, is not a conveyance.\n Section 54 of TP Act enacts that sale of immoveable property can be made only by a registered instrument and an agreement of sale does not create any interest or charge on its subject matter.\u2016", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-29", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "20. The facts of the decision so relied upon by the learned counsel for the petitioner as reported in 2010(1) P.L.J.R. 317, it is evident that the same was under Order 39 and 1 and 2 read with Section 151 of the C.P.C. relating to Title Suit No.24 of <span class=\"hidden_text\" id=\"span_21\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 22</span> 2003 as well as Title Suit No.19 of 2003 and in the aforesaid background, though the suit were filed asking for directing the defendant to execute sale deed after receiving the due consideration amount and in the aforesaid background, the theme of applicability of injunction was considered and further, in casual manner, the proprietary of the document in question in terms of Section 17 (1-A) of the Registration Act was taken note of. Furthermore, the aforesaid exercise was taken up in the background of argument advanced on behalf of learned counsel for the appellant that the suit was in terms of Section 53(A) of the T. P. Act.", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9ec57d95b2f8-30", "Titles": "Md. Anzar vs Md. Manzar Ali @ Kali on 9 May, 2016", "text": "21. In A.I.R. 2010 Punjab and Haryana 77, the aforesaid suit was for the purpose of Specific Performance of Contract wherein after appearance of defendant, plea was taken up on the ground of fraud having been played and for that, separate suit was filed and both the suits were clubbed together and then, was decided against which an appeal was filed. After going through the judgment, it is evident that though at an initial stage, the Court had perceived the suit to be that of Specific Performance of Contract, but during course of discussion, the finding was recorded treating the suit to be under Section 53(A) of the T.P. Act and so, applicability of Section 17(1-A) has been perceived. <span class=\"hidden_text\" id=\"span_22\"> Patna High Court CWJC No.8216 of 2013 (04) dt.09-05-2016 23</span>\n 22. As held, both two, that means to say, plea under Section 53(A) of the T. P. Act as well as a suit under Specific Performance of Contract Act has got independent identity and for that proper adjudication is required. That being so, it happens to be premature to infer at the present moment that instant suit happens to be under Section 53(A) of the T.P. Act, therefore, has got some sort of bezel of Section 17 (1-A) of the Registration Act. \n\n 23. In the background of aforesaid observation, instant petition is disposed of. \n\n\n (Aditya Kumar Trivedi, J) Vikash/-\n U", "source": "https://indiankanoon.org/doc/121562430/"}
+{"id": "9f3960bb7cbe-0", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "IN THE HIGH COURT OF JUDICATURE AT PATNA\n                      First Appeal No.633 of 1998\n======================================================", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-1", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "======================================================\nKusheshwar Purbey .... .... Appellant/s Versus Shri Shri 108 Ram Janaki Jee S .... .... Respondent/s ====================================================== with Miscellaneous Appeal No.508 of 1998 ====================================================== Kusheshwar Purbey .... .... Appellant/s Versus Mohan Nayak & Ors .... .... Respondent/s ====================================================== with First Appeal No.270 of 1998 ====================================================== Jibachh Pradhan .... .... Appellant/s Versus Most.Radha Devi .... .... Respondent/s ====================================================== with First Appeal No.276 of 2008 ====================================================== Thakur Shambhu Prasad Singh @ Thakur Pd. Sinha & Ors .... .... Appellant/s Versus Krishna Kumar Singh & Ors .... .... Respondent/s ====================================================== with First Appeal No.114 of 2013 ====================================================== Kusum Devi Wife Of Uma Kant Pandey Resident Of Village- Gaderia, P.S.- Imamganj, Dist.- Gaya .... .... Appellant/s Versus Pallavi Kumari D/O Late Brajesh Kumar Pandey Alias Brajesh Pandey R/O Village- Babhandi (Gaiwalganj), P.S. And Anchal- Imamganj, Dist.- Gaya .... .... Respondent/s ====================================================== with <span class=\"hidden_text\" id=\"span_1\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> First Appeal No.450 of 2001 ====================================================== Ram Ekbal Dubey @ Nathuni Dube .... .... Appellant/s Versus Deo Kumar Dubey & Anr .... .... Respondent/s ====================================================== with First Appeal No.98 of 1991 ====================================================== Indri Kuer & Ors .... .... Appellant/s Versus Krishna Kant Singh & Ors .... .... Respondent/s ====================================================== Appearance :", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-2", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "(In FA No.633 of 1998) For the Appellant/s : Mr. Ganpati Trivedi, Sr. Adv.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-3", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "Mr. R.K. Sinha no. 2, Adv. \n\n Mr. Madan Mohan, Adv. \n\n Mrs. Pallavi Pandey, Adv. \n\n For the Respondent/s : Mr. Jitendra Kishore Verma, Adv. \n\n Mr. Anjani Kumar, Adv. \n\n Mr. Abhishek Anand, Adv. \n\n Mr. Gautam Sinha, Adv. \n\n (In MA No.508 of 1998) For the Appellant/s : Mr. Sukumar Sinha For the Respondent/s : Mr. Nirmal Kumar Sinha-3 Mr. Arun Kumar Mr. Nawal Kishore Prasad (In FA No.270 of 1998) For the Appellant/s : Mr. Ray Shivaji Nath, Sr. Adv. \n\n Mr. Ray Saurabh Nath, Adv. \n\n Mrs. Manjari Nath, Adv. \n\n Mr. Chandan Jha, Adv. \n\n Mr. Alok Anand, Adv. \n\n For the Respondent/s : Mr. Subhro Sanyal Mr. Sanjiv Kumar <span class=\"hidden_text\" id=\"span_3\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> Mr. S.Kashyap (In FA No.276 of 2008) For the Appellant/s : Mr. Ratan Kumar, Adv.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-4", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "For the Respondent/s           :       Mr.\n                    (In FA No.114 of 2013)\n                    For the Appellant/s        :           Mr.\n                    For the Respondent/s           :       Mr.\n                    (In FA No.450 of 2001)\n                    For the Appellant/s        :           Mr. Kamal Nayan Choubey, Adv.\n                                                           Mr. Ambuj Nayan Choubey, Adv.\n                                                       Mr. Yogendra Kumar Dwiwedi, Adv.\n                                                        Mr. Nagendra Dubey\n\n                    For the Respondent/s           :       Mr. Shrinandan Singh, Adv.\n                                                           Mr. Ram Nath Sharma, Adv.\n                    (In FA No.98 of 1991)\n                    For the Appellant/s   :                Mr. Kalyan Kr.Ghosh\n                                                        Mr. Binay Kr.Ambastha\n\n                    For the Respondent/s           :       Mr. Madan Singh\n                                                        Mr. Hari Nr.Singh\n\n ====================================================== CORAM: HONOURABLE MR. JUSTICE KISHORE KUMAR MANDAL and HONOURABLE MR. JUSTICE V. NATH CAV ORDER (Per: HONOURABLE MR. JUSTICE KISHORE KUMAR MANDAL) 52 11-08-2017 The order on the reference of the learned single judge.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-5", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "The irksome issue pertaining to the classification of the appeals filed before this Court under Section 299 of the Indian Succession Act (for short 'the Act') and under section 384(2) of the Act has been placed for determination upon reference <span class=\"hidden_text\" id=\"span_5\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> expressing doubts over the decision by a learned single judge in Most. Kewala Devi Vs. Smt. Krishna Devi, 2013 (1) PLJR\n\n 176. The reasons for making the reference has been mentioned, in detail, in the order dated 03.11.2015, and the authoritative pronouncements by the Apex Court and other courts have also been elaborately taken into notice which require no repetition in this order. Suffice it to state that some of the appeals have been filed under Section 299 of the Act as First Appeals against the order of grant or refusal of probate or letters of administration and some of the appeals have been filed under Section 384 (2) of the Act against the order of grant or refusal of succession certificate.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-6", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "The main plank of submissions of Mr. Trivedi, learned senior counsel for the appellant in F.A. No. 633 of 1998 and M.A. No. 504 of 1998 is based upon the proposition that in view of the use of the word 'order' in Section 299 of the Act, an appeal filed against such 'order' would be governed by Section 104 of C.P.C. providing for an appeal against an order passed in the suit and would be further regulated by the procedure prescribed therefor. Pyramiding his contentions, learned senior counsel has relied upon general rules of statutory interpretations <span class=\"hidden_text\" id=\"span_7\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> frowning upon import of external aid for providing meaning to unambiguous words or provisions in a statute. Placing decisions galore, it has been propounded that an order passed in a proceeding for grant of probate or letters of administration of a Will or a proceeding for grant of succession certificate shall be subject to the procedure envisaged in the Code of Civil Procedure for an appeal against an order. Lastly, it has also been submitted that the Constitution Bench decision in P.S. Sathappan vs. Andhra Bank Ltd., A.I.R. 2004 S.C. 5152 has settled the controversy finally holding that an appeal against the orders in controversy at present would be an appeal under Section 104 C.P.C. Learned senior counsel, in addition, has also referred to the provisions in part-X of the Indian Succession Act for contending that an order passed in a proceeding for grant of succession certificate has also been declared conclusive but according to the practice and procedure of this Court, a Misc. Appeal is filed and entertained against such an order.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-7", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "Mr. Verma, learned counsel appearing on behalf of the respondents in F.A. No. 633 of 1998 and M.A. No. 508 of 1998, however, has taken an entirely different stand by coming out with the proposition that taking a literal meaning of the word 'order' in a statutory provision would not be only a determinative <span class=\"hidden_text\" id=\"span_9\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> factor, and the context in which certain order has been passed and its effect on the rights and liabilities of the parties in the proceeding have to be given primacy. It has been propounded that an adjudication in a proceeding shall be a 'decree' if the statute so provides directly or by deeming fiction but there is another classification also where such adjudication has been conferred the status of a decree under certain circumstances, by authoritative pronouncements. It has been argued that in a proceeding for grant of probate or letters of administration there is definitely a final adjudication on the rights and liabilities of the parties and an order under Section 299 of the Indian Succession act will have to be given the status of a 'decree' and an appeal against such order will be regulated by the procedure prescribed for an appeal against a decree. Making a frontal attack on the submissions on behalf of the appellants in first two appeals regarding statutory conclusiveness of the order passed in a proceeding for grant of probate or letters of administration and the proceeding of grant of succession certificate, it has been pointed out that there is substantial difference in the provision under Section 275 and the provision under Section 381 pertaining to the element of conclusiveness inasmuch as a certificate granted under part-X of the Indian Succession Act, as <span class=\"hidden_text\" id=\"span_11\"> Patna High Court FA No.633 of", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-8", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "class=\"hidden_text\" id=\"span_11\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> envisaged in Section 381, has been expressly made subject to the other provision of said part which includes Section 373 as well but no such condition has been mentioned while declaring the conclusiveness of the order passed in a proceeding for grant of probate or letters of administration.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-9", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "Learned counsel for the parties in other appeals, however, have supported the reference by submitting that a regular First Appeal would lie against the final order passed in a proceeding for grant of probate or letters of administration and a Misc. Appeal would lie against the final order in a proceeding for grant of succession certificate. \n\n Learned counsel for the parties have relied upon large number of decisions which shall be taken into notice in this order appropriately hereinafter.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-10", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "After considering the submissions on behalf of the parties, it is quite limpid that the adjudication in a proceeding for grant of probate or letters of administration involves determination of certain rights of the parties. This is also the view expressed by the Full Bench of the Allahabad High Court in Mrs. Panzy Fernandas Vs. Mrs. M.F. Queoros, A.I.R. 1963 All. 153 observing that an order passed in an application for probate or letters of administration does adjudicate on certain <span class=\"hidden_text\" id=\"span_13\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> rights of the parties conclusively. This facet has been now finally settled by the Apex Court in Subal Paul Vs. Malina Paul, (2003) 10 SCC 361 where their lordships have observed as follows:-\n \"31..........The order passed under Section 299 of the Act may be an interlocutory order determining the rights of the parties or a final order. When a final order is passed in a contentious suit, as would be evident from the provisions contained in Section 295 of the Act, the procedures of the Code of Civil Procedure are required to be followed. Therefore, a final order passed between the parties adjudicating upon the rights and obligations which are binding between the parties thereto and are enforceable, although may not be stricto sensu a decree within the meaning of section 2 (2) of the Code of Civil Procedure Code but it is beyond any cavil that the same would be a judgment within a meaning of Section 2 (9) thereof........\"", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-11", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "The controversy pertaining to the nature and legal effect of a final adjudicatory order in a proceeding for grant of probate or letters of administration has been also highlighted by the Apex Court in Smt. Rukmani Devi vs. Narendra Lal Gupta, A.I.R. 1984 SC 1866 where their lordships have opined <span class=\"hidden_text\" id=\"span_15\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> as follows:-\n \"2...........It is well-settled that the decision of the probate court is a judgment in rem. The High Court rightly held that till the order granting probate remains in force it is conclusive as to the execution and validity of the will till the grant of probate is revoked. Apart from the fact that a decision of the probate court would be a judgment in rem not only binding on the parties to the probate proceedings but it will be binding on the whole world. Therefore, a solemn duty is cast on the probate court. Section 41 of the Indian Evidence Act, 1872 provides that a final judgment or order of a competent court in the exercise of probate jurisdiction is conclusive proof of what is decided therein that is about the genuineness of the will. To be precise, a probate granted by a competent court is conclusive of the validity of such will until it is revoked and no evidence can be admitted to impeach it except in a proceeding taken for revoking the probate...................\"", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-12", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "We are inclined to align with the submission of Mr. Verma, learned counsel for the respondents that taking a literal meaning and connotation of the word 'order' in a statutory <span class=\"hidden_text\" id=\"span_17\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> provision would not be sufficient for determination of the nature and import of such order. In this context, it would be condign to notice the distinctive feature of the definition of a decree and an order in section 2 (2) and Section 2 (14) of the Code of Civil Procedure. In the former the emphasis is on an adjudication conclusively determining the rights of the parties whereas in the later it is any decision of the civil court which is not a decree. The attempt on behalf of the appellants to wriggle out of the implications flowing from the observations of their lordships in Subal Paul (supra) on the basis of the contention that the issue in the said decision mainly pertained to the connotation of 'judgement', has failed to enthuse this Court because in view of the definition of 'judgment' in the Code of Civil Procedure, there would have to be a judgment in both the cases when there is a 'decree' or 'order'. The crucial test, therefore, for determination of the question whether an order can be raised to the level of the decree is only the consideration whether it finally adjudicates the rights of the parties in the proceeding.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-13", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "In the case of M/s Ram Chand Spg. And Wvg. Mills Vs. M/s Bijli Cotton Mills (p) Ltd., Hathras, A.I.R. 1967 S.C. 1344, a three judge Bench of the Apex Court has laid down the test to adjudge the nature of an 'order' being final order as <span class=\"hidden_text\" id=\"span_19\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> follows:-\n \"12....... As to what is a final order was stated by this Court in Jethanand and Sons Vs. State of Uttar Pradesh, A.I.R. 1961 SC 794, in the following terms:-\n \"An order is final if it amounts to a final decision relating to the rights of the parties in dispute in the civil proceeding. If after the order the civil proceeding still remains to be tried and the rights in dispute between the parties had to be determined, the order is not a final order within the meaning of Art. \n\n 133.\" \n\n Similarly in Abdul Rahman Vs. D.K. Kassim and Sons, 60 Ind App 76: (A.I.R. 1933 PC 58), Sir George Lowndes observed: \"The finality must be finality in relation to the suit. If after the order the suit is still alive in which rights of the parties have still to be determined no appeal lies against it. The fact that the order decides an important and even a vital issue is by itself not material. If the decision on an issue puts an end to the suit, the order will undoubtedly be a final one.\"", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-14", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "13. In deciding the question whether the order is a final order determining the rights of parties and, therefore, falling within the definition of a decree in S. 2 (2), it would often become necessary to view it from the <span class=\"hidden_text\" id=\"span_21\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> point of view of both the parties-in the present case-the judgment-debtor and the auction-purchaser...... ............................\"\n The dictum of the Apex Court in Rajni Rani Vs. Khairati Lal, (2015) 2 SCC 682, in the context of the present controversy, is relevant to be noticed where their lordships, keeping in view the principles laid down in Jethanand (supra) in detail, has ruled as follows:-\n \"16.........We have referred to the aforesaid decisions to highlight that there may be situations where an order can get the status of a decree. A court may draw up a formal decree or may not, but if by virtue of the order of the court, the rights have finally been adjudicated, irrefutably it would assume the status of a decree.................................................\"", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-15", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "Learned senior counsel for the appellant in the first two appeals has led emphasis that though the right to appeal against an order in the proceeding for grant of probate or letters of administration has been conferred by Section 299 of the Indian Succession Act but such an appeal, having been expressly noticed/saved in Section 104 C.P.C., would nonetheless be an appeal under the said section of the C.P.C. Strong reliance has been placed on the Constitution Bench decision in P.S. <span class=\"hidden_text\" id=\"span_23\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> Sathappan (supra). However, the decision in P.S. Sathappan (supra) came up for consideration by the Apex Court, later on, in Fuerst Day Lawson Limited Vs. Jindal Exports Limited (2011) 8 SCC 333 where after referring to earlier decisions including the decision in Sublal Paul (supra), it has been held as follows:-\n \"29. P.S. Sathappan is actually an authority on the interplay of Section 104 of the Code of Civil Procedure and the Letters Patent jurisdiction of the High Court..................................................\"", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-16", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "30. Having, thus, put the controversy in the historical perspective, the Court in P.S. Sathappan case referred to sections, 4 and 104 of the Code and made the following observation in para 6 of the judgment. \"6......To be immediately notice that now the legislature provides that the provision of this code will not affect or limit special law unless specifically excluded. The legislature also simultaneously saves, in Section 104 (1), appeals under \u201eany law for the time being in force\u201f. These would include letters patent appeals.\" \n\n The above is really the kernel of the decision in P.S. Sathappan and the rest of the judgment is only an elucidation of this <span class=\"hidden_text\" id=\"span_25\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> point.....................\" \n\n (emphasis supplied) In view of the interpretation to the Constitution Bench decision in P.S. Sathappan (supra) as given above by the Apex Court in Fuerst Day Lawson (supra), we do not find force in the submission by learned senior counsel for the appellant that an appeal filed under Section 299 of the Indian Succession Act is an appeal under Section 104 C.P.C. and governed by the procedure prescribed for such appeal.\n The decision in Most. Kewala Devi (supra) has been rendered expressly relying upon the decision of the Full Bench of this Court in Sunita Kumari Vs. Prem Kumar, 2009 (3) PLJR", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-17", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "990. It is manifest, however, that the controversy which came up for consideration by the Full Bench in Sunita Kumari related to the nature of an order passed under the Family Courts Act, 1984 which has been enacted for adjudication of specified disputes mentioned therein and also prescribing the procedure for determination of such dispute/matter. This aspect has also been taken into notice by the Full Bench in Sunita Kumari (supra). We, therefore, find it difficult to subscribe to the proposition that the law laid down in Sunita Kumari (supra) shall have general application to all the statutory provisions providing for the <span class=\"hidden_text\" id=\"span_27\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> appeal against an 'order'. \n\n The fact has been accepted by learned counsel for the parties that in this court, prior to the decision in Most. Kewala Devi (supra) an appeal filed under Section 299 of the Act was treated as First Appeal and regulated by the procedure prescribed for a First Appeal and the appeal filed under Section 384 (2) of the Act was treated as Misc. Appeal and regulated by the procedure prescribed for Misc. Appeal. In the order of reference, notice has been taken to the provisions in the Patna High Court Rules having bearing upon the present issue relating to classification of the appeal (s). Even in Fuerst Dau Lawson (supra) their lordships have observed that 'normally, once an appeal reaches the High court it has to be determined according to the rules of practice and procedure of the High Court'.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-18", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "The conclusive nature of an order passed in a proceeding for grant of probate or letters of administration has been envisaged in section 275 of the Indian Succession Act but while prescribing the conclusive nature of the order in a proceeding for grant of succession certificate the provision of Section 381 has been made subject to the other provisions of part-X of the Act. Noticeably, Section 373 (3) falling in part-X of the Act dilutes the conclusive nature of the order in the <span class=\"hidden_text\" id=\"span_29\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> proceeding for grant of succession certificate when such proceeding has been stated to be a summary proceeding and the Court has been authorized to grant certificate to the applicant having prima facie the best title. Learned senior counsel on behalf of the appellant in the first two appeals is, therefore, not sound in his submission that the appeal under Section 299 and section 384 (2) can be treated at par so far as the conclusiveness of the orders therein is concerned. \n\n At this juncture, it would be fruitful to refer to a bench decision of Karnatka High Court in Miss Pressy Pinto Vs. Rony Maxim Pinto, A.I.R. 2009 Kar. 157 where the same issue came up for consideration and decided. It has been held as follows:-\n \"4. The question posed before us is whether such appeal could be termed as misc. first appeal or regular first appeal. If it is a misc. first appeal, S. 104 and O. 43, Rr. 1 and 2 of C.P.C. are applicable and if it is a regular first appeal S. 96, O.41, Rr. 1 and 2 of C.P.C. are applicable..............................\"", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-19", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "\".........When a decision is made determining the rights of the parties with regard to the matters in controversy, genuineness or otherwise of the Will, etc., such a final decision of the Court would <span class=\"hidden_text\" id=\"span_31\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> become a decree. Once the petition under Indian Succession Act becomes a contentious one, it shall be treated as a suit and even the case is numbered as original suit. The Court shall frame issues, allow the parties to lead evidence and then finally proceed to pronounce the judgment decreeing or dismissing the suit as the case may be. As per sub-section (14) of S. 2 \"orders\" also means formal expression of any decision of a Civil Court which is not a decree. When once the P and SC takes the form of an original suit, all the stages of suit have to be proceeded with and the ultimate result would be either decreeing the suit or dismissing the suit. The final decision of a contested matter pertaining to issues of probate or letters of administration ultimately results in the form of a decree if the case of the plaintiff is approved.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-20", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "5. In other words, by virtue of S. 295 of Indian Succession Act and the definitions referred to above, the contested matter in respect of a petition for probate or letters of administration becomes a suit and by virtue of S. 299 the appeal shall be in accordance with the provisions of Code of Civil Procedure. By virtue of sub-section (2) of S. 2, S. 96, O. XLI, R.1, such contested matter <span class=\"hidden_text\" id=\"span_33\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> against the orders in a original suit pertaining to issue of probate or letters of administration has to be termed as regular First Appeal....................................\"\n We have not been persuaded to take a different view than that taken in Pressy Pinto (supra). We respectfully agree to the view expressed by the Bench in the said case. Thus we come to the conclusion that the issue in Most. Kewala Devi (supra) regarding classification of an appeal under Section 299 of the Indian Succession Act has not been correctly decided. Accordingly, we answer the reference by holding that an appeal under Section 299 of the Indian Succession Act finally disposing of a contentious proceeding, as envisaged under Section 295, shall be treaded as regular First Appeal and would be governed by the procedure prescribed for such an appeal. It is further held that an appeal filed under Section 384 (2) of the Indian Succession Act shall be treated as Misc. Appeal and would be governed by the procedure prescribed for such an appeal.", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "9f3960bb7cbe-21", "Titles": "Thakur Shambhu Prasad Singh @ ... vs Krishna Kumar Singh & Ors on 11 August, 2017", "text": "As the issue decided in Most. Kewala Devi (supra) has held the field since 27.02.2012, in the interest of justice and to avoid complication and harassment to the litigants, it is directed that the appeals filed under Section 299 of the Indian Succession Act in a contentious proceeding as envisaged under <span class=\"hidden_text\" id=\"span_35\"> Patna High Court FA No.633 of 1998 (52) dt.11-08-2017</span> Section 295 of the Indian Succession Act after 27.02.2012 shall be treated for all purposes as First Appeals and similarly the appeals filed under Section 384 (2) of the Indian Succession Act shall be treated as Misc. Appeals for all purposes. \n\n The reference is answered, accordingly. \n\n (Kishore Kumar Mandal, J.) V. Nath, J: I agree. \n\n:\n (V. Nath, J.) Devendra/-\n U", "source": "https://indiankanoon.org/doc/65837090/"}
+{"id": "18f362df360a-0", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014                          1\n\n\n\n\n                        IN THE HIGH COURT OF JUDICATURE AT PATNA", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-1", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "LETTERS PATENT APPEAL NO.140 OF 2014\n                                                  IN\n                    CIVIL WRIT JURISDICTION CASE NO. 18253 OF 2011\n                   ======================================================\n 1. Brij Kishore Paswan, Son of Late Sri Paswan Resident, resident of Village- Mangabar, P.S.- Nabinagar, District- Aurangabad\n 2. Birendra Singh, Son of Late Brahm Lok Singh, Resident of Village- Kerka, P.S. Nabinagar And District- Aurangabad .... .... Appellants VERSUS\n 1. The State Of Bihar through the Principal Secretary, Department Of Revenue And Land Reforms, Patna (Bihar)\n 2. The District Collector, Aurangabad\n 3. The District Land Acquisition Officer, Aurangabad\n 4. The Additional District Magistrate, Aurangabad\n 5. The Circle Officer, Block Nabinagar, Aurangabad\n 6. The Bhartiye Rail Bijlee Corporation Ltd. Through Its Managing Director, New Delhi\n 7. Chief Executive Officer, Nabinagar Thermal Power Project, Bhartiye Rail Bijlee Company Limited, Head Quarter First Floor, Vidyut Bhavan, Bailey Road, Patna\n 8. General Manager, Nabinagar Thermal Power Project, Bhartiye Rail Bijlee Company Ltd., Site Office Satyendra Nagar, Aurangabad .... .... Respondents ====================================================== Appearance :", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-2", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "For the Appellant/s : Mr. Binod Kumar Singh, Advocate Mr. Anirudh Kumar Verma, Advocate For the Respondent/s : Mr. Anil Kumar Sinha,, Advocate Mr. A.C.to Advocate General ====================================================== CORAM: HONOURABLE MR. JUSTICE I. A. ANSARI AND HONOURABLE MR. JUSTICE SAMARENDRA PRATAP SINGH C.A.V. ORDER (Per: HONOURABLE MR. JUSTICE SAMARENDRA PRATAP SINGH) 9 18-04-2014 On requisition, vide letter no. ERHQ/NP/41, dated 15.05.2007, of National Thermal Power Corporation, the State Government decided to acquire lands of 9 (nine) villages for the purposes of setting up of Nabi Nagar <span class=\"hidden_text\" id=\"span_1\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 2</span> Thermal Power Project, titled Bhartiya Rail Bijlee Company Limited, at Aurangabad (hereinafter referred to as \u201ethe Company\u201f). The nine villages, whose lands were placed under acquisition, in terms of the requisition aforementioned, are; (i) Pirauta (ii) Saleya (iii) Kajarain (iv) Egharas (v) Surar (vi) Mangabar (vii) Khaira (viii) Kerka and (ix) Dhundhua.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-3", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "2. The rate of land, for payment of compensation, was determined on the basis of criteria contained in Clause (1) of the Bihar Land Acquisition Re- settlement and Rehabilitation Policy, 2007. On the basis of the criteria laid down in the said Policy, the value of the land, under acquisition, was determined at Rs. 5,16,221.83/- per acre for five villages, namely, Pirauta, Saleya, Kajarain, Egharas, Surar. The rate, determined for remaining four villages, to which the writ petitioners belonged, namely, Mangabar, Khaira, Kerka and Dhundhua, was at Rs. 2,61,317.61/- per acre and awarded sum was paid in the year 2009 itself to those, whose lands had been acquired including the writ petitioners, and it was, in the year 2009 itself, that the possession of the lands was taken over by the respondents. \n\n 3. Almost two years after receipt of the awarded sums, some persons, including the two appellants, who belonged to village Mangabar, Khaira, Kerka and <span class=\"hidden_text\" id=\"span_2\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 3</span> Dhundhua, filed a writ petition, bearing C.W.J.C. No. 18253 of 2011, seeking direction for payment of compensation for the lands acquired at the rate of Rs. 5,16,281.83/- per acre, as had been determined for lands acquired in other five villages, for the Nabi Nagar Thermal Power Project, in the light of Government Instruction No. 15/D.L.A.07/06- 923R, dated 18.05.2010, contained in Clauses 1.1 (Kha)", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-4", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "(ii), (iii) and (v) of Annexure-6 to the writ petition. Under the said instructions, the Government took a decision to pay maximum price fixed for any land acquired under the same transaction. \n\n 4. It is relevant to point out herein that all the writ petitioners belonged to one or the other four villages, where the rate of land was determined at Rs.2,61,317.61/- per acre for payment of compensation. \n\n 5. It is not the case of the writ petitioners that any of the oustees of the four villages, namely, Mangabar, Khaira, Kerka and Dhundhua, was paid at a rate higher than what was paid to the writ petitioners including the appellants. \n\n 6. The stand of the official respondents, in CWJC No. 18253 of 2011, was that though the Government instructions, dated 18.05.2010, had indicated grant of higher rate, the said instructions were subsequently revised vide Government memo, dated 24.05.2011, clarifying <span class=\"hidden_text\" id=\"span_3\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 4</span> therein that the earlier instructions of the Government, dated 18.05.2010, would be applicable to cases, where award had not been prepared under Section 11 of the Land Acquisition Act, 1894.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-5", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "7. It was the further case of the respondents, in CWJC No. 18253 of 2011, that the appellants resorted to agitation and even restrained the employees of the Thermal Power Project from entering into the work site hampering, thus, the project on a number of days. The respondents, in the interest of the project, held a meeting with the dissatisfied factions and agreed to pay compensation on the same rate as had been paid to the land oustees of the 5 (five) villages, namely, Pirauta, Saleya, Kajarain, Egharas and Surar, at Rs.5,16,221.83/- per acre as against the rate of Rs. 2,61,317.61/- per acre determined for the oustees of four villages, namely, Mangabar, Khaira, Kerka and Dhundhua, though legally they had no right to make such a claim. \n\n 8. In terms of the out of court settlement, so arrived at, the compensation, at enhanced rate, was to be paid only after the writ petitioners had entered into an agreement with the Company that no further claim for compensation would be made. The appellants, though wanted additional compensation at the revised rate, as indicated hereinbefore, refused to enter into such an <span class=\"hidden_text\" id=\"span_4\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 5</span> agreement.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-6", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "9. The learned single Judge noticed that a large number of beneficiaries had voluntarily accepted the compensation and only a handful of persons had resorted to arm twisting in order to extract undue advantage under the notion that the respondents would, ultimately, agree to all their demands, because it would be difficult for the respondents to abandon such a big power project. The learned single Judge observed that the appellants have already succeeded in persuading the Company to make payment at the enhanced rate, though they had received the awarded sums, in the year 2009, in terms of the provisions of the Land Acquisition Act, 1894, read with Bihar Land Acquisition Re-settlement and Rehabilitation Policy, 2007. \n\n 10. Having arrived at the conclusion, as mentioned above, the writ petition, namely, CWJC No. 18253 of 2011, has been dismissed with observation that if the writ petitioners are desirous to get the enhanced amount, they can only be allowed to get the same in terms of the agreement, which had been entered into between the parties as an out of court settlement.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-7", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "11. Aggrieved by the dismissal of the writ petition, namely, CWJC No. 18253 of 2011, two of the writ petitioners have preferred this appeal. <span class=\"hidden_text\" id=\"span_5\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 6</span>\n 12. The appellants, in this appeal, have taken the same stand as they had taken in CWJC No. 18253 of 2011. They state that the insistence of the respondents to make payment on enhanced rate only on entering into an agreement is unlawful and violative of Sections 15 and 23 of the Contract Act, 1872, as well as Articles 14 and 300A of the Constitution of India. The appellants state that the villagers of Mangabar, Khaira, Kerka and Dhundhua had the right to receive compensation at the same rate as has been awarded to the oustees of the other five villages. \n\n 13. On the other hand, learned Counsel for the State as well as learned Counsel appearing on behalf of the Company and Nabi Nagar Thermal Power Project have defended the order of learned single Judge as just and legal.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-8", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "14. Coming to the merit of the present appeal, it needs to be made clear that the National Thermal Power Corporation, through its Deputy General Manager, made a requisition to the Government of Bihar to acquire lands of nine villages for construction of Nabi Nagar Thermal Power Project titled as Bhartiya Rail Bijlee Company Limited. A notification, under Section 4 of the Land Acquisition Act, 1894, was accordingly published, on 27.09.2008, in daily newspapers, namely, \u201eAaj\u201f and \u201ePiyari Urdu\u201f as well as in the District Gazette, on 13.09.2008, for acquisition of the <span class=\"hidden_text\" id=\"span_6\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 7</span> lands, of those villages for installation of Thermal Power Project. The nine villages, under acquisition, are: (i) Pirauta, (ii) Saleya, (iii) Kajarain, (iv) Egharas, (v) Surar,", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-9", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "(vi) Mangabar, (vii) Khaira, (viii) Kerka and (ix) Dhundhua. The declaration under Section 6 of the Land Acquisition Act, 1984, was made in both the newspapers on 02.10.2008. The Joint Secretary, Department of Land Reforms, Government of Bihar, directed, on 02.02.2009, the Collector to make order of acquisition, in the light of the provisions of Sections 7 and 17(1) of the Land Acquisition Act, 1894. On 16.03.2009, notices, under Section 9 of the Land Acquisition Act, 1894, were given to the land holders to make their claim. The authority concerned made enquiry under Section 11 of the Land Acquisition Act, 1894, for determination of compensation in terms of the guidelines embodied in Bihar Land Acquisition Re-settlement and Rehabilitation Policy, 2007. An enquiry was made under Section 11(1) of the Land Acquisition Act, 1894. The rate of compensation was determined on the basis of the guidelines provided in the Bihar Land Acquisition Re- settlement and Rehabilitation Policy, 2007. The compensation for the lands of five villages, namely, Pirauta, Saleya, Kajarain, Egharas and Surar was determined @ Rs. 5,16,221.83/- per acre; whereas compensation for the lands of other villages, namely, Mangabar, Khaira, Kerka <span class=\"hidden_text\" id=\"span_7\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 8</span> and Dhundhua was fixed @ Rs. 2,61,317.61/- per acre. Most of the oustees of all these nine villages, including the appellants, received the awarded sum under Section 12", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-10", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "of all these nine villages, including the appellants, received the awarded sum under Section 12 of the Land Acquisition Act, 1894, without any demur or objection.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-11", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "15. The appellants herein did not even apply for making of reference to the Civil Court in terms of the provisions of Section 18 of the Land Acquisition Act, 1894. If any such reference had been sought for, but not made, the person or persons, who had applied for making of such a reference, ought to have, at the relevant point of time, taken recourse to law. Nothing, however, was done and the award attained finality. \n\n 16. After two years of acquisition, it was only in the year 2011 that the appellants as well as the other writ petitioners, who are residents of villages Mangabar, Khaira, Kerka and Dhundhua, began to demand compensation at the same rate as had been paid to the occupants of other five villages. The State Government, in the year 2007, came out with a policy, namely, Bihar Land Acquisition Re- settlement and Rehabilitation Policy, 2007, embodying therein uniform guidelines for determination of rate of land depending upon the nature of their use. The Government, vide its instructions, dated 18.05.2010, decided to grant compensation at the same rate to all the villagers, whose <span class=\"hidden_text\" id=\"span_8\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 9</span> lands were acquired in the same transaction. The Government instructions, dated 18.05.2010, have been revised, vide Government memo, dated 24.05.2011, stating therein that the guidelines, contained therein, would be applicable to cases, where award has not been finalized.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-12", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "17. There is no dispute that the appellants have received their awarded sum in the year 2009. Situated thus, it becomes clear that 2010 instructions, which stood replaced by 2011 instructions, would not ipso facto be applicable to the cases of the appellants. \n\n 18. Though the appellants herein had received the awarded sum, the appellants, taking the law into their own hand, had forced almost closure of the work of the Thermal Power Project. The respondents, in such circumstances, agreed, under pressure, to extend the benefit, which had accrued to a person under the Government instructions, dated 18.05.2010/24.05.2011, to the appellants subject to the condition that the parities concerned would enter into an agreement to the effect that the settlement, so arrived at, was final and conclusive and no further claim for compensation would be made. The respondents were, and still are, ready to make payment at the enhanced rate of Rs. 5,16,222.83/-, which was paid to others of the said five villages. \n\n 19. The plea of the appellants herein that <span class=\"hidden_text\" id=\"span_9\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 10</span> insistence upon entering into the agreement by the respondents is unlawful and contrary to Sections 15 and 23 of the Contract Act is devoid of merit and is only to be noticed to be rejected. \n\n 20. Section 15 of the Contract Act defines \"Coercion\" as committing, or threatening to commit, any act forbidden by the Indian Penal Code or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-13", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "21. Section 23 of the Contract Act, which enumerates as to what considerations and objects are lawful and what consideration or objects shall be recorded as unlawful, read as under:\n \"23. What considerations and objects are lawful, and what not- The consideration or object of an agreement is lawful, unless- It is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. \n\n In each of these cases, the consideration or object of an agreement is said to be unlawful. \n\n Every agreement of which the object or <span class=\"hidden_text\" id=\"span_10\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 11</span> consideration is unlawful is void\".\n 22. It would appear from the admitted materials on record that the award was prepared in the year 2009 and the appellants accepted the same without any objection. The appellants, at no point of time, while receiving the awarded sums, complained that they had received the awarded sums under any coercion. No reference was sought for in terms of Section 18 of the Land Acquisition Act, 1894, nor was any reference made and the appellants herein, at no stage, came to this Court seeking a direction to be issued to make reference for determination of the correct sum to be paid as compensation to the appellants.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-14", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "23. Further-more, I find that compensation was paid at such a rate as was warranted by Bihar Land Acquisition Re-settlement and Rehabilitation Policy, 2007. Later on, the Government, vide its instructions, dated 18.05.2010, came out with a policy to pay compensation at the same rate to all villagers, whose lands had been acquired under the same transaction. The Government revised its policy, in the year 2011, clarifying therein that the said policy would be applicable, where award had not been received. Nonetheless, as, on account of agitation launched by the appellants and the writ petitioners, the work of the Thermal Power Corporation was getting <span class=\"hidden_text\" id=\"span_11\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 12</span> hampered, the respondents, under such duress, agreed for an out of court settlement subject to the condition that the appellants would enter into an agreement, as mentioned hereinbefore. By no stretch of imagination, such an offer can be said to be unlawful or one involving coercion. The learned single Judge has rightly observed that it is for the appellants either to accept or not to accept the offer of the respondents. \n\n 24. I find that though the demand of the appellants, for payment of higher rates to which they may not have been entitled to, has been acceded to by the respondents, yet the appellants\u201f grievances seem to be unending as they do not want to execute any agreement despite the fact that they could not have had any grievance, now, with respect to the rate of compensation, which the respondents have agreed to pay. The learned single Judge has noticed that except for some, a large number of oustees have accepted the awarded sums and the awards stand satisfied.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-15", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "25. I agree with the view of the learned single Judge that on account of agitation launched by the appellants, the respondents have come out with an out of court settlement by making the offer to pay compensation at the enhanced rate as desired by the appellants subject to entering into agreement in larger interest of public <span class=\"hidden_text\" id=\"span_12\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 13</span> project. It is up to the appellants to accept the offer by entering into an agreement or not. In case the appellants are agreeable to the offer and enter into an agreement, the respondents would fulfill their commitment of making payment at the enhanced rate without any delay. \n\n 26. With the aforesaid observations, this appeal stands dismissed. \n\n 27. No order as to costs. \n\n\n (Samarendra Pratap Singh, J) I. A. Ansari, J.: While completely agreeing with the conclusions arrived at, and the directions passed by, my learned brother, Samarendra Pratap Singh, J., I consider it apposite to add a few lines to make a little explicit the nature of the offer, which the respondents concerned have, in the present case, made.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-16", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "2. With regard to the above, it may be pointed out that Section 18 of the Land Acquisition Act, 1894, prescribes two distinct periods of limitation for seeking reference under Section 18 of the Land Acquisition Act, 1894. If a person, who makes an application for compensation, was present or represented before the Collector at the time, when the award was made, the <span class=\"hidden_text\" id=\"span_13\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 14</span> application for reference has to be filed within six weeks from the date of the award. In a case, however, where the applicant was not present or was not represented before the Collector, at the time of making of the award, Section 18(2) provides that such an application for reference shall be made within six weeks from the date of receipt of the notice or within six months from the date of the Collector's award, whichever period shall first expire.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-17", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "3. The Supreme Court, in Raja Harish Chandra Raj Singh v. Deputy Land Acquisition Officer [MANU/SC/0386/ 1961 : AIR 1961 SC 1500 : (1962) 1 SCR 676], having considered the legal character of an award, which the Collector in a proceeding under the Land Acquisition Act, 1894, makes, concluded to the effect that the determination of the amount of compensation by the Collector and making of the award is, in law, nothing more than an offer or tender of the compensation to the owner of the property acquisitioned. It was held, in Raja Harish Chandra Raj Singh (supra), that if the owner accepts the offer, no further proceeding is required to be taken. Consequently, the awarded sum has to be paid and the proceedings, for compensation, shall stand concluded. If, however, the owner does not accept the offer, Section 18 gives the owner, points out the Supreme Court, in Raja Harish Chandra Raj Singh (supra), statutory right of <span class=\"hidden_text\" id=\"span_14\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 15</span> having the question of adequacy of compensation determined by the District Court and whatever amount is determined by the Court, as compensation, would be binding on the owner as well as the Collector. It has been further pointed out, in Raja Harish Chandra Raj Singh (supra), that where the reference is made or sought for, the amount, judicially determined by the Court, would be the compensation payable to the owner of the property acquired and, on such determination, the acquisition proceeding would stand concluded.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-18", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "4. From the above scheme of land acquisition, it becomes abundantly clear that having accepted award without seeking a reference to be made by taking recourse to Section 18 of the Land Acquisition Act, 1894, a person cannot, thereafter, agitate that the compensation, which had been paid to him, was inadequate. \n\n 5. Had the appellants sought for a reference to be made under Section 18 of the Land Acquisition Act, 1894, and had such reference not been made, the appellants could have come to this Court by way of a writ petition under Article 226 of the Constitution of India, seeking issuance of a writ in the nature of mandamus commanding the Collector concerned to make a reference, as envisaged by Section 18 of the Land Acquisition Act, 1894. No such step has been taken by the appellants and, <span class=\"hidden_text\" id=\"span_15\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 16</span> hence, the award given, in the present case, by the Collector stood finality. \n\n 6. In the backdrop of the law, which has been pointed out above, it becomes clear that in the case at hand, when the appellants had not sought for any reference to be made in terms of Section 18 of the Land Acquisition Act, 1894, and when the appellants had, thus, accepted the awarded sums, they could not have legally turned around and armed twisted the respondents to pay further sum or sums of money as compensation.", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "18f362df360a-19", "Titles": "Brij Kishore Paswan & Ors vs The State Of Bihar & Ors on 18 April, 2014", "text": "7. Notwithstanding the fact, that the appellants had no legal right to claim any further sum or sums of money, as compensation, the respondents concerned have, under duress, offered to make, as already discussed by my learned brother, Samarendra Pratap Singh, J., further sums of money as compensation, and, hence, it is, now, for the appellants to accept or not to accept the money, which has been offered to be paid to them by the respondents concerned. \n\n 8. I would like to further clarify that the sum of money, which the respondents concerned, has offered to pay subject to entering into an agreement, as indicated above, is nothing but a gratuitous payment and a Writ Court would not, therefore, force payment of such an amount unless the appellants enter into an agreement in <span class=\"hidden_text\" id=\"span_16\"> Patna High Court LPA No.140 of 2014 (9) dt.18-04-2014 17</span> terms of the offer, which has been made by the respondents concerned. \n\n\n (I. A. Ansari, J.) KHAN/ ANAND/ NAFR", "source": "https://indiankanoon.org/doc/189543577/"}
+{"id": "aa71c92d23d8-0", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "IN THE HIGH COURT OF JUDICATURE AT PATNA\n                              Civil Writ Jurisdiction Case No.19011 of 2013\n                 ======================================================\n                 1. Amiri Lal Sah S/o Late Ayodhya Sah, resident of village - Basahiyan\n                 Sheikh, P.O+P.S+ Anchal- Piprahi, District- Sheohar.\n                 2. Jamiri Lal Sah S/o Late Ayodhya Sah, resident of village - Basahiyan\n                 Sheikh, P.O+P.S+ Anchal- Piprahi, District- Sheohar.   .... Petitioner/s", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-1", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "Versus\n                 1. The State of Bihar, through the Principal Secretary, Land Reforms\n                    Department, Government of Bihar, Patna.\n                 2. The District Magistrate- cum- Collector, Sheohar.\n                 3. The District Magistrate- cum- Collector, Muzaffarpur.\n                 4. The District Land Acquisition Officer, Sheohar.\n                 5. The District Land Acquisition Officer, Muzaffarpur.\n                 6. The Special Land Acquisition Officer, Gandak Project, Muzaffarpur.\n                 7. The Rehabilitation Officer, Bagmati Project, Sitamarhi.\n                 8. The Sub-Divisional Officer, Sheohar.\n                 9. The Anchal Adhikari, Piprahi Anchal, District- Sheohar.\n                 10. The Anchal Adhikari, Purnahiya Anchal, District- Sheohar.\n                                                                         .... .... Respondent/s\n                 ======================================================\n                 Appearance :\n                 For the Petitioner/s      :   Mr. Ritesh Kumar Narain Singh\n                 For the Respondent/s        : Mr. Yogendra Pd. Sinha\n                 ======================================================\n                 CORAM: HONOURABLE MR. JUSTICE SHIVAJI PANDEY\n                 ORAL ORDER5 26-06-2014 Heard learned counsel for the petitioners and learned counsel for the State. \n\n In this case, petitioners are claiming to be owners of the raiyati land, details of the same are as follows:-\n\n                                                           Khata      Khesra        Area\n                                                           No.        No.\n                                                                                    A.D.\n                           Village           Basahiya      809        218           0.23", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-2", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "Sheikh            Anchal        800        231           0.25\n                           Purnahiya         P.S.                     217           0.32\n                           Sheohar No. 128                            216           0.08\n                           District          Sitamarhi                215           0.08\n                           Now                                        Total         0.96 D\n                           Sheohar\n<span class=\"hidden_text\" id=\"span_1\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span>\n\n\n\n\n\n\n In the present case, the claim has been made that a proceeding vide Land Acquisition Proceeding No. 18/1989-1990, in view of Section 24(2) of the Right to Fair Compensation in Land Acquisition, Rehabilitation and Resettlement Act, 2013, has lapsed. \n\n Precisely, it appears from the record that Rehabilitation Officer, Bagmati Project, Sitamarhi for rehabilitation of villagers sent a requisition for acquisition of 0.90 acres of land of village-Basahiya Seiku, Thana-Sheohar No. 128, Pargana-Babara, PS-Piprarhi, District-Sitamarhi vide letter dated 14th June 1989. \n\n In pursuance of the same, the Special Land Acquisition Officer, Muzaffarpur initiated a case vide Land Acquisition Case No. 18/1989-1990 for acquisition of the aforesaid area.", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-3", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "In pursuance thereof, a notification u/s 4 of the Act vide letter no. 825 dated 26/8/1989 was issued and the same was published in Hindi newspaper and after that, notification u/s 6 and 9 under Land Acquisition Act was issued on 16/02/1990 and 18/6/1990 respectively with respect to the land mentioned in the Gazette notification vide Annexure-G series, as per the State, award was prepared on 18/9/1990 under section 11 of the Act. In the year 1984, there was a partition of land of Jamabandi No. 671, <span class=\"hidden_text\" id=\"span_3\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> standing in the name of father of the petitioners, Late Ram Ayodhya Sah and accordingly, land in question was recorded in the name of two petitioners respectively.", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-4", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "The counsel for the petitioners submits that father of the petitioners had purchased the land vide registered sale deed dated 21/3/1987, Mauza- Basahiya, Tauzi -938, Khata no. 242, Khesra no. 157, area one decimal and P.S.-Piparahi, Khata no. 809, Khesra no. 218, area .23 decimal. He further submits that petitioners are in possession of the land they have no knowledge of pendency of proceeding under the Land Acquisition Act and in the year 2013, they could know, their land has been acquired for the purpose of Kabrishthan, they filed the application under the RTI Act and collected information. He further submits that the Circle Inspector, Piprahi in his report dated 14.8.2013 submitted that land in dispute is the raiyati land of the petitioners and they belong to the category of Simant Kisan. \n\n This Court is not required to see the status of the petitioners and only the Court has to see whether the proceeding for the land in dispute initiated in the year 1989-90 stands lapsed in view of the section 24 (2) of the Land Acquisition Act.", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-5", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "As per the claim of the petitioners, award has been prepared in the year 1990 but till date, it is in their possession so much so that no award money has been paid to them and to show <span class=\"hidden_text\" id=\"span_5\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> their possession, they have annexed the land possession certificate issued by Circle Officer vide Annexure-4. He further submits that in view of Section 24 (2) of the new Act now proceeding will be deemed to have been lapsed and in support of the contention, petitioners have relied on two judgments reported in 2014 (3) SCC 183 (Pune Municipal Corporation Vs. Harakchand Misirimal Solanki) 2013 (8) SCC 789 (Singareni Collieries Company Limited Vs. Vemuganti Ramakrishan Rao), Civil Appeal No. 5478-5483 of 2014 decided on 07.05.2014 (Union of India Vs. Shiv Raj and others) and they also relied on judgment of this Court passed in CWJC No. 14921 of 2013 (Vinay Kumar and another Vs. the State of Bihar and others.). \n\n It will be relevant to examine Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as \u201ethe Act, 2013\u201f). For proper appreciation, it is relevant to quote Section 24 of the Act, 2013:\n \"24. (1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings, initiated under the Land Acquisition Act, 1894, --", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-6", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "a) Where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the <span class=\"hidden_text\" id=\"span_7\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> determination of compensation shall apply; or\n\n b) Where an award under said section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed. \n\n (2) Notwithstanding anything contained in sub- section(1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894, where an award under the said section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act. \n\n Provided that where an award has been made and compensation in respect of a majority of land holding has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to <span class=\"hidden_text\" id=\"span_9\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> compensation in accordance with the provisions of this Act.\"\n Section 24(1)(a) provides that where no award under Section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply.", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-7", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "Sub-section (1)(b) of Section 24 of Act, 2013 provides that where an award under section 11 has been made then such proceedings shall continue under the provisions of Land Acquisition Act as if the said Act has not been repealed. Sub Section (2) of Section 24 of the Act, 2013 provides in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 where an award under section 11 has been made five years or more prior to the commencement of new Act but the physical possession of the land has not been taken or compensation amount has not been paid, the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate fresh land acquisition proceedings in accordance with the provisions of this Act. Emphasis has been given to sub-section (2).", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-8", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "According to the petitioner the award has been prepared in the year 1990, possession of land has still remained with the petitioner which is apparent from land possession certificate. From the letter dated 26.10.2013 issued by the Circle Officer, Piprahi <span class=\"hidden_text\" id=\"span_11\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> (Annexure-10) where it has been written that the land appertaining to Thana No. 128, Khesra Nos.218, 231, 217, 216 and 215, area 0.096 Acre have been divided in between two sons (petitioners) It has been mentioned that they are small farmers, already Kabristhan is available in that village. Details have been given and it has been said that petitioners have filed an application that they are the small persons and if their land would be taken away they will became landless and for that they have filed the present application. The Circle Officer highly recommended for release of land from acquisition.", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-9", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "Second aspect is also important that from the counter affidavit it appears that land acquisition proceeding was initiated in the year 1989. Accordingly notification was issued u/s 4 of L.A. Act on 26/8/89, Notification u/s 6 of L.A. Act was issued on 16.2.1990 and notice was issued under Section 9 on 6.6.1990. It appears that in the year 1990 the award was prepared, from the letter it shows that still the authorities have asked to transfer the compensation amount so that payment to be made. Letter dated 25.7.2007 shows that an award amounting to Rs.6,85,945/- has been prepared but the amount of award could not have been paid to the petitioner and requested for transfer of the amount. These facts show that though proceeding was initiated in the 1989, award has been prepared in 1990, even it may be accepted that there is <span class=\"hidden_text\" id=\"span_13\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> dispute about the possession of land as there is no clear cut document to show that the petitioner is still in possession of land but one thing is clear that the award money which was prepared to pay has not been paid to the petitioner. In terms of Section 24(2) of the Act, 2013 which provides that if the award has been prepared under Section 11 of the Act five years or more prior to commencement of this Act but physical possession of the land has not been given or compensation has not been paid to the person concerned in that circumstances by operation of Section 24(2) of the Act, 2013 the whole proceeding stands lapsed. This issue came up for consideration before Hon\u201fble Supreme Court in the case of Pune Municipal Corporation and another v.", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-10", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "for consideration before Hon\u201fble Supreme Court in the case of Pune Municipal Corporation and another v. Harakchand Misirimal Solanki and others, reported in 2014(3) SCC 183. Specifically the issue was raised about the status of the proceeding which was initiated under the Old Act, award was prepared but award amount has not been paid.", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-11", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "The Court has considered the manner the compensation is to be paid while interpreting Section 31 of the Old Land Acquisition Act where it has been provided that the money has to be tendered to the beneficiary in the event of refusal the awarded amount has to be deposited in the court. \n\n In the present case it is apparently clear that money was demanded from the Government by the Land Acquisition Officer <span class=\"hidden_text\" id=\"span_15\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> for payment of the same to the petitioners, admittedly without any iota of any doubt, it can safely be arrived that money has not been paid to the petitioner. \n\n Reliance has also been placed on Nazir Ahmad V King Emperor, reported in A.I.R. 1936 Privy Council 253(2) where the Court has held that when a thing has to be done in particular manner that thing should be done in that manner along. As there no payment of award amount, in view of provisions of Section 24(2) of the Act, 2013, the Hon\u201fble Court held, land acquisition proceeding will be deemed to have lapsed. \n\n Again this issue came up for consideration before this Court in Union of India and others v. Shiv Raj and others in Civil Appeal Nos. 5478-5483 of 2014 where the Court has considered the scope and application of Section 24 (2) of the Act, 2013 and has approved the view taken by the Hon\u201fble Supreme Court in the case of Pune Municipal Corporation (supra). It will be relevant to quote relevant portion of the aforesaid judgment:", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-12", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "\"The provisions of the Act 2013 referred to hereinabove have been considered by a three judge bench of this court in Pune Municipal Corporation and Anr. v. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183. In the said case, the tenure-holders had challenged the <span class=\"hidden_text\" id=\"span_17\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> acquisition proceedings before the Bombay High Court by filing nine writ petitions, although two of such writ petitions had been filed before making the award and seven had been filed after the award. The land acquisition proceedings had been challenged on various grounds. The High Court allowed the writ petitions and quashed the land acquisition proceedings and issued certain directions including restoration of possession as in the said case the possession had been taken from the tenure-holders. This Court in the appeal filed by the authority for whose benefit the land had been sought to be acquired, and who had been handed over the possession as the land vested in the State, approached this Court but the Court did not enter into the merit regarding the correctness of the judgment impugned therein rather held that it was not so necessary to deal with the correctness of the judgment in view of the provisions of the Act 2013 which provide for re-compulsory acquisition of land from the very beginning. The Court held as under: \"11. Section 24(2) also begins with non obstante clause. This provision has overriding effect over <span class=\"hidden_text\" id=\"span_19\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> Section 24(1). Section 24(2) enacts that in relation to the land acquisition proceedings initiated under 1894 Act, where an award", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-13", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "enacts that in relation to the land acquisition proceedings initiated under 1894 Act, where an award has been made five years or more prior to the commencement of the 2013 Act and either of the two contingencies is satisfied, viz.;", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-14", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "(i) physical possession of the land has not been taken or (ii) the compensation has not been paid, such acquisition proceedings shall be deemed to have lapsed. On the lapse of such acquisition proceedings, if the appropriate government still chooses to acquire the land which was the subject matter of acquisition under the 1894 Act then it has to initiate the proceedings afresh under the 2013 Act. The proviso appended to Section 24(2) deals with a situation where in respect of the acquisition initiated under the 1894 Act an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries then all the beneficiaries specified in Section 4 notification become entitled to compensation under 2013 Act. \n\n XXX", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-15", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "XXX\n\n 19. Now, this is admitted position that award was <span class=\"hidden_text\" id=\"span_21\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> made on 31.01.2008. Notices were issued to the landowners to receive the compensation and since they did not receive the compensation, the amount (Rs. 27 crores) was deposited in the government treasury. Can it be said that deposit of the amount of compensation in the government treasury is equivalent to the amount of compensation paid to the landowners/persons interested? We do not think so. In a comparatively recent decision, this Court in Ivo Agnelo Santimano Fernandes and Ors. v. State of Goa and Anr. (2011) 11 SCC 506, relying upon the earlier decision in Prem Nath Kapur v. National Fertilizers Corpn. of India Ltd. (1996) 2 SCC 71, has held that the deposit of the amount of the compensation in the state's revenue account is of no avail and the liability of the state to pay interest subsists till the amount has not been deposited in Court. \n\n XXX", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-16", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "XXX\n\n 21. The argument on behalf of the Corporation that the subject land acquisition proceedings have been concluded in all respects under the 1894 Act and that they are not affected at all in view of Section 114(2) of <span class=\"hidden_text\" id=\"span_23\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> the 2013 Act, has no merit at all, and is noted to be rejected. Section 114(1) of the 2013 Act repeals 1894 Act. Sub-section (2) of Section 114, however, makes Section 6 of the General Clauses Act, 1897 applicable with regard to the effect of repeal but this is subject to the provisions in the 2013 Act. Under Section 24(2) land acquisition proceedings initiated under the 1894 Act, by legal fiction, are deemed to have lapsed where award has been made five years or more prior to the commencement of 2013 Act and possession of the land is not taken or compensation has not been paid. The legal fiction under Section 24(2) comes into operation as soon as conditions stated therein are satisfied. The applicability of Section 6 of the General Clauses Act being subject to Section 24(2), there is no merit in the contention of the Corporation.\" (Emphasis supplied)", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-17", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "18. The judgment of Bharat Kumar v. State of Haryana & Ors, 2014 (3) SCALE 393 was a reverse case wherein the land owner had lost before the High Court. The Court held: \"Sub-section (2) of Section 24 commences with a non-obstante clause. <span class=\"hidden_text\" id=\"span_25\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> It is a beneficial provision. In view of this provision, if the physical possession of the land has not been taken by the Acquiring Authority though the award is passed and if the compensation has not been paid to the land owners or has, not been deposited before the appropriate forum, the proceedings initiated under the Act, 1894 is deemed to have been lapsed.\" (See also: Bimla Devi & Ors. v. State of Haryana & Ors., Civil Appeal Nos. 3871-3876 of 2014 decided on 14.3.2014)", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-18", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "19. In order to clarify the statutory provisions of the Act 2013 with respect to such lapsing, the Government of India, Ministry of Urban Development, Delhi Division, came up with a circular dated 14.3.2014 wherein on the basis of the legal opinion of the Solicitor General of India, it has been clarified as under: \"3. Interpretation of five years period: \"With regard to this issue viz., interpretation of five years period two situations have been envisaged in cases where the acquisition has been initiated under the Land Acquisition Act, 1894 viz., (1) parties whose lands have been acquired have refused to accept the compensation and <span class=\"hidden_text\" id=\"span_27\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> (2) parties whose lands have been acquired having just parted with physical possession of the land. However, in both the above situations, as on 1.1.2014, the period of 5 years would not have ended and in such cases, the advisory seeks to clarify that the new law shall apply only if the situation of pendency continues unchanged for a period that equals to or exceeds five years. In my view, it should be further clarified that in none of the cases the period of five years would have elapsed pursuant to an award made under Section 11 from the date of commencement of the Act and that the benefit of Section 24(2) will be available to those cases which are pending and where during pendency, the situation has remained unchanged with physical possession not being handed over or compensation not having been accepted and the period equals to or exceeds five years.", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-19", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "4. Limitation:\n As regards this item relating to the period spent during litigation would also be accounted for the purpose of determining whether the period of five years has to be counted or not, it should be clarified that it will <span class=\"hidden_text\" id=\"span_29\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> apply only to cases where awards were passed under Section 11 of the Land Acquisition Act, 1894, 5 years or more prior to 1.1.2014 as specified in Section 24(2) of the Act, to avoid any ambiguity. Since this legislation has been passed with the objective of benefiting the land-losers, this interpretation is consistent with that objective and also added as a matter of abundant caution that the period spent in litigation challenging an award cannot be excluded for the purpose of determining whether the period of five years has elapsed or not. If the possession has not been taken or compensation has not been paid due to the challenge to the land acquisition proceedings, the pendente lite period will be included to determine the five year period and including such period if the award was made five years or more prior to the commencement of the Act, then the said acquisition proceedings will be deemed to have elapsed and fresh proceedings, if so desired, will have to be initiated in accordance with the new Act.\"", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-20", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "The objects and reasons of the Act 2013 and particularly clause 18 thereof fortify the view taken <span class=\"hidden_text\" id=\"span_31\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> by this court in the judgments referred to hereinabove. Clause 18 thereof reads as under: \"The benefits under the new law would be available in all the cases of land acquisition under the Land Acquisition Act, 1894 where award has not been made or possession of land has not been taken.\"\n This Court has also considered this aspect of the matter in C.W.J.C. No.14921 of 2013 (Vinay Kumar and others V. State of Bihar and others) where in a similar situation, the Court has dealt with the issue involved in the present case relying on the judgment of Pune Municipal Corporation (supra). It will be relevant to quote paragraph of the aforesaid judgment:", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-21", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "\"Having considered the submission on behalf of petitioners and in view of the counter affidavit of the State, it must be held that on both the propositions, the writ petition must succeed and the entire land acquisition proceedings being Land Acquisition Case No 5 of 1984-1985 must be held to have lapsed. So far as the first contention is concerned, Section 11A of the Land Acquisition Act 1894, in no uncertain terms, lays down that award must be made within two years of the declaration under Section 6. From the facts, as noted above <span class=\"hidden_text\" id=\"span_33\"> Patna High Court CWJC No.19011 of 2013 (5) dt.26-06-2014</span> which are from the counter affidavit of the State itself, the Section 6 declaration was on 16.07.1984 and as per the notice of payment, it clearly stipulates that the award was prepared on 23.08.1986. Thus, it was clearly beyond two years. Thus, in view of the provisions of Section 11A of the Land Acquisition Act and the decision of the Apex Court in the case of Singareni Collieries Company Limited (supra), the land acquisition proceedings would be deemed to have lapsed.\" \n\n In view of the admitted position that though the award has been prepared more than five years earlier before commencement of the New Act and the award money has not been paid to the petitioner, in view of Section 24 (2) of the New Act, the land acquisition proceeding vide Land Acquisition Case No. 18 of 1989-90 is declared to have lapsed.. If the State is still in need of the land they can acquire the land in terms of provisions of the New Act.", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "aa71c92d23d8-22", "Titles": "Amiri Lal Sah And Anrs vs The State Of Bihar & Ors on 26 June, 2014", "text": "With the aforesaid observation and direction this writ petition is allowed.\n (Shivaji Pandey, J) Mahesh/-\n U            T", "source": "https://indiankanoon.org/doc/71207862/"}
+{"id": "1acc1a187869-0", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "IN THE HIGH COURT OF JUDICATURE AT PATNA\n              Civil Writ Jurisdiction Case No.21307 of 2011\n==============================================\n1. Abhishek Kumar S/O Ramanand Prasad Resident Of Village- Chainpura,\nP.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar), Pin Code-801109\n2. Ashok Prasad S/O Rambalak Prasad Resident Of Village- Chainpura,\nP.O- Dariyapur, P.S- Naubatpur, District- Patna(Bihar)\n3. Yugal Kishore S/O Vishwanath Thakur Resident Of Village- Chainpura,\nP.O- Dariyapur, P.S- Naubatpur, District- Patna(Bihar)\n4. Pramod Mahto S/O Jaleshwar Mahto Resident Of Village- Chinpura,\nP.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n5. Mahfooj Ansari S/O Late Noor Mohammad Ansari Resident Of Village-\nChainpura, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n6. Saiyed Hussain S/O Mohd. Nasir Ansari Resident Of Village- Chainpura,\nP.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n7. Mohd. Muskat Ansari S/O Mustafa Ansari Resident Of Village-\nChainpur, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n8. Mintu Ansari S/O Hamid Ansari Resident Of Village- Chainpura, P.O-", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-1", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n9. Sanjay Kumar S/O Late Sharma Singh Resident Of Village- Chainpura,\nP.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n10. Chandeshwar Singh S/O Late Devan Mauar Resident Of Village-\nChainpur, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n11. Rajni Devi W/O Late Ram Bacchan Mahto Resident Of Village-\nChainpur, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n12. Lalti Devi W/O Sidha Nath Mahto Resident Of Village- Chainpur, P.O-\nDariyapur, P.S- Naubatpur, District- Patna (Bihar)\n13. Shakila Khatoon W/O Md. Salim Ansari Resident Of Village- Chainpur,\nP.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n14. Vanaspati Devi W/O Late Ram Ashish Ram Resident Of Village-\nChainpur, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n15. Radhika Devi W/O Late Subash Thakue Resident Of Village- Chainpur,\nP.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n16. Premi Devi W/O Late Ram Anuj Thakur Resident Of Village-\nChainpur, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-2", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "17. Shambhu Prasad S/O Gurucharan Prasad Resident Of Village-\nChainpur, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n18. Ram Babu Ram S/O Late Ram Kishun Ram Resident Of Village-\nChainpur, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n19. Bidheshwari Ram S/O Later Ram Kishun Ram Resident Of Village-\nChainpur, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n20. Ranjit Thakur S/O Sarekha Thakur Resident Of Village- Chainpur, P.O-\nDariyapur, P.S- Naubatpur, District- Patna (Bihar)\n21. Jhamar Thakur S/O Late Sita Thakur Resident Of Village- Kopakal,\nP.O- Dariyapur, P.S- Kopakala, District- Patna (Bihar)\n22. Satish Kumar S/O Late Kamta Prasad Singh Resident Of Village-\nKopakal, P.O- Dariyapur, P.S- Kopakala, District- Patna (Bihar)\n23. Sachidanand Sharma S/O Sitaram Sharma Resident Of Village-\nKopakal, P.O- Dariyapur, P.S- Kopakala, District- Patna (Bihar)\n24. Akhilesh Sharma S/O Late Ramnak Singh Resident Of Village-\nKopakal, P.O- Naubatpur, P.S- Kopakala, District- Patna (Bihar)", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-3", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012                                  2", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-4", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "25. Bhim Thakur S/O Late Lagan Thakur Resident Of Village- Dariyapur,\n            Chainpura, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n            26. Sudeshwar Prasad S/O Late Jagarnath Thakur Resident Of Village-\n            Chainpura, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n            27. Sanjay Prasad S/O Late Baijnath Thakur Resident Of Village-\n            Chainpura, P.O- Dariyapur, P.S- Naubatpur, District- Patna (Bihar)\n\n                                                                  .... .... Petitioner/s\n                                              Versus\n            1. The State Of Bihar Through The Secretary Land Reforms, Govt. Of\n            Bihar, Patna\n            2. The Bihar Industrial Area Development Authority Through It'S\n            Managing Director, Patna.\n            3. The Executive Director, Biada, Patna.\n            4. The Collector-Cum-District Magistrate, Patna.\n            5. The Land Acquisition Officer, Patna.\n            6. The Secretary, Industry Department, Bihar, Patna.\n            7. M/S United Breweries Ltd., Ub City,24, Vittal, Mallya Road, Bangalore,\n            Karnataka.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-5", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": ".... .... Respondent/s\n                  ==============================================\n                                               WITH\n                               Letters Patent Appeal No.580 of 2008\n                                                 IN\n                            Civil Writ Jurisdiction Case No. 921 of 2008\n            ==============================================\n            Rajan Sharma, S/o. late Chulhan Singh, R/o. Vill. Kopa, Kala, P.O. + P.S.\n            Naubatpur, District- Patna.\n                                                                  .... .... Appellant/s\n                                               Versus\n            1. The State Of Bihar,\n            2. District Collector, Patna,\n            3. District Land Acquisition Officer, Patna,\n            4. Sub-Divisional Officer, Danapur, Patna.\n                                                                 .... .... Respondent/s\n            ==============================================\n            Appearance :\n            (In CWJC No.21307 of 2011)\n            For the Petitioner/s     : Mr. Ambuj Nayan Chaubey\n            For the Respondent/s      : Mr. Dhurandhar Pd. Chy Sc2\n            (In LPA No.580 of 2008)\n            For the Appellant/s      : Mr.\n            For the Respondent/s      : Mr.\n            ==============================================\n                CORAM: HONOURABLE MR. JUSTICE PRAKASH CHANDRA VERMA\n                                        AND\n                         HONOURABLE MR. JUSTICE VIKASH JAIN", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-6", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "AND\n                         HONOURABLE MR. JUSTICE VIKASH JAIN\n                                             ORAL ORDER14 06-07-2012 This writ application and L.P.A. have been filed in which challenge has been made to the Land Acquisition Proceedings initiated vide L.A. No.19 of 2007-08 whereby the State Government has acquired 96.71 acres of land to set up an industrial area at village- Kopakala, Naubatpur, District- Patna and also for quashing the allotment letter dated 03.06.2011 contained under Ref: No.2815/D issued by the Bihar Industrial Area Development Authority (hereinafter referred to as \u201eBIADA\u201f) annexed as Annexure-4 by which BIADA has allotted 42 acres of land out of aforesaid 96.71 acres to United Breweries Limited for establishment of a beer industry and also for quashing the entire process of land acquisition under notification dated 10.12.2007 issued by the Land Acquisition Directorate under the Revenue and Land Reforms Department contained in Annexure-1.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-7", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "2. The writ petition as well as the L.P.A. was disposed on 31.03.2012 on the concession granted to Mr. Ambuj Nayan Chaubey learned Senior Counsel appearing for the petitioner and the appellant in L.P.A. that he moved the application for review/recall of the order withdrawing his concession accordingly, the order so was recalled on 16.05.2012. \n\n Parties were heard on merit on the writ petition and L.P.A. and were also required to give their written argument. The <span class=\"hidden_text\" id=\"span_2\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 4</span> written arguments filed by the respective parties are taken on record. \n\n 3. Learned counsel for the petitioners has submitted that the allotment letter is illegal and it frustrates the very public purpose in the garb of which the acquisition was made. The government has played fraud upon the citizens of the State by allotting the land to establish a beer factory. The land acquired for Sugar Mill cannot be allotted for establishment of a beer factory. The Government cannot do business over the lands of its citizens. The action and omission on the part of the Government is violative of the right of the petitioners guaranteed under Article 14, 21 & 300A of the Constitution of India. For the acquisition purpose Land Acquisition Case No.19 of 2007-08 was instituted before the District Land Acquisition Officer, Patna. Although after preparation of award notices were issued for payment of 80% amount on the fixed dates under Section 17A of the Act but nothing has been paid so far to any of the petitioner. It is worth mentioning here that the notices were also not served upon all the petitioners.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-8", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "4. It is pertinent to mention here that one Rajan Sharma being one of the victims of the aforesaid irregular acquisition proceeding, preferred CWJC No.921 of 2008 <span class=\"hidden_text\" id=\"span_3\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 5</span> challenging the acquisition. The aforesaid writ application was dismissed vide order dated 09.05.2008 against which LPA No.580 of 2008 is connected with the present writ petition. \n\n 5. Learned counsel for the petitioners further submitted that the acquisition was made for establishment of a sugar factory which might be in public interest keeping in view the production of sugarcane and employment but nonetheless no one turned up before the Government showing its interest in establishment of Sugar Mill. The BIADA time and again advertised the availability of the acquired land for establishment of the Sugar Mill inviting interest from the interested entrepreneur but of no avail. Suddenly the BIADA for the reasons best known to the concerned authorities, issued an allotment letter dated 03.06.2011 contained in reference No.2815/D in favour of one M/S. United Breweries Ltd. Allotting thereby 42 acres of land out of aforesaid acquired land on lease of 90 years for the purpose of establishment of a Beer Industry. The BIADA charged Rs.46934748/- from M/S United Breweries Ltd., at the rate of more than Rs.11 lakhs per acre which is more than twice the compensation amount of about Rs.5.5 lakhs per acre as per the aforesaid notice.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-9", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "6. It is further submitted that respondent No.7 has <span class=\"hidden_text\" id=\"span_4\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 6</span> started changing the nature of the land. It will be very difficult for the petitioners and others to regain the nature of the land, if it would be changed in the manner by the respondent No.7 for establishing beer factory. For the purpose of establishment of either Sugar Mill or Beer Factory, there are various waste lands at nearby location but the Government deliberately choose the fertile lands of the petitioners to suit industrialist without there being any cogent public purpose. The Government ought to have returned the lands of the petitioners and others, if it did not succeed in establishing any sugar mill as was shown as the sole purpose of the public interest. Moreover, the whole acquisition process itself vitiated by virtue of non-existence of the public interest and non- payment of the compensation amount to the petitioners and others.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-10", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "7. Learned counsel for the petitioners has further submitted that it is well settled by the Apex Court that Section 17(1) read with Section 17(4) confers power upon the State to acquire private property without complying with the mandate of Section 5A. These provisions can be invoked only when the purpose of acquisition cannot brook the delay of even a few weeks or months. Therefore, before excluding the application of Section 5A, the authority concerned must be fully satisfied that time of few weeks or months is likely to be taken in conducting inquiry <span class=\"hidden_text\" id=\"span_5\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 7</span> under Section 5A which will frustrate the public purpose for which and is proposed to be acquired. The exercise of Power by the Govt. under Section 17(1) does not necessarily result in exclusion of Section 5A of the Act in terms of which any person interested in land can file objection and is entitled to be heard in support of this objection. The use of word \"May\" in Sub-section (4) of Section 17 makes it clear that it merely enables the Government to direct that the provisions of Section 5A would not apply to the cases covered under Sub-section (1) or (2) of Section", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-11", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "17. In other words, invoking of Section 17(4) is not a necessary concomitant of the exercise of power under Section 17(1). The acquisition of land for residential, commercial, industrial or institutional purposes can be treated as an acquisition for public purposes within the meaning of Section 4 but that by itself does not justify the exercise of power by the Government under Section 17(1) and/or 17(4). The Court can take judicial notice of the fact that planning, execution and implementation of the schemes relating to development of residential, commercial, industrial and institutional areas usually take few years. Therefore, the private property cannot be required for such purpose by invoking the urgency provision contained in Section 17(1). In this case exclusion of the rule of audi alteram partem embodied in Section <span class=\"hidden_text\" id=\"span_6\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 8</span> 5A (1) & (2) is not at all warranted in such matters. The Government has miserably failed in even finding out a proposer for establishment of Sugar Mill in last four years. So, it was not warranted on the part of the Government to notify the acquisition under Section 17(1) or (4) of the Act. The Government cannot run a business with the valuable lands of the Citizens and the Government/BIADA had no right to allot the lands for establishment of beer factory. The establishment of Sugar Mill would not come under the purview of public purpose.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-12", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "8. In reply learned Additional Advocate General-I appearing for the respondent Nos. 2 to 6 Bihar Industrial Area Development Authority submitted that the land in question was acquired for the purpose of industrialization of the State for setting up an industry including sugar industry, in furtherance of the object of industrialization of the State, the acquisition of the land was for industrialization and the present allotment of land is also for industrialization which would lead to increase in agriculture based raw material for the brewery, it would lead to increase employment opportunities for local farmers and people and would bring in revenue to the State. Thus, the petitioners cannot contend that the acquisition and the present allotment are not for public purpose. \n\n\n 9. Learned counsel for the respondent no. 2 to 6 further contended that the authority under the Bihar Industrial Area Development Act, 1974 allots lands for setting up industries which is a public purpose and once the land has been acquired and its possession taken, it is not necessary that the land should be utilized only for the purpose for which it had been acquired and not for any other public purpose later on. Thus, the contention of the learned counsel for the petitioners that as the Sugar Mill was not established the lands which have been acquired for it should be returned to them as it could be utilized only for putting up a sugar mill is not sustainable. The process of acquisition of the above land was undertaken by the Government through the Collector, Patna for the purpose of Land Bank Scheme for the Industrial Development Authority for industrialization, Sugar Mill and for important development schemes granted as is evident from the administrative approval granted by the Industries Department, Bihar vide letter bearing Memo No.1397 dated 16.03.2007. Thus, the land was to be acquired for public purpose.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-13", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "10. It is further stated on behalf of the respondents that the notification under Section 4 of the Act on 10.12.2007 and declaration under Section 6 of the Act was issued on 13.12.2007, out of 105 acres of land, 6.83 acres of land were released from <span class=\"hidden_text\" id=\"span_8\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 10</span> acquisition proceeding as the land owners of these lands were not willing to give their lands for acquisition and acquisition proceeding was initiated only with respect to the remaining 98.17 acres of land for which the land owners had expressed their consent as it clear from letter dated 04.05.2007 (Annexure-C) and Agreement (Annexure-E) with 60 farmers were also entered with recital that they have agreed to sell the land to Government. Thus, in view of the above consent of the land owners and the agreement with their consent to sell the land, it appears that the land acquisition proceeding vide Notification dated 10.12.2007 and Declaration dated 13.12.2007 was initiated by the Government under the Emergency Provisions of the Land Acquisition Act as after the said consents there remained no occasion for the land owners to raise any objection to the acquisition and thus purpose of Section 5A of the Act was no longer in existence. Therefore, the grievance of the petitioners is that there was no occasion to resort to emergency provisions under Section 17 of the Land Acquisition Act is not sustainable and both these applications are devoid of any merit is fit to be dismissed.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-14", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "11. Mr. Satyabir Bharti, learned counsel for the respondent No.7 submitted that for the purpose of planned development of industrial areas and promotion of industries, the <span class=\"hidden_text\" id=\"span_9\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 11</span> Bihar Industrial Areas Development Authority Act, 1974 has been enacted by the State Legislature under which BIADA has been constituted as an Authority for fulfillment of the aforesaid object. Section 9(1) of the aforesaid Act enables the State Government to acquire any land required for the purpose of the Authority, which shall be deemed to be \"public purpose\" under the land Acquisition Act, 1894. He further submitted that on 16.03.2007 (Annexure- A), the Industries Department, Government of Bihar gave an administrative approval for acquisition of 105 acres of land at Vill. Kopakalan for the purpose of Land Bank Scheme of Infrastructure Development Authority for Industrialization, setting up a sugar mill and for important development schemes. Thereafter, the Industries Department vide letter dated 17.03.2007 (Annexure-B) sent requisition to the Collector, Patna to acquire lands at Mauza Kopakalan, Block- Naubatpur measuring an area of 105 acres which was subsequently reduced to 96.71 acres of land invoking the emergent provisions as contained in Section 17(4) of the Land Acquisition Act.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-15", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "12. Learned counsel for respondent No.7 submitted that a proposal to BIADA for setting up of a brewery was made. The proposed investment was to the tune of more than 200 crores and would be a State of Art brewery with zero discharge of trade <span class=\"hidden_text\" id=\"span_10\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 12</span> effluent, thus causing absolutely no pollution. Besides the expected revenue collection to the State Government would be at least Rs. 250 crores per annum and at the same time will create employment opportunity to more than 250 people. Since, it is an agriculture based industry and barley is the major raw material which is an agricultural produce, as such it will provide opportunity for the agriculturists of the area for cultivation of barley and sale to the industry. The project upon approval by the BIADA by the impugned allotment letter dated 03.06.2011 allotted 41.97 acres of land at Industrial Plot No.A-1 in Industrial Area, Kopakala which was acquired by the impugned land acquisition proceedings. The Respondent No.7 for allotment of the aforesaid land paid a sum of Rs.4,69,34,748.00 to BIADA and possession was handed over on 06.09.2011. The Respondent No.7 additionally paid compensation to the land owners @ Rs.10.40 lacs per acre and has made payment to the tune of Rs.2.50 crores to the land owners and Rs.15 crores have already been invested in the project till date.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-16", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "13. He further submitted that a delay of three years in preferring the writ application inasmuch as admittedly the acquisition proceedings was initiated in the year 2007 whereas the writ application came to be filed in the fag end of 2011 and in the <span class=\"hidden_text\" id=\"span_11\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 13</span> meantime after acquisition, the lands was handed over to BIADA and thereafter a portion of the land to the Respondent No.7 to set up an industry in the industrial area so created by BIADA upon possession being handed over to BIADA. The writ petitioners admittedly had no objection to the acquisition proceedings and had in fact consented to the acquisition of the lands and after three years they have turned around and challenged the acquisition proceedings. Law is well settled that in matters involving challenge to the acquisition of land for \"public purpose\", delay in filing the writ petition should be viewed seriously and relief denied to the petitioners if he fails to offer plausible explanation for the delay in preferring the writ petition. The Courts have also held that the delay of even few years would be fatal to the cause of the petitioner, if the acquired land has been partly or wholly utilized for the public purpose. In the case of Girdharan Prasad Missir V. State of Bihar reported in (1980) 2 SCC 445 and (2002)7 SCC 712, the delay of 17 months & two years respectively were considered as a good ground for declining reliefs to the petitioner.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-17", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "14. He further submitted that the lands in question were acquired upon express consent of the land owners and only after the consent had been granted by the land owners, notification <span class=\"hidden_text\" id=\"span_12\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 14</span> under Section 4 r/w Section 17(4) was issued on 10.12.2007. It is relevant to mention here that the records as disclosed in the supplementary counter affidavit filed by Respondent No.7 in the pending writ petition and by the State respondent in the L.P.A. that except for the writ petitioner Nos.22 & 23, none of the writ petitioners as well as the sole appellant in the appeal are awardees in pursuance to the land acquisition proceedings and the awardees/owners of the lands so claimed by the writ petitioners and the appellant are persons different from the writ petitioners and appellant. In the light of the recent decision of the Hon\u201fble Apex Court in the case of Radhey Shyam Vs. The State of Uttar Pradesh, as reported in (2011) 5 SCC 553, it has been sought to be contended that the acquisition for lands for industrial purpose does not justify the exercise of powers by the Government under Section 17(1) and/or 17(4). At the outset, it is stated that the facts and circumstances of the said case are absolutely different from the facts and circumstances of the present case as in the present case the acquisition have been made with consent of land owners.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-18", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "15. Learned counsel for respondent No.7 submitted that law is well settled as enunciated in the celebrated judgment in the case of Kesavananda Bharti Vrs. State of Kerela (1973) 4 SCC 225 that legislation designed to secure public good and to <span class=\"hidden_text\" id=\"span_13\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 15</span> implement the Directives under Article 39(b) and (c) should have priority over individual rights and that the Fundamental Rights were to be subordinate to Directive Principles of State Policy. It was further held that Directive Principles under Article 39(b) and\n\n (c) are not limited to agrarian reforms. Directives Principles are necessary for the uplift and growth of industry in the country. Industrial democracy is the necessary complement to political democracy. The State has to serve its members by organizing an avenue of consumption. This can be done by socializing of those elements in the common welfare which are integral to the well being of the community. Thus, the acquisition for upliftment and growth of industry is in terms of the Directives contained in Article 39(b) and (c) and individual rights should give way to secure public goods. In the facts and circumstances of the case, this writ petition and the appeal are fit to be dismissed. \n\n 16. We proceed to examine the points raised by Shri Chaubey and the reply thereon.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-19", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "17. First and important point raised by Shri Chaubey is that transfer of acquired land by the Bihar Industrial Area Development Authority vide letter dated 03.06.2011 contained under Ref: No. 2815/D deserves to be quashed on the ground that the public purpose for which the land in dispute was acquired <span class=\"hidden_text\" id=\"span_14\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 16</span> became non-existent as after advertisement no company came to establish the sugar factory for the purpose of which the land was acquired. He emphatically argued that the establishment of alcohol factory cannot be said to be a public purpose as every State are making endeavour to prohibit the consumption of intoxicating drinks or alcohol as it does not improve the public health as enshrined under Article 47 of the Constitution of India. In Chapter-4 the larger public interests in the various articles have been enumerated for which the policy of the State should be directed or endeavour has to be made by the State to achieve that policy in the larger public interest. \n\n 18. In reply to this learned counsel for the petitioners submitted that land was acquired by BIADA for growth in State of Bihar and in the wake of non-coming up of any company to establish sugar mill, the other auctions were considered for industrial growth in the State and the land was allotted to respondent No.7 for establishment of beer factory.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-20", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "19. Regulation of production, supply and sale of alcohol fit for human consumption including the beer have become very good source of revenue of the States and every State has enacted enactment in this regard. Thus, the reason of the Government to establish the Beer Factory is for the industrial <span class=\"hidden_text\" id=\"span_15\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 17</span> growth in the State and for the more augmentation of revenue which is in the largest interest. Article-31C of the Constitution was inserted by 1971 3 of the Constitution (Twenty-fifth Amendment) Act, 1971 with effect from 28th April, 1972. The validity of 25th Amendment Act was challenged in Supreme Court which was decided in celebrated case well famous in the name of Fundamental Rights Case. Kesavananda Bharti Sripadagalvaru and others V. The State of Kerala and Another reported in AIR 1973 SC 1461. The majority in the aforesaid judgment upheld the constitutional validity of Article 31C by which the provisions of Clause B and Clause-C of Article-39 have given primacy over the fundamental right contained in Articles-14 & 19 of the Constitution, if the Act really seeks to achieve the objectives contained therein. \n\n 20. By 42nd Amendment Act an amendment was made in Article-31C by Clause 4 of the Constitution 42 Amendment Act, 1976 land was inserted as under:\n\n \"4. Amendment of article 31C.- In article 31C of the Constitution, for the words, brackets, letters and figures \"the principles specified in clause (b) or clause\n (c) of article 39\", the words and figures \"all or any of the principles laid down in Part IV\" shall be substituted.\"", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-21", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "Validity of this Act came to be considered in 42nd Amendment Act especially it was considered in Minerva Mills <span class=\"hidden_text\" id=\"span_16\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 18</span> case and in Waman Rao\u201fs case quoted respectively by the same Constitution Bench by majority in both the judgments (supra). It has been held that insertion of Article-31C as it stood prior to 42nd Amendment Act made was valid and 4 of the 42nd Amendment was unconstitutional. Thus, violation of fundamental rights under Articles-14 & 19 will not be a ground to challenge the Act which really seeks to achieve the objectives contained in Clause-B or Clause-C of Article-39. In respect of other articles or clauses of the article of Chapter 4. The Violation of Articles-14 & 19 can be claimed. Thus, the larger interest contained under Clauses-B & C of Article-39 have been given supremacy over the other directive principles contained in Chapter-4. It has been held in Kesavananda Bharti Sripadagalvaru and others V. The State of Kerala and Another reported in AIR 1973 SC 1461 that directive principles contained under Article 39B & C is not grant refused.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-22", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "Thus, the principles are necessary for the upliftment and growth of industry in the country. Industrial democracy is the necessary complements to political democracy. The State has to be served its member by organizing and avenue of augmentation of revenue. This can be done only by socialization of these elements in the common welfare which are integral to the well being of the community. Since the grant of permission and allotment of land <span class=\"hidden_text\" id=\"span_17\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 19</span> to establish beer industry is for more augmentation of revenue and production of beer fit for human consumption which shall create avenue of more revenue to the State as well as shall generate employment is in the larger public interest of the State. It is settled law that after acquisition of land for public purpose can be transferred to any other public purpose. Thus, the argument of learned counsel for the petitioners fails and is hereby rejected. \n\n 21. The next point argued by Shri Chaubey is that urgency clause has wrongly been invoked. Learned counsel for the respondent has submitted that a proposal was sent by the BIADA for industrial growth in the Bihar to acquire the land for establishment of industries which was accepted by the Secretary, Industrial Development and accordingly decision was taken to acquire the land. Before acquisition proceedings, the efforts were made to negotiate with the owners of the land and these owners gave consent of the land who gave consent for acquisition their land have been acquired. Therefore, the petitioners cannot say that urgency clause was wrongly invoked.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-23", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "22. From perusal of Annexure-A to the counter affidavit, it is clear that on 16.03.2007 the industries department Government of Bihar, Patna wrote to the Accountant General for administrative approval of acquisition of 105 acres of land in the <span class=\"hidden_text\" id=\"span_18\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 20</span> first phase situated in Mauza-Kopkala, Block- Naubatpur, Thana No.151 for Industrial Development Scheme on 17.03.2007. The Industries Department, Government of Bihar requested to the Collector, Patna to take steps for acquisition. The Collector informed to the Government of Bihar vide Memo No.2176 dated 04.05.2007 that a general meeting was held between the owners of the land and the Collector, Patna and the local representatives. The owners of 6.83 acres had expressed their unwillingness remaining land owners of 98.17 acres expressed their consent for acquisition of the land which is evident from Annexure-C. Accordingly, the 6.83 acres of land was not taken into acquisition proceedings and only 98.17 acres was taken for which every land owners gave their consent. Acquisition proceedings were initiated. On 20.07.2007 60 farmers entered into agreement with BIADA with regard to acquisition of land. One proforma is annexed as Annexure-E to the counter affidavit. The notification under Section 4 of the Land Acquisition Act (hereinafter referred to as the Act) read with Section 74 was issued and published in two newspapers and gazette for acquisition of 98.17 acres of land. After notification under Section 4 & 17(4) notification under Section 6 was issued on 13.12.2007 and published in gazette and newspapers as required", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-24", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "was issued on 13.12.2007 and published in gazette and newspapers as required under the Act. On 01.05.2008 BIADA <span class=\"hidden_text\" id=\"span_19\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 21</span> deposited 80% of estimated amount of compensation worth Rs.60573419 vide Cheque No.84399. The Collector on 17.02.2008 handed over the possession of land to the BIADA as per possession of transfer certificate. This writ petition was filed on 24.11.2011 and came up for orders before this Court. Three Judges Bench of Hon\u201fble Supreme Court in Case of Satyendra Pd. Jain and others V. State of U.P. & Others reported in (1993) 4 SCC 369 after referring various judgments relying by the same Court in Rajasthan Housing Board Vs. Shree Kishan reported in (1993) 2 SCC 84, wherein it was held that when the possession of the land is taken over under Section 17(1) of the Act the land vests in the Government. There is no provision by which land statutorily vested would transfer to the original owner held in para-15 of the Satyendra Pd. Jain and others case as under:-", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-25", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "\"15. Ordinarily, the Government can take possession of the land proposed to be acquired only after an award of compensation in respect thereof has been made under Section 11. Upon the taking of possession the land vests in the Government, that is to say, the owner of the land loses to the Government the title to it. This is what Section 16 states. The provision of Section 11-A are intended to benefit the landowner and ensure that the award is made within a period of two years from the date of the Section 6 declaration. In the ordinary case, therefore, when Government fails to <span class=\"hidden_text\" id=\"span_20\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 22</span> make an award within two years of the declaration under Section 6, the land has still not vested in the Government and its title remains with the owner, the acquisition proceedings are still pending and, by virtue of the provisions of Section 11-A, lapse. When Section 17(1) is applied by reasons of urgency, government takes possession of the land prior to making the award under Section 11 and thereupon the owner is divested of the title on the land which is vested in the government states so in unmistakable terms. Clearly, Section 11-A can have no application to cases of acquisitions under Section 17 because the lands have already vested in the Government and there is no provision in the said Act by which land statutorily vested in the Government can revert to the owner.\"", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-26", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "23. In the present case possession was taken over under Section 17(1) of the Act on 17.02.2008. After that date the owners of the land has lost their title to the government. Thus, the petitioners have no locus to challenge the acquisition proceeding on the ground that the urgency clause was wrongly invoked. Here in the present case award has also been made and thereafter advertisement was made by the BIADA for allotment of land for setting up sugar mill. Since no entrepreneur came up therefore the decision to establish the beer factory was taken by the government, which was duly advertised and respondent No.7 was given allotment by the BIADA. Respondent No.7 taken <span class=\"hidden_text\" id=\"span_21\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 23</span> possession on 21.10.2011. Before taking over possession by the respondent No.7, the award was also made. It has further come that Development and Construction work is going on and respondent No.7 has incurred heavy expenditure to establish beer factory before filing of writ petition. Thus, at this stage, the grounds for wrongly invoking of urgency clause under Section 17(4) cannot be sustained and rejected accordingly. For the same reasoning and for the reasoning given by the learned Single Judge we agree with the judgment which was delivered on 09.05.2008.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-27", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "24. The Connected L.P.A. has been filed challenging the same acquisition proceeding against the judgment of the learned Single Judge in CWJC No. 921 of 2008. The learned Single Judge has dealt with every pleading raised by the petitioner and reply by the respondents and has elaborately dealt with the point raised mala fide in exercise of power under Section 17(4) has rejected. After considering several decisions, we agree with the reasoning given by the learned Single Judge, we do not find any merit in the L.P.A. as well as writ petition and are liable to be dismissed.", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "1acc1a187869-28", "Titles": "Rajan Sharma vs The State Of Bihar & Ors on 6 July, 2012", "text": "25. The filing of this writ petition after receipt of the award and additional compensation paid by the respondent No.7 after due bargain shows that the petitioners are pressing for <span class=\"hidden_text\" id=\"span_22\"> Patna High Court CWJC No.21307 of 2011 (14) dt.06.07.2012 24</span> undue/illegal bargain just to pressurize the Respondent No.7 for more compensation which is not permissible in the interest of public at large and if under such circumstances any disturbance is made, by the petitioners, the DGP, Bihar and D.M., Patna shall provide full protection and maintain law and order. \n\n 26. For the reasons recorded above, the writ petition as well as the L.P.A. are dismissed. \n\n\n (Prakash Chandra Verma, J) Mkr./-\n (Vikash Jain, J)", "source": "https://indiankanoon.org/doc/88416932/"}
+{"id": "9e2a5662617f-0", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "JUDGMENT Jagannadha Rao, J.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-1", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "1. Questions relating to the interpretation of International Tax Agreements containing international tax language fall for consideration in this reference.  \n2. The question of law referred to us at the instance of the Commissioner of Income-tax, Andhra Pradesh, Hyderabad, is as follows :  \n \"Whether, on the facts and in the circumstances if the case, the assessee is immune from liability either wholly or partly to tax on the basis of the Double Taxation Avoidance Agreement between Germany and India?\" \n3. The Income-tax Appellate Tribunal, Hyderabad, has consolidated 21 reference applications as common question are involved and it has drawn up a single reference application.  \n4. The assessee is the Visakhapatnam Port Trust (hereinafter called the \"Port Trust\"). The Port Trust is under the Ministry of Shipping and Transport, Govt. of India. The Visakhapatnam Port exports a large amount of iron ore. In order to speed up the export operations, the Port Trust felt it necessary to install a plant known as \"Bucket Weel Reclaimer\". The purpose of this was to remove iron ore mechanically from the wharfs and put it on a conveyer belt which takes the ore directly into the ship. Global tenders were called for by the Port Trust in June, 1967. A German company known as M/s. Maschinenfabrik Buckau R. Wilf (hereinafter called at the \"German company) tendered a contract for supply of the Bucket Wheel Reclaimer on June 26, 1967.  \n5. After several negotiation the contract was finalised on 12th September, 1968.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-2", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "6. The terms of the lengthy contract dated September 12, 1968, may be briefly noticed. The German company, (i) undertook to supply and deliver to the Port Trust one Bucket Wheel Reclaimer as per drawing, and(ii) to delegate one engineer-erector for supervising the total erection and one special fitter for installation of electrical equipment. It is not in dispute that the engineer-erector delegated was Mr. Bremer and that no special fitter was delegated. The period of contract was 131/2 months and shipments were to be so effected that the material would arrive at the Visakhapatnam Port in ten months. The price payable was as follows (in DM & Rupees separately).  \n   (a) Reclaimer          weight    Valye      Payable    in Rupees\n(Tons)    (DM)       in DM        &\n(i) Supply items       326   1,889,687   1,399,860+    9,19,900\ninluding ballast              DM         9,19,000\n(ii)Erection costs & --         101,726      90,000 +    27,000\nTravelling expense           DM          22,000\n-------------------------------------------                        326    1,991,413  1,489,860+\n326    1,99,413+    1,489,860+  9,41,000\nDM\n(b) Spares                16      210,416      210,416\nDM            DM\n--------------------------------------------\n342      2,201,829  1,700,276+\nDM       9,41,000", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-3", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "7. The terms of payment in clause 12 were in several parts :", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-4", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "(i) DM 1,700,276 = (DM 1,399,860+DM 210,416) DM 1,610,276 + DM 90,000 was payable in Germany. 5% of the above amount was payable at the conclusion of the contract, 10% by opening letters of credit in four weeks and 85% (DM 1,445,240) in 20 equal semi-annual installments each of DM 72,22262, of which the first installment was payable as soon as the Port Trust certified that the unit was ready. For the credit remaining after payment of each of these installments, interest was to be paid by the Port Trust at 6% p. a. The deferred payment was to be guaranteed by the State Bank of India. The interest portion for the deferred payment was DM 451,637. Of course, the figures were to be redetermine according to the formula agreed in the price variation clause which depended on such variable factors like \"the mixed material price\" and the \"standard wage\" in Germany which would vary from time to time.  \n (ii) Rs. 9,19,000 : This amount was payable to the German company towards the supply of certain items. But the invoice had to be made out by the person appointed by the German company, vide para. 12(b) and the address and the bank account would be informed to the Port Trust by the German company. 10% of this amount was to be paid at the time of signing the contract, 40% in six months and 50% when the German company informed that the items were ready.  \n (iii) Rs.. 22,000 was to be paid for the erecting supervising staff. Out of this 20% was to be paid at the commencement of the erection and 80% in monthly installments as demanded by the German engineer.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-5", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "(iv) In case of delayed payments, clause 12(c) Provided that the German company shall be entitle to claim interest on arears at 6% p. a.  \n8. Thus there were two different types of interest charged at 6% p. a. which are specified in the contract and we are concerned with the tax on the interest in clause 12(a).  \n9. The German company had to supply the mechanical equipment, the structural steel-work, the lubrication system, the rubber-belting, the electrical equipment, ballast and spares.  \n10. Clause 10 of the contract provided that the German company could delegate the erection work to the supervision staff as stated earlier. The Port Trust was to provide suitable skilled and unskilled labour, scaffolds, ect, water and electricity and the Port Trust alone had to pay for these items.  \n11. Clause 11 provided the price variation formula and it was to be applied to, (i) for DM 1,610,276 (DM 1,399,860 for items of supply and DM 210, 416 dor spares); (ii) for DM 90,000 (erection = wages and travelling expenses). Total : DM 1,700,276. But in respect of (iii) Rs. 9,41,000 = (Rs. 9,19,000+Rs. 22,000), the price variation formula was to be mutually agreed after the German company appointed its agent.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-6", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "12. The contract proceeds on the basis that the German company is to send all the parts. But cls. 7 and 17 do contemplate the employment of a sub-contractors or sub-supplier. What work is to be given to the subcontractor is also not mentioned in the contract., All that we get is that Rs. 9,19,000 is set apart to be paid to the sub-contractor upon the direction of the German company.  \n13. Later, an Indian company incorporated under the Indian Companies Act known as the Buckau-Wolf India Engineering Works Ltd, Pimpri, near Poona (hereinafter called the Poona company), came into the picture. It is common ground that the Poona company is not a subsidary of the German company nor is it, in any manner whatsoever, controlled by the German company. This Poona company was employed to fabricate a single thick steel sheet. Such of the items (items 13 to17 of the contract) which the German company manufactured in Germany and dispatched to Bombay Port were to be firmly imbedded on the steel plate (Boom) by the Poona company and delivered at Visakhapatnam where the items which would be directly sent by the German company to the Visakhapatam Port were to be put on the said plate under the supervision of the German engineer, Mr. Bremer.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-7", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "14. The assembling at the Visakhapatnam Port was to be done at the expense of the Port Trust. This is also clear from the fact that clause 10 of the contract provided that the Port Trust had to provide suitable skilled and unskilled labour, scaffolds, ect., water and electricity and pay for these items of expenditure. The Port Trust has filed a lot of documentary evidence to prove that the Port Trust itself, as a fact, paid for all the assembling and erection expense at Visakhapatnam as per the contract which came to Rs. 66,613.72 + Rs. 72,856 + Rs. 33, 137.40 and Rs. 2,22,448.26 = Total of Rs. 3,97,034.66.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-8", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "15. In clause 11, the words \"erection\" were said to mean \"wages and travelling expenses\".\"Erection\" according to the contract meant the payment of wages, i.e., to Mr. Bremer, the German Supervising Engineer and his travel expenses. These were covered partly in DM 90,000 to be paid in Germany (including travel outside India) and Rs. 22,000 for erection (i.e., wages and travelling expenses) in India. The German company's engineer-erector, Mr. Bremer was, according to it, only in charge of supervision. Documentary evidence has been filed by the Port Trust which shows that the amount payable in DM including DM 90,000 is to be paid in Germany as per the terms of the contract. After the contract was signed on September 12, 1968, letters of credit were opened in Germany to enable the German company to receive from a German bank (the Deutsche Bank, Cologne) payments of the price in installments for each export consignment, by sea or air. Eight export consignments of the component parts of the Bucket Wheel Reclaimer including spare parts were dispatched on May 15,1969 (to Bombay), August 20, 1969 (to Bombay), September 13, 1969 (to Visakhapatnam), December 22, 1969 (to Bombay), November 6, 1969 (to Visakhapatnam), November 6, 1969 (to Visakhapatnam). These are covered by bills issued by the German company and these bills refer to the import license dated June 5, 1968, taken out by the Port Trust and irrevocable letters of credit dated May 17, 1969, and May 22, 1969, State Bank of India, Visakhapatnam. All the bills specify that the price is to be noted for delivery (C. I.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-9", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "All the bills specify that the price is to be noted for delivery (C. I. F. Bombay or Visakhapatnam) \"without assembly\" or \"without erection\". The shipping documents on record show that the Port Trust paid the installments of the price as they fell due in 20 installments in German currency in Germany. The Port Trust itself paid the customs duuty and the landing charges and carriage expenses from Visakhapatnam Port to the erection site from Bombay Port to Pimpri, Pimpri to Poona, and Poona to Visakhapatnam.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-10", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "16. On a consideration of the terms of the contract and the mode of payment made by the Port Trust, and other facts of the case, the ITO was of the view that the Port Trust should have deducted tax at source in accordance with the provisions of s. 195 of the I. T. Act, 1961 (hereinafter referred to as \"the Act\"). The assessee raised various objections but they were overruled by the ITO who passed as order under s. 195(2) of the Act directing the assessee to pay the tax as well as the interest under s. 20 (1A) in a sum of Rs. 2,83,44,178.  \n17. The assessee carried the mater in appeal before the AAC. The assessment years involved were 1968-69 to 1974-75. In the appeal it was argued that s. 195 (2) of the Act did not apply as the property in the money and goods passed in Germany. It was alternatively contended that the entire amount should not be taxed inasmuch as the machinery portion was supplied in Germany for which the payment was also made in Germany. The AAC substantially accepted the contention of the assessee but held that so far as the interest paid along with the twenty semi-annual instalments was concerned, it was liable to be taxed in accordance with the provisions of s. 195 of the Act. Accordingly, he directed that the interest should be grossed-up, i.e., the interest portion of the payment was held to fall within the mischief of s. 195 of the Act.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-11", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "18. The assesse preferred appeals to the Tribunal in so far as the interest wa concerned. The question of interest arose only in respect of the assessment years 1970-71 to 1974-75. There was no question of interest for the assessment years 1968-69 and 1969-70. Thus the appeal for the assessment years 1968-69 and 1969-70 were indeed redundant. The assessee had also filed seven appeals against the assessee. The Revenue filed seven appeals against the finding of the appellate authority that only interest was liable to be charged to tax. That was how, in all, the Tribunal had 21 appeals before it.  \n19. For the first time before the Tribunal the assessee raised the question that the tax was not payable in India in view of the Indo-German Double Taxation Avoidance Agreement (hereinafter called \"the Agreement\" for brevity). The Tribunal thought it fit to consider the question of the applicability of the Agreement inasmuch as it would be unnecessary to decide all other question in the event of the assessee obtaining the benefit of the said agreement. There was no objection on behalf of the Revenue before the Tribunal for considering the applicability or otherwise of the said Agreement to the facts of the case.  \n20. The Tribunal firstly rejected the preliminary objection raised by the Department regarding the jurisdiction of the Tribunal relying upon art XVIII of the agreement.  \n21. The Tribunal then considered the rival contentions on facts and summarised its findings as follows :  \n (i) that the actual installation work or erection work or assembly work was not undertaken by the German company to be done at their cost;  \n (ii) payment in respect of the sub-contract had nothing to do with the assembly, erection or installation of the Bucket Wheel Reclaimer :  \n (iii) The German company merely supervised the installation :", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-12", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "(iii) The German company merely supervised the installation :  \n (iv) The Port Trust did not recover any money from the German company in respect of any part of the erection job :  \n (v) the activity which was carried on by the German company in relation to the supply and delivery of the Bucket Wheel Reclaimer cannot be designated as amounting to the German company having a permanent establishment in India within the terms and spirit of the Agreement :  \n (vi) Interest is not de hors the contract and it is part of the purchase money and it is not a separate source by itself and it forms part of the industrial and commercial profits which are covered by the Agreement :  \n (vii) There is no indebtedness independent of the terms of the contract and interest is not on any debt but it is on account of the terms of the contract itself.  \n22. Before this court, the learned counsel for the Department, Sri. M. Suryanarayan Murthy, contended that the Tribunal had no jurisdiction to apply the Agreement in view of art. XVIII contained therein. He also submitted that s. 9(1) (i) of the I. T. Act was attracted as the German company and the Poona company had \"business connection\" and that the Indo-German Agreement did not override s. 9. He further submitted that art. II(1) (i) (aa), (bb), and (dd) (1) applied to the facts of the case and thereby the German company had a \"Permanent establishment\" in india, and the income was taxable by applying the latter part of the art. III. We shall deal with the various aspects of this question a little later. He also argued that the interest payable in DM on the 20 instalments to the German company is an independent source income taxable under art. VIII.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-13", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "23. On the other hand, the learned counsel for the assessee (Port Trust) Sri. B. V. Subrahmanyam, contended that art. XVIII of the Agreement did not oust the jurisdiction of the Tribunal to apply the said Agreement. He submitted further that s. 9 was subject to the agreement and that the German company had no \"permanent establishment\" in India either by itself or through the Poona company or through Mr. Bremer as contended by the Revenue. He then argued that interest payable along with the instalments was part of the consideration for the contract itself and was not an independent source of income on any indebtedness of the Port Trust.  \n24. In our view, the points that arise for consideration are the following :  \n \" (1) Whether, under art. XVIII of the Agreement, the remedy of moving the Competent Authority specified therein was in substitution of the ordinary remedies of appeal, etc., available under the Income-tax statues of the respective countries ?  \n (2) Whether the German company is liable to income-tax in India on the basis that income is deemed to accure or arise in India, directly or indirectly, through or from any 'business connection' in India or other-wise through an agent, the Poona company, in view of section 9(1) (i) of the Income-tad Act, 1961, and, if so, what is the effect of the first part of art. III of the Agreement on such income?  \n (3) Whether the German company can be said to have a 'permanent establishment' in India by itself or through the Poona company or through Mr. Bremer so as to attract the levy of income-tax with reference to the later part of art. II(1) (i) of the Agreement?", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-14", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "(4) Whether the interest payable to the German company along with each of the twenty instalments in DM can be classified as interest arising out of any indebtedness within art. VII of the Agreement?\"  \n25. As the case turns upon the meaning of either technical expressions or clauses which have been evolved in model conventions since the time of the League of Nations, it would be useful to briefly trace the history of the model forms.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-15", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "26. Model forms applicable to all countries were first prepared by the fiscal committee of the League of Nations in 1927. Later the said committee conducted meetings at Mexico during 1943 and in London in 1946 and proposed minor variations. The model conventions were published in Geneva in April, 1976, by the fiscal committee of the U. N. Social & Economic Council. Later the fiscal committee of the organisation for European Economic Co-operation (O. E. E. C.), published a draft on 6th July, 1963 (vide Halsburys Laws of England, 4th Edn., VOl 23, para. 1040). In the meantime in September, 1961, the organisation for Economic Co-operation and Development (O. E. C. D.), was established to succeed the O. E. E. C. and the draft dated 6th July, 1963, submitted to the O. E. E. C. was confirmed by the O. E. C. D. These are called the O. E. C. D. models (vide Simon's Taxes 3rd Edn., Butterworths, p. 351, para. F(4,401). They have been further modified in 1974 and 1977 by either the O. E. C. D. or in individual cases by the contracting countries. The O. E. C. D. provided its own commentaries on the technical expressions and the clauses in the model conventions. Lord Radcliffe in Ostime v. Australian Mutual Provident Society [190] AC 459, 480; 39 ITR 210, 219 (HL), has described the language employed in these Agreements as the \"internal tax language\". For a complete but history of the tax treaties from 1270 in various countries and the League of Nation and U. N. - see Dr. M. B.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-16", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "various countries and the League of Nation and U. N. - see Dr. M. B. Rao's Books on Double Tax Treaties between Developing and Developed Countries (Milend Publications, New Delhi, 1983). Dr. Rao quotes M. B. Carrol to say that international tax law is \"in a state of perpetual becoming\" (p. 69).", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-17", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "27. We shall now take up the first point relating to the jurisdiction of the domestic courts or tribunals. Article XVIII of the Agreement reads thus :  \n \"XVIII, Where a resident of one of the territories show proof that the action of the taxation authorities of the other territory resulted or will result in double taxation contrary to the provisions of the present Agreement, he shall be entitled to present his case to the COmpetent Authority of the territory of which he is a resident. Should has claim be deemed worthy of consideration, the Competent authority to which the claim is made shall endeavour to come to an agreement with the Competent Authority of the other territory with a view to avoiding double taxation.\" \n28. The above article is called \"mutual agreement procedure\" and corresponds to art. XXV of the O. E. C. D Model (Simon's Taxes, p. 369) and it has come up for consideration in various countries. From the article by John Averi Jones and other \"The Legal Nature Agreement Procedure under the O. E. C. D. Model Convention-I\" (British Tax Review (1979) p. 333), we have obtained useful material on this question which is mentioned below.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-18", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "29. The German Federal Supreme Tax court has held that the existence of the 'mutual agreement procedure' does not prevent the court from proceeding with the case. (German Federal Supreme Tax Court 1-2-67, I 220/64 (B. St. B 1, 1967 III 495). The same view has been taken by the Swiss Federal Tribunal (Swiss Federal Tribunal, 17-3-67, BGE 93I-189). This was in 1967 even before the words \"irrespective of the remedies provided by the domestic law of those States\" were introduced in the O. E. C. D. Model. The commentary on the O. E. C. D. model (Commentary to art. 25, para. 6), also makes it clear that this procedure is in addition to and not in substitution of the remedies in the domestic courts or tribunals (Robert Verhoeven, Counseller, Ministry of Finance, Belguim in his Commentary on the O. E. D. C. Model published in Bulletin of Income-tax No. 553, July, 1977 and 25/11) (5).  \n30. In Simon's Taxes, already referred to, it is stated at p. 169 (F. 1.263) as follows :  \n \"This step may be taken in addition to any legal form of appeal in the country concerned, and may be taken before any additional tax has been imposed.\"", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-19", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "31. Even where the taxpayer initially invokes the mutual agreement procedure, in case the said authorities fail to agree or their agreement is not satisfactory to the taxpayer, all countries (except Sweden) are agreed that there will be no objection to the taxpayer then moving the courts within the prescribed time, if any (British Tax Review). In Canada (No. 76-15) and the United States (Rev. Proc. 70-18) the Government tax publications suggest that taxpayers should protect their rights of appeal before the courts while applying for the mutual agreement procedure (British Tax Review (1979), p. 333).  \n32. We respectfully agree with the rulings mentioned above. We are also of the opinion that art. XVIII underlines a procedure which is in addition to and not in substitution of the remedies before the domestic courts or tribunals. Hence the assessee was entitled to rely on the agreement before the Income-tax Appellate Tribunal. The first point is, therefore, held in favour of the assessee.  \n33. The second point turns upon the effect of art. XVI of the Agreement on s. 9(1) of the Act.  \n34. Article XVI of the Agreement reads as follows :  \n \"The laws in force in either of the territories will continue to govern the assessment and taxation of income in the respective territories except where express provision to the contrary is made in this Agreement.\" \n35. What is the express provision to the contrary that is made in the Agreement?  \n36. Now art. III(1) of the Agreement is so far as it is material on this point reads as follows :  \n \"Subject to the provisions of paragraph (3) below, tax shall not be levied in one of the territories on the industrial or commercial profits of an enterprise of the other territory unless profits are derived in the first-mentioned territory through a permanent establishment. .....\"", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-20", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "37. In para. 3 of art. III are enumerated certain specified items of income, i.e., rents, royalties, interest, dividends, etc., which are excluded from the \"industrial or commercial profits\" of the foreign enterprise.  \n38. It is contended that in this case the German company must be taken to have derived its profits in India even though the money might have been paid in West Germany and further that the Poona company which has prepared the steel plate and has assembled items 13 to 17 thereupon must be taken to have a \"business connection\" with the German company and that the income must be taken to have been derived in India.  \n39. It is true that under s. 9(1) (i) of the Act all income accuring or arising whether directly or indirectly, through or from any \"business connection\" in India, or other income mentioned in that section shall be deemed to accure or arise in India. But the charging provision, s. 4, as well as s. 5 of the Act defining the \"total income\" of either a resident or a non-resident are expressly made\" subject to the provisions of the Act\", including agreements made under s. 90.  \n40. A similar view was taken by the House of Lords in Ostime (Inspector of Taxes) v. Australian Mutual Provident Society [1960] AC 459, 480-81; 39 ITR 210, where it was held that if there was a conflict between the terms of the agreement and the taxation statue, the agreement alone would prevail. Later, however, s. 497 of the U. K. Income and Corporation Taxes Act, 1970, provided expressly for legislation by way of statutory instrument in the form of an Order-in-Council declaring the arrangements specified in the order to have effect, \"notwithstanding anything in any enactment\".", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-21", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "41. The decision of the Supreme Court in Turner Morrison & Co. Ltd. v. CIT , relied upon for the Department is, in our opinion, not relevant in the context of the Double Taxation Avoidance Agreements which override the liability of a non-resident principal or an Indian agent who may be otherwise liable to tax under ss. 4 and 5 read with s. 9. Similarly, we hold that the ruling in P. C. Ray & Co. (India) P. Ltd. v. A. C. Mukherjee, ITO [1959] 36 ITR 365 (Cal), of the Calcutta High Court is also not relevant.  \n42. Coming to the part played by Mr. Bremer, we are of the view that even there, no \"business connection\" is established. It may be noted that Chinnappa Reddi J. (as he then was), sitting with Punnayya J. in CIT v. Hindustan Shipyard Ltd. , held that an agreement providing for guarantees, deputing of technical and other personnel by a Polish company to the Hindustan Shipyard for supervision of the erector and for sending a supervising engineer, did not establish a business connection\" with the shipyard. It was held that they were dealing with each other on a principal to principal basis. So is the relationship between the German company and the Poona company as shown by us under the this point.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-22", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "43. Therefore, the legal position on the second point may be summarised as follows : The provisions of ss. 4 and 5 of the Act are expressly made subject to the provisions of the Act which means that they are subject to the provisions of s. 90. By necessary implication they are subject to the terms of the Double Taxation Avoidance Agreement. If any, entered into by the Govt. of India. Therefore, the income arising or accuring to a foreign company through or from any \"business connection\" in India which is deemed to arise or accure in India, being part of the total income specified in s. 5 and chargeable to income-tax under s. 4, is also subject to the provisions of the Agreement to the contrary.  \n44. Therefore, even assuming for a moment that all the profits of the German company are to be deemed to have accrued or arisen in India by virtue of s. 9 of the ACt, the terms of art. III of the Agreement prevail over s. 9 of the Act. In effect, the industrial or commercial profits of the German company are not liable to tax under s. 9 of the Act except to the extent permitted by art. III. We shall deal with these exceptions separately under points Nos. 3 and 4.  \n45. The second point is, therefore, held against the Department and in Agreement separately under points Nos. 3 and 4.  \n46. The third point that arises is whether the German company can be said to be deriving profits in India through a \"permanent establishment\" which can be taxed in India in view of the latter part of art. III of the Agreement?  \n47. That leads us to art. (II) (1) (i) of the Agreement. Article II(1) (i) reads as follows \" (to the extent that it is relied upon before us) :", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-23", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "\"Article II. (1) In the present Agreement, unless the context other-wise requires :...... \n (i) the term 'permanent establishment' means a fixed place of business in which the business of the enterprise is wholly or partly carried on :  \n (aa) the term \"fixed place of business\" shall include a branch, an office, a factory, a workshop, a warehouse, a mine, quarry or other place of extraction of natural resources, and a permanent sales exhibition :  \n (bb) an entereprise of one of the territories shall be deemed to have a fixed place of business in the other territory if it carries on in that other territory a construction, installation or assembly project or the like;.....  \n (dd) a person acting in one of the territories for or on behalf of an enterprise of the other territory shall be deemed to be a permanent establishment in the first mentioned territory, but only it", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-24", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "1. he has and habitually exercises in the first mentioned territory a general authority to negotiate and enter into contracts for or on behalf of the enterprise, unless the activities of the person are limited exclusively to the purchase of goods or merchandise for the enterprise, or", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-25", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "2. he habitually maintains, in the first mentioned territory a stock of goods or merchandise......  \n 3. he habitually secures orders in the first mentioned territory, ....\"  \n48. Was the German company having a \"permanent establishment\" in India?  \n49. The word \"permanent establishment\" is one of those technical expressions which is invariably used in all international Double Taxation Avoidance Agreements as these are based on standard O. E. C. D. models.  \n50. In view of the standard O. E. C. D. models which are being used in various countries, a new area of genuine \"international tax law\" is now in the process of developing. Any person interpreting a tax treaty must now consider decisions and rulings worldwide relating to similar treaties : (British Tax Review [1978] p. 394). The maintenance of uniformity in the interpretation of a rule after its international adaption is just as important as the initial removal of divergencies (Per Scott L. J., in Eurymedon [1938] 1 All ER 122 (CA). Therefore, the judgments rendered by courts in other countries or ruling given by other tax authorities would be relevant.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-26", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "51. The Supreme Court of Belgium (judgment of the Supreme Court of Belgium on French-Belgium Treaty) has held that a Belgiaan subsidiary of a French parent company was not the parent's \"permanent establishment\", notwithstanding the very tight control exercised by the parent company over the sales-territory and product lines allocated to the sub-sidiaries notwithstanding the considerable amount of management and financial reporting which was required of the subsidiary. This decision of the Belgium Supreme Court, if regarded as persuasive in other countries, if of immense relief to multinational corporations (MNC) which often do lay down strict guidelines for the operations of their subsidiaries : (vide Michael Edwards-Ker's Book, the International Tax Treaty Service published by In-Depth Publishing Ltd., 1978 Dublin (13)).  \n52. The Swiss Bundesgericht (judgment of the Swiss Bundesgericht dt. 17-9-77 on Swiss-Spanish Treaty) had to interpret the Swiss-Spain treaty and decided whether the representative-office\" of a Spanish bank constituted a \"permanent establishment\" in Switzerland. The Budesgericht, whilst it cited the commentary of the 1963 O. E. C. D. model, held that it was not such a \"permanent establishment\" of the Spanish bank in Swizerland (British Tax Review [1978] p. 394).  \n51. Similarly, the U. S. Revenue Ruling (No. 72-1-418 on U. S.-Germany Treaty) has decided while dealing with U. S. /German tax treaty that a German bank's representative office in U. S. did not constitute a \"permanent establishment\" of the German bank in the U. S. (British Tax Review [1978] p. 394).", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-27", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "52. A \"Permanent establishment\" connotes a projection of the foreign enterprise itself into the territory of the taxing state in a substantial and enduring form : (vide F. E. Koch's Book on the Double Taxation Conventions published by Stevens & Sons, London., 1947, Vol. I, at p. 51, quotating Mitchell B. Caroll before the sub-committee of the committee of U. S. Senate Foreign Relations). It is common practice for an enterprise which carries on trade or business in one country to expand its operation, with out incorporation or further incorporation into another country, for it then has a branch there, or a permanent establishment which can be regarded as having sufficient presence in that country to make then tax-able there in the same manner as the residents of that country. (Harvey Mc. Gregor, Old Exemptions - New Credits. The or Permanent Establishment under the Double Taxation Agreements between U. K. and U. S. A.-1 (British Tax Review [1977] Pt. 6, p, 327).  \n53. In our opinion, the words \"permanent establishment\" postulate the existence of a substantial element of an enduring or permanent nature of a foreign enterprise in another country which can be attributed to a fixed place of business in that country. It should be of such a nature that it would amount to a virtual projection of the foreign enterprise of one country into the soil of another country.  \n54. First we shall take up sub-clause (aa).", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-28", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "54. First we shall take up sub-clause (aa).  \n55. Applying the above tests to sub-clause (aa) of art. III(1) (i), there is, in our view, nothing in the contract between the German company is to establish in India any establishment of a permanent or enduring nature either wholly or substantially which would amount to a virtual projection of the German company in India. Nor has any material been brought to our notice in this behalf. The agreement was purely for the supply of parts and for sending of an expert engineer to supervise the erection of the Reclaimer by the Port Trust. We have no difficulty whatsoever in holding that sub-clause (aa) is not attracted.  \n56. The submission for the Department under sub-clause (bb) is in several parts which we shall now consider.  \n57. (A) It was urged that by virtue of the deeming provision in sub-clause (bb) the German company was to be treated as having a \"permanent establishment\" in India as it was, according to the Department, duty bound to manufacture and install and assemble the Reclaimer as a single unit in India and, therefore, the German enterprise must be deemed to have had a \"permanent establishment\" in India.  \n58. We are of the firm opinion that the contract between the parties did not contemplate any work of installation or assembly or the like to be performed by the German company. As already stated, the contract was limited to the supply of the items from Germany and to the delegation of an expert engineer to supervise the installation or assembly work to be conducted by the Port Trust.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-29", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "59. Apart from this, we are of the view that clause 10 of the contract entered into between the parties is absolutely clear and that it clinches the issue. It states that it is the duty of the Port Trust to provide suitable \"skilled\" and \"unskilled\" labour, one crane with a boom, scaffolds and tackles for erection and other consumables required for erection and to secure the necessary quantity of water and electricity that may be required during their operations, and also to provide for the transportation of various items. As already stated, the Port Trust has produced voluminous evidence to show that it was the Port Trust that spent Rs. 3,97,034.66 towards the expenditure for wages for the workmen, etc. Our attention has not been drawn to any material which will show that the German company has conducted these operations or has paid for them either wholly or partly, or that it has reimbursed the Port Trust. This is also clearly found by the Tribunal against the Department. This submission, therefore, clearly lack factual foundation.  \n60. Reliance is then placed on the eight bills issued by the German company which refer to the price being payable C. I. F. Bombay or Visakhapatnam \"without assembly\" or \"without erection\". It is argued that theses operations of assembly and installation must, therefore, be taken to have been conducted in India by the German company.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-30", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "61. In our pinion, the above words in these bills do not raise a presumption that these operations have been conducted by the German company. The question must depend solely on the evidence as to who has actually got the operations of assembly or installation or erection made or paid for it. The material on record in this reference is only one way, namely, that it was the Port Trust that got the Reclaimer assembled, installed and erected at Visakhapatnam and that, in fact, the Port Trust paid Rs. 3,97,034.66 to the workers. There is absolutely no material in favour of the Department on this question. There is no evidence that the German company even reimbrused the expenditure of the Port Trust in this regard. This contention is, therefore, liable to be rejected.  \n62. According to the learned counsel for the Department, the contract between the parties used the word \"erection\" and, therefore, it must be presumed that the German company was in charge of the \"erection\" of the Reclaimer.  \n63. Firstly, on a reading of the entire contract as a whole, we have no doubt that the word \"erctio\" has been used in this contract in a limited sense as meaning the expense involved in respect of the salary payable to Mr. Bremer and for his travelling expenses. Secondly, this is also made explicit in clause 11 of the contract. The word \"erectin\" is clearly described as being equivalent to \"wages and travelling expenses\". Thirdly, the word \"wages\" here cannot be understood to mean the wages of the workmen at Visakhapatnam for which the responsibility is in that regard, as already pointed out by us, rested on the Port Trust alone under clause 10 of the contract. Therefore, there is no force in this submission either.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-31", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "64. (B) It is then vehemently contended that even so, the German company would fall under clause (bb) inasmuch as, according to the Department, the said company carried the work of construction, installation or assembly or the like through its agent (i.e., Poona company) and that the German company must, therefore be deemed to have had a \"permanent establishment\" through such agent in India.  \n65. This submission is based on an assumption that the word \"it\" in clause (bb) can be applied not only to the German company but also to its agent. It is based on a further assumption that the Poona company is an agent of the German company.  \n66. In our view the Agreement has made special provision in clause (dd) in respect of agents who satisfy certain conditions. When such a special provision is made in respect of agents in clause (dd), it is highly doubtful if the respective Governments in India and Germany intended that sub-clause (bb) is to cover once again the case of an agent so as to render the conditions imposed in clause (dd) otiose.  \n67. In any event, the Poona company cannot, as we shall presently show, be said to be in the position of an Indian agent of the German company, and our conclusion is based on the following reasons :  \n In Lakshminarayan Ram Gopal and Son Ltd. v. Government of Hyderabad , their Lordships of the Supreme Court pointed out the distinction between an agent, a servant and an independent contractor and quoted the following passage from Halsbury's Laws of England (Hail-sham Edn., Vol. I, p. 193, para 345), as follows (p. 456 of 25 ITR) :", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-32", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "\"An agent is to be distinguished on the one hand from a servant and on the other from an independent contractor. A servant acts under the direct control and supervision of his master, and is bound to conform to all reasonable orders given to him in the course of his work; an independent contractor, on the other hand, is entirely independent of any control or interference and merely undertakes to produce a specified result employing his own means to produce that result. An agent, though bound to exercise his authority in accordance with all lawful instructions which may be given to him from time to time by his principal, is not subject in his exercise to the direct control or supervision of the principal.\" \n68. Further in Pritchett & Gold and Electrical Power Storage Co. Ltd. v. Currie [1916] 2 Ch D 515 (CA) and Mohamed Shafi v. Fazal Din AIR 1930 Lah 1062, it was held that the relationship between a contractor and his sub-contractor is similar to that between one principal and another.  \n69. In the light of these principles of law applicable to the cases of a servant, agent and sub-contractor, let us examine the facts of the case.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-33", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "70. The contract itself, in cls. 7 and 17, contemplates the employment of a sub-contractor or sub-supplier. The Poona company was so employed later. It is admitted before us that it is not a subsidiary of the German company. The Poona company is neither a party to the contract nor is there reference to it in the contract. Even in clause 11(c) relating to price variation, the German company stipulated that its own agent in India or (the contractor's Indian agent) will be appointed to negotiate the said question. Clause 12(b) also deals with appointment of an agent. The contract itself, therefore, draws a clear distinction between \"agents\" of the German company on the one hand and a \"sub-contractor\" on the other. (Contrast cls. 7, 17 with cls. 11(c) and 12(b)). There is also no proof that the Poona company is to transmit the profit it made to the German company or that it had drawn any commission. As submitted on behalf of the Port Trust, there is neither any identity of interest nor identity of character nor of personality, nor is there any unity in profit-making between the Poona company and the German company. They were in the position of principal to principal and were dealing with each other at arm's length. The German company had no control nor could it interfere with the performance of the sub-contract by the Poona company. We are of the opinion that the Poona company cannot, therefore be treated as an \"agent\" of the german company, and, therefore, the \"assembly\" and \"installation\", in so far as the work relating to the steel-plate at Pimpri is concerned, cannot be attributed to the German company so as to attract the provisions of clause (bb) of art. II(1) (i).", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-34", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "(C) The further submission of the learned counsel for the Department under clause (bb) is that the German Engineer, Mr. Bremer who was deputed to India to \"supervise\" the assembly and installation operation of the Reclaimer brings the German company within the mischief of clause (bb).  \n71. The German Federal Finance Court (British Tax Review, 1972, p. 265 quoting Bundesfinanzh of March 4, 1970, (IR 140/66) while interpreting the U. K.-German treaty was dealing with the case of a British company having no permanent establishment in the Federal Republic of Germany and which supplied technical information and advice or know-how to two German enterprises against payment. The German tax authorities regarded these profits as earnings from independent work performed in Germany in the sense of s. 18 of the (German) Income Tax Law, and subjected to restricted tax liability in pursuance of s. 49(1) No. 3 and the relevant corporation tax provisions. But the court decided that the know-how fees were not to be regarded as earnings from independent work based on the personal activities of a taxpayer but as profits derived from an industrial enterprise. The British company having no permanent establishment in Germany, these profits were not taxable.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-35", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "72. In our opinion, Mr. Bremer did not carry on any construction, installation or assembly project or the like on behalf of the German company in India. He was only delegated to India for supervision. As already pointed out, the work of construction, installation or assembly was actually done by the Port Trust and not by the German engineer. It is not, therefore, permissible to equate the situation with one where the German engineer has, instead of merely supervising the above operations, was himself in charge of those operations on behalf of the German company. The Income-tax Tribunal was, therefore, right in holding that the role of Mr. Bremer does not result in bringing the German company within clause (bb). In this context it may be noted that the very same Indo-German Agreement came up for consideration before the Income-tax Appellate Tribunal, Delhi, and the said Tribunal had also taken a view similar to the one taken by the Hyderabad Tribunal, when it held that the mere \"supervision\" done by the German engineer in that case, viz., of Mr. Ritacher, on behalf of M/s. Carl Schenck of West Germany in respect of erection and commissioning of a plant at Hyderabad did not amount to the German manufacturer having a \"permanent establishment\" in India-vide Bharat Heavy Electricals Ltd. v. ITO [1982] 65 Taxation (section 6) p. 12, (Appellate Tribunal decision).  \n73. We are, therefore, of the opinion that the German company cannot be brought within clause (bb) of art. II(1) (i) by reason of any of the submissions made on behalf of the Department.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-36", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "(D) The next argument of the learned counsel for the Department is that the German company falls within clause (dd) inasmuch as the Poona company must be treated as an agent of the german company within sub-clause (1) of clause (dd). No submission has, however, been made under sub-cls. (2) and (3) of clause (dd).  \n74. We have already held while dealing with clause (bb) that the Poona company cannot be treated as an agent of the German company but that it is in the position of an independent contractor dealing, at arm's length, with the German company on a principal to principal basis. Further, clause (dd) requires that the agents shall exercise a general authority in India to negotiate and enter into contracts on behalf of the German enterprise. There is no material placed before us to show that the Poona company had any such general authority as above stated. Therefore, clause (dd) (i) cannot be invoked on behalf of the Revenue.  \n75. For all the above reasons we are unable to accept any of the submissions made on behalf of the Department under art. II(1) (i) of the Agreement. Therefore, the third point is held against the Department.  \n76. Now we shall deal with the last point regarding interest. We have to see whether the interest paid by the Port Trust in DM along with each of the 20 instalments under clause 12(a) of the contract, namely, DM 451,637 is liable to income-tax in India.  \n77. This leads us once again to a consideration of the relevant portions of art. III in relation to art. VIII of the Agreement :", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-37", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "\"Art. III (1) Subject to the provisions of paragraph (3) (below) tax shall not be levied in one of the territories on the industrial or commercial profits of an enterprise of the other territory unless profits are derived in the first-mentioned territory through a permanent establishment..... \n (3) Fro the purposes of this Agreement the term 'industrial or commercial profits' shall not include income in the form of rents, royalties, interest, dividends, management charges, remuneration for labour or personal services or income from the operation of ships or aircraft but shall include rents or royalties in respect of cinematographic films.\"  \n78. The items enumerated in sub-clause (3) are referred to in the later articles. Article V deals with the conditions for taxation of income from the operation of aircraft, article VI in respect of shipping operations, art. VII dividends, art. VIII interest, and so on.  \n79. The first question that arises for consideration is with regard to the construction of sub-clause (3) in relation to the first part of art. III(1).", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-38", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "80. The words \"subject to the provisions of paragraph (3) \" in art. III(1) would in our view indicate that while \"industrial or commercial income\" of the foreign enterprise are not taxable in India, the rents, royalties, interest, dividends, etc., derived by the foreign enterprise from sources in India are taxable. Obviously, sub-clause (3) cannot be construed as excluding these items from the taxable income of the permanent establishment by applying sub-clause (3) to the latter part of art. III, Sub-clause (3) has relevance only to the first part of art. III(1). Further, in our opinion, the items : rents, royalties, dividends, interest, etc., are taxable only when they satisfy the conditions mentioned for their liability to tax as envisaged in the various specific article such as arts. V, VI, VII, VIII, etc. Article VIII refers to the taxability of interest in India.  \n81. In all OECD models, these items in sub-clause (3) in art. III are normally dealt with separately in the Agreement (Simons Taxes 3rd Edn., para. F. 1.212 (para. 147)). Lord Radcliffe has also held in Ostime's case [1960] AC 459; 39 ITR 210 (HL) (at pp. 481-482 of the report), that except and in so far as art. VI dealing with dividends (in the Australian Treaty) makes certain special stipulations about double taxation of dividends, the taxation of these item is not otherwise permissible - see also Harvey Mcgregor's article (British Tax Review, 1978, p. 394), dealing with this interpretation and the unjust departure therefrom by some countries).", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-39", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "82. Therefore, we have to look to the first part of art. III and clause (3) of art. III, and then refer to art. VIII alone and decide whether the interest paid along with the 20 instalments satisfies the provisions of art. VIII, so as to attract income-tax in India.  \n82. Article VIII reads :  \n83 Interest on bonds, securities, notes, debentures or any other form of indebtedness derived by a resident of one of the territories from sources in the other territory may be taxed in both countries.  \n84. Does the \"interest\" payable on these 20 instalments in DM in Germany under clause 12(a) of the contract fall within the words any form of \"indebtedness\" mentioned in art. VIII of the Agreement, so as to create an independent source of income liable to income-tax in India?", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-40", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "85. The law relating to interest arising out of \"indebtedness\" is well settled. 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 praesenti, solvendum in futuro : Webb v. Stenton [1883] 11 QBD 518, 527 (CA). A liability depending upon a contingency is not in praesenti or in futuro till the contingency happened. But if there is a debt is certain and does not make it any the less a debt if the liability is certain and what remains is only the quantification of the amount. The expression \"debt\" may take colour from the provisions of the concerned Act. It may have different shades of meaning; Kesoram Industries and Cotton Mills Ltd v. CWT [1977] 59 ITR 767 (SC). It money is due to a person and is not paid for but has been withheld from him by the debtor after the time when payment is to have been made, in breach of his legal rights, it is a compensation whether it is liquidated under agreement or statute. The compensation is properly described as interest : (Westminster Bank Ltd. v. Riches [1974] 28 TC 159, 189; 15 ITR (Supp) 86 (HL). Therefore, when interest is paid not as part of the compensation but is given for the deprivation of the use of the money, it is an independent source of income and is taxable. Dr. Shamlal Narula v. CIT , and similarly if the right to interest arises because the person is kept out of his money, the interest received is chargeable to tax as income. The same principle would apply if interest is payable under the terms of an agreement and the court or the arbitrator gives effect to the terms of the agreement and awards interest : T. N.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-41", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "or the arbitrator gives effect to the terms of the agreement and awards interest : T. N. K. Govindaraju Chetty v. CIT .", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-42", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "86. But where the interest is merely in name but constitutes part of the compensation or part of the damages, it is not \"interest\" chargeable to income-tax. As an integral part of such compensation it may be either slumped-up with the other elements in the gross sum or may be separately stated but treated as part of the gross sum. IRC v. Ballantine [1924] 8 TC 595 (C. Sess). Mere description of the amount as interest which in fact is part of compensation does not have the effect of altering the true character of the compensation. Simpsom v. Executors of Bonner Maurice as Executor of Edward Kay [1929] 14 TC 580 (CA). That, in fact, is also position with regard to unpaid purchase money coupled with a liability to pay interest along with each of the instalments.  \n87. Where as here, parties enter into an agreement to accept a portion of the purchase money immediately and the balance to be paid in certain instalments along with interest on the instalment of purchase money, the agreement though it vested the property agreed to be sold in the purchaser, does not have the effect of converting the price due into a loan. The intrinsic nature of the money due to the vendor is as unpaid purchase money and not as debt. The parties may, however, agree to convert the unpaid purchase money as a debt-Radha Kissen v. Keshardeo, . An agreement to pay the balance of consideration due by the purchaser does not in truth give rise to a loan : Bombay Steam Navigation Co. (1953) Pvt. Ltd. v. CIT [1965] 56 ITR 52, 57 (SC).", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-43", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "88. When, therefore, there is no agreement initially or any novation between the parties to treat the unpaid purchase money as a debt repayable with interest, even though the purchaser incurred the obligation of paying the sale proceeds to the seller, he does not become, in any sense, a debtor of the seller. If there is no agreement initially or by way of novation to treat the balance of sale consideration as paid off in full and no novation to treat the balance of consideration as a loan, the amount received by the seller cannot be regarded as interest on money.  \n89. The word \"source\" means somethings from which income arises. The seller would have, in a contract for sale of goods, got any way interest on sale proceeds under s. 61 of the Sale of Goods Act even had not untilised the money : Lakhmichand Muchhal v. CIT [1961] 43 ITR 315 (MP). The interest in such a case is received as part of the purchase price itself, that is to say, as part of the consideration for sale of goods on deferred payment basis and not as a separate source : CIT v. Saurashtra Cement & CHemical Industries Ltd. , the mere nomenclature employed by the parties notwithstanding. When the payment of interest is as part and parcel of the agreement to pay the unpaid purchase money on a deferred payment basis, there is no indebted-ness (Chittela Venkata Subba Reddi v. Jayanthi Audinaraya - A. S. No. 446 of 1964, dt. 2-8-68 (per Kondaiah J., as he then was), affirmed in L. P. A. No. 267 of 1968, dt 14-3-69).", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "9e2a5662617f-44", "Titles": "Commissioner Of Income-Tax, ... vs Visakhapatnam Port Trust on 17 June, 1983", "text": "90. Bearing these well-settled principles in mind, it has to be seen whether interest payable on the agreed instalments of unpaid purchase money can be treated as a separate \"source\" being interest on any form of \"indebtedness\" contemplated in article VIII of the Agreement.  \n91. We are of the opinion that the interest agreed to be paid along with each of the instalments of unpaid purchase money was agreed to be part of the sale consideration itself and cannot be treated as an independent \"source\" of income. The words \"any other form of indebtedbess from sources\" in the other territory can only mean interest arising or accuring as a separate \"source\" of income. It cannot include interest payable on the unpaid purchase money agreed to be part of the sale consideration. There is nothing in the initial contract or any novation converting the interest payable with the instalments as a \"loan\". Hence the interest specified in clause 12(a) of the contract is, in our opinion, not liable to income-tax.  \n92. Therefore, we hold on the fourth point in favour of the Port Trust and against the Department.  \n93. For all the above reasons, we agree with the Tribunal and answer the question referred to us in the affirmative, in favour of the assessee, Port Trust, and against the Department, that the assessee is immune from liability either wholly or partly to income-tax in view of the provisions of the Double Taxation Avoidance Agreement between the Federal Republic of Germany and India.", "source": "https://indiankanoon.org/doc/865397/"}
+{"id": "773ecf5cc908-0", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "JUDGMENT Chandra Reddy, C. J. \n\n 1. This is an appeal under Section 82 (2) of the Employees State Insurance Act (34 of 1948) (hereinafter referred to as the Act) against the order of the Employees' Insurance Court, Hyderabad, holding that the workmen in the canteen attached to the Sirsilk Limited, Sirpur-Kagaznagar, are employees of the appellant, and, consequently, the appellant is liable to contribute to the Employees' insurance fund. \n\n2. The Regional Director, the Employees' State Insurance Corporation called upon the appellant to make a contribution to this fund for the staff of the canteen. It is to avoid compliance with the requisition of the Regional Director that the appellant had recourse to Section 75 of the Act inviting the decision of the Employees' Insurance Court. The Insurance Court took the view that the workmen of the canteen are the employees of the appellant for purposes of the Act and hence the appellant was obliged to contribute to the insurance fund for the workers in the canteen. It is this conclusion of the Insurance Court that is challenged before us.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-1", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "3. It is urged by the learned Advocate General appearing for the appellant that the canteen being an autonomous body managed by the canteen committee, it is a separate entity unconnected with the factory, that there was no contract of service between the employees of the canteen and the management of the factory, that separate accounts are maintained for the canteen and that the employees of the canteen are not under the control and supervision of the management and, therefore, there Is complete dissociation between this institution and tin factory. The learned Advocate-General fortified this argument by adverting to the testimony of D. K. Birla, member of the Managing Committee. On the basis of his evidence, the learned Advocate-General contended that there is no scope for the workmen of the canteen to invoke the aid of the provisions of the Act. He maintains that It is difficult to bring the staff of the canteen within the range and sweep of the relevant sections of the Act. \n\n4. To appreciate the contentions urged on either side, it is necessary to lead the sections of the Act and also of the Factories Act (63 of 1948) in so far as they have a material bearing on the present enquiry. Section 2 (9) of the Act defines an \"employee\" thus:\n \" 'employee' means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and ..... \n\n(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-2", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or xx xx xx xx\"  \n5. We are unconcerned with Clause (iii) and, therefore, we need not extract it here. \n\n6. Pausing here for a moment, we see that any person employed for wages in or in connection with the work of a factory or establishment or who satisfies the tests propounded in Clause (i), (ii) or (iii) is an \"employee''. We are unable to accede to the proposition of the learned Advocate-General that the two elements contemplated by the main Clause and any of the Clauses (i) to (iii) should exist before a person could satisfy the definition of an \"employee\". It looks to us that the word \"and\" at the and of the main clause is disjunctive. We do not think that it has to be read cumulatively with one or other of the Clauses (i) to (iii) because if the employment must of necessity be in connection with the work of the factory the provisions of Clause (ii) would be intelligible as that clause provides for the work which is inter alia incidental to the purpose of the factory or establishment. Of course, if both the expressions, \"in connection with the work of a factory or establishment\" and \"incidental to the purpose of the factory or establishment\" are intended to convey the same thought, it is a different matter. But the learned Advocate-General argues that the two expressions embody two different concepts. If that were so, that would be importing repugnancy between the two.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-3", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "7. Even assuming that the interpretation sought to be put upon this section is correct, we do not think that it will make much difference in the ultimate conclusion to be reached by us. \n\n8. It was next contended by the learned Advocate-General that the definition of \"employee\" should be read in conjunction with the definition of \"worker\" in the factories Act, as, according to him, it is only a \"worker\" that could take advantage of the State Insurance Act. According to Section 2, Clause (1) of the Factories ACT, \"'worker' means a person employed, directly or through any agency, whether for wages or not in any manufacturing process or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process;\" \n\"Manufacturing process\" is defined in Clause (k) as meaning:\n \"any process for making, altering, repairing, ornamenting, finishing, packing, Oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adopting any article or substance with a view to its use, sale, transport, delivery or disposal.\"   \n9. On the language of this clause, It is submitted by ins learned Advocate-General that it is only a person who is engaged in the process of manufacturing that would fulfil the requirements of the definition of \"worker\" and that since the staff of the canteen cannot be said to be engaged in the manufacturing process, they could not be termed as the employees of the appellant. He argues that the work in the canteen, by no stretch of imagination, could be described as being incidental to or connected with the manufacturing process and, consequently, a worker in the canteen cannot avail himself of the benefits of the Act.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-4", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "10. In support of the proposition that only such things as are integrally connected with the manufacturing process or with the actual working of the factory that could be described as being incidental to or connected with the manufacturing process, some of the decisions of English Courts are cited to us. \n\n11. In London County Council v. Attorney General,(1902) A C 165 at p. 169, the question arose whether the statutory powers of the London County Council to purchase and work tramways would include the power to work omnibuses in connection with the tramways and It was answered in the negative since it was thought that the omnibus business was not incidental to the tramway business. In the speach of Lord Macnaghten occurs the following passage:\n \"The London County Council are carrying on two businesses -- the business of a tramway company and the business of omnibus proprietors. For the one they have the express authority of Parliament; for the other, so far as I can see, they have no authority at all. It is quite true that the two businesses can be worked conveniently together but the one is not incidental to the other. The business of an omnibus proprietor is no more incidental to the business of a tramway company than the business of steamship owners is incidental to the undertaking of a railway company which has its terminus at a seaport ......\" \nThe argument founded on these observations is that though the canteen is run for the convenience of the workmen in the appellant-factory, it could not be said that the canteen was incidental to or in connection with the work in the factory.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-5", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "12. In the same trend of thought is Attorney General v. Pottypridd Urban Council, (1960) 2 Ch 257. The problem that was to be solved there was whether the erection and use of the refuse destructor was ancillary to the supply of electricity. The Court of Appeal decided that the erection and use of the refuse destructor could not be considered to be ancillary to the supply of electricity though the surplus heat produced by the consumption of refuse was useful to the machinery for generating electricity. Collins M. R., who delivered the main opinion of the Court, observed that the use of the refuse destructor was not something which was incidental to the main purpose and, therefore, was not covered by the authority to carry out the main purpose and that it was an independent undertaking of a different nature by which it was found to be convenient to combine the purpose of discharging the obligation to remove refuse with the purpose of generating electric power. He further remarked that it was not a necessary adjunct for the carrying out of the main purpose of the electric lighting. It was also observed that the erection of the refuse destructor was undertaken really to enable the council to carry out their duties, as a sanitary authority, to get rid of the refuse at the same time and on the same land as they were carrying out their purpose of generating electricity.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-6", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "13. To a like effect is the decision of the English Court in Attorney General v. West Gloucestershire Water Co., (1909) 2 Ch 338. There, a water company was authorized by their special Acts to erect waterworks and supply water within the limits of a particular parish. Despite this limitation, the company agreed with the owner of a residential property situated in an adjoining parish to supply water. For this purpose, the company had to extend their main in the parish -- the supply of water to which alone the company was authorized to its boundary where the residential property mentioned above was situate and thereafter the main was laid along the high-way for some distance at the cost of the owner and then pipes were laid to the property. It was held by the Court of appeal that the water company were acting ultra vires in extending the main and supplying water to the property not lying within the limits of the parish to which alone the company was authorized to supply water, as they were not empowered to supply water outside the limits of the particular parish. \n\n14. We do not feel that these eases are in point. On an analysis of these three cases, it is clear that none of the purposes undertaken by any of the concerns other than those to the execution of which they were authorized, were intimately connected with the main task they were entrusted with. Although the second purpose which was sought to be undertaken by the authorities concerned might be said to be convenient and of some help to them in the discharge of their main duty, it could not be said that it was incidental or ancillary to the main purpose. \n\n15. That is not the situation here. We shall presently show that a canteen is essential for enhancing the efficiency of the workmen employed in the factory. We cannot, therefore, derive much benefit from these rulings.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-7", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "16. We shall next turn our attention to another English decision which was placed before us by the learned Advocate-General, Luttman v. Imperial Chemical Industries Ltd., (1955) 3 All ER 481. The point that presented itself there was whether a canteen attached to a factory was part of the factory within the terms of the Factories Act, 1937. The question arose this way. An action was laid for recovery of damages for breach of a statutory duty in that the defendants did not provide a hand-rail in a canteen which resulted in a person employed in the canteen as a cleaner slipping, falling and sustaining an injury. The defence to the action was that the canteen was not part of the factory by reason of Section 151 (6) of the Factories Act and, consequently, the plaintiff could not avail herself of the remedies under that Act. Judgment was entered for the plaintiff by the Court in the view that the canteen formed part of the factory because the canteen was not solely used for some purpose other than a process carried on in the factory as it was used for feeding and entertaining the people working in the factory, which was a purpose incidental to the process of manufacture carried on in the factory. \n\nWe are unable to see how the appellant in the present case can take advantage of the principle enunciated in this case. On the other hand, it furnishes an answer to his contention, namely, that a canteen serves a purpose which is incidental to the process of the factory.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-8", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "This decision establishes the proposition that the canteen workers are persons employed in connection with the work in the factory and thus they satisfy the definition of the \"employees\" in Section 2 (9) of the Act, even if a cumulative effect is to be given both to the main clause and anyone of the sub-clauses under it. If a canteen is to be regarded as part of a factory, how can we escape the conclusion that the workers in that can teen are employees of the factory? Any person who is working in a part of the institution can be said to be working in the Institution. \n\n17. Our attention was also drawn by the learned Advocate-General to the decision of the Bombay Labour Court in Employees' State Insurance Corporation v. C. H. Raman, (1957) 1 Lab L J 267 (Bom). There, the question was whether a person employed in the administrative office of a factory mainly for the purpose of taking down dictation from the Manager and other officers and typing letters could claim the benefits of the State Insurance Act. It was held that such a person could not answer the description of an \"employee\" as contained in Section 2 (9) of the Act for the reason that his duties could not be said to be either incidental, preliminary to, or connected with, the work of the factory. We do not think that this decision is of any help to the appellant because the administrative office was concerned with the sale of the products of the factory and the work of the factory ended with the production of these goods. As such the duty of the person employed in the administrative office of the factory was not connected with the purpose of the factory.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-9", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "In the course of the judgment, Gajendragadkar, J., who spoke for the Court, observed as follows:\n \"A person engaged on the management side would not have been a worker within the meaning of the Indian Factories Act. A person engaged on the management side may be an employee provided the management is carried on in an office and the management, on the facts, can be said to be connected with the work of factory itself. Even so, we do not think that the work which the respondent admittedly does in discharging his duties can be said to be either incidental, preliminary to or connected with the work of the factory.\" \nOn the facts of that case, there could be little doubt that the duty of the person concerned had nothing to do with the purpose of the factory. So, that ruling is not of much avail to the appellant", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-10", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "18. We shall now turn to the judgment of a Division Bench of the Madras High Court relied on by the learned Advocate-General, Employees' State Insurance Corporation v. Sriramulu, . There, a cinema studio was engaged in the production of cinematograph films. The work in the studio was done in the following departments, (i) electrical (ii) camera, (iii) sound, (iv) setting, (v) moulding, (vi) carpentry, (vii) laboratory (viii) editing, (ix) office and Watch and Ward, (x) art and (xi) make up. The question arose whether these departments could come within the term \"factory\" under the Factories Act and it was held that they did. The learned Judges observed that if within the same premises or compound, a number of departments are situate and the departments are engaged in the work in connection with or incidental to, the manufacturing process of the factory, they would prima facie all form part of the factory. We do not think that this decision in any way conies to the rescue of the appellant. What was laid down there was that the expression \"employee\" in the Act was of wider import than the word \"worker\" occurring in the Factories Act and that having regard to the nature of the benefits secured to the insured employee under the State Insurance Act, the term 'factory' should have a different and wider interpretation than that of the same word in the Factories Act which was intended to safeguard against the risks attendant in a factory to workers connected at least in a way with the manufacturing process. We are in entire agreement with the interpretation placed by the learned Judges on the term \"employee\" in the Act.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-11", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "The word \"employee\" has a larger denotation than the expression \"worker\" in the Factories Act, and there is no scope for limiting the meaning of the word \"employee\" to a \"worker\" as defined in the Factories Act. \n This being a beneficial legislation, should receive a liberal construction. To read it in a restricted sense as applying only to persons engaged in the manufacturing process would be to defeat the very purpose of this enactment and will be opposed to the well recognised canons of construction. \n\n19. Another ruling of a Division Bench of the Madras High Court on which strong reliance was placed by the learned Advocate-General is Employees' State Insurance Corporation v. Ganapatia, . In this case, the question for decision was whether seven of the employees of the managing agents of the Lotus Mills, Limited, Coimbatore, could be described as the employees of the lotus Mills, so as to cast an obligation on the latter to contribute to the insurance fund for these persons. After referring to the nature of the duties performed by six of these persons who were utterly unconnected with the work of the factory in any way, the learned Judges remarked that their duties being connected only with the office of the managing agents their work could not be regarded as being incidental or preliminary to or connected with the work of the factory. As one of these persons was entrusted with the task of disbursing not only the pay of the Manager and staff but also the wages to the workers of the mill, it was held that he was entitled to the insurance contribution. This decision if at all, is authority for the proposition that although a person is unconcerned with the manufacturing process, still he would be an \"employee\" for the purpose of the Act if his work is in some way connected with the purpose of the factory.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-12", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "Surely, if an employee of the managing agents of a factory whose duty was only to disburse salaries to the staff and wages to the workmen could be regarded as engaged in a work which serves the purpose of the factory, it is difficult to resist the claim of the worker in a canteen which is attached to the factory. This decision supports the contention of the respondent that a canteen worker discharges functions connected with the purpose of the factory. \n\n20. Two more decisions, one of the Madras High Court in Thyagarajan Chettiar v. Employees' State Insurance Corporation, Madural, 1953-2 Mad LJ 77 : (AIR 1953 Mad 361) and another in Royal Masonic Institution for Boys (Trustees) v. Parkes, 1912-3 KB 212 are brought to our notice by Sri Krishna Rao. In the first of them it was held that the gardeners, building workers, office attender and watchman employed in a Textile Mill were employees within the meaning of the State Insurance Act. The learned Judges remarked that the maintenance of the garden would be conducive to the health of its manual workers and would also enhance their efficiency and health and that, therefore, they would come within the definition of \"employees\" in the Act. It is seen from this ruling that the gardeners, building workers and office attendee who were in no way connected with the process of manufacture in the factory, were held to be entitled to the benefits of the Act,\n \n\n21. In the second of the cases, it was ruled that a laundry which served the inmates of a school, which was a public institution within the meaning of the Factory and Workshop Act, 1907, was incidental to the purpose of the school and therefore, fell within the provisions of the Act.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-13", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "22. We will lastly refer to the recent pronouncement of the Supreme Court in the State of Punjab v. British India Corporation Ltd., Civil Appeals Nos. 639 of 1961 and 287 of 1962 : , which is of much importance and which helps us considerably in resolving the controversy raised in this appeal. The question that fell to be considered there was whether certain buildings situated within the premises of a factory could claim exemption from taxation under the Punjab Urban Immovable Property Tax Act, 1940, which exempted buildings and lands used for the purpose of a factory from taxation. A claim was made on behalf of the management of the factory for exemption on the ground that some of the buildings were used either for running a canteen or for other similar purposes. It is seen that the Act that fell to be interpreted by the Supreme Court had also employed the language \"used for the purpose of a factory as may be prescribed.\" Their Lordships of the Supreme Court held that buildings used for housing a canteen or for other allied purpose must be held to be \"used for the purpose of the factory\". In reaching that conclusion their Lordships referred to the various provisions of the Factories Act which were conceived for the welfare of the workmen employed in the factory and said that in order that a factory may function in accordance with law, buildings or parts of buildings have to be provided by the owner for the use of the workmen for the purposes mentioned in the several sections and that such use of the buildings must be held to be \"use for the purpose of a factory\". They added:\n \"Advances in scientific knowledge as to how Industrial efficiency can be improved have made it clear that even other facilities and amenities, other than those required by the factory legislation, conduce in a great measure to a rise in the efficiency of the industrial worker and that some of these are indeed necessary to the maintenance of a proper standard of efficiency.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-14", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "X X X X XXX In our opinion, the use of buildings for the provision of such facilities and amenities which are necessary to the maintenance of a proper standard of efficiency of the factory workers must also be held to be \"use for the purpose of a factory.\" \n23. It is plain from this pronouncement that the running of a canteen in a factory serves the purpose of the factory in that it conduces to the efficiency of the workmen employed in the factory i.e., it feeds and entertains persons engaged in the process of manufacturing. If a building in which a canteen is located is said to be used for the purpose of the factory, it follows as a necessary corrolary that the persons employed in the canteen should be regarded as persons engaged in a work connected with the factory. \n\n24. The learned Advocate-General then fell back upon the provisions of the Factories Act, which east an obligation on a factory which employees more than 250 workers to maintain a canteen, and urges that when a canteen is opened in accordance with such statutory obligation, it cannot be postulated that the canteen is essential for the purpose of the factory. We are unable to appreciate this argument, If the running of a canteen is a statutory obligation, it is all the more an essential requisite of a factory. The mere fact that the management is obliged to run a canteen on pain of being punished for failure to do so, does not alter the character of the work done in the canteen. \n\n25. We will now look at the provisions of Section 46 of the Factories Act. It reads:\n\"(1) The State Government may make rules requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be provided and maintained by the occupier for the use of the workers.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-15", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "(2) Without prejudice to the generality of the foregoing powers, such rules may provide for --\nXX XX                      XX                    XX                      XX\n \n\n(b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen;\n \n\n(c) the foodstuffs to be served therein and the charges which may be made therefor;\n \n\n(d) the constitution of a managing committee for the canteen and representation of the workers in the management of the canteen;\n \n\n(e) the delegation to the Chief Inspector, subject to such conditions as may be prescribed of the powers to make rules under Clause (c)\".  \n \n\n26. It is in exercise of the powers conferred by this Section that rules were made by the Madras Government, which were amended by the Government of Andhra Pradesh subsequently. These rules provide inter alia for the situs of the canteen, for the equipment of the canteen, for the constitution of the managing committee and for maintenance of its accounts, The rules that are relevant in the contest of this enquiry are Rules 67 to 70. Rule 67 says :\n\"(1) There shall be provided and maintained sufficient utensils, crockery, cutlery, furniture and any other equipment necessary for the efficient running of the canteen. Suitable clean clothes for the employees serving in the, canteen shall also be provided and maintained.\" \n\nSub-rules (2) and (3) are unnecessary for the present enquiry. \n\nWe will next read Rule 70. It says:\n\"(1) The manager shall appoint a Canteen Managing Committee which shall be consulted from time to time as to --\n(a) the quality and quantity of food stuffs to be served in the canteen;\n(b) the arrangement of the menus;\n(c) times of meals in the canteen; and", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-16", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "(d) any other matter as may be directed by the Committee.\"  \nIt is abundantly clear from Rule 70 that the Managing Committee functions only in a consultative capacity. Under Rule 67, the manager of the factory has to provide and maintain sufficient utensils, crockery, cutlery, etc. It is, therefore, an obligation on the part of the factory to supply utensils, crockery, cutlery etc. Under Rule 70, the manager should appoint a Canteen Managing Committee. It is in consonance with these rules that the manager of the factory nominates the members of the Managing Committee which gives advice to the manager of the canteen, who is invariably an employee of the factory in regard to matters enumerated in that sub-rule. \n27. If we turn to the admissions made in the evidence on record, it is plain that the real management of the canteen vasts in the factory in that the finances for the running of the canteen are provided by the factory, that the persons working in the canteen are ordinarily appointed by the manager of the factory and that the employees in the canteen work under the control and supervision of the factory. P. W. 1, D. K. Birla, admitted that canteen was solely run by an employee of the factory from its inception in 1958 till February 1959, when the Managing Committee was constituted by the factory manager. It appears from his evidence that large sums of money advanced by the appellant to the canteen were written off and they were adjusted as losses for aiding the canteen and for the welfare of the employees. We cannot also lose sight of the fact in this context that the canteen is run solely for the benefit of the workers in that factory.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-17", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "Another factor to be taken into account in this connection is that utensils, crockery, cutlery, furniture etc. and other equipment necessary for the efficient running of the canteen have to be provided by the factory as per Rule 67. It is also pertinent to note that it is the manager of the factory that appoints members of the Managing Committee from the employees of the factory (i) chosen by the manager of the factory and (ii) chosen by the workmen among themselves and the Chairman of the Committee is invariably a nominee of the management of the factory. It further emerges from his evidence that the minutes of the meeting are sent to the management and guidance of the management is also sought for on certain matters. It appears from the proceedings recorded by the Insurance Court that it is the manager of the factory that employs the workmen for the canteen and that out of the 37 workers at the relevant time 20 were old workers. There is significant admission by P.W. 1, namely, that all the members of both the committees of 1958 and 1960 including the workmen are the employees of the Sirsilk Ltd. This admission was a sequel to the question as to whether Sri Misra, the canteen manager, was not an employee of the mill and whether he was not running the canteen since its inception in September 1958. To this question, in emphatic terms, he says:\n \"Why, I agree that all the members including the workmen are the employees of the Sirsilk Ltd.\" No doubt, this statement is not conclusive on the question as to whether the workers of the canteen could be regarded as employees of the factory. But this shows how the management itself regarded these workmen.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-18", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "28.On a consideration of the evidence, the material on record, the statutory provisions and the decided cases to which our attention was drawn, we have reached the conclusion that the staff in the canteen are employees for the purpose of the Act and that the management of the appellant-factory is liable to contribute to the insurance fund for the staff in the canteen. So, the decision of the Employees' Insurance Court, Hyderabad, cannot be successfully impugned.", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "773ecf5cc908-19", "Titles": "Sirsilk Ltd., Sirpur, ... vs Regional Director, The ... on 16 August, 1963", "text": "29. In the result, the appeal fails and is dismissed with the costs of Sri M. Krishna Rao, who ably assisted us amicus curiae, which we fix at Rs. 250/- (two hundred and fifty).", "source": "https://indiankanoon.org/doc/1153319/"}
+{"id": "63d644a0f764-0", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "JUDGMENT Sirimulu, J.  \n 1. This appeal is directed against the order of our learned brother Jeevan Reddy. J. dated 12-10-1979 passed in W.P. No. 1615/1978, dismissing the petition for the issuance of a writ of mandamus, restraining the Central Excise authorities and the Central Government from levying and collecting excise duty on \"Coffee-Chicory Mixture\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-1", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "2. The appellant herein M/s. Brooke Bond India Ltd., was the petitioner in the Writ Petition. The petitioner-company has 33 Area sales offices and seven Factories in different parts of India, including the factory at Ghatkesar, Ranga Reddy District and is represented by its Factory Manager. The petitioners carry on the business of selling among other items \"Coffee-Chicory Mixture\". The activities of the petitioners consist of purchasing coffee seeds, roasting and grinding them and preparing coffee powder out of those seeds by mechanical process involving consumption of power. The petitioners also purchase chicory-roots and then they are subjected to roasting and grinding by mechanical process involving consumption of power. The powders thus obtained from coffee and chicory are then blended by mechanical process involving consumption of power and the product thus obtained is bottled and marketed as \"Coffee-Chicory Blend\", what is known as \"French Coffee\" in the business market. The proportion in which the coffee and chicory powders are mixed is equal. The sample bottles in which the French Coffee is sold have been shown to us and they describe with the mixture consisting of 50% coffee and 50% chicory. The petitioners paid duty on coffee-chicory blend under Item No. 68 of the First Schedule of the Central Excises and Salt Act, 1944 (hereinafter referred to as \"the Act\") without any demur since 1-3-1975. But for the first time in their letter dated 10-1-1978, they raised an objection to the said levy and claimed exemption from duty under notification No. 55/75-C.E., dated 1-3-1975 issued by the Central Government claiming that the mixture of \"Coffee and Chicory\" is an item of food. The Department rejected the claim of the petitioners. Thereupon the petitioners challenged the levy of duty in the Writ", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-2", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "claim of the petitioners. Thereupon the petitioners challenged the levy of duty in the Writ Petition, which has been dismissed as stated above by the impugned order.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-3", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "3. In this appeal Shri K. Srinivasa Murthy, the learned counsel for the appellant-company contended firstly that the process of mixing chicory power with coffee powder undertaken by the appellant-company in their factory at Ghatkesar, does not amount to manufacturing process as no new product emerges by this mixture and it continues to be the same and it has to be treated as coffee only within the definition of the term under Item No. 2 of the First Schedule of the Act and hence Item No. 68 of the First Schedule of the Act is not applicable to the mixture of coffee and chicory, so as to attract liability to duty under that item. Accordingly, he argued that the demand for Excise duty on the ground that the mixture of chicory and coffee powders results in a new commercial commodity treating it as an item falling under Item No. 68 of the First Schedule is illegal. Secondly he contended that even if the mixture of Coffee and Chicory is treated as a new and different commodity covered by Item No. 68 of the First Schedule of the Act, the mixture being a food is exempted from duty under Notification No. 55/75-C.E., dated 1-3-1975 issued under Item No. 68 by the Central Government. Whereas Shri Upenderlal Waghray, Additional Central Government Standing Counsel on behalf of the respondents herein contended that the process employed by the petitioners in preparing the \"Coffee-Chicory Blend\" with the aid of power is manufacturing process, resulting in the production of a new and different commercial commodity and that, therefore, Item No. 68 of the First Schedule is attracted. He further contended that \"Coffee-Chicory Blend\" is not \"food products or food preparations\" within the meaning of Notification No. 55/75-C.E, dated 1-3-75 and, therefore, not entitled to exemption.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-4", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "4. In order to appreciate the rival contentions of the counsel for the parties, it is necessary to refer to the relevant provisions of the Central Excises and Salt Act, 1944 and the Rules made thereunder. The expressions \"Curing\", \"Excisable goods\", \"Factory\" and \"Manufacture\" are defined in Section 2 of the Act thus :  \n \"(c) 'curing' includes wilting, drying, fermenting and any process for rendering an unmanufactured product fit for marketing or manufacture;  \n (d) 'excisable goods' means goods specified in the First Schedule as being subject to a duty of excise and includes salt;  \n (e) 'factory' means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinary carried on;  \n (f) 'manufacture' includes any process incidental or ancillary to the completing of a manufactured product; and", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-5", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "(i) in relation to tobacco includes the preparation of cigarettes cigars, cheroots, biris, cigaretee or pipe or hookah tobacco, chewing tobacco or snuff;  \n (i-a) in relation to manufactured tobacco, includes the labelling or re-labelling of containers and repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer;  \n (ii) in relation to salt, includes collection, removal, preparation, steeping, evaporation, boiling or any one or more of these processes, the separation or purification of salt obtained in the manufacture of saltpetre, the separation of salt from earth or other substance so as to produce alimentary salt, and the excavation or removal of natural saline deposits or efflorescence;  \n (iii) in relation to patent or proprietary medicines as defined in Item No. 14-E of the First Schedule and in relation to cosmetics and toilet preparations as defined in Item No. 14-F of that schedule, includes the conversion of powder into tablets or capsules, the labelling or relabelling of containers intended for consumers and re-packing from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumers;  \n (iv) in relation to goods comprised in Item No. 18-A of the First Schedule, includes sizing, beaming, warping, wrapping, winding or reeling, or any one or more of these processes, or the conversion of any form of the said goods into another form of such goods; and the word 'manufacture' shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-6", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "5. The expressions \"curer\", \"duty\", \"grower\" and \"unmanufactured products\" are defined under Rule 2 of the Central Excise Rules, 1944 thus :  \n \"(iv) 'curer' means a person curing unmanufactured products whether of his own growing or grown by others; and includes a person curing such product by the labour of his relatives, dependants, or any person in his employ;  \n (v) 'duty' means the duty payable under Section 3 of the Act;  \n (vi) 'grower' means a person growing unmanufactured products whether by his own labour, or by that of his relatives, dependants or other persons in his employ, or by tenants;  \n (ix) 'unmanufactured products' means excisable goods which are described in the First Schedule to the Act as unmanufactured or cured.\"  \n 6. Section 3 of the Act reads thus :  \n \"3. Duties specified in the First Schedule to be levied :- (1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the First Schedule.  \n (1-A) The provisions of sub-section (1) shall apply in respect of all excisable goods other than a salt which are produced or manufactured in India by, or on behalf of Government, as they apply in respect of goods which are not produced or manufactured by Government.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-7", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "(2) The Central Government may, by notification in the Official Gazette, fix, for the purpose of levying the said duties, tariff values of any articles enumerated either specifically or under general headings, in the First Schedule as chargeable with duty ad valorem and may alter any tariff values for the time being in force.  \n (3) Different tariff values may be fixed for different classes or description of the same article.\"  \n 6. Section 37 of the Act reads thus :  \n \"37. Power of Central Government to make rules : The Central Government may make rules to carry into effect the purposes of this Act.  \n (2) In particular and without prejudice to the generality of the foregoing power, such rules may........exempt any goods from the whole or any part of the duty imposed by this Act\"  \n 7. Section 4 of the Act deals with the valuation of excisable goods for the purpose of charging of duty of Excise. The Act levies a duty called \"Excise Duty\" on goods produced or manufactured in India. Duty is levied on the basis of value or on the weight or number, as the case may be, The rates of excise duty are those mentioned in the First Schedule appended to the Act. The following Items of the First Schedule which fall for interpretation in this case may be extracted :  \n TABLE\n------------------------------------------------------------------------\nTariff     Description      Rate of basic duty          Special Excise\nNo.         of goods\n------------------------------------------------------------------------\n(1)           (2)                 (3)                         (4)\n------------------------------------------------------------------------\n2.  Coffee\n    (1) Coffee, cured.     Rs. 100/- per quintal       5% of the basic\n                                                       duty chargeable.\n(2) Coffee commercially    Twenty-five per cent        5% of the basic\n    known as               valorem plus the duty       duty chargeable.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-8", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "known as               valorem plus the duty       duty chargeable.\n    \"Instant Coffee\".      for the time being\n                           leviable under\n                           sub-item (1) of this\n                           item on Coffee cured\n                           used in the manufacture\n                           of such \"Instant Coffee\"\n                           if not already paid.\n68.  All other goods,      Eight per cent ad           5% of the basic\nnot elsewhere              valorem.                    duty chargeable.\nspecified but\nexcluding -\n(a) alcohol, all sorts\nincluding alcoholic\nliquors for\nhuman consumption;\n(b) opium, Indian hemp,\nand other narcotic\ndrugs and narcotics;\nand\n(c) dutiable goods as\ndefined in Section 2(c)\nof the Medicinal and Toilet\nPreparations (Excise Duties)\nAct, 1955 (16 of 1955).\n------------------------------------------------------------------------", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-9", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "8. The Central Government by its Notification No. 55/75-C.E., dated 1-3-1975 has exempted certain goods specified in the Schedule annexed thereto which is as follows :  \n  \n \n\n \"Goods of the description specified in the Schedule annexed hereto, and falling under Item No. 68, are exempt from the whole of the duty of excise leviable thereon.  \n \n\n THE SCHEDULE  \n \n\n 1. All kinds of food products and food preparations, including -  \n  \n \n\n (i) meat and meat products;  \n \n\n (ii) dairy products;  \n \n\n (iii) fruit and vegetable products :  \n \n\n (iv) fish and sea foods  \n \n\n (v) bakery products; and  \n \n\n (vi) grain mill products  \n \n \n\n 2. Omitted  \n \n\n 3. Exercise books;  \n \n\n 4. Writing slates and slate pencils;  \n \n\n 5. Drawing and mathematical instruments;  \n \n\n 6. Sports goods;  \n \n\n 7. Omitted;  \n \n\n 8. Handicrafts;  \n \n\n 9. Animal feed including compound livestock feed;  \n \n\n 10. Omitted;  \n \n\n 11. Agricultural implements and parts thereof but excluding (i) power operated agricultural implements and parts thereof, and (ii) implements designed for use as attachments with tractors or power tillers and parts thereof;  \n \n\n 12. Contraceptives;  \n \n\n 13. All products of the printing industry including newspapers and printed periodicals;  \n \n\n 14. Scented Chunnam (lime);  \n \n\n 15. Katha (Catechu);  \n \n\n 16. Artificial limbs and rehabilitation aids for the handicapped;  \n \n\n 17. Vibuthi (Thiruneeru);", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-10", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "17. Vibuthi (Thiruneeru);  \n \n\n 18. Insecticides, pesticides, weedicides and fungicides;  \n \n\n 19. All drugs, medicines, pharmaceuticals and drug; intermediate not elsewhere specified;  \n \n\n 20. Agricultural discs;  \n \n\n 21. Engraved copper rollers or cylinders for use in textile industry;  \n \n\n 22. Guar splits :  \n  \nProvided that food products and food preparations specified in the Schedule, shall not include boiled sweets, toffees, caramels, candies, nuts (including almonds) and fruit kernels coated with sweetening agent.\"    \n \n\n In the light of the provisions stated above we have to determine the rival contentions of the counsel for the parties.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-11", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "9. The first question which falls for consideration in this appeal is whether on the facts and in the circumstances of the case, the mixing and blending of coffee powder with chicory powder so as to obtain the product known as \"French Coffee\" amounts to \"manufacture\" within the meaning of the definition of \"manufacture\" contained in Section 2(f) of the Act, which includes any process incidental or ancillary to the completion of a manufactured product and thereby results in the production of a new commodity or goods. It is not in dispute that the petitioners have a factory at Ghatkesar where it prepares the said mixture of Coffee and Chicory, what is known as \"French Coffee\". We have, therefore, to consider whether mixing and blending of coffee powder with chicory powder constitute a manufacturing process and the outcome is different and a new commercial commodity. The definition of the word \"manufacture\" extracted above is only an inclusive definition.  \n 10. In Corporation of the City of Nagpur v. Employees , the Supreme Court observed thus :  \n 'The inclusive definition is a well-recognized device to enlarge the meaning of the word defined, and therefore, the word \"industry\" must be construed as comprehending not only such thing as it signifies according to its natural import but also those things the definition declares that it should include : see Siroud's Judicial Dictionary, Vol. 2, p. 1416. So construed, every calling service, employment of an employee or any business, trade or calling of an employer will be an industry. But such a wide meaning appears to overreach the objects for which the Act was passed. It is, therefore, necessary to limit its scope on permissible grounds, having regard to the aim, scope and the object of the whole Act.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-12", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "11. In C.I.T. v. Taj Mahal Hotel , the Supreme Court observed thus : \"The word 'includes' is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used, those words and phrases must be construed as comprehending not only such things as they signify according to their nature and import but also those things which the interpretation clause declares that they shall include. The words used in an inclusive definition denote extension and cannot be treated as restricted in any sense. While dealing with an inclusive definition it would be inappropriate to put a restrictive interpretation upon terms of wider denotation.\" State of Bombay v. Hospital Mazdoor Sabha) .", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-13", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "12. While the definition \"manufacture\" enumerates the processes incidental or ancillary to the completion of a manufactured product in relation to unmanufactured tobacco, in relation to manufactured tobacco, in relation to salt, in relation to parent or proprietary medicines as defined in item No. 14E of the First Schedule, and in relation to goods comprised in item No. 18, it is silent in relation to unmanufactured coffee or any other item not specified in the First Schedule which is likely to fall under item No. 68. The First Schedule contains 67 designated commodities, 68th being a residuary item, out of which all goods but two tobacco and coffee - are manufactured goods, the taxable event occurs, in theory, at the moment when the process of manufacture is completed. The definition of 'manufacture' which includes any incidental or ancillary process requisite to the completion of finished product, precludes the imposition of tax until all steps preparatory to completion of the product of a particular goods have taken place. Where as in the case of unmanufactured goods (tobacco and coffee) the taxable event occurs when the goods cured are suitable for sale. If manufacture is necessary to put the goods in salable form, as in the case of manufacture of cigarettes from cured tobacco, the taxable event occurs when the goods have been cured and are suitable for manufacture. In the case of unmanufactured coffee and chicory, the salable event will occur when the goods are blended and mixed by mechanical process involving consumption of power. Thus the essence of the expression 'manufacture' is the changing of one object into another for the purpose of making it marketable.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-14", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "13. Shri K. Srinivasa Murthy, the learned counsel for the appellant maintained that by blending and mixture of Coffee Powder and chicory, no new commodity was created and it was erroneous to say that it resulted in a manufacturing process. The learned Single Judge did not accept that contention. A large number of cases have been placed before us by the counsel for the parties and in each of them the same principle has been applied : Does the process of the original commodity bring into existence a commercially different and distinct article. In some of the cases particularly of the Supreme Court, it was held that although the original commodity has undergone a degree of processing it has not lost its original identity and whereas on the other side cases it was held by the Supreme Court and High Courts that a different commercial article had come into existence and that such process amounts to \"manufacture\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-15", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "14. As held by the Supreme Court in Commissioner of Sales Tax v. Harbilas Rai and Sons (1968) 21 STC 17 (SC) the word 'manufacture, has various shades of meaning and, in the context of sales tax legislation, if the goods to which some labour is applied remain essentially the same commercial commodity it cannot be said that the final product is the result of manufacture. Sales of pig bristles to foreign countries after they had been treated with chemicals and put to a certain manual process were not regarded as manufactured goods within Explanation II(ii) of Section 2(h) of the Act. It is correct that that decision was rendered before the aforesaid definition of the word 'manufacture' was inserted in the Act. It was so inserted by U.P. Act No. 38 of 1975 with effect from 13th October, 1972. Anyhow, grinding of wheat into flour has not been held to be manufacture, vide U.P. Atta Chakki Vyavasai Sangh, Varanasi v. Krishi Utpadan Mandi Samiti, Varanasi (1976 U.P.T.C. 322). Similarly, in the case of a dealer, who purchased til oil and, after adding scent to it, sold it as hair oil, it was held that the mixing of scents in ordinary til oil does not amount to manufacture of perfumed oil, vide Commissioner of Sales Tax v. Bechu Ram Kishori Lal (1976) 38 S.T.C. 236.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-16", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "15. The word 'manufacture' implies a change but every change in the raw material is not manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use. Mere labour bestowed on an article, even if the labour is applied through machinery, will not make it a manufacture, unless it has progressed so far that a transformation ensues, and the article becomes a commercially known as another and different article from that with which it begins its existence. It must not be a commodity, which is commercially the same as it was before the activity was applied to it. In a given case, it may be that the ingredients are totally transformed and, in another given case, it may be that they undergo some change, alteration or transformation, and yet retain their essential character and properties. The test in all cases, therefore, is to ascertain whether the result is commercially a different commodity, and it is irrelevant whether this result is produced by a mechanical or chemical process or otherwise.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-17", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "16. Whether execution of a particular kind of work results in production of new and different material would depend upon a number of tests - the nature of the work carried out, whether the material undergoes alteration or change in its essential nature and character or in other words, whether a new product emerges. On the other hand, where no new quality or character is imported, there is no transformation of material. The Supreme Court in Tungabhadra Industries Ltd. v. Commercial Tax Officer, Kurnool considered the question whether hardened or hydrogenated groundnut oil (commonly called vanaspati) was still groundnut oil within the meaning of rule 18(2) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939. The learned judges of the Supreme Court in Tungabhadra Industries Case observed that even after such manufacturing process there was no change in the essential nature of the groundnut oil.  \n 17. The Supreme Court in Lt. Governor, Delhi v. Ganesh Flour Mills Co. Ltd. held that the tin sheets or tin plates used by vegetable oil dealers were materials intended for being used for packing of goods for sale. According to the Supreme Court, the fact that tin sheets and tin plates had to be subjected to the process of cutting and moulding into tin containers would not by itself take them out of the aforesaid category. The cutting and moulding only facilitated the actual used in packing. The ratio decidendi of the aforesaid decision is that the mere fact that a material undergoes a process is not decisive and the test in these cases is whether by such processing the material undergoes a change in its essential nature and character and whether a new product is thereby manufactured.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-18", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "18. In South Bihar Sugar Mills Ltd. v. Union of India , the Act with which the Court was concerned was the Central Excises and Salt Act, 1944, which furnishes no special definition of the word 'manufacture'. The question canvassed there was whether carbon dioxide one of the constituents of kiln gas, produced as one of the processes necessary for refining sugar, could be said to have been manufactured, quite apart from the manufacture of sugar itself. It was held that what was produced was kiln gas, a compound of different gases and not carbon dioxide, though it was one of the different gases, which made up kiln gas, and, therefore, did not attract item 14-H in the Schedule to the Act. Since the excise duty was leviable under the Act on 'manufacture' of goods, the Court explained the connotation of the word 'manufacture'. In so doing, the court said that the word 'manufacture' implied a change, but that a mere change in the material was not manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character, use. This was also the meaning given to the word 'manufacture' in Union of India v. Delhi Cloth and General Mills . A notification issued by the Government of U.P. under Section 3-A of the U.P. Sales Tax Act, 1948, declared that the turnover in respect of medicines and pharmaceutical preparations would not be liable to tax except (a) in the case of medicines and pharmaceutical preparations imported into U.P. and (b) in the case of medicines and pharmaceutical preparations manufactured in U.P. The question was whether, when in a dispensary medicines and pharmaceutical preparations, as prescribed by a doctor, are mixed, the process of mixing results in manufacture of medicines. The question was answered in the negative on the ground that when a mixture of different drugs, as prescribed by a doctor,", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-19", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "in the negative on the ground that when a mixture of different drugs, as prescribed by a doctor, is prepared by a medical practitioner or his employee, especially for the use of a patient in the treatment of an ailment of discomfort diagnosed by such a medical practitioner by his professional skill, and which mixture is normally incapable of being passed from hand to hand as a commercial commodity, the medical practitioner supplying the medicine cannot be said to be a manufacture of medicine and the mixture cannot be said to be manufactured within the meaning of the notification. In all these cases, the statute or the notification concerned did not furnish any artificial meaning to the expression 'manufacture' and the Court applied, therefore, the ordinary meaning as commonly understood to that expression. The expression 'manufacturing purposes', thus, means purposes for making or fabricating articles or materials by a physical labour or skill, or by mechanical power, vendible and useful as such, such making or fabricating does not mean merely a change in an already existing article or material, but transforming it into a different article or material having a distinctive name, character or use of fabricating a previously known article by a novel process.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-20", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "19. Merely selling the goods purchased under a different label or trade name will not amount to manufacture even if such label or trade name is known in the market as a commercial commodity different from that by which the goods purchased are known in the market.  \n 20. The Supreme Court in Deputy Commissioner of Sales Tax v. Pio Food Packers was concerned with the question, whether conversion of pineapple fruit, after washing and removing inedible portion, the end crown, the skin and the inner core with the addition of sugar would amount to consumption of pineapple fruit in the manufacture of those goods so as to be liable to purchase tax under Section 5-A of the Kerala General Sales Tax Act, 1963, and it was held as under :  \n \"........... Commonly, manufacture is the end-result of one or more processes, through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another, and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered, the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. Where there is no essential difference in identity between the original commodity and the processed article it is not possible to say that one commodity has been consumed in the manufacture of another. Although it has undergone a degree of processing, it must be regarded as still retaining its original identity\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-21", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "21. The Supreme Court, in that connection referred to the decision of the American Supreme Court in Anheuserbush Brewing Association v. United States 52 L. Ed. 336 (338) where what is manufacturing as well as what is the distinction between a processing and a manufacturing has been succinctly indicated. The passages relied upon by the Supreme Court read as under :  \n \"Manufacture implies a change, but every change is not manufacture, and yet every change in an article is the result of treatment, labour and manipulation. But something more is necessary There must be transformation, a new and different article must emerge, 'having a distinctive name, character or use'.  \n .......... At some point procession and manufacturing will merge. But where the commodity retains a continuing substantial identity through the processing stage, we cannot say that it has been 'manufactured.\"   \n 22. The principle of law has been re-affirmed by the Supreme Court in its subsequent decision in Chowgule & Co. Pvt. Ltd. v. Union of India .  \n 23. In State of Maharashtra v. C.P. Manganese Ore it was observed thus :  \n \"What is to be determined is whether there has been the manufacture of a new product which has a separate commercially current name in the market. The mere giving of a new name by the seller to what is really the same product is not the 'manufacture' of a new product. Where it was only manganese ore of different grades which was unloaded at the port and given the name of 'Oriental Mixture', because the ingredients got mixed up automatically in transportation and satisfied certain specifications; it was held that no new commodity was produced in this process.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-22", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "24. In State of Gujarat v. Sukharam Jagannath (50 S.T.C. 76), the Gujarat High Court held : \"Any and every process, treatment or adaptation will not amount to or result in a manufacture within the meaning of Section 2(16) of the Gujarat Sales Tax Act, 1969. A sale would cease to be a resale within the meaning of Section 2(26) of the Act only if something is done to the goods which would amount to or result in a manufacture. In other words, where there is some transformation in the sense of a new and different article emerging as a result of the processing, treatment or adaptation having different name, characteristic or use so that the end-product does not retain a continuing substantial identity, in can be said that manufacturing has been taken place.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-23", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "Accordingly, where the Tribunal found as a matter of fact that the constituent articles composing the two varieties of pan-masala sold by the assessee retained their original form and that the substantial identity of those articles continued. The Court held that : (i) it could not be said that there was a transformation of the different constituent elements in the sense of a new or different article emerging therefrom, (ii) the mixture of supari, variyali, dhanadal, sweet flavoured powder etc. as effected by the assessees and sold under the popular name of pan-masala did not amount to 'manufacture' within the meaning of that expression as defined in Section 2(16) of the Act and accordingly the assessee was entitled to deduct the sales thereof as resales of goods purchased from registered dealers in terms of Section 7(ii) of the Act, (iii) the assessee's sales of pan-masala containing the mixture of supari, chuna and tobacco were sales of a 'form of tobacco' within the meaning of Item 4 of the First Schedule to the Central Excises and Salt Act, 1944 and, therefore, they were sales of tobacco within the meaning of entry 43 of Schedule 1 to the Act and were free from all taxes\".  \n 25. In all the cases referred to in the above, paras, relied upon by Sri K. Srinivasa Murthy, the learned counsel for the appellants, the Courts have held that although the original commodity has undergone a degree of processing it has not lost its original identity. Now we will scrutinise the cases relied upon by Shri Upendralal Waghray, the learned Additional Central Government Counsel, where it was held by the Courts that a different commercial article had come into existence.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-24", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "26. In Anwarkhan Mehboob Co. v. State of Bombay the question that arose for consideration was whether the conversion of raw tobacco into bidi pattis by removing stem and dust, which, in turn, is required for the manufacture of bidis amounted to consumption of raw tobacco and, consequently, gave rise to tax liability under the provisions of the Bombay Sales Tax Act. It was contended for the petitioner therein that the 'tobacco' purchased by him was not delivered in the State of Bombay for the purpose of consumption and all that was done in the State of Bombay before despatch to Madhya Pradesh was to remove the stem and dust of the tobacco and such removal of stem and dust did not amount to consumption of tobacco. It was argued that the tobacco despatched from the State of Bombay after the removal of waste material was not a commercially different article from the tobacco purchased from the cultivators, but it was only converted into bidi pattis for immediate use in the manufacture of bidis. The Supreme Court held that raw tobacco and cleaned tobacco converted into bidi pattis are different and distinct commercial articles. Thereafter, they considered whether the conversion of raw tobacco into bidi pattis amounted to consumption of raw tobacco. They were construing the word 'consumption' as used in explanation to Article 286 of the Constitution. The Supreme Court held that by the conversion of one type of goods into another type of goods, which is commercially different, the former gets consumed and the latter gets produced. The relevant portions of the judgment contained in paras 9 and 11 read as follows :", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-25", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"(9)...... The act of consumption with which people are most familiar occurs when they eat, or drink or smoke. Thus, we speak of people consuming bread, or fish or meat or vegetables, when they eat these articles of food; we speak of people consuming tea or coffee or water or wine, when they drink these articles; we speak of people consuming cigars or cigarettes or bidis, when they smoke these. The production of wealth, as economists put it, consists in the creation of 'utilities'. Consumption consists in the act of taking such advantage of the commodities and services produced as constitutes the 'utilisation' thereof. For some commodities, there may be even more than one kind of final consumption........  \n But the act that there is for each commodity what may be considered ordinarily to be the final act of consumption, should not make us forget that in reaching the stage at which this final act of consumption takes place the commodity may pass through different stages of production and, for such different stages, there would exist one or more intermediate acts of conversion.  \n (10)...... This conversion of a commodity into a different commercial commodity by subjecting it to some processing is consumption within the meaning of the Explanation to Article 286 no less than the final act of user when no distinct commodity is being brought into existence but what was brought into existence is being used up........  \n (11) It must, therefore, be held on the facts of this case that when tobacco was delivered in the State of Bombay for the purpose of changing it into a commercially different article, viz. bidi patti, the delivery was for the purpose of consumption. The purchases in this case, therefore, fall within the meaning of Explanation to Article 286(1)(a) and must be held to have taken place inside the State of Bombay.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-26", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "27. In Hajee Abdul Shukoor & Co v. State of Madras (1964) (15 S.T.C. p. 79), their Lordships of the Supreme Court held that hides and skins in the untanned condition are undoubtedly different as articles of merchandise than tanned hides and skins. It was observed that the tanning of raw hides and skins is a manufacturing process as a result of which the product that emerges is different from the raw material.  \n 28. In the State of Madras v. Swasthik Tabacco Factory (1996) (17 S.T.C. p. 316) (SC) the dealer in tobacco purchased raw tobacco; by processing it in a prescribed manner, converted it into chewing tobacco and sold it as such in small paper packets. The said process has been described by the Supreme Court, relying upon the decision of a Division Bench of the Madras High Court in Belimark Tobacco Co. v. Government of Madras (1961) (12 S.T.C. p. 126) thus : \"Taking, however, the cumulative effect of various processes to which the assessee subjected the tobacco before he sold it, it is clear that what was eventually sold by the assessee was a manufactured product, manufactured from the tobacco that the assessee had purchased. Soaking in jaggery water is not the only process to be considered. The addition of flavouring essences and shredding of the tobacco should establish that what the assessee sold was a product substantially different from what he had purchased.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-27", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "29. In Ganesh Trading Co. v. State of Haryana the appellants carried on the business of buying paddy and after getting it husked either in their own mills or in other mills sell the rice to the Government and other registered dealers. The question considered by the Supreme Court was whether paddy and rice could be considered as identical goods for the purpose of imposition of sales-tax. The argument advanced by the appellant before the Supreme Court was that both rice and paddy are identical goods and that when paddy was dehusked there is no change in the identity of the goods. Reliance was placed by the appellants in support of their contention on the previous decisions of the Supreme Court in Ramavatar Budhaiprasad v. Assistant Sales Tax Officer wherein the Court was called upon to consider whether betel leaves could be considered as vegetables. Further reliance was placed on another earlier decision of the Supreme Court in Commissioner of Sales Tax v. Jaswant Singh Charan Singh , wherein the Supreme Court held that the word \"coal\" included \"charcoal\" on the ground that in ordinary parlance 'coal' includes 'charcoal'. The appellant therein also relied upon the earlier decision of the Supreme Court in State of Madhya Bharat v. Hiralal wherein the Court was called upon to consider whether when a dealer purchased scrap iron locally and imported iron plates from outside and after converting them into bars, flats and plates in his mills, sold them in the market, they continued to be \"iron and steel\". The Supreme Court ruled that in spite of the change effected because of the process the goods had undergone the goods sold in the market did not cease to be \"iron and steel\". Their Lordships held that that decision were not of any assistance to the appellants' case because both the goods purchased as well as sold were \"iron and steel\". Further reliance was placed by the appellants in the earlier decision of the Supreme Court in Tungabhadra Industries", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-28", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "placed by the appellants in the earlier decision of the Supreme Court in Tungabhadra Industries Ltd. v. Commercial Tax Officer, Kurnool wherein the question was whether hydrogenated oil continued to be groundnut oil. The Supreme Court held that hydogenated groundnut oil continued to be groundnut oil. The Supreme Court observed that \"in arriving at that conclusion this Court took into consideration that the essential nature of the goods had not changed after the groundnut oil had been subjected to chemical process\". The appellants also relied upon the decision in State of Gujarat v. Sakarwala Brothers (1967) (19 S.T.C. 24) (S.C.), wherein the question was whether patasa, harda and alchidana could be considered as 'sugar'. The Supreme Court distinguished that case by holding that when sugar was processed into patasa, harda and alchidana, it did not change its essential characteristic. Its identity continued to be the same.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-29", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "30. Distinguishing all the above cited cases, the Supreme Court, in Ganeshmal's case on the question whether rice and paddy are two different things observed thus : \"Now the question for our decision is whether it could be said that when paddy was dehusked and rice produced, its identity remained. It was true that rice was produced out of paddy but it is not true to say that paddy continued to be paddy even after dehusking. It had changed its identity. Rice is not known as paddy. It is a misnomer to call rice as paddy. They are two different things in ordinary parlance. Hence quite clearly when the paddy is dehusked and rice produced, there has been a change in the identity of the goods\".  \n 31. This decision in Ganeshmal's Case was followed by the Supreme Court in its later decisions in Baburam Jagdish Kumar & Co. v. State of Punjab and in State of Karnataka v. Raghurama Shetty (1981) (47 S.T.C. 369).", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-30", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "32. It was contended before the Supreme Court in the last mentioned case that since the assessees would be exposed to double taxation both as buyers of paddy and as sellers of rice that we should hold that the levy in question is impermissible because paddy and rice are liable to be taxed at a single point. Their Lordships observed thus : \"No provision is shown to us which bars such a taxation when the commodities are different. In fact, in this case, there is no double taxation on the same commodity.\" A similar contention was rejected by this Court in the case of Baburam Jagdish Kumar & Co. v. State of Punjab (44 S.T.C. 159) (S.C.) thus : \"We may at this stage refer to one other subsidiary argument urged on behalf of the appellants. It is urged that because paddy and rice are not different kinds of goods, but one and the same, the inclusion of both paddy and rice in Schedule C to the Act would amount to imposition of double taxation under the Act. There is no merit in this contention also because the assumption that paddy and rice are one and the same is erroneous. In Ganesh Trading Co. v. State of Haryana arising under the Act, this Court has held that although rice is produced out of paddy, it is not true to say that paddy continued to be paddy even after dehusking; that rice and paddy are two different things in ordinary parlance and, therefore, when paddy is dehusked and rice produced, there is a change in the identity of the goods\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-31", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "33. In Devgun Iron and Steel Rolling Mills v. State of Punjab (1961) (12 S.T.C. 590), the petitioners carry on the business of rolling steel into rolled steel sections. They claimed that the process of rolling steel into rolled steel sections is not a process of manufacture and that this process amounts to no more than making the steel to be a more marketable commodity as such. According to them, the nature and character of the commodity does not undergo any alteration. The High Court of Punjab negatived the contentions of the petitioners and held that when steel is rolled into rolled steel sections the outcome is a different and a new commodity and when it is sold, there is a sale of a different commodity and not a sale of steel over again.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-32", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "34. In Devi Dass Gopal Krishnan v. State of Punjab one of the appellants in the batch of appeals carried on business in rolling steel. They purchased steel scrap and steel ingots and converted them into rolled steel sections. It was contended on behalf of the dealer that when iron is converted into rolled steel it does not involve the process of manufacture, but the scrap is made into a better marketable commodity. The Supreme Court held that \"when iron scrap is converted into rolled steel, the scrap iron ingots undergo a vital change in the process of manufacture and are converted into a different commodity, viz. rolled steel sections. During the process the scrap iron loses its identity and becomes a new marketable commodity. The process is certainly one of manufacture\". In Rangoon Metal and Refining Co. v. State of Tamil Nadu (1981) (47 S.T.C. 60) the assessee purchased from hawkers and vendors scrap metal, which had not suffered tax at any earlier stage, melted the scrap so purchased and turned them into ingots. The assessee contended that the scrap was melted and turned into ingots only for the purpose of removing the impurities contained in the scrap, that the ingots continue to remain the same as the scrap minus the impurity and that, therefore, it was not a case of manufacture of a different goods. The Madras High Court negatived the contentions of the assessee and observed thus : \"We are unable to agree. Unless the scrap retained its identity, it could not be said that it was not consumed in the manufacture of other goods. Ingots would be 'other goods' as scrap and ingots are not the same. Anyone going into the market and asking for scrap will not be given ingot and vice versa. Further the process employed by the assessee by putting the steel scrap into fire and making ingots out of them is a process of manufacture and therefore, there", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-33", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "steel scrap into fire and making ingots out of them is a process of manufacture and therefore, there is consumption of steel scrap and manufacture of the same into goods\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-34", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "35. In Ghennakesavulu v. Board of Revenue (1981) (47 S.T.C. 403) the assessee purchased old silver jewellery or silverware from customers, and after melting them manufactured new silver jewellery or silverware and sold them. It was contended on behalf of the dealer before the Madras High Court that whether they are old jewellery or new jewellery or whether they are different kinds of jewellery, still the jewellery continued to be silver jewellery. The Court held that the old silver jewellery or silverware purchased, melted subsequently and made into new silver jewellery or silverware ought to be treated as separate distinct goods or commodities.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-35", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "36. In Jammula Srirangam Brothers v. Sales Tax Officer (1966) (17 S.T.C. p. 69) it was held that converting gold or silver into gold or of similar articles is manufacture. In Bapalal & Co. v. State of Tamil Nadu (1982) (49 S.T.C. 20) the assessees who were dealers in jewellery purchased old jewellery in the course of business, liable to single point tax as 'bullion' at the point of first sale in the state, from their customers who were not dealers and on whom no tax was leviable, and the bullion so purchased was melted and went into the manufacture of the new jewellery. It was contended on behalf of the dealer that when the petitioner made the new jewellery the form alone changed and it still continued to be gold jewellery. The High Court of Madras rejected that contention. To the same effect are the decisions of the Madras High Court in Nataraja Chettiar & Co. v. State of Tamil Nadu (1982) (49 S.T.C. 53) and the Andhra Pradesh High Court in Sree Lakshmi Narayana Jewellers v. Comml. Tax Officer (1979) (43 S.T.C. 115).", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-36", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "37. In Devi Dass Gopal Krishnan v. State of Punjab , as already observed above, their Lordships of the Supreme Court held that where the goods purchased and the goods sold are not identical once it cannot be said that the same goods are taxed at two stages. Therefore, where there is a purchase tax on oil-seeds or steel scrap and steel ingots or cotton, and sales tax on oil and oil cake or rolled steel sections or yarn after manufacture, it cannot be said that the same goods are taxed at two stages, since the manufacture has changed the identity of the goods purchased and the goods sold. When the oil is produced out of oil-seeds, the process certainly transforms raw material into different article for use and oil-seeds can, therefore, be said to be used in the manufacture of goods.  \n 38. In State of Punjab v. Chandu Lal , the assessee purchased unginned cotton and after ginning the cotton by a mechanical process and removing the seeds sold the ginned cotton to the customers outside the State. The assessee paid purchase tax on the purchase turnover and in respect of the cotton seed sold by him. Through the registered dealers the assessee claimed deduction from the purchase turnover. The Supreme Court, while accepting the contention of the applicants, the State of Punjab that the ginning involves a manufacturing process and that the seeds and the cotton were two distinct commercial goods observed thus :", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-37", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"On behalf of the appellants the argument was stressed that ginning process was a manufacturing process, and ginned cotton and cotton seeds were different commercial commodities and the respondent was not entitled to the exemption under Section 5(2)(a)(vi) of the Act. It was said that unginned cotton was transformed into two distinct commercial commodities and there was no substantial identity between unginned cotton and ginned cotton or cotton seeds. It was argued that the ginning process required complicated machinery of manufacture. Reference was made in this connection to the mechanical aspect of the ginning process described in Encyclopeadia Britannica, Vol. 6 :  \n \"Hand separation of lint and seed was replaced rapidly by use of saw-type gins in the United States after the inventions of Eli Whitney in 1794 and of Hogden Holmes in 1796. Whitney's gin was improved upon by Holmes who substituted toothed saws for the hooked cylinder and flat metal ribs for the slotted bar used by Whitney. The saws, metal ribs and doffing brush in these early models persist in modern gins, with no basic change in ginning principle having been made, although some modern gins substitute an air blast for the doffing brushes.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-38", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "Additional gin machinery has been developed to keep pace with changes in harvesting practices which have resulted in a trend from careful hand picking to rougher hand and machine harvesting. These developments include sees-cotton driers, seed-cotton cleaners, burr ex-tractors, green-boll traps and magnetic devices for removing metal. Line cleaners, designed to remove trash from lint after it had been removed from the seed, were added to modern gins in the late 1940s and 1950s. Improvement in grade, which resulted in a higher price for the lint, was, in some cases, offset by the loss in weight. Gin installations include presses for balling the lint and equipment for moving the seed away from the gin stands. While some of the seed is saved for planting purposes, most of it moves directly to an oil mill for processing (Encyclopaedia Britannica, Vol. 6, p. 14). In our opinion, the appellants are right in their contention that the ginning process is a manufacturing process\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-39", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "39. In Imperial Fertiliser and Co. v. State of Madras (1973) (31 S.T.C. p. 390 (S.C.) the assessee purchased various items of chemical manure referred to in item No. 21 of the First Schedule to the Tamil Nadu General Sales Tax Act, 1958 and then mixed them with some organic manure as chemical fertilisers and sold them. His contention was that as the various items of chemical manures purchased and used by him for the production of the mixture sold by him have earlier suffered tax, his sale should not be treated as the first sales in chemical fertilisers and that as such his sales should not be subjected to single point tax. The High Court of Madras, while negativing that contention observed thus : \"We are not in a position to accept the contention that a detailed reference to various items of chemical manure in item 21 leads to the inference that if the tax had been paid on those items earlier, a mixture of any one or more of those items should be treated as either a second or a subsequent sale. We are inclined to agree with the decision of the Tribunal in this case. The Tribunal had stated that a sale of a product can be said to be a second sale only if the same goods had been the subject-matter of a sale at an anterior stage. In this case if the assessee has purchased the various items of chemical manure referred in item 21 and brings about a new product by mixing one or more of the said articles with one or more of any organic manure, that product cannot be said to be the same chemical manure or fertiliser which he had purchased and which had already been subjected to tax. The produce got by the petitioner by mixing one or more of chemical manure with one or more of the organic manure will have different properties of its own and it cannot be said it retains the same characteristics or properties of any one of", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-40", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "properties of its own and it cannot be said it retains the same characteristics or properties of any one of the chemical manures or organic manures which went to make up the resultant mixture. For getting an exemption on the ground that the sale of an article is a second or subsequent sale, it must be established that there has been a sale of the same goods at an anterior point of time. If there is no identity between the product purchased with the product sold it is not possible to treat the sales of the products manufactured and sold by the petitioner as second sales\". This decision was followed by the High Court of Madras in its later decision reported in State of Tamil Nadu v. Rallis India Limited (1974) (34 S.T.C. p. 532) and in State of Tamil Nadu v. Pyare Lal Malhotra .", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-41", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "40. In State of Tamil Nadu v. Rallis India Ltd. (1974) (34 S.T.C. p. 532) it was held that as manure mixture prepared from one or more of the articles mentioned in sub-items (1) to (15) of item 21 of the First Schedule to the Tamil Nadu General Sales Tax Act is chemical fertiliser different from its components and its use is also different, it is not possible to treat the manure mixture as the same article as the components themselves. The following observations made in this decision are pertinent : \"If the product obtained by mixing the various chemical fertilisers referred to in item No. 21 is sold as a different commercial product and for a different user, it has to be treated as a different article from the components, whether the process of such mixture is one of manufacture or not\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-42", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "41. In State of Tamil Nadu v. Pyare Lal Malhotra the question was whether the manufactured goods consisting of steel rounds, flats angles, plates, bars or similar goods in other forms and shapes could be taxed again if the material out of which they were made had already been subjected to sales tax once as iron and steel scrap, as both were iron and steel. Their Lordships of the Supreme Court in that case observed thus : \"As soon as separate commercial commodities emerge or come into existence, they become separately taxable goods or entities for the purposes of sales tax. Where commercial goods, without change of their identity as such goods, are merely subjected to some processing or finishing or are merely joined together, they may remain commercially the goods, which cannot be taxed again in a series of sales so long as they retain their identity as goods of a particular type.\" Their Lordships further observed thus : \"We think that the correct rule to apply in cases before us is the one laid down by this court (Supreme Court) in Devi Dass Gopal Krishnan v. State of Punjab where Subba Rao, Chief Justice, speaking for a Constitution Bench of the Supreme Court said thus : \"Now coming to Civil Appeals Nos. 39 to 43 of 1965 the first additional point raised is that when iron scrap is converted into rolled steel it does not involve the process of manufacture. It is contended that said conversion does not involve any process of manufacture, but the scrap is made into a better marketable commodity. Before the High Court this contention was not pressed. That apart, it is clear that scrap iron ingots undergo a vital change in the process of manufacture and are converted into a different commodity, viz., rolled steel sections. During the process the scrap iron loses its identity and becomes a new marketable commodity. The process is certainly one of manufacture\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-43", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "42. The Supreme Court further observed thus : \"It is true that the question whether goods to be taxed have been subjected to a manufacturing process so as to produce a new marketable commodity, is the decisive test in determining whether an excise duty is leviable or not on certain goods. No doubt, in the law dealing with the sales tax, the taxable event is the sale and not the manufacture of goods. Nevertheless, if the question is whether a new commercial commodity has come into existence or not, so that its sale is a new taxable event, in the sales tax law, it may also become necessary to consider whether a manufacturing process, which has altered the identity of the commercial commodity, has taken place. The law of sales tax is also concerned with \"goods\" of various descriptions. It, therefore, becomes necessary to determine when they cease to be goods of one taxable description and become those of a commercially different category and description\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-44", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "43. The Supreme Court in its later case in Shaw Wallace and Co. Ltd. v. State of Tamil Nadu (1976) (37 S.T.C. page 523) (S.C.), relied upon the decisions in Imperial Fertiliser Case (31 S.T.C. 390), Pyare Lal Malhotra Case (37 S.T.C. 319) (S.C.) and Rallis India Case (34 S.T.C. p. 532). In that case Shaw Wallace and Co. (the appellant) was manufacturing and dealing in Chemical Fertilisers prepared fertiliser mixtures by dry mixing various chemical fertilisers and fillers like China Clay, gypsum etc., as its mixing works manually by means of shovels according to a standard formula approved by the Directors of Agriculture. The appellant claimed that as the fertiliser mixture prepared by it could not be said to be a commodity different from the ingredients composing the mixture and as the components of the mixture purchased within the State had suffered tax, the fertiliser mixture could not be taxed again. The High Court disallowed the appellant's claim. On appeal to the Supreme Court, it was held thus : \"A plain reading of the above mentioned provisions would show that it is only when a chemical fertiliser specified in sub-items (1) to (15) of item No. 21 of the First Schedule is sold in the same condition in which it is purchased that it is not subject to a fresh levy. Fertiliser mixture, it would be noted, is not the same article as the ingredients composing it. It is sold as a different commercial product. It is put to a different use and has different chemical properties. As such, it has to be treated as a different article from its component parts. The question whether there is any manufacturing process involved in the preparation of any fertiliser mixture or whether shovel mixing of the chemical fertilisers amounts to manufacture or not is wholly irrelevant for the purpose of the determination", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-45", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "mixing of the chemical fertilisers amounts to manufacture or not is wholly irrelevant for the purpose of the determination of the question before us\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-46", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "44. The Supreme Court relied upon the following observations of Justice Beg in Pyarelal Malhotra's Case : \"The mere fact that the substance or raw material out of which it is made has also been taxed in some other form, when it was sold as a separate commercial commodity, would make no difference for purposes of the law of sales tax. The object appears to us to be tax sales of goods of each variety and not the sale of the substance out of which they are made.... As soon as separate commercial commodities emerge or come into existence, they become separately taxable goods or entities for purposes of sales tax...... The law of sales tax is also concerned with 'goods' of various descriptions. It, therefore, becomes necessary to determine when they cease to be goods of one taxable description and become those of a commercially different category and description.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-47", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "45. In State of Gujarat v. Oil & Natural Gas Commission [(1982) 49 S.T.C. p. 310)], a Division Bench of the Gujarat High Court considered the question whether the operation of mining mineral from the earth or for that matter extracting oil from the oil well can be considered to be a process which can be included in the term 'manufacture' as defined under the provisions of the Bombay Sales Tax Act, 1959, as applicable to the State of Gujarat. Their Lordships of the Gujarat High Court, relying upon the principles laid down by the Supreme Court in Chowgule & Co. Pvt. Ltd. v. Union of India held that on the plain reading of the term 'manufacture', the extracting of any goods or for that matter minerals from the earth will squarely fall within the definition of the term 'manufacture'. Their Lordships relying upon the following observations of Bhagwati, J., who rendered the judgment in Chowgule's case observed thus : \"In that context, the Supreme Court, speaking through Bhagwati, J., posed two questions for the consideration of the court. The first question to which the court addressed itself was whether the blending of ore in the course of loading it in the ship by means of the mechanical ore handling plant constituted manufacture or processing of ore for sale within the meaning of Section 8(3)(b) and rule 13 and secondly whether the process of mining, conveying the mined ore from the mining site to the riverside, carrying it by barges to the harbour and then blending and loading it in the ship through the mechanical ore handling plant constituted one integrated process of mining and manufacture or processing of ore for sale, so that the items of goods purchased for use in mining and integrated operations could be said to be goods purchased for use in mining and manufacturing or processing of ore for sale falling within the scope and ambit of Section 8(3)(b) and Rule", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-48", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "ore for sale falling within the scope and ambit of Section 8(3)(b) and Rule 13 of the said Act and the Rules. What is the meaning of 'Processing' was answered by the Supreme Court after referring with approval to its earlier decision in Deputy Commissioner of Sales Tax v. Pio Food Packers which had earlier ruled that the relevant test which is required to be applied in this behalf is whether the processing of original commodity brings into existence a commercially different and distinct commodity or not. The nature and extent of processing may be different in different cases : the nature and extent of the change is also not material. What is necessary in order to characterise an operation as 'processing' is that the commodity must, as a result of the operation, experience some basic and material change. The court, therefore, held that blending of ore of diverse physical compositions in the course of loading by mechanical ore handling plant results in a change in the physical and chemical composition of ore and, therefore, the blended product suffered a change in its respective chemical and physical composition. The Supreme Court disapproved the view of the Bombay High Court in Nilgiri Ceylon Tea Supplying Co. v. State of Bombay (1959) 10 S.T.C. 500 where the Bombay High Court had held that manual mixing of different kinds of tea would not bring into any product of a different characteristic, name or use and, therefore, mixing cannot be said to be any process of manufacturing. The Supreme Court held that the said decision did not lay down the correct law because the means employed for the purpose of carrying out the operation would not be relevant for purposes of determining whether any process is applied or not, but it is the effect of the operation on the commodity that is material for purposes of determining whether the operation constituted 'processing' or not. In that view of the matter, therefore, the Supreme Court held that in the course of loading the blending of ore taken from different stock piles would amount to", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-49", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "Court held that in the course of loading the blending of ore taken from different stock piles would amount to processing and, therefore, would be an activity of manufacturing\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-50", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "46. In Metro Ready Wear Company v. Collector of Customs (1978 II Excise Law Times, p. J 520) the appellants were the manufactures of brassieres. After the brassieres were stitched, the finished brassieres were ironed with electric iron in the premises of the appellants and then they were packed in card-board boxes. All the work upto the stage of ironing was carried out without the aid of electric power. But after the process of stitching was over the stitched brassieres were ironed in the appellant's factory using electric irons before they were packed in boxes. It was argued that 'manufacture' involves a transformation in the commercial identity of an article and any process that does not bring about such a change of identity cannot be regarded as a process of manufacture. The Kerala High Court rejected that contention and held as follows : \"In our opinion it is unnecessary for the purpose of this case to consider the broad question as to whether it is essential that every item of work carried our or process applied to an article should by itself bring about a change in the commercial sense at that very stage in order that such work may be regarded as a process carried on in relation to the manufacture of such article. We say so because for the purpose of the Act the expression 'manufacture' has been given a special definition in Section 2(f). Under that definition 'manufacture' includes any process incidental or ancillary to the completion of a manufactured product. The scope of this definition came up for consideration before the Gujarat High Court in Extrusion Processes Pvt. Ltd. v. N.R. Jadhav (1974 Tax L.R. 1655) = 1979 ELT (J 380). The question that arose for decision in that case was whether under Item 27(e) of the First Schedule of the Act which subjects to payment of excise duty extruded pipes and tubes of aluminium, the levy of duty is attracted when a", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-51", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "of excise duty extruded pipes and tubes of aluminium, the levy of duty is attracted when a person, who has purchased plain extruded tubes that have been manufactured by others and which were already subjected to excise duty, applies to those tubes a process of printing and lacquering. It was held by the Division Bench of the Gujarat High Court that under Item 27(e) of the First Schedule, the levy of duty is on the manufacture of tubes of aluminium by applying the process of extrusion. After pointing out that the word 'extrusion' in relation to tubes means the process of forming the tube from a metal slug or dump the learned judges held that the said process had already been applied fully when the plain extruded aluminium tubes purchased by the petitioner were originally manufactured. Dealing with the scope of the definition contained in Section 2(f) the learned Judges held that any process that is incidental or ancillary to the completion of a manufactured product, however unessential it may be, will fall within the compass of the expression 'manufacture'. But, in order that any process can be regarded as incidental or ancillary to the completion of a manufactured product it must have some relation to the manufacture of finished product. On the facts of that case the learned Judges came to the conclusion that the printing or lacquering could not be said to be incidental or ancillary to the completion of the process of manufacture referred to in Item 27(e) of the First Schedule since the said item takes in only a manufacture of tubes by application of the process of extrusion. This decision is, in our opinion, of little assistance to the petitioner because the conclusion of the learned Judges that excise duty was not leviable in that case was rested wholly on the ground that Item 27(e) of the First Schedule authorises the levy of excise duty only if there is a manufacture of pipes or tubes of aluminium by the application of any process or extrusion. It was because that process of", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-52", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "or tubes of aluminium by the application of any process or extrusion. It was because that process of manufacture had been completed prior to the stage of the purchase of the tubes by the petitioner in that case that the learned Judges held that the work of printing and lacquering carried out by the petitioner in relation to those tubes could not be said to be incidental or ancillary to the completion of the process of manufacture referred to in Item 27(e).\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-53", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "47. Their Lordships further observed thus : \"In the present case, Item 22D of the First Schedule with which alone we are concerned, authorises the levy of 10% ad valorem duty on articles of ready-to-wear apparel including undergarments and body supporting garments in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power. Since the definition contained in Section 2(f) of the Act includes all processes that are incidental or ancillary to the completion of a manufactured product the only question to be considered by us, in the present case, is whether the process of ironing applied to the stitched brassieres can be regarded as incidental or ancillary to their completion. In our opinion, the process of ironing that was applied to the stitched brassieres prior to their packing was a process incidental to the completion of the brassieres as a manufactured product since the said process was obvious intended to give a finishing touch in order to render them marketable as ready-to-wear undergarments. Inasmuch as the said process was admittedly being carried out with the aid of power, liability for payment of duty under item 22D gets attracted.  \n The contention to the contrary put forward by the petitioner cannot, therefore, be accepted\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-54", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "The contention to the contrary put forward by the petitioner cannot, therefore, be accepted\".  \n 48. In Union of India v. Ramlal Mansukharai , the respondents were carrying on the business of manufacturing Kansi and brass utensils. For that purpose they procured copper, tin and zinc. Kansi is prepared as an alloy of copper and tin and brass as an alloy of copper and zinc. These alloys are prepared by melting the metals and mixing them together. These alloys are then converted into billets. Excise duty was levied by the Department on the basis that at the stage when the billets were rolled into circles, the process of manufacture of circles was complete and consequently these circles became liable to excise duty at the rates mentioned against item 26-A(2) of the First Schedule of the Central Excises and Salt Act, 1944. The respondents claim that the product, as it appears in the form of uncut circles after rolling of billets by the rolling mills, unless these uncut circles are trimmed and after further work on them, they are converted into utensils. The contention on behalf of the respondent was that when the billets were rolled into circles no process of manufacture was carried out and consequently excise duty could not be charged under item No. 26-A, which imposes the liability only when goods like circles are manufactured. Reliance was placed by the respondent on the interpretation of the word 'manufacture' as defined in the Central Excises and Salt Act and interpreted in two decisions of the Supreme Court in Union of India v. Delhi Cloth & General Mills and South Bihar Sugar Mills Ltd. v. Union of India (1968 S.C. 922). Justice Bhargava of the Supreme Court repelled the contention raised on behalf of the respondent and observed that the principles laid down in the said two decisions of the Supreme Court have no application to the present case. The Supreme Court observed thus :", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-55", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"In our opinion, neither of these cases supports the contention raised on behalf of the respondents, and it appears that the ratio of these decisions has been misunderstood by the High Court and the lower courts. In the Delhi Cloth and General Mills' cases the contention on behalf of the Union of India was that, in the course of manufacture of Vanaspati, the vegetable product from raw groundnut and til oil, the respondent used to bring into existence at one stage, after carrying out some processes with the aid of power, what is known to the market as \"refined oil\" and this \"refined oil\" falls within the description of \"vegetable non-essential oils, all sorts in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power\", and so is liable to excise duty under Item 12 of the First Schedule. The Court examined the process of manufacture of Vanaspati and found that vegetable non-essential oils as obtained by crushing containing the impurities were first produced as raw vegetable non-essential oils. They had then to undergo the process of refining which consisted of adding an acueous solution of an alkali which will combine with the free fatty acids to form as soap and settle down with it a large amount of suspended and mucilaginous matter; after setting the cleat supernatant layer is drawn off and treated with an appropriate quantity of bleaching earch and carbon is then filtered. In this process, the colouring matter is removed and the moisture that was originally present in the neutralised oil will also be removed. At this stage, the oil is a refined oil and is suitable for hydrogenation into vegetable product. What was sought to be taxed was the refined oil at this stage; but that contention was rejected, because the Court held that the oil produced at that stage is not known as refined oil to the consumers in the commercial community and can be described as refined oil only after", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-56", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "known as refined oil to the consumers in the commercial community and can be described as refined oil only after deodorization. Since the process of deodorization is not carried out before that stage, no refined oil had come into existence and, consequently, the oil could not be taxed as such. That case has no applicability to the case before us where the tax is to be imposed on circles in any form. When the rolling mills have rolled the billets, what comes into existence are circles known as such, even thought they are in uncut form. The product at that stage fully satisfies the description contained in Item 26-A(2).\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-57", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"Similarly, the decision in South Bihar Sugar Mills Ltd. v. Union of India is of no held on this point, because again the gas, which was subjected to excise duty, was held by the court not to be carbon dioxide, while only carbon dioxide was liable to duty. It was held that the product that came into existence was a mixture of gases containing only a percentage of carbon dioxide and could not, therefore, be held to be carbon dioxide alone which could be subjected to excise duty under Item 14-H of the First Schedule,\"   \n 49. As regards are contention that there was no process of manufacture in the goods, the Supreme Court further observed as follows :", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-58", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"According to the respondents, the conversion of billets into circles did not bring any new substance into existence, nor did it bring into existence any completed product, so that there was no process of manufacture which alone could render the circles liable to excise duty. This argument again appears to be based on a misunderstanding of the law. There is, first, the circumstance that, in Item 26-A itself, the legislature has laid down that excise duty shall be leviable on billets at a lower rate and on manufacture of circles at a higher rate. This provision itself makes it clear that the legislature was aware that billets are converted into circles, and it was decided that excise duty should be leviable at both stages. When the legislature used the word 'manufacture' in connection with circles, after having taken account of the fact that billets were already subjected to excise duty, it is obvious that the process, by which the billets were converted into circles, was held by the legislature to amount to manufacture. The word 'manufacture' is defined in Section 2(f) of the Act as including any process incidental or ancillary to the completion of a manufactured product. The rolling of a billet into a circle is certainly a process in the course of completion of the manufactured product, viz., circles. In the present case, as we have already indicated earlier, the product, that is sought to be subjected to duty, is a circle within the meaning of that word used in Item 26-A(2). In the other two cases which came before this court, the articles mentioned in the relevant items of the First Schedule were never held to have come into existence, so that the completed product, which was liable to excise duty under the First Schedule, was never produced by any process. In the case before us, circles in any form are envisaged as the completed product produced by manufacture which are subjected to excise duty. The process of conversion of", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-59", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "as the completed product produced by manufacture which are subjected to excise duty. The process of conversion of billets into circles was described by the legislature itself as manufacture of circles.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-60", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "50. Thus on a conspectus of all the aforesaid decisions the principle which emerges is that when a process is adopted for convenience of sale or making the article of more use to the customers, if the article in question retains its essential character, it has to be taxed as such article only and the processing would make no difference. The physical stage or even composition may change, but so long as the essential character of the article continues to remain the same, it has to be taxed as that commodity alone. The test for determining whether 'manufacture' can be said to have taken place is whether the commodity which is subjected to the process of manufacture can no longer be regarded as the original commodity, but is recognised in the trade as a new and distinct commodity. The tests laid down by Pathak, J. in Pio Food Packers' Case should be the guiding principles in determining the question whether a particular commodity has been subjected to the process of manufacture. Commonly manufacture is the end result of one or more processes through which the original commodity is made to pass. The nature and extent of processing may vary from one case to another and indeed there may be several stages of processing and perhaps a different kind of processing at each stage. With each process suffered the original commodity experiences a change. But it is only when the change, or a series of changes, take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct article that a manufacture can be said to take place. The test that is required to be applied is : does the processing of the original commodity being into existence a commercially different and distinct commodity. On an application of this test it is clear that the blending of different qualities of ore possession differing chemical and physical composition so as to produce ore of the contractual specifications cannot be said to involve the process of manufacture, since the ore that is produced cannot be regarded as a commercially new and distinct commodity from", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-61", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "of manufacture, since the ore that is produced cannot be regarded as a commercially new and distinct commodity from the ore of different specifications blended together. The nature and extent of processing may vary from case to case; in one case the processing may be slight and in another it may be extensive; but with each process suffered, the commodity would experience a change. Wherever a commodity undergoes a change as a result of some operation performed on it or in regard to it, such operation would amount to processing of the commodity. The nature and extent of the change is not material. It may be that camphor powder may just be compressed into camphor cubes by application of mechanical force or pressure without addition or admixture of any other material and yet the operation would amount to processing of camphor powder as held by the Calcutta High Court in Sri M. M. Prakas Gupta v. Commissioner of Commercial Taxes (1965) 16 S.T.C. 935. What is necessary in order to characterise an operation as \"processing\" is that the commodity must, as a result of the operation, experience some change.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-62", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "Judged in the light of the above decisions and the principles laid down by the Supreme Court in the cases in the preceding paras, the question is as to whether the blending of coffee and chicory by mechanical process involving consumption of power, after curing, roasting and grinding coffee seeds and chicory roots, constitute manufacture or processing of \"Coffee\" and \"Chicory Mixture\" and what is produced as a result of blending is commercially the same article viz., Coffee covered by item No. 2 of the First Schedule of Central Excises and Salt Act, 1944, or a distinct commercial commodity or excisable goods.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-63", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "51. The Central Excises and Salt Act, 1944 charges duty on production or manufacture of goods. The expression \"Excisable goods\" defined in Clause (d) of Section 2 means \"goods specified in the First Schedule as being subject to a duty of excise and includes salt\". \"Coffee\" is one of the items specified in the First Schedule as Item No. 2 which has been extracted above. Item No. 2 of the First Schedule covers only two kinds of coffee viz, \"Coffee cured\" and \"Coffee\" commercially known as \"Instant Coffee\". For the purpose of this item \"Coffee\" means the seed of the Coffee tree (coffee) whether with or without husk, whether cured or uncured. Section 3 of the Act provides for the levy on all excisable goods, other than salt which are produced or manufactured in India at the rates set forth in the First Schedule. The Central Government framed the Central Excise Rules, 1944 in exercise of the powers conferred on it by Sections 6, 12 and 17 of the Act. Under Rule 8(1) the Central Government is empowered by notification in the Official Gazette to exempt, subject to such conditions as may be specified, any excisable goods from the whole or part of duty leviable on such goods. The rate of excise duty was mostly on the ad valorem basis and hence Section 4 laid down the principles to be followed in calculating the value of an article.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-64", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "52. In the present case, as we have already indicated earlier, the product that is sought to be subjected to duty is the goods viz., mixture or blend of 'Coffee and Chicory'. Chicory is neither an excisable goods nor it is an item of the First Schedule. It is only the Coffee which is an excisable goods covered by Item No. 2 of the First Schedule. Under Item No. 2(1) the levy on Coffee, cured is Rs. 100/- per quintal and whereas under sub-item (2) the levy on 'Instant Coffee' is 20% ad valorem plus the duty for the time being leviable under sub-item (1) on cured coffee used in the manufacture of such 'Instant Coffee', if not already paid. From what is mentioned in column 3 against sub-item (2) of item 2 relating to rate of duty and against sub-item (1), it is clear that cured coffee is used in the manufacture of instant coffee. Evidently the process of manufacture is complete and the finished product 'Instant Coffee' comes into being. On a perusal of Item No. 2 of the First Schedule, we find that the excisable coffee is divided into two categories (i) coffee, cured and (ii) 'Instant Coffee'. In this case we are not concerned with the 'Instant Coffee', which is evidently a manufactured product.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-65", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "53. In the definition of clause (f) of Section 2, the expression 'manufacture' includes any process incidental or ancillary to the completion of a manufactured product. While the clause, as already stated above, gives out details as to the process incidental or ancillary to the completion of a manufactured product in relation to the goods like Tobacco, Salt, patent or proprietary medicines as defined in Item No. 14-E of the First Schedule, in relation to cosmetics and toilet preparations as defined in item No. 14-F of that Schedule and also in relation to goods comprised in Item No. 18-A of the First Schedule, it is silent as to any process incidental or ancillary to the completion of a manufactured product in relation to 'Instant Coffee' or any other product containing any ingredient in addition to 'Coffee', cured covered by sub-item (1) of Item No. 2 of the First Schedule.  \n 54. In the present case it is the admitted case of the parties that the petitioners purchased 'Coffee' seeds, roasted and ground them and prepared coffee powder out of those seeds by mechanical process involving consumption of power. Similarly they purchased chicory roots, roasted and ground them by mechanical process involving consumption of power. Then they blended both the powders thus obtained from 'Coffee' and 'Chicory' in equal proportions by mechanical process involving consumption of power. The petitioners then bottled and marketed such product as \"Coffee-Chicory Blend\" known in the commercial world as \"French Coffee\".  \n 55. The levy of duty on this commodity or goods by the Department is challenged before this Court.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-66", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "56. Shri K. Srinivasa Murthy, the learned counsel for the appellant, relied upon various articles, journals and books written by experts and also the provisions of the Prevention of Food Adulteration Act, 1954 and the rules made thereunder to explain as to the meaning and content of \"Coffee\" of various kinds and Chicory and also \"Coffee-Chicory Mixture\". It is not is dispute that Chicory is a perennial herb. As a cultivated crop, common Chicory is grown to some extent for its roots. It roots roasted and ground are used as a substitute for an adulterant of or an addition to Coffee. In Great Britain it is chiefly in connection with coffee that Chicory is employed. Chicory gives the coffee additional colour, bitterness and body. The roots of Chicory, dried, ground and roasted are used by the appellants for admixture with Coffee. The flavour of Chicory is very peculiar and popular. The Prevention of Food Adulteration Rules defined the standards of quality for and fixed the limits of variability permissible in respect of Coffee and Chicory, which are as follows :  \n \"A.08. COFFEE :  \n A.08.01 (1) Coffee (green, raw or unroasted) means the seeds of Coffee arabica, coffee liaberica, coffee excelsa or Coffee robusta freed from all but a small portion of its spermoderm by decortication.  \n (2) Roasted coffee means properly cleaned green coffee which has been roasted to a brown colour and has developed its characteristic aroma.  \n (3) Ground coffee means the powdered product obtained from 'roasted Coffee' only and shall be free from husk.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-67", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "(4) Coffee (green, raw and unroasted), 'roasted coffee' and 'ground coffee' shall be free from any artificial colouring, flavouring, facing extraneous matter or glaxing substance and shall be in sound, dry and fresh condition free from rancid or obnoxious flavour.  \n (5) 'Rosted Coffee' and 'ground coffee' shall conform to the following analytical standards :  \n (i) Total ash (determined on the sample dried to constant weight at 100 degree C), shall be feathery white or bluish-white in colour and shall be not less than (3-0) per cent and not more than (6.0) per cent by weight of which not less than 65 per cent shall be soluble in boiling distilled water. The ash insoluble in dilute HCL shall not be more than 0.1 per cent.  \n (ii) The alkalinity of the soluble ash per gram of dried coffee shall be equivalent to not less than (3.5) ml. and not more than (4.5) ml. of N/10 acid.  \n (iii) The caffeine content obtained by standard methods shall be not less than (1.0) per cent.  \n (iv) The aqueous extract (determined by extraction of 2 grams or the sample dried to constant weight at 100 degree C with 100 ml. of boiling distilled water for one hour under reflux) shall be not less than (26.0) per cent and not more than (35.0) per cent.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-68", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "A.08.02 - CHICORY means the roasted chicory powder obtained by roasting the cleaned and dried roots of Chicorium intybus Lin with or without the addition of edible fats and oils or sugar like glucose or sucrose in proportion not exceeding 20 per cent by weight in aggregate. It shall be free from any artificial colouring and flavouring matter.  \n It shall conform to the following standards :  \n Total ash..... Not more than 3.5 per cent and not less than 10.0 per cent (on dry basis).  \n Ash insoluble in dilute HCI..... Not more than 2.5 per cent on dry basis.  \n Water soluble matter...... Not less than 50.0 per cent on dry basis.  \n A.08.03 - COFFEE-CHICORY MIXTURE or coffee mixed with chicory or coffee and chicory shall be pure ground coffee mixed with roasted and ground chicory and shall be in sound, dry and dust-free condition with no rancid or obnoxious flavour.  \n The coffee-chicory mixture shall contain caffeine not less than 0.6 per cent and the aqueous extract shall not be more than 50 per cent.  \n Any tin or other receptacle containing a mixture of coffee and chicory shall not bear any misleading expression. The expression \"French Coffee\" may be used it followed by the words \"mixed with chicory\" or \"blended with chicory\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-69", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "57. From what is stated above it is clear that coffee and chicory are two separate and independent commodities or goods. Coffee is an excisable goods covered by item No. 2 of the First Schedule. Chicory does not find place in the items of the First Schedule. There is nothing on record to show that Chicory has been declared as an excisable goods, even under Item No. 68 of the First Schedule. The Central Excises and Salt Act, 1944 does not define 'Goods'. The Legislature, therefore, must be taken to have used every word in its ordinary dictionary meaning. The Dictionary meaning of the \"goods\" is that it must be something which can ordinarily come to the market to be bought and sold and is known to the market. As already stated above 'excisable goods' means goods specified in the First Schedule as being subject to duty of excise and includes salt. The operation of the provisions of the Central Excises and Salt Act, 1944 and the Rules made thereunder is confined to enumerated commodities in the First Schedule. As chicory has not been declared as an 'excisable goods' it is not liable to duty and it does not fall under item No. 68 of the First Schedule. Therefore, out of the two ingredients of 'Coffee-Chicory Mixture' only coffee is an excisable goods covered by item No. 2 of the First Schedule. Further item No. 2 deals with only two kinds of coffee viz. (1) coffee, cured and (2) Instant Coffee. The legislative intent is, therefore, clear that any commodity which can be called 'Coffee' has to fall squarely under the kinds of 'Coffee' mentioned in Item No. 2. The ordinary meaning to be assigned to a taxable item in a list of specified is considered as a separately taxable item for the purpose of levy of excise duty under the First Schedule of the Central Excises and Salt Act,", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-70", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "purpose of levy of excise duty under the First Schedule of the Central Excises and Salt Act, 1944. A particular commodity cannot come under more than one items or under combined items of the Schedule for the purpose of excise duty. It is well known that the Excise Laws in India tax the production or manufacture of excisable goods. As soon as separate commercial commodity emerges or comes by the mixture or combination of more than one goods by whatever process, the new commercial goods become separately taxable under the Central Excises and Salt Act, 1944. Once there is mixture or blend of two distinct commodities and particularly when they are blended by mechanical process involving consumption of power the identity of each is lost and such mixture cannot be called by the name of one of the ingredients constituting the mixture. It is altogether different question whether the mixture has emerged in a distinct commercial commodity attracting liability to excise duty, but the fact remains such mixture cannot be called by the name of one of the ingredients. In the present case the mixture of coffee and chicory cannot be called by individual name of either coffee or chicory. Hence the mixture of coffee and chicory cannot be treated as excisable goods falling under item No. 2 of the First Schedule as \"Coffee\" as defined thereunder.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-71", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "58. In Dy. Commissioner of Commercial Taxes v. Iyanar Coffee & Tea Co. (1962) 13 S.T.C. 457, the High Court of Madras happened to consider the similar question whether the expression \"Coffee\" as found in Section 5(v) of the Madras General Sales Tax Act, 1959 would include a variety of stuff known as \"French Coffee\" or by any other trade-name which is made by an admixture of Coffee powder and Chicory powder. It was held in that case that the term \"Coffee\" should be confined only to the forms of Coffee as explained in Madras General Sales Tax Act, 1959 and that it could not be extended to coffee Blended with chicory which, according to the usage, is different article from coffee and is often referred to as \"French Coffee\". It was further observed that : \"When....... we find that there are several enactments dealing with the Coffee which defined Coffee in a particular manner, confined only to pure coffee, there is no reason why a similar connotation to the expression \"Coffee\" in the absence of any particular definition thereof in the Madras General Sales Tax Act, should not be adopted. In our opinion the mixture or blend of two commodities \"Coffee and Chicory\" as such does not fall within the content of the expression \"Coffee\" used in item No. 2 of the First Schedule and hence it necessarily falls under item No. 68 of the First Schedule.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-72", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "59. Shri K. Srinivasa Murthy, the learned counsel for the appellants, relying upon the various decisions of the Supreme Court and High Courts already referred to in the above paras next contended that the mixture or blend of coffee powder with Chicory powder does not amount to manufacture within the meaning of the definition of 'manufacture' under Section 2(F) of the Central Excises and Salt Act, 1944 and as such the Department acted illegally in treating the \"Coffee\" and \"Chicory Mixture\" as a distinct commercial commodity and resorting to double taxation. His contention is that the mixing of coffee powder with Chicory powder does not constitute 'manufacture' and the resultant product known as \"French Coffee\" does not constitute the process of manufacture within the meaning of the definition of 'manufacture' under the Act.  \n 60. An identical question came up for consideration before a Division Bench of Bombay High Court in the decision reported in Commissioner of Sales Tax v. Dunken Coffee Manufacturing Co. (1975) (35 S.T.C. 493). The question for consideration in that case was whether the process of mixing or blending of coffee powder with chicory powder known as \"French Coffee\" amounts to 'manufacture' within the meaning of the definition of 'manufacture' contained in Clause (17) of Section 2 of Bombay General Sales Tax Act, 1959. Even in that case it was argued that no doubt by mixing up coffee with chicory what has resulted is the new mixture, in which some of the original components might have been emerged, but there is no alternation and, accordingly, there is no manufacture as has been defined in the Bombay Sales Tax Act of 1959. Rejecting that contention a Division Bench of the Bombay High Court observed thus :", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-73", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"The term 'manufacture' used in the sales tax legislations of different states has several times came up for interpretation before courts. In North Bengal Stores Ltd. v. Member, Board of Revenue, Bengal (1946) 1 S.T.C. 159, which the Calcutta High Court had to consider was whether dispensing of medicines by a chemist was a manufacture. Under the Bengal Finance (Sales Tax) Act, 1941, where the turnover of a dealer who himself manufactured or sold any goods exceeded Rs. 10,000, he was liable to pay tax under the said Act. The court came to the conclusion that the dealer in that case was liable to pay tax. Gentle, J. did not give any finding whether dispensing of medicines constituted a manufacture, but he held that dispensing resulted in a new mixture and thereby the chemist produced goods for sale. He observed (at page 160) :  \n \"When dispensing has taken place, but not before the chemist has the goods with which to supply his customers and which he has agreed to sell to them. The resultant mixtures, after dispensing prescriptions, are the goods sold by a dispensing chemist to his customers the process of dispensing is to produce those goods for sale, without which process sales of mixtures or compounds cannot be effected by a chemist. Even if that process is not the manufacture of goods, as articles of furniture, mechanical appliances and paints are made from raw materials, nevertheless, since it is the production of goods for the purpose of selling to customers, the chemist who dispense prescriptions thereby produces goods for sale.\"  \n Das, J., however, held that the activity of dispensing constituted a manufacture. He observed :", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-74", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"To manufacture goods in common parlance means 'to bring goods into being'. To manufacture or produce goods for sale means to bring into being or to produce something in a form in which it will be capable of being sold or supplied in course of business. The essence of manufacturing, I apprehend, is that something is produced or brought into existence which is different from that our of which it is made, in the sense that the thing produced is by itself commercial commodity which is capable as such of being sold or supplied. It does not mean that the materials with which the thing is manufactured must necessarily lose their identity or become transformed in their basic or essential properties.\"  \n 61. Subsequent decisions show that the test laid down by Das, J. has been accepted by various High Courts as also the Supreme Court. In State of Bihar v. Chrestien Mica Industries Ltd. (1956) 7 S.T.C. 626, the question was whether the process of mining mica was tantamount to manufacture of goods within the meaning of Section 2(g) of the Bihar Sales Tax Act, 1947. The Patna High Court held that no manufacture must mean to bring into being something in a form in which it was capable of being sold or supplied in the course of business. The court observed : \"The essential point to remember is that something is brought into existence which is different from that originally existing, in the sense that the thing produced is by itself a commercial commodity and is capable as such of being sold or supplied. It is not necessary that the stuff or material of the original article must lose its character or identity or it should become transformed in its basic or essential properties.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-75", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "62. The learned Judges found that the mixing and blending of Coffee powder and Chicory powder was commercially known as \"French Coffee\" and that it is in its character different from pure coffee powder. It was further found that the Coffee powder when mixed with Chicory powder might change in colour and odour and that what is produced is a new mixture in which some of the original components viz., Coffee Powder and Chicory Powder have been merged. Applying the tests laid down in the decided cases referred to by them, the learned Judges observed that there can be no doubt that the mixing and blending of coffee powder with chicory powder so as to bring being a different commercial product known as \"French Coffee\" is a process which amounts to manufacture within the definition of the expression 'manufacture' defined in Bombay Sales Tax Act, 1959. The learned Judges referred to Anwarkhan Mehboob's case (11 S.T.C. 698) (S.C.) relied upon by the company and observed that it is not a direct authority on the question of what is 'manufacture' and that it does not furnish a guide that in such cases the test should be the bringing into existence of a different commercial commodity. Again referring to the decision of Nilgiri Ceylon Tea Supplying Co. v. State of Bombay (10 S.T.C. 500), the learned Judges observed that it is pertinent to note that in that case what was bought was tea leaves and what was sold was also tea leaves and that there was no plea that it was commercially different article, as the commodity remains in the same condition. In fact the Supreme Court in Pio Food Packers' case (46 S.T.C. p. 63) = 1980 ELT 343 disapproved the view of Bombay High Court in Nilgiri Ceylon Tea Supplying Company (10 S.T.C. 500). The Supreme Court held that the said decision did not lay down the correct", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-76", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "500). The Supreme Court held that the said decision did not lay down the correct law because the means employed for the purpose of carrying out the operation would not be relevant for the purpose of determining whether any process is applied or not, but it has the effect of the operation of the commodity that is material for the purpose of determining whether operation constituted processing or not. In our view the Division Bench of the Bombay High Court in the above-mentioned case has taken the same view as we are inclined to take in this matter and we are in respectful agreement with the same view of the Bombay High Court.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-77", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "In our view the decisions relied upon by Shri K. Srinivasa Murthy, the learned counsel for the appellants, already referred to above, are not any assistance to the appellants' case, as in all those cases the identity of the commodity, even after conversion and processing remained the same.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-78", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "63. In Commissioner of Sales Tax v. Harbilas Rai (1968) (21 S.T.C. 17) (S.C.) it was found that by grinding of wheat into flour, no new commodity emerged. In Tungabhadra Industries case . Their Lordships of the Supreme Court considered the question whether hydrogenated groundnut oil commonly known as Vanaspati, was groundnut oil. The Supreme Court held that there was no change in the essential nature of the groundnut oil and it cannot be said that the refined groundnut oil, Vanaspati, was not groundnut oil. In Lt. Governor, Delhi v. Ganesh Flour Mills Co. Ltd. it was held by the Supreme Court that no new product was manufactured. In South Bihar Sugar Mills v. Union of India , the Supreme Court held that the transformation was not such so as to result in the emergence of a different article having a distinctive name, characteristic or use. Similar finding was given in Union of India v. Delhi Cloth and General Mills . In Deputy Commissioner of Sales Tax v. Pio Food Packers (46 S.T.C. 63) (S.C.) = 1980 ELT 343, the Supreme Court held that the pine-apple fruit remained the same even after washing and removing inedible portion, the end crown, the skin and the inner core, with the addition of sugar and that there was no change in the commodity. Similarly in Chowgule and Co. Pvt. Ltd. v. Union of India (47 S.T.C. 124), the Supreme Court held that there was no manufacturing process. In the case of State of Maharashtra v. C. P. Manganese Ore , the Supreme Court held that no new commodity was produced in the process and that the mere giving of a new name by the seller to what is really the same product is not the manufacture of a new product. In the case of the State of Gujarat", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-79", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "the same product is not the manufacture of a new product. In the case of the State of Gujarat v. Sukharam Jagannath (50 S.T.C. 76), it was found, as a matter of fact that the constituent articles composing the two varieties of pan-masala retained their original form and that the substantial identity of those articles continued. Thus in almost all the cases relied upon by the learned counsel for the appellants the original commodity has not lost it original identity.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-80", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "In our view, on the facts, each of the above cases relied upon by Shri K. Srinivasa Murthy, the learned counsel for the appellants, has been rightly decided and there is no conflict as such with the decisions rendered by the Supreme Court relied upon by Shri Upendralal Waghray, Counsel for the Central Government discussed hereunder.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-81", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "64. In Anwarkhan Mehboob Co. v. State of Bombay , the Supreme Court held that the conversion of raw tobacco into bidi pattis by removing stem and dust, which, in turn, was required for the manufacture of bidis, emerge into a commercially different commodity. In the case of Hajee Abdul Shukoor & Co. , the tanning of raw hides and skins was held as a manufacturing process resulting in the production of different commercial commodities. In the case of Swasthik Tobacco Factory (17 S.T.C. 316) (S.C.), the Supreme Court held that the conversion of raw tobacco into chewing tobacco was a manufacturing process resulting in the production of a substantially different commercial commodity. In the case of Ganesh Trading Company (32 S.T.C. 623) (S.C.) and also in the case of Raghurama Shetty (47 S.T.C. 369), the Supreme Court held that paddy and rice are two distinct commodities and that the milling of paddy involves a manufacturing process. In Devgun Iron and Steel Rolling Mills (12 S.T.C. 590), the Punjab High Court held that the process of steel rolling into rolled steel sections was the manufacturing process and the outcome is a different and new commodity. Similarly in the case of Devidas Gopal Krishnan (20 S.T.C. 430), the Supreme Court held that the iron scrap when converted into rolled steel, it is a manufacturing process, resulting in a new marketable commodity. In the cases of Chennakesavulu (47 S.T.C. 403), and Bapalal and Co. (49 S.T.C. 20), melting of old silver jewellery and making into new silver jewellery was held to be a manufacturing process producing a different commercial commodity. In the case of State of Punjab v. Chandulal , it was held by the Supreme Court that conversion of unginned cotton into ginned cotton", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-82", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": ", it was held by the Supreme Court that conversion of unginned cotton into ginned cotton by a mechanical process was a manufacturing process, resulting in the production of two distinct commercial goods. In the cases of Imperial Fertiliser (31 S.T.C. 390) and the State of Tamilnadu v. Rallis India Ltd. (34 S.T.C. 532), it was held by the High Court of Madras that the mixture of chemical fertilisers and the resultant product were different commercial commodities. In Pyarelal Malhotra's case (37 S.T.C. 319) (S.C.) = 1983 ELT 1582, conversion of scrap iron ingots into rolled steel was held by the Supreme Court to be a process of manufacture resulting in production of a different commodity. Similarly in the case of Shaw Wallace (37 S.T.C. 523) (S.C.), the Supreme Court relying upon Imperial Fertiliser case held that the preparation of fertiliser mixture involved manufacturing process resulting in production of a new commodity different from the ingredients composed for the mixture. In the case of Metro Readywear Co. v. Collector of Customs (1978 II Excise Law Times, p. J 520), the Kerala High Court held that the ironing of stitched brassieres using electric iron to be a manufacturing process involving a transformation in the commercial identity of the article. In the case of Union of India v. Ramlal Mansukharai , the process of melting the metals and mixing them together was held by the Supreme Court as a manufacturing process, resulting in the production of a new commercial commodity.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-83", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "Relying upon the ratio decided in these cases and applying the test laid down therein and on a consideration of all the facts and circumstances of the case we hold that the process adopted by the appellants of roasting and grinding coffee seeds and Chicory roots by the mechanical process involving consumption of powder and then mixing the powders thus obtained from coffee and chicory by mechanical process involving consumption of power constitute the process of manufacture as defined in Section 2(f) of the Central Excises and Salt Act, 1944 and further hold that the product thus obtained known as \"Coffee-Chicory Blend\" and otherwise known as \"French Coffee\" in the business market is a distinct commercial commodity falls under Item No. 68 of the First Schedule and hence liable to levy of excise duty in the manner taxed by the Department. We further hold that the blend or mixture called \"French Coffee\" differs in identity from the two ingredients constituting the mixture. The new product commercially known as \"French Coffee\" is undoubtedly an article different in characteristic, use, colour, odour and flavour from pure coffee powder.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-84", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "65. It is next contended by the learned counsel for the appellants, Shri K. Srinivasa Murthy, that since the appellants would be exposed to double taxation both on coffee and also the mixture of \"Coffee and Chicory\" this court should hold that the levy in question is impermissible as \"Coffee\" and the mixture of \"Coffee and Chicory\" are not different commercial commodities. We have already held that the mixture of \"Coffee and Chicory\" commercially known as \"French Coffee\" is a distinct commercial commodity and it is different from \"Coffee\". In fact in this case there is no double taxation on the same commodity. A similar contention was rejected by the Supreme Court in the case of Babu Ram Jagdish Kumar (44 S.T.C. 159) (S.C.) thus : \"We may at this stage refer to one other subsidiary argument urged on behalf of the appellants. It is argued that because paddy and rice are not different kinds of goods but one and the same, the inclusion of both paddy and rice in Schedule C to the Act would amount to imposition of double taxation under the Act. There is no merit in this contention also because the assumption that paddy and rice are one and the same is erroneous. In Ganesh Trading Co., Karnal v. State of Haryana arising under the Act, this court has held that although rice is produced out of paddy, it is not true to say that paddy continued to be paddy even after dehusking; that rice and paddy are two different things in ordinary parlance and, therefore, when paddy is dehusked and rice produced, there is a change in the identity of the goods\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-85", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "66. The principle laid down in this case was relied upon by the Supreme Court in the later case in State of Karnataka v. Raghurama Shetty (47 S.T.C. 369) (S.C.). In the instant case we cannot accept the contention raised by Shri K. Srinivasa Murthy, the learned counsel for the appellants that \"Coffee\" and \"French Coffee\" are not different kinds of goods, but one and the same. We have already held above that although the mixture of \"Coffee and Chicory\" is called \"French Coffee\", the resultant product does not continue to be coffee and that \"Coffee\" and \"French Coffee\" are two different goods in commercial circles and that there is a change in the identity of the goods.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-86", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "67. In Alladi Venkateswarlu v. Government of A.P. (41 S.T.C. 394), Beg, C.J. observed thus : \"It may be that an item may be taxed once as raw material and after it is manufactured and converted into separately taxable goods, taxed again as another taxable item altogether. But in such cases, the identity of the goods sold would be deemed to be different even though the raw materials may have been taxed already in a different form earlier. The question, therefore, before us is whether rice which is obtained form paddy already taxed under Item No. 8 of the Second Schedule ceased to be \"rice\" falling prima facie under Item No 66B as \"rice\" on which tax was already paid when it was in the from of paddy ?..... It is clear that there is a distinction between \"Paddy\" as found in Item No. 8 of the Second Schedule and \"Rice\", as mentioned in Item No. 66 of the First Schedule. Apparently, the removal of the husk makes this difference...... The \"rice\" in husk is \"paddy\". When it is removed from husk the husk and rice become separately taxable\".  \n Applying the principles laid down in the aforementioned decisions, we hold that there is no double taxation in the instant case, in view of our finding that \"Coffee-Chicory Mixture\" is a distinct commercial commodity from \"Pure Coffee\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-87", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "68. The learned counsel for the appellants Shri K. Srinivasa Murthy lastly contended that the \"Coffee-Chicory Mixture\" being an article of food is exempt from excise duty by virtue of exemption Notification No. 55/75-C.E, dated 1-3-1975 issued by the Central Government exempting certain goods specified in the Schedule annexed thereto and falling under Item No. 68 of the First Schedule. His argument is based on the premises that the \"Coffee-Chicory Mixture\" continues to be \"Coffee\" and is as much as the item \"Coffee\" falls as Item No. 2 under the general heading \"Food\" of the First Schedule. According to him if the \"Coffee-Chicory Mixture\" is held as an item of food it attracts the aforementioned exemption notification, which exempts all kinds of \"Food Products\" and \"Food Preparations\" (vide the notification extracted above). Presumably his argument is that if \"Coffee\" is food, then blend of Coffee and Chicory has to be treated as food, in which case the \"Coffee-Chicory Blend\" attracts the aforementioned exemption notification and that this court need not go into the question whether any manufacturing process was adopted in the process of mixing of \"Coffee and Chicory\" and whether such process of mixing emerges into a distinct commercial goods. In support of his proposition that coffee is food and so also Coffee-Chicory Mixture, he relied upon number of foreign texts and authorities dealing with the items of expression \"Food\", \"Coffee\" \"Coffee Products\" and \"Coffee-Chicory Mixture\". Whereas Shri Upendarlal Waghray, the learned counsel for the Central Government contended that merely because the item \"coffee\" happens to be one of the first three items falling under the title and heading \"Food\" in the First Schedule, the item \"Coffee\" cannot be treated as \"Food", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-88", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "heading \"Food\" in the First Schedule, the item \"Coffee\" cannot be treated as \"Food Product\" or \"Food Preparation\", much less the \"Coffee-Chicory Mixture\", which is a distinct commercial commodity from \"Coffee\" in view of the specific definition of \"Coffee\" in Item No. 2 of the First Schedule and that in any case the exemption notification is not applicable to goods \"Coffee-Chicory Mixture\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-89", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "69. Shri K. Srinivasa Murthy, the learned counsel for the appellants relied upon certain passages in Corpus Juris Secundum, Vol. X 36 under the heading \"Food\" in General : which reads thus :  \n \"Except as used in some statutes, the word \"Food\" includes that which is drunk, as well as that which is eaten, for nourishment, as used in statutes. It may include food for animals as well as food for human beings, although in common use the word \"feed\" is employed when referring to articles fed to animals.\"  \n \"In the general sense of the term, food is \"that which is eaten or drunk for nourishment\". It includes lard, milk, milk chocolate, cheese, coffee, condiments, confectionary, popcorn, and oleo oil, but not talc, tobacco, whisky, or saccharin. What constitutes food within the meaning of statutes making it an offence to mingle poisons with food is considered in the C.J.s. title poisons.\"  \n \"In food statues the term usually includes all articles used for food or drink by man, or by man and other animals whether sample, mixed, or compound. In construing certain statutes, however, it has been held that the term 'food' does not include a beverage or drink; and it is also held that, while the usual pure food statute which expressly provides that the term \"food\" shall include articles used for drink would undoubtedly cover the ordinary beverage, it does not comprehend as article, such whisky, which at the time is outlawed as a beverage. A legislative body may provide its own definition of food, under a law which it enacts, and, when it does so, that definition must necessarily control regardless of dictionary definitions, or even though it goes beyond the ordinary meaning of the term.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-90", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "70. In paragraph 1093 in volume 18 of the 'Halsbury's Laws of England' (4th Edition), 'Coffee' and 'Coffee Products' are mentioned under the general heading \"Food, Dairies and Slaughter-House\", and under the sub-heading 'food generally'. Coffee-Chicory blend also is mentioned in that paragraph. Coffee and Chicory product has been mentioned in the context of the law of food adulteration and the Coffee and Coffee-product Regulations, 1967, which was in force in India.  \n 71. Justice Bose of Supreme Court happened to consider the question as to what is and what is not food in the case reported in State of Bombay v. Virkumar , while dealing with the meaning and scope of the expression 'Food stuff' as defined in Clause 3 of the Spices (Forward Contracts Prohibition) Order, 1944 read with Section 2(a) of the Essential Supplies (Temporary Powers) Act, 1946, which reads thus :  \n \"Much learned judicial thought has been expended upon this problem - what is and what not food and what is and what is not a food stuff : and the only conclusion I can draw from a careful consideration of all the available material is that the term 'food stuff' is ambiguous. In one sense it has a narrow meaning and is limited to articles which are eaten as food for purposes of nutrition and nourishment and so would exclude condiments and spices such as yeast, salt, pepper, baking powder and turmeric. In a wider sense, it includes everything that goes into the preparation of food proper (as understood in the narrow sense) to make it more palatable and digestible. In my opinion, the problem posed cannot be answered in the abstract and must be viewed in relation to its background and context. But before I dilate on this, I will examine the dictionary meaning of the words.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-91", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"The Oxford English Dictionary defines 'food-stuff' as follows : \"that which is taken into the system to maintain life and growth and to supply waste of tissue\". In Webster's international Dictionary 'food' is defined as -  \n \"nutritive material absorbed or taken into the body of an organism which serve, for purposes of growth, work or repair and for the maintenance of the vital process\".  \n \"Then follows this explanation :  \n \"Animals differ greatly from plants in their nutritive processes and require in addition to certain organic substances (water, salts etc.) and organic substances of unknown composition (vitamins) not 'ordinarily' classed as foods ('though absolutely indispensable of life, and contained in greater or less quantities in the substances eaten complex organic substances which fall into three principal groups, Proteins, Carbohydrates and Fats.\"  \n \"Next is given a special definition for legal purposes namely -  \n \"As used in laws prohibiting adulteration etc., 'food' is generally held to mean any article used as food or drink by man, whether simple, mixed or compound, including adjuncts such as condiments etc., and often excluding drugs and natural water\".  \n The definition given of 'food stuff' is :  \n \"1. Anything used as food.  \n 2. Any substance of food value as protein, fat etc., entering into the composition of a food.\"  \n \"It will be seen from these definitions that \"Food stuff\" has no special meaning of its own. It merely carries us back to the definition of 'food' because \"food stuff\" is anything which is used as \"food\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-92", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"So far as \"food\" is concerned, it can be used in a wide as well as narrow sense and, in my opinion, much must depend upon the context and background. Even in a popular sense, when one asks another, \"Have you had your food ?\", one means the composite preparations which normally go to constitute a meal-curry and rice, sweet-meats, pudding, cooked vegetables and so forth. One does not usually think separately of the different preparations which enter into their making, of the various condiments and spices and vitamins, any more than one would think of separating in his mind the purely nutritive elements of what is eaten from their non-nutritive adjuncts. So also, looked at from another point of view, the various adjuncts of what I may term food proper which enter into its preparation for human consumption in order to make it palatable and nutritive, can hardly be separated from the purely nutritive elements if the effect of their absence would be to render the particular commodity in its finished state unsavoury and indigestible to a whole class of persons whose stomachs are accustomed to a more spicely prepared product.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-93", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "The proof of the pudding is, as it were, in the eating and if the effect of eating what would otherwise be palatable and digestible and, therefore, nutritive is to bring on indigestion to a stomach unaccustomed to such unspiced fare, the answer must, I think, be that however nutritive a product may be in one from it can scarcely be classed as nutritive if the only result of eating it is to produce the opposite effect; and if the essence of the definition is the nutritive element, then the commodity in question must cease to be food, within the strict meaning of the definition to that particular class of persons, without the addition of the spices which make it nutritive. Put more colloquially, \"one man's food is another man's poison\" I refer to this not for the sake of splitting hairs but to show the undesirability of such a mode of approach. The problem must I think, be solved in a common sense way.\"  \n 72. His Lordship further observed thus : \"Now the comparison of one Act with another is dangerous, especially when the Act used for comparison is an English Act and a war-time measure, and I have no intention of falling into that error. I am concerned herewith the Act before me and must interpret its provisions uninfluenced by expressions, however similar, used in other Acts. I have referred to the case discussed above, not for purposes of comparison but to show that the terms 'food' and 'food-stuffs' can be used in both a wide and a narrow sense and that the circumstances and background can alone determine which is proper in any given case\".  \n 73. The Supreme Court has laid down guidelines as to the use of Foreign Decisions and Laws, while considering the provisions of the Indian Statutes. The Supreme Court made the following observations in various cases :", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-94", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"No assistance can be derived from decisions that deal with other laws made in other countries to deal with situations that do not necessarily arise in India\". [Pratap Singh v. Shri Krishna Gupta .  \n \"While dealing with the problem of construing a specific statutory provision it would be unreasonable to invoke the assistance of English decisions dealing with the statutory provisions contained in English law. Where there is a positive enactment of the Indian Legislature the proper course is to examine the language of that statute and to ascertain its proper meaning uninfluenced by any consideration derived from the previous state of the law or of the English law upon which it may be in [State of West Bengal v. B. K. Mondal and Sons .  \n \"Where there is a Code and where words have been designedly chosen in respect of a subject-matter, it is nor proper to first go into the English cases on the subject without considering the words of the statute.\" [Hari Har Prasad v. State of Bihar, .  \n 74. Now turning to Central Excises and Salt Act, 1944, with which we are concerned it will be necessary for us to advert to the provisions contained therein. The word \"food\" has not been defined in the Act and so also the expressions \"Food Products\" and \"Food Preparations\" Sri K. Srinivasa Murthy placed his main reliance on the heading and title \"Food in which the item of excisable goods falls as item No. 2, among the first three items of the First Schedule.  \n The Supreme Court as regards the use of chapter Headings and Marginal Notes observed thus :  \n \"Title of a Chapter cannot be legitimately used to restrict the plain terms of an enactment.\" [C.I.T. v. Ahmedbhai Umarbhai & Co. .", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-95", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"The Headings prefixed to sections or sets of sections in some modern statutes are regarded as preambles to those sections. They cannot control the plain words of the statute but they may explain ambiguous words. If there is any doubt in the interpretation of the words in the section, the heading certainly helps to resolve that doubt.\" (Bhinka v. Charan Singh, .  \n \"It is true that the marginal note cannot control interpretation of words of a section particularly when language of the section is clear and unambiguous.\" (Western India Theatres Ltd. v. Municipal Corporation of City of Poona, .  \n \"If the words of the section of an Act admit of a reasonable doubt, the title or heading of the chapter or group of sections may be looked to for interpreting the section. But, although such heading may be looked for interpreting a section, the words of which admit of any reasonable doubt, it cannot be taken to restrict the plain terms of the section. It does not also prevail, where the intention of the legislature can be gathered by reference to other sections. The heading of a chapter may be referred to in order to determine the sense of any doubtful expression in a section ranged under it. But it cannot control unambiguous expressions.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-96", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "\"It has repeatedly been said by the Supreme Court that it is not safe to pronounce on the provisions of one Act with reference to decisions dealing with other Acts, which may not be in pari materi (Hari Khemu Gawali v. Deputy Commissioner of Police, Bombay, . It is no sound principle of construction to interpret expressions used in one Act with reference to their use in another Act. The meaning of words and expressions used in an Act must take their colour from the context in which they appear. (Ram Narain v. State of Uttar Pradesh, . It is the part of judicial prudence to decide an issue arising under a specific statute by confining the focus to that statutory compass as far as possible. The diffusion into wider jurisprudential areas is fraught with unwitting conflict or confusion (State of Madhya Pradesh v. Orient Paper Mills Ltd., .\"  \n 75. In D. N. Banerjee v. P. R. Mukherjee the Supreme Court said : \"Though the definition may be more or less the same in two different statutes, still the objects to be achieved not only as set out in the preamble but also as gatherable from the antecedent history of the legislation may be widely different. The same words may mean one thing in one context and another in a different context. This is the reason why decision on the meaning of a particular words or collection of words found in other statutes are scarcely of much value when we have to deal with a specific statute of our own; they may be helpful but they cannot be taken as guides or precedents.\"", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-97", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "76. In State of Bihar v. Ram Naresh, the Supreme Court held that there was no reason for limiting the connotation and significance of the words used in one context with reference to the meaning given to those words used in other sections in another context. They observed that words must be considered with regard to the particular context in which they were used and with regard to the scheme and purpose of the provision under consideration.  \n Thus, if a word has a certain meaning in one statute or if a situation is followed by certain consequences under one statute, it does not follow that the word will have the same meaning in another statute or that the situation will be followed by the same consequences under the other statute. Regard must be had to the context, the intention of the Legislature and the object sought to be achieved by the two statutes. In construing a particular statute the provisions of other contemporaneous statute in existence cannot be decisive or conclusive.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-98", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "77. In our opinion, as laid down by the Supreme Court in the aforementioned cases, the aid of English and American concepts, laws and precedents in the interpretation of the Indian Laws, words and expressions used therein, to know always without its dangers and we have, therefore, to be relied upon with some caution, if not without hesitation because of difference in the nature of those laws, concepts and definitions. In the present case we are concerned with the interpretation of words and expressions \"Coffee\", \"Food\", \"Food product\", and \"Food preparation\" used in the Central Excises and Salt Act, 1944, which is a taxing statute. Now there is one cardinal rule of interpretation which is always to be borne in mind, while interpreting entries and expressions in a tax legislation and it is that the words used the entries must be construed not in any technical sense, not from the scientific point of view but as understood in the common parlance. We must give the words used by the legislature the popular sense meaning \"That sense which people conversant with the subject-matter with which the statute is dealing would attribute to it\". The words \"Coffee\", \"Food\" and \"Food Products\" and \"Food preparations\" must, therefore, be interpreted according to ordinary parlance and must be given a meaning which people conversant with these commodities would ascribe to them.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-99", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "78. The question in this appeal thus revolves on the interpretation to be placed on the words and expressions \"Coffee\", \"Food\", \"Food products\" and \"Food preparations\", taking into consideration the scheme of the items of the First Schedule. In Union of India v. G. W. F. Mills , the Supreme Court held that the well-known rule in interpreting items in statutes like the Central Excises and Salt Act, 1944, as we are concerned with is, that resort should be had not to the scientific or the technical meaning of such terms, but to their popular meaning or the meaning attached to them by those dealing in them, that is to say to their commercial sense.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-100", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "79. As already stated above there are 68 items of goods in the First Schedule, out of them 67 items deal with distinct items of excisable goods and whereas the 68th item is residuary item and it applies to all other excisable goods not elsewhere specified in the First Schedule. The scheme of the items enumerated in the First Schedule of the Central Excises and Salt Act, 1944 is such that a particular article cannot come under two items of the Schedule for the purpose of excise duty. Item No. 68 of the First Schedule applies to only all other excisable goods which are not specified in item Nos. 1 to 67. In other words any item which falls under any of the item Nos. 1 to 67 shall not fall under Item No. 68. Under Rule 8(1) of the Central Excise Rules, 1944, the Central Government may, from time to time, by notification in the Official Gazette, exempt subject to such conditions as may be specified in the notification, any excisable goods from the whole or any part of duty leviable on such goods. Item No. 2 of the First Schedule is \"Coffee\" including Coffee, cured and coffee commercially known as \"Instant Coffee\". Each of these two catagories of Coffee is liable to excise duty at different rates as shown in the third column against each category of coffee. No notification has been issued by the Central Government under Rule 8(1) of the Rules exempting any product or preparation of either coffee cured or instant coffee, which is covered by item No. 2 of the First Schedule. The categories of 'Coffee' has been defined in item No. 2 itself hence the term 'coffee' shall have the restricted meaning assigned to it in item No. 2 itself and no aid can be taken from the definition and content of the expression \"Coffee\" in any other statute, or Dictionary or case law under", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-101", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "definition and content of the expression \"Coffee\" in any other statute, or Dictionary or case law under other Acts. Item No. 1B deals with \"Prepared or preserved foods put up in unit containers and ordinarily intended for sale including preparations of vegetables, fruit, animal blood, fish, crustaceans or molluscs, not elsewhere specified\". Item No. 1C deals with \"Food products, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power, the following, namely :- (1) Biscuits, (2) Butter, whether pasteurised or not, and (3) pasteurised or processed cheese\".", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-102", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "80. Item No. 1C is restricted only to the three kinds of mechanically manufactured \"food products\" mentioned therein. It really the intention of the Legislature was to consider the goods \"Coffee\" or \"Instant Coffee\" or \"Coffee-chicory Mixture\" manufactured with the aid of power, as \"food\" or \"Food product\", then these commodities would have been under Item 1C and not as a separate item under Item No. 2 and that too in a very restricted manner and sense. Evidently the intention of the Legislature is to treat each of the goods \"Coffee\" covered by Item No. 2, and \"food\" and \"food products\" covered by Item Nos. 1B and 1C respectively as separate and distinct commercial goods. If any food prouct other than the articles enumerated in Item No. 1C are to be exempted by a notification in the Official Gazette by the Central Government under Rule 8(1) of the Rules, it can be possible only by issuing a notification under item No. 68. The fact that item No. 68 deals with only other excisable goods not specified in item Nos. 1 to 67, clearly goes to show that 'Coffee' covered by item No. 2 and the food products enumerated in item No. 1C are distinct goods from the excisable goods to be covered by item No. 68. The exemption notification relied upon by the learned counsel for the appellants clearly refer to the excisable goods of the description specified in the Schedule annexed thereto and falling under item No 68 but exempt from the whole of the excise duty leviable thereon. In view of the specific mention in the exemption notification that \"Food products\" and \"Food Preparations\" falling under item No. 68 alone are exempt from the whole of the excisable duty leviable thereon, clearly disclose the intention of the Legislature that", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-103", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "the whole of the excisable duty leviable thereon, clearly disclose the intention of the Legislature that those items mentioned in the exemption notification including the \"Food products\", and \"Food preparations\" are distinct commercial and excisable goods from item Nos. 1 to 67 including item No. 2 \"Coffee\", item No. 1B \"Food\" and item No. 1C \"Food products\" as described therein. The fact that the item \"Coffee\" is covered by a specific item No. 2 of the First Schedule, the possibility of coffee or its products falling under the aforementioned exemption notification issued under Item No. 68 of the First Schedule, does not at all arise. Further the specific language used in the exemption notification namely \"goods\" of the description specified in the Schedule annexed hereto, and falling under Item No. 68, are exempt from the whole of the duty of excise leviable thereon\" and naming one of the goods as \"all kinds of food products and food preparations\", cuts at the very root of the theory of the learned counsel for the appellants that \"Coffee\" is an article of food and that \"Food-products\" and \"Food preparations\" mentioned in the exemption notification include \"Coffee\" or \"Coffee-chicory Mixture\". Thus the commodity \"Coffee\" which falls under specific Item No. 2 cannot fall under the residuary Item No. 68, nor it can be interpreted as to include \"any other goods\" declared as excisable goods under Item No. 68, not any other excisable goods which are exempted from the duty of excise by a special notification. As a logical corollary, if the article of \"Coffee\" cannot fall under Item No. 68 or under any item of \"food product\" or \"Food preparation\" declared as excisable goods or goods exempted from duty of excise by a special notification, the question of \"Coffee-chicory", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-104", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "exempted from duty of excise by a special notification, the question of \"Coffee-chicory Mixture\" falling under exemption notification issued under Item No. 68 of the First Schedule does not arise. The burden of proof that \"Coffee-chicory Mixture\" was food or food product or food preparation was on the appellants to be entitled for exemption of 'Coffee-chicory Mixture'. The appellants must show that the goods 'Coffee-chicory Mixture' was covered by the aforementioned exemption notification. The fact that the item 'coffee' covered by Item No. 2 of the First Schedule is distinct from the items mentioned in the exemption notification falling under Item No. 68 of the First Schedule, one has to irresistibly conclude that the goods \"Coffee-chicory Mixture\" is neither food, nor food product nor food preparation, so as to enable the appellants to claim exemption from excise duty.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-105", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "81. In this context it has to be borne in mind that the Central Government by another notification No. 179/77-C.E., dated 18-6-77 exempted from the whole of the duty of excise leviable on goods falling under Item No. 68 in or in relation to the manufacture of which no process is ordinarily carried on with the aid of power. We have already noted that in the exemption notification No. 55/75-C.E., dated 1-3-1975, all kinds of food products and food preparations including the other items mentioned therein which fall under Item No. 68 have been exempted from the whole of the duty of excise leviable thereon. These two exemption notification clearly go to show that they cover such excisable goods which are not covered by any of the items 1 to 67 of the First Schedule including coffee and coffee-chicory mixture.  \n 82. Thus on an integral reading of Item No. 2 relating to coffee, Item No. 1B relating to the food of particular kind mentioned therein, Item No. 1C relating to food products of particular kind mentioned therein, the residuary Item No. 68 of the First Schedule and the exemption notification in question, the Legislative intent is made amply clear namely that it did not want \"Coffee\" or \"Coffee-chicory Mixture\" to be treated as \"Food\" or \"Food product\" or \"Food preparation\" and to be exempt from the levy of excise duty under the exemption notification.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "63d644a0f764-106", "Titles": "Brooke Bond India Ltd. vs Union Of India And Ors. on 24 September, 1982", "text": "83. In the light of the foregoing discussion, we hold that Item \"Coffee\" is not an article of \"Food\" and that \"Coffee-chicory Mixture\" is not an article of \"Food product\" or \"Food preparation\" mentioned in the exemption notification issued by the Central Government under Item No. 68 of the First Schedule of Central Excises and Salt Act, 1944. We have already held above that the \"Coffee-chicory Mixture\" commercially called \"French Coffee\" is a distinct commercial commodity differing in identity from the two ingredients constituting the mixture and that it falls under Item No. 68 of the First Schedule and hence liable to levy of excise duty in the manner taxed by the Department.  \n 84. We further hold that the exemption notification in question is neither applicable to the item \"Coffee\" nor \"Coffee-chicory Mixture\" and hence the goods \"Coffee-chicory Mixture\" is liable to excise duty under Item No. 68 of the First Schedule of Central Excises and Salt Act, 1944 as a distinct excisable goods in the manner taxed by the Department.  \n 85. For these reasons, this Writ Appeal fails and is, accordingly, dismissed with costs. Advocate's fee Rs. 250/-.  \n 86. On the pronouncement of the judgment, Oral application for leave to appeal to the Supreme Court was made. We are unable to certify that this Writ Appeal involves such substantial questions of law of general importance which would require consideration by the Supreme Court or that it is otherwise a fit case for the grant of leave. Leave is refused.  \n 87. The learned counsel also requested for stay of the collection of excise duty. We do not think that the circumstances of the case justify the grant of any stay. Stay refused.", "source": "https://indiankanoon.org/doc/157861/"}
+{"id": "6666c4e8e029-0", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "JUDGMENT Jeevan Reddy, J.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-1", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "1. The Income-tax Appellate Tribunal, Hyderabad, has referred the following question for our opinion under s. 256(1) of the I.T. Act, 1961, at the instance of the Revenue :  \n \"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the amount of Rs. 14,665 received by the assessee from the Government of Andhra Pradesh in the relevant accounting period was not liable to be included in the total income assessable for the assessment year 1974-75 ?\" \n2. On December 31, 1968, the Government of Andhra Pradesh in Industries Department issued G.O. Ms. No. 1225, providing certain facilities and incentives to entrepreneurs wishing to set up industries in the State with a view to speed up the Industrial development of the State. This G.O. was superseded by G.O. Ms. No. 455, Industries and Commerce Department dated May 3, 1971. The preamble to both the G.Os. is identical, and, therefore, it is sufficient if we notice the reasons for issuance of the said G.Os. as recited in the second G.O. It states :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-2", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "\"Having regard to the slow pace of industrialisation in the State particularly in the private sector and with a view to stimulating rapid industrialisation throughout the State, Government had offered facilities and incentives in the G.O. cited for new industrial under takings. Subsequently, certain issues arising out of the Government or der were considered by the Officers' Committee constituted in G.O. Ms. No. 1226, dated 31st December, 1968. At their meeting held on 16th July, 1969, certain clarifications were considered with regard to these issues. Subsequently, the Director of Industries raised further issues for clarification on certain aspects of the G.O. cited and also of the Officers' meeting.\" \n3. We may set out the relevant portions of the G.O. relevant for the present purpose.  \n \"2. Keeping in view the points raised by the Director of Industries, the Government issued the following order in suppression of the orders issued in the G.O. cited, with regard to the facilitates and incentives which may be given to industrialists wishing to set up new industries as indicated below :  \n (a) Refund of sales tax on raw materials, machinery and finished goods, levied by the State Government subject to a maximum of 10 % of the equity capital paid up in the case of public limited companies and the actual capital in the case of others :  \n Explanation. - The ceiling of 10% shall be for the whole period of five years for which this concession is available according to para. 3 and not an annual ceiling.  \n (b) Subsidy on power consumed for production to the extent of 10% in the case of medium and large scale industries and 12 1/2% in the case of small scale industries. The concession will not apply to cases where concessional tariffs are allowed by the Electricity Board.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-3", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "Explanation. - 'Small Scale Industries' referred to above will include all industrial units with a capital investment of not more than Rs. 7.5 lakhs irrespectives a of the number of persons employed. Capital investment for this purpose will be invested in plant and machinery only. In calculating the value of plant and machinery the original price paid by the owner irrespective of whether the plant or machinery are new or second hand will be taken into account.  \n This Explanation is subject to such modifications as the Government may from time to time make.  \n (c) Exemption from payment of water rate on water drawn from sources not maintained at the cost of Government or any local body;  \n (d) Refund of water rate in respect of water drawn from a Government source or from a source maintained by any local body but returned purified to it;  \n (e) Liability on account of assessment of land revenue or taxes on land used for establishment of any industry, shall be limited to the amount of such taxes payable immediately before the land is so used.  \n (f) The following additional incentives will be allowed to new industrial units set up in the ayacut areas of Nagarjunasagar, Pochampad and K.C. Canal in the Ramagundam-Kothagudem areas and in the following eight backward districts :  \n (1) Nalgonda, (2) Medak, (3) Mahaboobnagar, (4) Karimnagar, (5) Warangal, (6) Anantapur, (7) Khammam, and (8) Chittor, and such other districts as may, from time to time, be notified by the Planning Commission as backward districts for the purpose of grant of incentives for industrialisation :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-4", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "(i) Sale or lease of Government land at concessional rates; and (ii) grant of financial assistance on a priority basis by the State Financing Institutions.  \n Explanation. - 'Ayacut areas' mean villages, all or part of the lands of which are included in the ayacut of the irrigation project specified above.  \n4. The above incentives will be available to all new industrial undertaking which commenced production on or after 1st January, 1969, with investment capital (excluding working capital) not exceeding Rs. 5 cores. The incentives under items (a) to (f) in para. 2 above will be allowed in each case for a period of five years from the date of commencement of production. The concessions will also be available for subsequent expansions (50% and above) of existing capacities provided, in each case, the expansion is located in a city or town or Panchayat areas, other than that in which the existing unit is located.\"  \n5. The assessee - Sahney Steel and Press Works Ltd. - set up a factory at Patancheru in Medak District, which went into production in the year 1973. The assessee maintains its accounts according to the calendar year. It was, therefore, entitled to the benefits of the said G.O. in the calendar year 1973, which means the assessment year 1974-75. In the said accounting year, the assessee obtained refund of the following three items totaling Rs. 14,665.70 in terms of G. O. Ms. No. 455. The three items are :  \n Rs.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-5", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "(i) Refund of sales tax on purchase of    5,839.93\nmachines during 1971-72\n(ii) Refund of sales tax on purchases       390.79\nof raw materials during the year 1971-72\n(iii) Refund of sales tax paid on sale     8,423.98\nof finished goods during the year 1971-72", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-6", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "6. The ITO, while making the assessment for the year 1974-75, included the said amount in the assessable income of the petition which was confirmed on appeal by the Commissioner of Income-tax (Appeals.) On further appeal, however, the Tribunal upheld the assessee's contention and held that the amount of Rs. 14,665.70, refunded to the petitioner in terms of the said G.O. \"did not represent refund of sales tax\" but was a development subsidy in the nature of a capital receipt. The Tribunal also held that the said amount cannot be deemed to be the income of the assessee under s. 41(1) either. Reliance was also placed upon a circular (N0.142) of the Central Board of Direct Taxes dated August 1, 1974, issued with respect to \"10% central grant of subsidy scheme (1971)\", in support of its conclusion. Thereupon the Revenue asked for and obtained this reference.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-7", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "7. Mr. M. S. N. Murty, the learned standing counsel for the Revenue, contended that items Nos. 2 and 3 comprised in the said refunded amount squarely falls within the four corners of sub-s. (1) of s. 41 and must, therefore, be deemed as income of the assessee for the relevant assessment year. He contended that the Tribunal was in error in holding that the amount refunded to the assessee did not represent refund of sales tax. The counsel contended further that all the three items constitute trading receipts and are, therefore, includible under sub-s. (1) of s. 28. According to him, the receipts are not in the nature of capital receipts in the hands of the assessee but they are receipts of a revenue nature. Counsel also contended that the circular of the Central Board has no application to the facts of the case, nor is it valid and enforceable being inconsistent with the provisions of the Act. On the other hand, Sri. Y. V. Anjaneyulu, the learned counsel for the assessee, submitted in the first instance that none of the three items comprised in the said amount constitute income as understood in the income-tax law, nor do they fall within the four corners of sub-s. (1) of s. 41. Counsel contended that the said amount represents a voluntary contribution unrelated to the character of the assessee, that it is not a return for the capital, skill or labour employed but a bounty given by the State for the specific purpose of development of industry which the assessee is not entitled to use as he pleases. He contended further that the assessee had no right to receive the said amounts, that it was purely out of generosity that the State made the said grant in terms of the G.O. which was issued long prior to the petitioner commencing production. He also submitted that this amount has to be used specifically for the", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-8", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "to the petitioner commencing production. He also submitted that this amount has to be used specifically for the purpose of development which means for the expansion of the unit and cannot be distributed as profits nor can it be used as any other income of the assessee and, hence, is in the nature of a capital receipt.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-9", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "8. Since it is stated that the decision in this case governs a large number now pending in this court, we have heard both the counsel at quite some length and we are obliged to both of them for the valuable assistance rendered to us.  \n9. The following questions arise for our decision :  \n \"(1) Whether the refund of the amount of Rs. 14,665.70 in terms of G.O. Ms. No. 455 represents refund of sales tax paid by the assessee or whether it was a voluntary contribution by the State unrelated to the character of the assessee and whether the said amount constituted income in the hands of the recipient, viz., the assessee ?  \n (2) Whether the three items comprised in the said amount or any of them fall within the four corners of section 41(1) ?  \n (3) Whether the circular of the Central Board of Direct Taxes applies herein and whether it helps the assessee's case in any manner ?\"  \n10. The first question has four aspects, viz., whether the refund of the said amount was a voluntary contribution, secondly, whether the contribution was unrelated to the character and business of the assessee, thirdly, whether the nature of the receipt is capital or revenue and, lastly, whether it can be called \"income\" in the hands of the assessee.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-10", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "I. (i) G.O. Ms. No. 455 is of general application. It was not issued for the purpose of helping this particular assessee. Whoever fulfills the conditions prescribed in the said G.O. is entitled to the facilities and benefits provided by it. In other words, any person satisfying the requirements of the said G.O. was entitled to the facilities and incentives as a matter of right. If in the case of any person, the same were denied, he could well maintain a writ petition or other proceeding to compel the State to extend the said benefits to him in terms of the said G.O. It may be that there is no consideration for the benefits extended thereunder in the common law sense. But it cannot be said that it is an act of generosity on the part of the State. The State is interested in the industrial development of the State; it wants to attract industries to enhance the employment potential, economic prosperity and the income of the State. It is to attract the new entrepreneurs that the Government has come forward with the said incentives. The extension of the said benefits cannot, therefore, be likened or equated to the receipt of funds by the monastery concerned in Rev. Father Prior, Sacred Heart's Monastery v. ITO[1956] 30 ITR 451(Trav-Cochin). In that case, the Sacred Heart's Monastery, a religious institution was in receipt of certain donation from foreign countries for putting up charitable institutions and for other similar purpose. The donations were being sent regularly over a considerably long period. The Department's contention was that, since the monastery was in receipt of these amounts coming in with a certain regularity over a fairly long period, the same must be treated as income of the Monastery. This view was challenged by way of a writ petition in the Kerala High Court. Section 5(3)(iii) of the Cochin Income-tax Act, in so far as it is relevant,", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-11", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "of the Cochin Income-tax Act, in so far as it is relevant, read as follows (at p. 471) :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-12", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "\"Any income of a religious or charitable institution derived from voluntary contributions and applicable solely to religious or charitable purposes.\" \n11. The High Court observed (p. 473) :  \n \"The mere fact that a particular item of receipt does not come within an exemption clause does not mean that it is assessable income. The primary question is whether it is income at all...... If donations of this kind are assessable income all individuals and bodies other than religious or charitable institutions should be liable to be assessed to income-tax in respect of such income under the Cochin Income-tax Act. We do not think that it will be seriously contended that under the Indian Income-tax Act, donations received by a person for putting up a charitable institution and used for that purpose will be regarded as his income and assessed to income-tax. They are obviously of the nature of gifts and are capital receipts. They do not come within the meaning of the word 'income' as understood in the ordinary language.\" \n12. Then the Division Bench referred to the decision of the Privy Council in CIT v. Shaw Wallace and Co. [1932] 2 Comp Cas 276 and certain other decisions and observed (p. 476) :  \n \"...... it cannot be contended for a moment that donations received by a person from a few individual on different occasions for putting up a charitable institution and utilised for that purpose will constitute his income. The payments depends entirely on the whim of the donors. There is also no regularity or expected regularity in the payments. It is obvious that receipts of this nature do not constitute 'income' of the recipient.\"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-13", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "13. They also observed that the receipts are of a casual and non-recurring nature and that they do not arise from the business or exercise of profession, vocation or occupation of the monastery. We are unable to see that the nature of the receipts in the kerela case and the nature of the receipts concerned herein is the same. In this case, as we have pointed out herein before, the assessee and for that matter any other person setting up an industry in the state of Andhra Pradesh was entitled to the facilities and incentives provided by the said G.O. as a matter of right, which, if denied he could enforce in a court of law. These receipts are also not of the same nature as were received by Rani Amrit Kunwar v. CIT[1946] 14 ITR 561 (All). The Rani concerned in that case was the wife of the ruler of the Kalsia State and the sister of the Maharaja of Nabha State. She was receiving certain amounts towards her maintenance, etc., both from the Kalsia State from Nabha state. The controversy arose about the payment received form Sabha state which were styled as \"wardrobe allowance\" and included present on certain specified days of festival in each year. Each payment was specifically budgeted for in the annual budget of the Nabha State and the payments were made consecutively over a period of twenty years. The Allahabad High Court held that there was no evidence in the case to show that the payments made by the Nabha State were attributable to any custom, usage or tradition or obligation and there was consequently no origin for the payments which could amount in its nature to a definite source so as to render each payments income and not merely a casual or annual windfall. It was accordingly held that the said payment do not constitute income in the hands of the Rani and were not assessable to income-tax. In that case, though the rani was receiving the said amounts from", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-14", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "assessable to income-tax. In that case, though the rani was receiving the said amounts from the Nabha State regularly, she had no right to the said amounts, which were being made out of pure generosity and which, if stopped, the Rani could not claim as a matter of right nor could she enforce the payment through a court of law.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-15", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "14. Mr. Y. V. Anjaneyulu, the learned counsel for the assessee, the contended that the said G. O. could be withdrawn at any time by the Government and that neither the assessee nor any other person could compel the Government not to withdraw it. It is true that in para. 8 of G.O.Ms. No. 455, the Government expressly stated :  \n \"Government, however, reserve the right to withdraw at any time any or all of the concessions mentions above in relation to a class or classes of industries without assigning any reasons.\" \n15. Yet we do not think that this would make any difference to the nature of the payments. The position would be no different if these payments were provided by a statute. A statute too can be repealed or modified or amended by a legislature at any time and no person has a right to compel the legislature not to do so. But that does not mean that so long as the stature is in operation, the person concerned does not have a right to enforce the same. Similarly, the fact that the Government reserved to itself the power to withdraw the G.O. or to amend it, does not mean that so long as the G.O. is in operation, the person concerned do not have a right to enforce the same.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-16", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "16. A similar question was considered by a Bench of this court in Panyam Cements and Mineral Industries Ltd. v. Addl. CIT [1979] 117 ITR 770. A large number of representations were made by the industrialists in this State submitting that the existing power rates charged by the Andhra Pradesh State Electricity Board, being very high compared to the other states in the country, were adversely affecting their competitive capacity and the growth and expansion of the industries in the state and that the same should be reduced. A committee appointed by the Government to look into the representation recommended that the Government should evolve a scheme of concessional rates for attracting new industries to the state and also to help the existing industries. Accordingly, the Government issued G.O. Ms. No. 678 dated April 27, 1961. The relevant portions of the G.O. extracted in the said decision read as follows (at p. 774) :  \n \"This committee examined, in all its aspects, the question of making available the supply of power to new industries at concessional rates as a method of stepping up the pace and range of industrial development in Andhra Pradesh. The Committee came to the conclusion that reductions in existing power rates were necessary and, therefore, steps should be taken by the Government to work out a scheme of concessional rates for attracting new industries to the State.  \n17. As regards the methods of financing to be adopted for the grant of concessional rates, in view of the inability of the Andhra Pradesh Electricity Board to meet the cost involved, the Committee considered that a subsidy should be granted to the Industries Department by the Government to defray the loss of revenue likely to be incurred by the Andhra Pradesh Electricity Board.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-17", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "18. The Director of Industries and Commerce has reported (in his second letter read above) that the present rates of power supply in Andhra Pradesh (as compared to those obtained for the same loads in neighbouring states like Madras, Mysore and Bombay) have been a contributory cause of the unsatisfactory pae of imdustrial growth in Andhra Pradesh. He has, therfore, urged the grant of concessional rates of power supply to selected categories of medium and large industries on the following basis :  \n (i) Power tariff rates in Andhra Pradesh should be brought on a level with those ruling in mysore, Madras and Maharashtra for comparable loads.  \n (ii) Concessional power rates should be offered to the following categories of new industries :  \n (a) industries for which power is an important cost factor;  \n (b) industries which require bulk loads; and", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-18", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "(c) essential of catalyst industries - the establishment of which will attract other industries to this state.  \n (iii) Concessional power rates to be offered to new industries falling within the abovementioned categories for a period of five years in the first instance.  \n (iv) The cost of difference between existing negotiated power rates and proposed concessional rates (estimated at Rs. 20 to 25 lakhs over the period of the next five years) be given as a grant to the Industries Department by the Government; and", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-19", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "(v) The applications for these concessions should be screened and sanctioned by a small committee consisting of the Secretary, Industries Department (Chairman) and secretary, Finance, the secretary, Public works Department, the Director of Industries and Commerce, and the chief Engineer, Electricity Board and Projects, with powers to add new items/industries to the approved lists under the three categories of industries mentioned above.\"  \n19. In pursuance of the said G.O., the assessee in that case, Panyam Cement and Mineral Industries, was sanctioned 20% concession on the existing tariff rates in respect of it second plant. When the amount representing the said concession was ought to be treated as income of the assessee, it was contended by the assessee that the same does not constitute its income and that it was an amount granted by the government and was in the nature of a windfall wholly unconnected with the business carried on by it. This was repelled by a Bench of this court in the following words (p. 776) :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-20", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "\"In these circumstances, it cannot be held that the amounts granted by the Government was in the nature of a windfall to the assessee and that they are wholly unconnected with the business carried on by it. The assessee has to use electricity in the manufacture of cement and the subsidy given by the Government has only the effect of supplying electricity at reduced rates. The assessee was entitled to the concessional rates because it had been approved by the screening Committee appointed by the Government as per G.O. Ms. No. 678. If the assessee was not carrying on the business, it would not have been eligible for the said concession. The receipt of the amounts mentioned above is not of a casual and non-recurring nature. The assessee was granted the subsidy as result of G.o. Ms. 678. It is not a casual payment. Though there was no contractual obligation on the part of the government, the assessee could reasonably expect the grant of the amount for a period for which the government passed the orders. We are unable to see how it could be called a windfall or a causal receipt.\" \n20. We are of the opinion that the principle of this decision squarely governs the present case. Just as in that case the assessee had to obtain the approval of the Screening Committee appointed by the Government to obtain the benefits of that G.O. the assessee in this case had to, and did, obtain a certificate from the director of Industries, on the basis of which he became entitled to the benefits under G.O. Ms. No. 455.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-21", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "21. For these reasons, we reject the contention that the refund of the said amount was purely voluntary in nature, or that it was in the nature of a windfall or a generous bounty on the part of the State. We hold that the assessee had a right to the said refund in terms of the said G.O. which he could enforce in a court of law. The G.O. was issued prior to the setting up of the industry by the petitioner and it did expect to receive the said benefits and it did receive them. The source as well as the payments were both certain and definite.  \n (ii) We shall now consider whether the said payments were unrelated to the character of the assessee or the business carried on by it. We think that the said payments or refunds, as the case may be, are closely and inseparably connected with the business carried on by the assessee. The benefits are available only from the date the new industrial undertaking commences production and for a period of five years therefrom. The refund or the subsidy, as it may be called, is dependent upon the industry continuing in production. Paragraph 7 of the G.O. says that if any industrial unit stops production, the concession shall be discontinued. We have also referred to the fact that in the case of a similar G.O., a Bench of this court held in panyam Cements case [1979] 117 ITR 770, that the grant of subsidy is closely connected with the business carried on by the assessee. The said observation applies with equal force here. In this connection, the following passage from the judgment of Rowlatt J. in Beynon (H. M. Inspector of taxes) v. Thorpe [1928] 14 TC 1(KB), may be usefully quoted (p. 13) :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-22", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "\"It is perfectly true that a voluntary payment or gift, though in itself not a profit or gain at all, may become a profit or gain in the hands of the recipient if it can be attached to an office or if it can be attached to an employment or vocation of which we have many instances. The best known instances are of course the offerings made voluntarily to ministers of religion which gives rise to many cases, that is, they become profits or gains of an office, because although they are voluntary, it is by the office which is the source of the minister's taxable income that he has been given them. So also voluntary payments made to persons exercising employments; gratuities to servants and so on, are undoubtedly, because they are servants-I do not mean to say from master to servants but to people like waiters, to put a concrete example-gratuities to people of that kind, which they get because they are carrying on a particular employment; although they have no right to ask for them, when they do get them they get them they get them as profits or gains in their employment and, therefore, they are profits or gains which are taxable. But a mere gifts is not a profit or gain at all.\"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-23", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "22. This passage, and particularly the illustrations given therein, in our opinion, clearly bring out the true position in law. Indeed, the correctness of the same is not questioned before us. Applying the principle of the said decision, we hold that the amount in question was refunded or paid to the assessee because he had set up a new industrial undertaking and has commenced producing goods and continued in production. It is not possible to divorce the said payment from the character of the business carried on by the assessee. Reference may be made in this connection to cases holding that the income derived from sale of import entitlements, which were granted on account of export performance of the assessee, is income within the meaning of s. 28(iv). It was held that the import entitlements were issued only because of, and by virtue of, the exports made by the assessee, they must be treated as profits of business : vide Agra Chain Manufacturing Co. v. CIT and Kesoram Industries And Cotton Mills Ltd. v. CIT.  \n (iii) In Ostime (H. M. Inspector of Taxes) v. Pontypridd and Rhondda Joint Water Board [1946] 28 TC 261; 14 ITR (supp) 45, 47 (HL), Viscount Simon stated the following two propositions (p. 278) :  \n \"The first proposition is that, subject to the exception hereafter mentioned, payments in the nature of a subsidy from public fund made to an undertaker to assist in carrying on the undertakers trade or business are trading receipts, that is, are to be brought into account in arriving at the balance of profits or gains under Case I of Schedule D....", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-24", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "The second proposition constitutes an exception. If the undertaker is a rating authority and the subsidy is the proceeds of rates imposed by it or comes from, a fund belonging to the authority, the identity of the source with the recipient prevents any question of profits arising... \"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-25", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "23. Only the first of the two propositions stated by Viscount Simon is relevant for our purposes. While the learned standing counsel for the Department seeks to read the said observations as applying to all subsidies given by the state to an undertaking, Mr. Y. V. Anjaneyulu seeks to limits the same only to such subsidies as are given \"to assist in carrying on the undertaker's trade or business\". We are not inclined to read the said proposition in such a wide fashion as the Department wants us to do. The state may give a subsidy to a person to set up a new plant. In such a case, it cannot be said that the subsidy is a trading receipt. At the same time, we must say that a subsidy to assist the business of a assessee may be given in many a manner. There are several ways of subsidising an industrial undertaken. The State may do it by supplying the raw material at a concessional rate, by giving a tax holiday, by giving a development rebate, by purchasing its goods at a rate higher than the market rate and so on. It is not possible to exhaustively lay down the several methods or manner in which the State may choose to subsidies an undertaking; but, one thing is clear in all such cases, the subsidy so given would fall within the first proposi tion of Viscount simon. However, before we express our opinion on the nature of the subsidy concerned herein, it would be appropriate to refer to a few cases cited at the Bar. Seaham Harbour Dock Company v. Crook (H.M. Inspector of Taxes) [1931] 16 TC 333 (HL), is a case where the grant made was for a specific purpose, viz., relieving unemployment. There, a dock company applied for financial assistance. The committee consented to sanction grants from time to time as the work progressed were paid for, equivalent to half the interest for two years (not exceeding an average rate of", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-26", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "progressed were paid for, equivalent to half the interest for two years (not exceeding an average rate of 51/2% per annum), on approved expansion made out of loans. Payments were made on that basis several times. The Revenue included these payments in the profits and gains of the company and sought to tax them. When the mater came before the House of Lords, Lords Buckmaster held that it was not a trading receipt and that (p. 353) :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-27", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "\"It was a grant which was made by a government department with the idea that by its use men might be kept in employment, and it was paid to and received by the Dock Company without any special allocation to any particular part of their property, either capital or revenue, and was simply to enable them to carry out the work upon which they were engaged, with the idea that by so doing people might be employed. I find myself quite unable to see that it was a trade receipt, or that it bore any resemblance to a trade receipt.'", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-28", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "24. Lord Atkin dealt with the mater in the following words (p. 353) :  \n \"It appears to me that when these sums were granted and when they were received, they were received by the appropriate body not as part of their profits or gains or as a sum which went to make up the profits or gains of their trade. It is a receipt which is given for the express purpose which is named, and it has nothing to do with their trade in the sense in which you are considering the profits or gains of the trade. It appears to me, with respect, to be quite irrelevant whether the money, when received, is applied for capital purposes or is applied for revenue purposes; in neither case is the money properly said to be brought into a computation of the profits or gains of the trade.\" \n25. Strong reliance is placed by Mr. Anjaneyulu on this decision. He says that it is really unnecessary for this court to go into the question whether the amount received by him is capital or revenue in nature. According to him, the amount is received for a specific purpose, viz., development of the unit and that it is not open to the assessee to use the said amount as it chooses. For example, it is pointed out that it is not open to the assessee to distribute the said amount by way of dividends or to use it for meting other expenditure. Emphasis is laid upon para. 6 of G.O. Ms. 455, where it is stated :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-29", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "\"The subsidies, refunds and other financial concessions granted under this G.O. shall be deemed to be a development grant for each unit. Therefore, in order to ensure that this development grant is used only for the purpose intended, every application shall be accompanied by an affidavit to the effect that the amount applied for will be wholly and solely for the development of the unit. Misutilisation will, apart from other consequences, entail loss of eligibility for the continuance of th subsidies and other financial concessions for future years under this G.O. and the subsidies, refunds and financial concessions already granted may be summarily recovered.\" \n26. Mr. Anjaneyulu wants to read the words \"development of the units\" as expansion and therefore, says that the said refund amount cannot be treated as a revenue receipt. We are unable to read the word \"development\" as meaning \"expansion\" only. The word \"develop\" is defined by the Concise Oxford Dictionary as follows :  \n \"Unfold, reveal, bring or come from latent to active or visible state; make or become fuller, more elaborate or systematic or bigger; make progress; come or bring to maturity.\" \n27. Similarly, the meaning of \"development\" are :  \n \"gradual unfolding, fuller working out, growth; evolution, wellgrown state; stage of advancement.\" \n28. In the Compact Edition of the Oxford English Dictionary, volume I,at page 707, the following meanings are given for the word \"development\" :  \n \"A gradual unfolding, a bringing into a fuller view; a fuller discovery or working out of the details of anything as a plan, a scheme, a plot of a novel. \n (c) The bringing out of the latent capabilities (of anything); the fuller expansion of any principle or activity;  \n (4) gradual advancement through progressive stages; growth from within;... \"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-30", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "(4) gradual advancement through progressive stages; growth from within;... \"  \n29. It, therefore, cannot be said that the said refunds were made only for the expansion of the unit. They were made with a view to strengthen the unit financially so that it can be run efficiently, and can become strong and grow. It is well-known that in the initial stages of any industrial unit, it has to face a number of problems, sometimes referred to as \"teething problems\". Very often, they are not able to avoid suffering losses in the initial years. It is for this reason that a number of benefits are given at this stage of development like tax holiday, initial depreciation on machinery and so on. The Subsidy in questions is also of such a nature and cannot be treated as one exclusively meant for expansion of the unit. The word \"development\" used in para 6. of the G. O. has not been defined. The said paragraph only means that the money shall not be diverted to any other unit or for any other purpose except for developing, improving and strengthening the unit concerned. In Seaham Harbour Dock Company's case [1931] 16 TC 333 (HL), the subsidy was not given exclusively for the purpose of expansion of the dock, but it was given for the specific purpose of relieving unemployment, which was no part of the business or trade of the assessee. In this case, however, there is no room or basis for dissociating the subsidy from the business of the assessee, inasmuch as the subsidy is given for development of the business and not for any other unrelated purpose.  \n30. The learned standing counsel for the Department places strong reliance upon a decision of the Bombay High Court in Dhrangadhra Chemical Works Ltd. v. CIT [1977] 106 ITR 473 (Bom). We may briefly note the facts of the case.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-31", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "31. During the years 1950-51 and 1951-52, there was a glut in the market for soda ash because of large imports. In spite of levying countervailing duties, the landed cost of imported soda ash was lower than the cost of production of the soda ash in the country. There were only two plants in India, manufacturing soda ash, viz., the assessee in the said case, Dhrangadhra Chemical Works and Tata Chemicals Ltd. On the basis of the recommendations of the Tariff Board, the Government resolved on February 22, 1950, to allow a subsidy of Rs. 1 per cwt. on soda ash produced by these two companies and sold on or after the said date, provided the Government was satisfied that the companies actually sold the soda ash at the fair selling price recommended by the Tariff Board. When the assessee-company ultimately received the said subsidy, the ITO sought to bring the same to charge as income for the relevant assessment year. On a reference, it was held by the Bombay High Court, following the observations in Ostime v. Pontypridd and Rhondda Joint Water Board [1946] 28 TC 261; 14 ITR(suppl) 45, that (p. 481 of 106 ITR) :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-32", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "\"... Where subsidies or grants are given by the Government to assist a trader in his business, they are, generally speaking, payments of a revenue nature. They are supplementary trade receipts and not capital payments although they might be called advances or might be subject to contingency of repayment. It is clear from the recommendations of the Tariff Board, which were partially accepted by the Government by its resolution dated February 22, 1950, that the object underlying the grant of subsidy was to enable the assessee-company and Tata Chemicals Ltd. to carry on their business of soda ash profitably... Such receipt under the tests laid down by Viscount Simon is clearly a revenue receipt and has to be taken into account in arriving at the income, profits and gains of the business.\" \n32. We have already pointed out that a subsidy to assist the business of an undertaking can be given in several ways. The method adopted in Dhrangadhra Chemicals' case [1977] 106 ITR 473, is one such. In the case before us too, the subsidy is given for strengthening and improving the industrial undertaking so that it can work properly and grow. This is another method. But in both cases the subsidy is given to assist the business of the undertaking. We are, therefore, of the opinion that the receipt of the said subsidy or refund, as it may be called, is of a revenue nature and cannot be called a capital receipt in the hands of the assessee.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-33", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "(iv) We shall now deal with the main and primary submission of Mr. Y. V. Anjaneyulu, the learned counsel for the assessee, that the said refund cannot be treated as income at all in the hands of the assessee as the said expression is understood in the income-tax law. The contention is that the said amount is not a return for either the capital, labour or skill of the assessee and that it is a mere bounty born out of generosity of the State. We have already touched upon the latter aspect of the above contention. We shall now deal with the submission that the receipt of the said amount does not constitute income in the hands of the assessee. Counsel places strong reliance upon the following well-known passage from CIT v. Shaw Wallace & Co. [1932] 2 Comp Cas 276, at p. 280 :  \n \"The object of the Indian Act is to tax 'income', a term which it does not define. It is expanded, no doubt, into 'income', profits and gains', but the expansion is more a matter of words than of substance. Income, their Lordships, think, in this Act connotes a periodical monetary return 'coming in' with some sort of regularity, or expected regularity, from definite sources. The source is not necessarily one which is expected to be continuously productive, but it must be one whose object is the production of a definite return, excluding anything in the nature of a mere windfall. Thus income has been likened pictorially to the fruit of a tree, or the crop of a field. It is essentially the produce of something which is often loosely spoken of as 'capital'. But capital, though possibly the source in the case of income from securities, is in most cases hardly more than an element in the process of production.\"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-34", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "33. According to this passage, there are four essential features of income, viz., (i) it must be a return; (ii) it must be received with a certain regularity; (iii) it must come in periodically; and (iv) it must come through a definite source. Counsel contends that though the subsequent decisions of the Privy Council and the Supreme Court have done away with the second and third requirements, the first and fourth requirements are still recognised and are considered as basic to the concept of income. The learned counsel relies upon the discussion and the reasoning contained in the decision of the Bombay High Court in Mehboob Productions Private Ltd. v. CIT [1977] 106 ITR 758, in this behalf and commends the same for our acceptance.  \n34. In Raghuvanshi Mills Ltd. v. CIT [1952] 22 ITR 484 (SC), the Supreme Court has observed that the observations of the Privy Council in Shaw Wallace's case [1932] 2 Comp Cas 276, with respect to the meaning of the word \"income\" should be read with reference to the facts of that particular case. Indeed, the Privy Council had pointed out in Gopal Saran Narain Singh (Maharajkumar) v. CIT [1935] 3 ITR 237 (PC), that the word \"income\" is not limited by the words \"profits and gains\" and that \"anything which can properly be described as income is taxable under the Act unless expressly exempted.\"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-35", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "35. There is another major reason why we cannot accept the proposition that the element of return is an essential ingredient of every income. If this were so, then the dicta of Viscount Simon in Ostime (H. M. Inspector of Taxes) v. Pontypridd and Rhondda Joint Water Board [1946] 28 TC 261; 14 ITR (Supp) 45 (HL), as also the decision of the Bombay High Court in Dhrangadhra Chemical Works Ltd. v. CIT [1977] 106 ITR 473 (Bom), should be wrong and this is not suggested by Mr. Anjaneyulu. Indeed, the observations of Viscount Simon show that even by 1946, the proposition was well established that subsidies made to an undertaker to assist him in carrying on the undertaker's trade or business are revenue receipts. Now, it cannot be suggested that a subsidy made by the State to an industrial undertaking is in the nature of a return for the capital, labour or skill employed in the industry. The subsidy can, by no stretch of imagination, be treated as a return for the investment made by the entrepreneur. For example, the grant made by the State to Dhrangadhra Chemicals Ltd. cannot, by any test, be called a return for the management, labour, skill or investment made by the industrial under-taking. But yet such subsidies have been held to be incom. We are, therefore, unable to agree with Mr. Y. V. Anjaneyulu that unless a receipt is in the nature of a \"return\", it cannot be treated as income, nor would we try to define the expression \"income\" which the Legislature has itself advisedly refrained from doing. For these reasons, we respectfully disagree with the judgment of the Bombay High Court in Mehboob Productions Private Ltd. v. CIT [1977] 106 ITR 758", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-36", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "Mehboob Productions Private Ltd. v. CIT [1977] 106 ITR 758 (Bom), in so far as the learned judges say that, for constituting income, the receipt must necessarily be in the nature of a \"return\" for the labour, and/or skill bestowed and/or capital invested by him. For this reason, we also think it unnecessary to refer to the various cases considered by the Bombay High Court in Mehboob Productions' case. Suffice it to observe that no other case has been brought to our notice which lays down that for a receipt to constitute income, it must necessarily be in the nature of return.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-37", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "36. Now, looked at from the above standpoint, it would follow that items Nos. 2 and 3 comprised in the amount concerned herein undoubtedly constitute income in the hands of the assessee. So far as item No. 1 is concerned, it is no doubt a refund of sales tax on purchase of machines and the amount spent for purchase of machines is undoubtedly in the nature of a capital receipt. But it must be remembered that the refund is being made after the undertaking has commenced production and with a view to facilitate the development of the unit. It is not a subsidy given for setting up the plant, but subsidy given for efficient and profitable running of industry and its growth. We, accordingly, hold that all the three items constitute the income of the assessee chargeable under s. 28 of the Act.  \n37. In this view of the matter, it is not necessary for us to consider whether the amount refunded represented refund of sales tax paid by the assessee or whether it is a contribution and grant made by the State adopting the basis of sales tax only as a measure. Once we hold that the subsidy constitutes income in the hands of the assessee, the said distinction, if any, becomes merely academic.  \n (II). The next question is whether the three items comprised in the said refunded amount or any of them fall within the four corners of s. 41(1). Section 41 (1) of the I.T. Act reads as follows :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-38", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "\"41. (1) where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee, and subsequently during any previous year the assessee has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by him or the value of benefit accruing to him, shall be deemed to be profits and gains of business or profession and, accordingly, chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not.\"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-39", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "38. The contention of the learned standing counsel for the Department is that items Nos. 2 and 3 comprised in the said amount do definitely fall within s. 41(1) inasmuch as, admittedly, these two items were claimed as deduction in the previous assessment years and were now refunded to the assessee concerned herein. So far as the first item is concerned, it was not claimed or allowed as a deduction and, therefore, it is conceded, it stands on a different footing. On the other hand, the contention of Mr. Y. V. Anjaneyulu, the learned counsel for the assessee, is that for s. 41(1) to apply, the refund of sales tax must be as sales tax. He submits that s. 41(1) contemplates a case where sales tax may have been refunded in a subsequent assessment year as a result of appeal, revision or other proceeding. Mr. Anjaneyulu submits that in this case the assessee's liability to sales tax was neither altered nor rescinded. In this behalf, he also submits that the amount refunded to the assessee was not paid by the sales tax department nor from the sales tax account of the state but from a different head of account altogether. It is pointed out that the amount paid to the assessee was debitable to \"35-Industries-C. Grants in aid-Contribution-schemes included in the IV Five Year Plan-XIV-B Grants towards Incentives to Industries.\"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-40", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "39. We are unable to agree with the contention of Mr. Anjaneyulu. There are no words in sub-s. (1) of s. 41 which support such a contention. Sub-s. (1) is couched in very wide terms. It says that if the assessee had obtained \"any amount in respect of such loss or expenditure or some benefit in respect of such trading liability, by way of remission or cessation thereof\", the amount so obtained shall be deemed to be profits and gains of his business. The words \"any amounts\" and \"in respect of\" need to be noticed. In view of this language, it is not possible to agree with Mr. Anjaneyulu that unless sales tax paid by the assessee was refunded as sales tax and/or as a result of the proceedings under the said Act, the refund cannot be deemed to be income within the meaning of 41(1). We see no reasons not to give full effect to the fiction enacted by s. 41(1). This is also the decision of this court in Panyam Cement's case , the facts of which we have referred to hereinbefore. It was observed (at p. 777) :  \n \"In the present case, the assessee had paid the electricity charges at the original rate in full and claimed an allowance in respect of the said expenditure. In pursuance of the policy of the Government to supply electricity at a concessional rate of 20% less, the above amounts were paid to the assessee towards the expenditure incurred by him in regard to electricity charges and hence they should be deemed to be profits and gains of the business. All the requirements of s. 41(1) of the I.T. Act have been fulfilled.\"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-41", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "40. It must be noticed that even in Panyam Cement's case [1979] 117 ITR 770, the subsidy was given not by the Electricity Board but by the Government and yet it was held that the subsidy made by the Government falls within s. 41(1).  \n41. Mr. Anjaneyulu then argued that what is refunded is not sales tax but a subsidy measured in terms of the sales tax paid. This is again an argument which is merely academic. Section 41(1) creates a fiction; what is not income in the ordinary sense of the term is deemed to be income under this provision. Once the amount received by the assessee falls within the four corners of s. 41(1), it is immaterial under what name the amount is received. Mr. Anjaneyulu relied upon Senairam Doongarmall v. CIT to contend that the measure and method of payment is not decisive of the character of the receipt. That was a case where the tea estate including certain factories and buildings were requisitioned for defence purposes by the military authorities. Though the possession of the assessee was not disturbed, the manufacture of tea was stopped completely. For the years 1944 and 1945, the assessee was paid compensation under the Defence of India Rules calculated on the basis of the out-tern of tea that would have been manufactured by the assessee during the said years. The question arose whether the amounts of compensation so received were revenue receipts taxable in the hands of the assessee. It was held by the Supreme Court that (p. 397) :  \n \"It is the quality of the payment that is decisive of the character of the payment and not the method of the payment or it measure, and makes it fall within capital or revenue.\"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-42", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "42. Then they considered the character of the payment in that case with reference of the principles emerging from decide case and held that because the business of the assessee, viz., production of tea was stopped altogether and business being carried on by it was discontinued, the amounts received cannot be treated as income from trade or business notwithstanding the fact that payment was made to compensate the assessee and the measure was the out-turn of tea which would have been manufactured by the assessee but for the intervention of the state. It was emphasised that it was not a case in which the business continued; in such a case, it was observed that the amount paid could be treated as one conceived to bring up the profits to normal level. We are unable to see how the principle of the said decision applies here. The ratio of the Supreme Court's decision is : once the business of the assessee was completely stopped, the amount received cannot be treated as its income from business, notwithstanding the method or manner of payment. This is also the principle of the decision in Simpson v. Executors of Boner Maurice [1929] 14 TC 580 (CA). In this case, a British subject who held certain securities, etc., in Germany, received at the end of the war-he having died meanwhile, his executors received the amounts-certain amounts by way of compensation in terms of the Peace Treaty. The compensation paid was calculated in terms of the interest the said securities would have earned in the normal course. (During the war years, the interest was not remitted). The Court of the Appeal held that what was received was compensation in terms of the Peace Treaty, and not interest and, hence, not taxable, notwithstanding the fact that the measure adopted for determining the quantum of compensation was the interest that would have accrued.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-43", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "43. The next case relied upon is S. R. Y. Sivaram Prasad Bahadur v. CIT , wherein it was held that interim payments under s. 50(2) of the Madras Estates (Aboolition and Conversion into Ryotwari) Act, 1948, received every year by a former holder of an estate during the period between the taking over of the estate and final determination and deposit of compensation under the Act, are of a capital nature and not liable to income-tax. Firstly, this case does not arise under, nor does it consider, s. 41(1). Secondly, the nature of the payments fell to be determined in the light of the provision of the Madras Act under which the payments were made. We may point out that, in another case arising under the Hyderabad Jagir Abolition Regulations, in Raja Rameshwara Rao v. CIT , the Supreme Court held that the interim payments received constitute income. Be that as it may, the cases cited by Mr. Anjaneyulu do not deal with, and were not decided with reference to, s. 41(1) and, therefore, are of no help to him in this behalf.  \n44. We are, therefore, of the opinion that items Nos. 2 and 3 comprised in the said amount do squarely fall within s. 41(1) and must be treated as gains of business.  \n45. III. Lastly, Mr. Anjaneyulu relied upon circular No. 142 of the Central Board of Direct Taxes, dated August 1, 1974. The circular is found printed at p. 151 of the statutes section in [1974] 95 ITR. It reads as follows :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-44", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "\"Subject : Taxability of subsidy - Revenue receipt or capital receipt '10 percent. Central outright grant or subsidy Scheme, 1971' -Clarification- Regarding. \n46. The Board had occasion to consider whether the amount of subsidy received under 10% Central Outright Grant of Subsidy Scheme for industrial units to be set up in certain selected backward districts/areas would constitute revenue receipt or capital receipt in the hands of the recipient for the purpose of income-tax.  \n 2. I am directed to say that the payment of subsidy under the scheme is primarily given for helping the growth of industries and not for supplementing their profits. Under the scheme, the quantum of subsidy is determined with reference to the fixed capital and not the profits. The working capital has been specifically excluded from the computation of fixed capital for this purpose. One of the conditions for the grant of the subsidy is that the undertaking must remain in production at least for a period of five years after it goes into production. Since the subsidy is intended to be a contribution towards capital outlay of the industrial unit, the Board are advised that such subsidy can be regarded as being in the nature of capital receipt in the hands of the recipient.  \n 3. Contents of this Circular may kindly be bought to the notice of all the officers working in your charge.  \n (Sd.) T.P. Jhunjhunwala, Secretary, Central Board of Direct Taxes, (F. No. 204/25/74-ITA-II).\"", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-45", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "47. A perusal of the circular makes it clear that it was issued with respect to a particular scheme, viz., 10% Central Outright Grant of Subsidy Scheme of 1971. It is not a circular applicable to all types of subsidy schemes. This much is conceded by Mr. Anjaneyulu also. But what he argues is that inasmuch as our scheme is in the same terms as the Central Scheme of 1971, the principle of the said circular should be applied. We are unable to accede to this contention. We cannot extend the scope of the circular by analogy. Secondly, on a perusal of the Central Scheme of 1971 we find that the scheme concerned therin was not in the same terms as the State Scheme with which we are concerned herein. The subsidy under the Central Scheme was available only to the industrial units with a capital of less than fifty lakhs whereas the State scheme is applicable to units with a capital up to five cores. The circular was applicable only to those industrial units which were located throughout the State. To those industries which are located in the specified districts/areas called \"selected districts/areas\" where as the State scheme is applicable to industries locsted throughout the state. To those industries which are located in the specified backward districts, certain additional incentives are provided under the State scheme. paras 5 to 7 of the Central Scheme would show that it prescribed a particular procedure which had to be followed by the industrial units for availing of the benefits thereunder which is at variance with the procedure prescribed under the state scheme. Moreover, the Central Scheme did not provide for refund of sales tax or other taxes and charges paid but provide for an outright grant to the extent of 10% of the estimated fixed capital investment. We are therefore, of the opinion that the said circular is absolutely of no help to the assessee herein.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-46", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "48. We may incidentally refer to another controversy raised though not fully debated before us. It was contended that the circular issued by the Central Board of Direct Taxes is binding upon the assessing authorities and has also got to be followed by the courts, notwithstanding the fact that the said circular may run counter to the provisions of the Act.  \n49. The power to issue circulars by the Central Board of Direct Taxes is derived from s. 119(1) of the Aact, which reads as follows :  \n \"The Board may, from, time to time, issue such orders, instructions and directions to other income-tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board : \n50. Provided that no such orders, instructions or directions shall be issued -  \n (a) so as to require any income-tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-47", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "(b) so as to interfere with the discretion of the Appellate Assistant Commissioner or the Commissioner (Appeals) in the exercise of his appellate functions\"  \n51. The power is conferred upon the Board \"for the proper administration of this Act\" and it would follow that this power has to be exercised consistent with and within the four corners of the Act. In other words, the Board is given the power to fill in the details or to prescribe procedures where the Act and the Rules are silent. But the said power can never be constructed as one enabling the Board to issue circulars overriding, modifying or in effect amending the provisions of the act. Mr. Anjaneyulu argues that the circulars which are favourable to the assessees are binding but not those which are against the interests of the assessees. Again we are unable to discern any principle behind such a distinction. The power conferred by the Board by s. 119 cannot be put on a higher footing than the rule making power and it is well-settled that the rule-making authority cannot travel beyond the four corners of the Act, nor can it makes authority cannot travel beyond the four corners of the Act, nor can it make a rule contrary to the provisions of the Act. Indeed in Jalan Trading Co. Private Ltd. v. Mill Mazdoor Sabha , the provision empowering the Central Government to remove doubts or difficulties in giving effect to the provisions of the Act was struck down as amounting to delegation of the legislative power to executive authority which is impermissible. However, Mr. Anjaneyulu has brought to our notice a decision of the Supreme Court in Ellerman Lines Ltd. v. CIT [1971] 82 ITR 913, where at page 921, the Supreme Court observed as follows :", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-48", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "\"Now, coming to the question as to the effect of instructions issued under section 5(8) of the Act, this court observed in Navnit Lal C. Javeri v. K. K. Sen, Appellate Assistant Commissioner, : \n 'It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under section 5(8) of the Act. This circular pointed out to all the officers that it was likely that some of the companies might have advanced loans to their shareholders as a result of genuine transactions of loans, and the idea was not to affect such transactions and not to bring them within the mischief of the new provision.' The directions given in that circular clearly deviated from the provisions of the Act, yet this court held that the circular was binding on the Income-tax Officer.\"  \n52. On the basis of the last sentence in the above passage, Mr. Anjaneyulu contends that even though a circular of the Central Board runs counter to the provisions of the Act, still it has to be followed and applied. We are unable to give effect to such extreme contention, which, in our opinion, does not flow from the decision of the Supreme Court. Indeed, the Madras High Court in A. L. A. Firm v. CIT [1976] 102 ITR 622, has also held that the said decision cannot be understood as suggested by the learned counsel. Mr. Anjaneyulu brought to out notice certain other decisions as supporting his contention. But we do not think it necessary to go into this question at any depth, since it is not necessary for the purpose of the present case. We only wish to indicate our dissent from the extreme proposition advanced by the learned counsel for the assessee, which is supported neither by principle nor by any authority.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "6666c4e8e029-49", "Titles": "Commissioner Of Income-Tax, ... vs Sahney Steel And Press Works Ltd. on 3 November, 1983", "text": "53. Lastly, Mr. Anjaneyulu urged upon us the following consideration. He said that if we hold that the subsidy concerned herein constitutes income and is, accordingly, includible in the assessable income of the assessee, more than half of it would be taken away by the State in the shape of taxes and that this may have never been the intention of the state while extending this subsidy. Firstly, the subsidy is given by the State Government while the income-tax is levied by a statute made by Parliament. Secondly, in construing a taxing statute, we are expected to go strictly by the letter of law and are not to be swayed by considerations, viz., whether the assessee is suffering hardship or that he is getting away with a bonanza. The language of the enactment is the guide to its intention and in view of the well-established proposition that subsidy given to an undertaking to assist or improve its business constitutes income of such an undertaking, we have no other option but to hold that the amount concerned herein does constitute income in the hands of the assessee for the relevant assessment year and has to be assessed as such.  \n54. The question referred to us is, accordingly, answered in the following terms :  \n On the facts and in the circumstances of the case, the amount of Rs. 14,655 received by the assessee from the Government of Andhra Pradesh for the relevant accounting period was liable to be included in the total income assessable for the assessment year 1974-75. \n55. We answer the reference in favour of the Department.", "source": "https://indiankanoon.org/doc/1606698/"}
+{"id": "5f9f6fdcdf3b-0", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "JUDGMENT B.J. Divan, C.J. \n\n1. All these matters relate to the same point viz. the question of post-manufacturing costs in the context of Section 4 of the Central Excises and Salt Act, 1944 (hereinafter referred to as 'the Act'). The writ appeals are against the decision of our learned brother Ramchandra Raju, J. in a group of matters which he disposed of by a common judgment and since the same question arises in each of these matters, we will dispose of this group of matters by this common judgment. \n\n2. The respondent in Writ Appeal No. 252 of 1976 is Vazir Sultan Tobacco Company Ltd., and the respondent in Writ Appeals Nos. 435, 550, 553 and 560 of 1976 is National Tobacco Co. Ltd. The petitioner in W.P. No. 3114 of 1975 is the Andhra Sugars Ltd., Tanuku.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-1", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "3. Under the provisions of the Act and the rules made thereunder with effect from 1968, the Government of India introduced a procedure known as \"Self Removal Procedure\". Under this procedure, the manufacturers could clear the excisable goods without prior assessment by the Central Excise Officer or his counter-signature on the gate pass at the time of clearance of the goods. But, under this Scheme, there was an obligation on the manufacturers to submit to the appropriate Excise Authorities from time to time price lists in the prescribed form for their approval for the purpose of levying excise duty. Till the decision of Ihe Supreme Court in A. K. Roy v. Voltas Ltd., AIR 1973 SC 225 Vazir Sultan Tobacco Co. Ltd., and the National Tobacco Company Ltd., were showing in their price lists the price which the. wholesaler was paying to the case of both these companies, the manufacturer sells the goods to the distributor, the distributor sells the goods to the wholesaler and the wholesaler, in his turn, sells the goods to the retailer. Up to the time of the decision in Voltas case, the price lists were being submitted on the basis of the price which the distributor was charging to the wholesaler. But, in the Voltas case the Supreme Court clarified the legal position behind the concept of \"wholesale cash price\" mentioned in Section 4 of the Act and it was made clear, according to those two manufacturers, that only the manufacturing costs and the manufacturers profits were includible in the wholesale cash price. All post-manufacturing costs were deductible from the price paid by the wholesaler. According to the two companies, in declaring the \"wholesale cash price,\" they are also entitled to exclude from the price which they charge to their distributors the selling expenses, advertising expenses and freight which they incur for carrying the goods from the factory gate to any place. When the Vazir Sultan Tobacco Co., started submitting price lists since July", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-2", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "gate to any place. When the Vazir Sultan Tobacco Co., started submitting price lists since July 25, 1974, to the excise authorities claiming deductions or these three Items of expenditure viz., selling expenses, advertising expenses and freight from the price which the distributor was paying to the manufacturer, the excise authorities did not approve of those lists. Thereafter, Vazir Sultan Tobacco Company filed Writ Petition No. 7143 of 1974 praying for a writ of mandamus directing respondents 2 and 3, who are excise officers, to approve the price lists submitted by the company on 25-7-1974, 14-8-1974, 10-10-1974 and 16-12-1974 and also restraining the respondents from levying, collecting or recovering any excise duty from the company on the price charged by it to the distributors without excluding post-manufacturing coats and expenses and profits. The Company sought a further direction that the excise authorities should approve the price lists which may be submited by the company in which post-manufacturing costs and expenses and profits were excluded from the price realised by the comany from the distributors. The company also sought for payment of refund of the excise duty illegally recovered by inclusion in the duty illegally in the wholesale cash price of the company's products the post-manufacturing expenses and profits with regard to to lists mentioned in the writ petition.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-3", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "4. As regards the National Tobacco Company after the decision in Voltas case-1977 E.L.T. (J 177), it submitted price lists dated 24-8-1973, 28-8-1973 and 18-10-1973 deducting from the price paid by the distributor to the manufactures 6.15% of the total turnover as marketing and distribution expenses ... The Assistant Collector of Central Excise, Rajahmundry. by his order dated 20-3-1974 held that the company was not entitled for deduction of 6.15% on sale price towards marketing and distribution expenses. The Inspector of Central Excise, Biccavolc, issued a demand notice for the period from Aug. 1973 to Feb. 1974. The National Tobacco Company filed Writ Petition No. 1748 of 1974 challenging this order. For the subsequent period from March 1974 to Feb. 1975, a similar order and a similar demand notice were issued by the excise officer concerned, which were challenged in W.P. No.-2274 of 1975. The order and the demand notice for the period from 1st March to 31st Aug. 1975 were challenged in W.P No. 5156 of 1975 and the order and the supplemental demand notice for the period from Aug. 1973 to Feb. 1974 were challenged in W.P. No. 2275 of 1975. \n\n5. In all these writ petitions filed by the National Tobacco Company. Ltd., the manufacturer, prayed for the issue of writs of certiorari quashing the orders and the notices of demand basing its claim for deductions in the post-manufacturing costs.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-4", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "6. In W.P. No. 3114 of 1975, Which come directly before us for disposal, the Union Carbide India Ltd., Division : National Carbon Co., Moula Ali, Secunderabad, sought deduction of post-manufacturing costs from the price lists submitted by it. The petitioner in this writ petition is a manufacturer and seller of dry cell batteries.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-5", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "7. The Andhra Sugars Ltd., Tanuku is the petitioner in W. P. No. 6044 of 1975. It Manufacturers caustic soda in all three forms-Lye, Flakes and solids and clears from the factory on prices agreed to in the contracts with various customers. The question is of deduction of post-manufacturing costs from the price paid by the wholesaler or the customer to the manufacturer and here again the orders passed by the excise authorities refusing the claim of the manufacturer for the deduction of such post manufacturing costs have been challenged in this writ petition.8. In order to appreciate the controversy between the excise authorities on the one hand and the respective manufacturers on the other in this group of matters, it is necessary to refer only to two sections of the Act. Section 3 of the Act, which is the chargin section in the Act provided at the relevant time that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into any part of India as, and at the rates, set forth in the First Schedule to the Act. Thus, it is clear that, so far as goods other than salt are concerned, the excise duties are levied on the production or manufacture of excisable goods. Section 4 of the Act, as it stands after its substitution by the new section with effect from 1973 by virtue of Central Excises and Salt (Amendement) Act, 1973 does not arise for consideration in this judgment. Section 4, after its substitution by Finance Act, 1955 provided as follows.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-6", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "9. It is the contention of the Revenue in these writ appeals, which have been filed by the Union of India and Excise Authorities against the decision of our learned brother, Ramchandra Raju, J., allowing each of the writ petitions filed by the Vazir Sultan Tobacco Company and National Tobacco Company and granting appropriate relief in the respective writ petitions, that the case clearly falls under Section 4(a) and not under Section 4(b). The further contention is that in view of Section 4(a) and Explanation to Section 4, as it stood at the relevant time, deductions sought for by the respective manufacturers are not permissible and that the only deductions, which are permissible, are the trade discount and excise duty from the price paid by the wholesaler to whom first sales are effected by the manufacturer. \n\n10. Since Section 4, which is the subject matter of consideration before us in the form as it stood before the substitution of new Section 4 by virtue of the Amendment Act, 1973, was enacted by a post-constitution Act, it was necessary to refer to the relevant entry in the List 1 of Seventh Schedule of the Constitution, to appreciate the background regarding the enactment of Sectior 4 and placing it on the statute book. Item 84 in List I i.e., Union List in the Seventh Schedule to the Constitution mentiones :\n\"84. Duties of excise on tobacco and other goods manufactured or produced in India except-\n(a) alcoholic liquors for human comsumption;\n(b) opium, Indian hemp and other narcotic drug and narcotics but including medicinal and toilet preparations containing alcohol or any substance included in sub-para (b) of this entry.\"", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-7", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "11. It is therefore clear, as was amply made clear by charging Section 3 of the Act, which was enacted in 1944, that excise duty could be levied only on excisable goods manufactured or produced in India. It may also be pointed out that the relevant entry in the Federal List, which was entry 45 in the relevant Schedule to the Government of India Act, 1935, was also on the same lines as Item 84 which we have referred to above and therefore it was competent to the Central Legislature in 1944 to provide only for the levy of excise duty on excisable goods produced or manufactured in India. It is clear, when one bears these constitutional entries in mind, that the taxable event in the case of excise duty is the production or manufacture of excisable goods and nothing else. \n\n* * * *\n\n \n\n12. It is therefore, clear that when considering Section. 4, one has to bear in mind that section provides for machinery of collection of excise duty for administrative convenience. If, in enacting Section.4 and Explanation thereto, any words are used which are capable of being construed as enabling the excise authorities to calculate the excise duty on anything other than manufacture or production of goods by the well known doctrine of \"Reading Down'', which has been evolved by Courts of law, first in Australia and then followed in India, the language of Section. 4 must be confined to the power of the Legislature referable to Item 84 in the Union List in the Seventh Schedule to the Constitution, viz., that only the manufacture or production should be taken into consideration by the excise authorities while fixing the value of the goods for the purpose of excise duty when excise duty is leviable on an ad valorem basis.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-8", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "13. In re: Sea Customs Act, (AIR 1963 SC 1760), the Supreme Court observed (at. p. 1776) :\n \"The taxable event in the case of duties of excise is the manufacture of goods and the duty is not directly on the goods but on the manufacture thereof. In this connection sales tax may be contrasted which is also imposed with reference to goods sold, where the taxable event is the act of sale. Therefore, though both excise duty and sales tax are levied, with reference to goods, the two are very difficult imposts; in one case the imposition is on the act of manufacture or production while in the other, it is on the act of sale.\" \n\n14. In Shinde Brothers v. Deputy Commr., , the Supreme Court after referring to the earlier cases, observed that these cases establish that in order to be an excise duty (a) the levy must be upon 'goods', and (b) the taxable event must be the manufacture or production of goods. Further the levy need not be imposed at the stage of production or manufacture but may be imposed later. \n\n15. As we have observed earlier, if the machinery section in the Act seeks to bring within its scope any item of cost incurred by the manufacturer, which is not referable to production or manufacture of the goods, then it is not an excise duty, but something else altogether and therefore it is not within the purview of the excise anthorities functioning under the four corners of the Act and the rules made thereunder while levying excise duty.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-9", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "16. The first contention of Mr. Subrahmanya Reddy, the learned Standing Counsel for the Central Government in each of these matters before us that the case falls under Section. 4(a) and not under Section. 4(b) is correct, because each of the manufacturers before us actually sells the goods manufactured by it to a wholesaler or consumer. Again, the excise authorities seek to take into consideration the entire price which the first purchaser, be it the distributor or be it the first wholesaler, pays to the manufacturer less trade discount and excise duty at the time of the removal of the goods from the factory or other premises mentioned in Section. 4(a) of the Art\n\n \n\n17. It may be mentioned at this stage that, long before the enactment of the Act of 1944, a similar concept, which later on was enacted in Section 4(a) was embodied in the Sea Customs Act, 1878. Under Section 30 of the Sea Customs Act, it was provided :\n\"for the purposes of this Act the real value shall be deemed to be (a) the wholesale cash price, less trade discount for which goods of the like kind and quality are sold or are capable of being sold at the time and place of importation or exportation as the case may be without any abatement or deduction, whatever except (in the case of goods imported) of the amount of the duties payable op the importation thereof, or\n\n \n\n(b) where such price is not ascertainable, the cost at which goods of the like kind and quality could be delivered at such place, without any abatement or deduction except as aforesaid.\"", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-10", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "18. In Ford Motor Co. v. Secy, of State-AIR 1938 P.C. 15, the Privy Council interpreted Cl (a) of Section 30 of the Sea Customs Act. The facts of the case before the Privy Council were that the Ford Motor Company of India, the appellants before the Privy Council, were importing Ford Motor vehicles into India from Canada and the questions which arose in the appeal before the Privy Council related to the amount of customs duty payable upon 256 Ford motor cars consigned to the appellants which arrived in Bombay by the S.S. \"Algic\" on or about 9th Jan. 1929. The appellants had a monopoly of the supply of Ford vehicles to India. Except that they sometime sold direct to their own employees or to Government, they sold in India only to authorised dealers or distributors. Each distributor had a particular district within which in was the sole agent for or retail seller of Ford vehicles. The appellants obtained from the distributors information as to their future requirements and placed consolidated orders accordingly once or twice a month wtth the manufacturers in Canada. After the Ford (Canada) received the order, they were required to build the car and a month was required for passage of time. They Sold to the dealers in large quantities Ford vehicles and all parts relating thereto. The Ford Motor Company of India (appellants) issued from time to time a price list and the terms of business were that the retail price to be charged by the distributor to the public was that stated in the price list current at the time of arrival of the vehicles in India and the price payable by the distributor to the appellants was the same price less a discount of 20 per cent. The distributor had to pay this price before obtaining delivery. Delivery was given by the appellants \"free on rail\" save in the case of the authorised dealers for the district of Bombay itself viz , Ford Automobiles (India),", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-11", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "the case of the authorised dealers for the district of Bombay itself viz , Ford Automobiles (India), Limited - to whom delivery was made at their own warehouse in Bombay. The price mentioned in the price list was in all cases for a vehicle in running order, and the same was true of the contract between the appellants and the distributors. Each of the cars now in question arrived in India packed in a case, but incompletely assembled in this respect that the battery had to be charged and fixed, the wheels, mudguards, and running boards to be fixed, and other Items of work done to put the vehicle in running order. Having no facilities for doing such work in Bombay, the appellants gave delivery of the cars in the state in which they had arrived, making an agreed allowance to their distributors against the price. For each car the allowance was 13 rupees 8 annas. On those facts the question arose as to what was the wholesale cash price to be taken into consideration for the purpose of Section 3 of the Sea Customs Act. The Privy Council held that the price, which was charged by the appellants to their distributors was a wholesale price within the meaning of Section 30. It was a cash price. The cars were invoiced a few days before arrival of the ship and the price became fixed then and not before. The sales were therefore sales at the time and place of importation in every reasonable sense. It was further held that the overhead charges had no bearing upon any matter arising under Cl. (a) of Section 30.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-12", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "19. In the context of these facts while discussing the provisions of Cl. (a) of Section 30 of the Sea Customs Act, the Privy Council observed at page 18 of the report :\n'If the facts of the present case and the terms of Cl. (a) be placed side by side for comparison, several points of exact agreement become clear. The appellants price to their distributors is a wholesale price within the meaning of the section as declared in 59 Ind App 258 (Vacuum Oil Co. v. Secy. of State- AIR 1932 PC 168. It is a cash price; payment was made before delivery and delivery was within a few days of the arrival of the goods. The ony discount has been deducted. \n\n* * * * That the Legislature intended to exclude post-importation expenses need not be doubted, but it had to do this in a practicable manner without undue refinement, and it must be taken to have regard to the phrase which it employed as sufficient for the purpose if taken in a reasonable sense. The fact that the motor cars were incompletely assembled at the time of their arrival in Bombay gives rise to no difficulty; because although the car, according to the price lists in respect of this defect was an agreed allowance, and reduced the sum payable by the distributor to a price referable to the car in the condition in which it arrived in Bombay. The allowance was deducted by the customs authorities from the price to the distributors before arriving at the price upon which duty was calculated. \n\n*                    *                    *                    *\n\n \n\nThe price upon which customs duty has been charged appears therefore to be a wholesale cash price, less trade discount, for which the goods under assessment were in fact sold at the time and place of importation.\"", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-13", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "20. It was also pointed out by the Privy Council that the goods under assessment may under Cl. (a) of Section. 30 be considered as members of their own class even although at the time and place of importation there are no other members. The price obtained for them may correctly represent the price obtainable for goods of the like kind and quality at the time and place of importation.\n\n   \n\n*                    *                    *                    *", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-14", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "21. Thus, in the context of Section 4 of the Central Excises and Salt Act, 1944 and especially with reference to Section 4(a), the Supreme Court has now laid down in Voltas case-1978 E.L.T. (J 177), that the real value should be found after deducting the selling cost and selling profits and that the real value can include only the manufacturing cost and the manufacturing profit. If in cartain case, there are costs necessarily incidental to manufacturing process, they can be rightly said to form part of the manufacturing costs and thus they are also to be included in the real value including only the manufacturing costs and the manufacturing profit. Anything other than the manufacturing costs and manufacturing profit is not within the purview of Section 4(a)", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-15", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "22. In Atic Industries v. Asst Collector, Central Excise , the facts before the Supreme Court were that the appellants before the Supreme Court carried on business of manufacturing dye stuffs in a factory situate in a small township called Atul in Bulsar district in the State of Gujarat. The dye stuffs manufactured by the appellants were, throughout the period relevant, to the appeal, sold by them in wholesale units to two wholesale buyers, namely, I.C.I. (India) Ltd., and Atul Products Ltd. These sales were effected under respective agreement entered into by them with I.C.I, and Autl. Seventy per cent of the dye stuffs manufactured by the appellants were sold to I.C.I, while the remaining 30 per cent to Atul. The price charged by the appellants to I.C.I, and Atul was a uniform price described as \"the basic selling price\" less trade discount of 18 per cent. I.C.I, and Atul, in their turn, resold the dye-stuffs purchased by them from the appellants to two categories of buyers. One was the category of textile mills and other large consumers, while the other was the category of distributors. The sales by I.C.I. and Atul to the textile mills and other large consumers were at the basic selling price without any discount but so far as the distributors were concerned, the sales to them by I.C.I, and Atul were at a higher price, though with trade discount. I.C.I, charged a higher price but allowed 10 per cent trade discount, while Atul charged a slightly lower price and allowed two and a half per cent trade discount. The prices were, however so adjusted that the net selling prices charged by I.C.I. and Atul to the distributors were almost the same. The distributors, in their turn, resold the dye-stuffs purchased by them from I.C.I. and Atul to the", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-16", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "resold the dye-stuffs purchased by them from I.C.I. and Atul to the small consumers at a slightly higher price referred to as \"small consumers price\". No discount was given by the distributors to the small consumers. On these facts the Supreme Court held that the assessable value of the dye-stuffs manufactured by the appellants before the Supreme Court must be taken to be the price at which they were sold by the appellants to I.C.I, and Atul less 18 per cent trade discount and not the price charged by I.C.I, and Atul to their dealers. After referring to the Voltas case, Bhagwati, J., speaking for the Court, in para 10 at page 967 of the report, pointed out:", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-17", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "\"The wholesale dealings between the appellants and I.C.I. and Atul were purely commercial dealing at arms length and the price charged by the appellants for sales in wholesale made to I.C.I, and Atul less trade discount of 18 per cent was, therefore, clearly \"wholesale cash price\" within the meaning of Section. 4(a) and it did not make any difference that the wholesale dealings of the appellants were confined exclusively to I.C.I. and Atul and apart from these two, no independent buyers could purchase the dye-stuffs in 'wholesale from the appellants.\"", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-18", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "23. Mr. Subrahmanya Reddy for the appellants in the writ appeals and the respondendents in the writ petitions with which we are concerned in these cases, has very strongly relied upon the conclusion of the Supreme Court in Atic Industries v. Asst. Collector, Central Excise (supra) as set out in para 13 of the report and contended that, in the instant case, the price charged by the manufacturers to the first wholesalers, be they referred as distributors or wholesalers, is the wholesale cash price and it is that wholesale cash price less trade discount, and excise duty which should be the basis for imposition of excise duty in view of the language of Section 4. We are unable to accept this argument of Mr. Subrahmanya Reddy in its entirety. It is clear from the observations of Mathew J. in Voltas case (supra) which were approved by the Supreme Court in Atic Industries v. Assistant Collector, Central Excise (supra) that the excise duty, which is a duty payable on manufacture or production of goods, can only be on the aggregate of manufacturing costs and manufacturing profit. As we have observed above, if there are any Item of costs, which are necessarily incidental to the process of manufacture, they will also be part of the manufacturing costs. But if it can be demonstrated by a particular manufacturer that, even on the first sale to the first wholesale dealer there is an element other than that of manufacturing cost and manfacturing profit and thus the price charged to the first wholesaler includes post-manufacturing cost, such post-manufacturing cost must be eliminated by the excise authorities from their calculations. It must be pointed out that there may be two broad categories of manufacturers. The first category consists of manufacturers who only manufacture as in the case of Atic Industries case (supra) but do not sell the goods except to the first wholesaler with whom they have arrived at", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-19", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "but do not sell the goods except to the first wholesaler with whom they have arrived at an agreement at arms length. The second category is the category of manufacturers who not only manufacture, but also sell and incur the expenditure for the sale of goods as distinguished from manufacturing cost and manufacturing profit and if it can be demonstrated that, when the manufacturer of the second category sells the goods to the first wholesaler and incurs some post-manufacturing costs which have entered into the calculations and that the price charged to the first wholesaler by the manufacturer includes the post-manufacturing cost, then such post-manufacturing cost must be eliminated by the excise authorities from their calculations. Applying the process of 'reading down' it must be held that any Item other than manufacturing costs, including costs which are necessarily incidental to manufacturing process and manufacturing profit, must be excluded for the purpose of arriving at wholesale cash price. If such leading of post-manufacturing costs even in the price charged by the manufacturer to the first wholesaler with whem an agreement was entered into at arms length is permitted, the concept of excise duty being a duty payable on the manufacturer or production of goods, would be violated. We are therefore unable to accept this contention of Mr. Subrahmanya Reddy.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-20", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "24. Mr. Subrahmanya Reddy has very strongly relied upon the decision of a Division Bench of the Gujarat High Court consisting of J.B. Mehta, Acting Chief Justice and M.P. Thakkar J., in Golden Tobacco Co. Ltd., Bombay v. Union of India - 1977 E.L.T. (J 113). The petitioner in that case sought to deduct from the price charged by them to the first Wholesaler 3% of the additional deduction as sought under the Chartered Accountant's certificate by way of marketing expenses and for consequential refund for the period between Dec. 1, 1972 to May 15, 1974. The petitioners had two cigarette factories at Bombay and Baroda. The petitioners had stated that they followed a uniform pattern for marketing goods as they sold the products manufactured by them to distributors who, in their turn, sold the same to the wholesale. dealers. The contention of the petitioner was that 3% represented the post-manufacturing costs. After considering all the relevant decisions on the point, the Division Bench of the Gujarat High Court held that the only deduction from the price which was permissible was trade discount and excise duty and no other deduction was permissible. With great respect to the learned Judges of the Gujarat High Court, we are unable to follow the conclusion of the learned Judges because the very concept of excise duty is that it is only a duty solely on the manufacture or production of the goods and nothing else and therefore any costs other than manufacturing costs in the sense we have explained above and manufacturing profit should not be allowed to enter in the wholesale cash price. It may be pointed out that, barring this decision of the Gujarat High Court, the other decision subsequent to the decisions in Voltas' case-1977 E.L.T. (J 177) and Atic Industries case (supra), the Supreme Court have taken the same view as we are taking in the instant case.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-21", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "the Supreme Court have taken the same view as we are taking in the instant case.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-22", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "25. In Coromandel Fertilisers Ltd., v. Union of India (Writ Petn. Nos. 1400 to 1403 of 1976 decided on 24-9-1976, a Division Bench of this Court consisting of Sambasiva Rao, J., and Punnayya J., after referring to the decisions in Voltas case (supra) and Atic Industries case (supra) observed :\n \"No doubt in neither of the two cases the question of inclusion or exclusion of freight charges arose. But certainly the question of the impost of excise duty and the nature of wholesale cash price arose in the two cases, The law on the point has been made clear by the highest court of the land which is binding on all the courts in India. From what we have extracted from the decisions of the Supreme Court there cannot be any possible doubt that freight charges cannot be included in estimating the wholesale cash price, since they are not part of the manufacturing and producing cost but are only post-manufacturing expenses.\" \n\n26. The Division Bench also pointed out that a similar view was adopted by the Bombay High Court in Misc. Petn. No. 293 of 1974, the Madras High Court in W.P. Nos. 2180 of 1972 and 2742 of 1975 and W.P. Nos. 2182 and 2183 of 1975 and the Karnataka High Court in W.A. No. 8 of 1975 (Kant). The Division Bench of the Gujarat High Court in Golden Tobacco Co. Ltd., Bombay v. Union of India (Spl. Civil Appln. No. 858 of 1974 (Guj) referred to the decisions of the Karnataka High Court, the Bombay High Court and the Kerala High Court, but differed from the views taken by those High Courts.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-23", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "27. For the reasons stated above, we differ from the view taken by the Gujarat High Court and accept the view taken by the Division Bench of this Court consisting of Sambasiva Rao. J., and Punnayya, J., in Coramandel Fertilisers Ltd. v: Union of India (W.P. Nos. 1400 to 1403 of 1976 decided on 24-9-1976). It may be pointed out that the view which we are taking is the view which was taken by the Kerala High Court in Madras Rubber Factory v. Assistant Collector, Central, Excise, 1977 E.L.T. (J 85), by the Bombay High Court in Union of India v. Mansigka industries Private Limited, 1976 Tax LR 1971, by the Karnataka High Court in Union of India v. I.T.C. Ltd., 1976 Tax LR 2003, by the Madhya Pradesh High Court in Universal Cables v. Union of India, 1977 E.L.T. (J 92), and by the Allahabad High Court in l.T.C. Ltd. v. Union of India, 1977 E.L.T. (J 28). It may also be pointed out, us indicated by the Allahabad High Court in l.T.C Ltd v. Union of India (supra), that the Madras High Court has also taken the same view as the High Court other than Gujarat High Court. The conclusion that we have independently reached on our own is thus strengthened by the view taken by the Division Bench of this Court in Coramandel Fertilisers Ltd. v. Union of India (W.P. Nos. 1400 to 1403 of 1976) decided on 24-9-1976 : and by the view taken by the Kerala, Karnataka, Madras, Allahabad and the Bombay High Courts. In view of the near", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-24", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "Kerala, Karnataka, Madras, Allahabad and the Bombay High Courts. In view of the near uniformity among the views expressed by the different High Courts, we see no reason to take a different view from the one which we have independently arrived at in the instant case.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-25", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "28. In t,his view we must hold that the view taken by our learned brother, Ramachandra Raju, J., in W.P. Nos. 1748 and 7143 of 1974 and 2274, 2275 and 5136 of 1975 (Andh. Pra.) was correct and that the order passed by him that the petitioners were entitled to deduct from the price which they charged their distributors any expenditure incurred by them towards sales but not connected with the manufacture or production viz., advertisement expenses, selling expenses and freight charges, must be upheld. He rightly observed that these deductions had to be worked out between the petitioners before him and the Excise Department. He rightly allowed the writ petitions. \n\n29. we, therefore, dismiss each of the writ appeals in the group before us. We allow Writ Petitions Nos. 3114 of 1975 and 6044 of 1975 and direct the excise authorities not to take into consideration in arriving at the wholesale cash price any costs other than manufacturing costs (inclusive of costs necessarily incidental to manufacturing process) and manufacturing profit and if the price charged by the manufacturer to the first wholesaler is found to be loaded by any post-manufacturing costs, such loading is totally foreign to the concept of excise duty under the constitutional entry 84 in List I-Union List in the Seventh Schedule to the Constitution and contrary to the basic notion underlying the charging section and must be excluded. \n\n30. As observed by our learned brother, Ramchandra Raju, J., the deductions will have to be worked out by the excise authorities in the light of the observations which we have made in this judgment.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "5f9f6fdcdf3b-26", "Titles": "Union Of India (Uoi) And Ors. vs Vazir Sultan Tobacco Co. Ltd., ... on 18 May, 1977", "text": "31. Each of these writ appeals is therefore dismissed and the two writ petitions before us are allowed and the directions to the excise authorities will be issued accordingly to deduct from the wholesale cash price any post-manufacturing costs so as to exclude from the wholesale cash price, apart from trade discount and excise duty, any element other than the manufacturing costs (inclusive of costs necessarily incidental to the process of manufacture) and manufacturing profit. The appellants in the writ appeals and the respondents in the writ petitions will pay the costs to the respondents in the writ appeals and the petitioners in the writ petitions respectively. Advocate's fee Rs. 150/- in each matter.", "source": "https://indiankanoon.org/doc/1707698/"}
+{"id": "8e72595b72e2-0", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "JUDGMENT Jagannadha Rao, J. \n 1. The following questions arise for consideration in this appeal as to how compensation under S.110-B of the Motor Vehicles Act is to be computed, what is meant by loss to the 'dependency' and how is the 'multiplier' to be chosen, what is meant by the loss to he 'estate' and how is it to be computed, can the compensation be shared by the dependents not enumerated under the Fatal Accidents Act, 1855 and finally as to how the compensation is to be apportioned?", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-1", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "2. The deceased Mohd. Mahfooz was a carpenter when he died, he was aged 22 years. The accident occurred at 9.45 p.m. on 14-11-1977 at Hanamakonda when a bus belonging to the appellant Corporation bearing the number APZ 8330 knocked down the deceased. The deceased was admitted in the Mahatma Gandhi Hospital, Warangal and he expired on 21-11-1977 in the hospital at 9.00 p.m. The deceased was a carpenter owning a carpentry shop at Hunter Road and was earning Rs.400/- to Rs.500/- per month. He left behind him his mother and four unmarried sisters as his heirs and dependents who filed O.P. No. 11/1978 on 5-61978 claiming Rs.72, 000/- towards the dependency, at the rate of Rs.1500/- p.a. for 48 years and Rs.500/- towards damages to his clothing articles and cycle. The Corporation was impleaded as the Ist respondent and the driver as the 2nd respondents. \n3. The Tribunal held that the accident occurred on account of the negligence of the appellant's driver. It accepted that the deceased was aged 22 years at his death, that he was earning Rs.400/- to Rs.500/- P.M. as a carpenter and would have given for the family at least Rs.1500/- per annum for a period of 48 years i.e., Rs.72, 000/- inasmuch as he would have lived up to 70 years. An award was passed for the other damages of Rs.500/- towards loss of clothing articles and cycle, in all making up a total of Rs.72, 500/-. Interest was granted at 6% p.a from the date of petition i.e., 5-6-1978.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-2", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "4. Against the above award, the Corporation has filed the present appeal. \n\n5. We are not inclined to disturb the finding of the lower Court that the appellant's driver was negligent. The finding in this regard is based on the evidence of P.W. 2, another cyclist who was cycling by the side of the deceased, the wound certificate Ex. A-1 and the other circumstances. This finding is therefore confirmed. \n6. Sri C. Ananda Rao, the learned counsel for the Corporation contends that the Tribunal erred in taking a multiplier of 48. He also contended that the sisters of the deceased are not among the dependents enumerated in the Fatal Accidents Act, 1855, that the provisions of S.110-B are merely procedural and that they cannot confer any rights on the sisters of the deceased for claiming share in the dependency. He placed reliance on the decision of the Supreme Court in N.I. Insurance Company v. Shanti Misra . \n7. On the other hand, it is contended by the learned counsel for the respondents Sri K.F. Baba, that the multiplier adopted under law, be Rs.2400/- p.a. and not Rs.1500/- p.a. He also contended that the sisters of the deceased are entitled to be in the dependency in view of the special provisions of S.11 of the Motor Vehicles Act which according to him are wider than those under the Fatal Accidents Act, 1855. He contends that the provisions of S.110-B are also substantive in nature. According to him the sisters of the deceased are entitled to a share in the dependency in view of the decision of a Division Bench of this Court in Vanguard Insurance Company v. C. Hanumantha Rao (1975) 1 Andh WR 327 1975 Acc C.J. 344.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-3", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "8. We shall firstly address ourselves to these twin concept of loss to the dependency and loss to the estate. \n\n9. The loss of the benefit to the dependents' is a concept derived from the English Fatal Accidents Act, 1846, known as the Lord Campbells Act. The corresponding law in India is the Fatal Accidents Act (Act 13 of 1855). \n\n10. The loss of 'benefit to the estate' of the deceased is the loss arising to the estate under the heads of mental and physical pain, loss of expectation of life and loss of amenities. The compensation payable in this regard is made to survive to his legal representatives under the Legal Representatives Suits Act. 1855 read with S.306 of the Indian Succession Act, 1925. The corresponding law in England in this regard is the Law Reform (Miscellaneous Provisions) Act. 1934. The Indian Legislature would seem to have anticipated the English Stature of 1934 by several decades. \n\n11. As there is a fatal accident in this case, the provisions of the Fatal Accidents Act. 1955 and of the Legal Representatives Suits Act read with S.306 of the Indian Succession Act 1925 apply and allow damages to be claimed after the death of the person killed in the accident. The damages are ascertained and shared and apportioned under S.110-B of the Motor Vehicles Act. \n12. We shall now deal with the various components of the above-said 'compensation'.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-4", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "(A) Loss of Benefit to the Dependents and the Multiplier:\n13. The Fatal Accidents Act, 1855 provides that whenever the death of a person shall be caused by wrongful act, neglect or default, and the act, neglect or default is such as would (if death had not ensued) have entitled the party injured to maintain an action and recover damages in respect thereof, the party who would have been liable to death had ensued shall be liable to an action or suit for damages notwithstanding the death of the person injured. Even such action or suit shall be for the benefit of the wife husband, parent or child, if any, the deceased and the Court may 'apportion' the damages 'as it may think fit.'", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-5", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "14. Damages under this head are restricted to the financial loss A basic figure regarding the net contribution for the support of the dependents which would have been derived from the future income of the deceased is arrived at. Then an estimate of the probable length of time for which the earnings or contribution would have continued is made, and then a convenient 'multiple' is determined - a number of years purchase - which will reduce the total loss to its 'present value' after taking into account the provide risks of rise of fall in the income. Thereafter all contingencies such as the possibility of the widow remarrying or the dependant dying earlier have to be taken into account. We shall explain this question in detail presently. \n15. The mode of estimating the present value of the loss of benefit to the dependants by applying the 'multiplier' method was first dealt with by Lord Wright in Davis v. Powell Duffryn Association Collieries limited (1942) Ac 601 = (1942) 1 All ER 657 (HL) and by Lord Simon in Nance v. British Columbai Electric Railway Company Ltd. (1951) A.C. 601 = (1951) 2 All ER 448 (P.C.) and has been consistently followed in England. Australia, Newzealand etc. This method was explained in Davis case (1942) A.C. 601) (page 617) by Lord Wright:", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-6", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "\"The starting point is the amount of wages which the deceased was earning, the ascertainment of which to some extent may depend on the regularity of his employment. Then there is an estimate of how much was required or expended for his own personal and living expenses. The balance will give a datum of basic figure which will generally be turned into a lump sum by taking a certain number of years purchase. That sum however, has to be taxed down by having due regard to uncertainties for instance, that the widow might have again married and thus ceased to be dependant, and other like matters of speculation and doubt.\" \n16. The multiplier method has been consistently applied by our Supreme Court in various cases Subba Rao, J. (as he then was) referred to the above rulings in the decision of the Supreme Court in Gobald Motor Service Limited v. R.M.K. Veluswami . In Municipal Corporation of Delhi v. Subhagwanthi , after referring to the above passage from Lord Wright's judgment. Ramaswami J. applied a multiplier of 15 in respect of a person who died at the age of 30 years. A few years later, in C.K. Subrahmonia Iyer v. T. Kunhi Kuttan Nair Hegde J. also referred to the above English cases and after quoting a passage from Windfiled on Torts (7th Edn. At pages 135, 136) observed: \n\"as a general rule parents are entitled to recover the present cash value of the prospective service of the deceased minor child. In addition they may receive compensation for loss of pecuniary benefit reasonably to be expected after the child attains majority.\"", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-7", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "Coming to Sheikpura Transport Company v. N.I.T. Company Limited in respect of a person who died at the age of 42 years, Hegde J. adopted a multiplier of 15. In Hardeep Kaur v. State of Punjab the deceased was 25 years of age and a multiplier of 20 was adopted by Jaganmohan Reddy J. Similarly in Madhya Pradesh S.R.T.C. v. Sudhakar AIR 1977 SC 1189 Krishna Iyer & A.C. Gupta, JJ. Observed:\n\"a method of assessing damages, usually followed in England, as appears from Mallet v. M.C. Monagle (1970) A.C. 166 = (1969) 2 All ER 178 annual 'dependency' by a number of 'years' purchase. (p.178) that is the number of years the benefit was expected to last taking into consideration the imponderable factors infixing either the multiplier or the multiplicand.\" \nThere the deceased died at the age of 23 years and had 35 years of service and a multiplier of 20 was used against the annual sum payable to the dependents and it was observed;\n\"In a decision of the Kerala High Court relied on by the appellant (P.B. Kader v. Thatchamma ) to which on of us was a party the rare method of assessing compensation was adopted. Krishna Iyer J. who delivered the Judgment in the Kerala case P.B. kader v. Thatchmma explained that standardised methods have been devised for calculating the value of the dependency of the 'present value' of the pecuniary benefit that the deceased would have conferred upon the dependents in the future. In the Kerala case Krishna Iyer, J. finally observed as follows:", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-8", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "\"As I mentioned earlier there are two ways of which the present value of the dependents can be worked out: either you fix the multiplier, disregarding the fact of lump sum payable now, and the, with reference to the relevant annuity tables read down that figure into the present value; or alternatively you reduce the multiplier having in mind the thought that a lump sum is being paid now in the place of staggered payments over the years. Courts in England have learned towards the latter method and in arriving at the multipliers mentioned above I have adopted the same course.\"   \n17. Thus in England as well as in India, the multiplier method is applied to compute the 'present value' of the future benefit to the dependents. \nThe British Law Commission has observed:\n\"the multiplier has been remains and should continue to remain, the ordinary, the best and only method of assessing the value of a number of future annual sums (Working paper No. 27- 1970)", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-9", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "18. With regard to the choice of the multiplier, Judges select the same from their experience. But there is every possibility of the awards being arbitrary or speculative if it is left to the uncontrolled discretion of the Court. Lord Goddard in Heatley v. Steel Company of Wales (1953) 1 All ER 489 pointed out that Judges were likely to act arbitrarily or on speculative grounds. The present case is an example of the use of a multiplier of 48 for which there is neither precedent nor scientific basis. \n19. We are of the view that it is necessary to judicially define the scope of the discretion in the selection of the 'multiplier' as well as the 'multiplicand' (the annual dependency) so that it may not be exercised arbitrarily. \n20. It is in this context that the annuity tables become useful. Their use will help in selecting a multiplier appropriate to the age of the deceased at his death with reference to his working age or the age up to which the deceased would have earned for his dependents. \n21. At one time it was thought that these tables do not take into consideration the probabilities but they consider only the chances that they do not take into account various 'contingencies', or that they give a false appearance of accuracy and precision in a sphere where conjectural estimates have to play a large part. (Per Lord person in Taylor v. O Connor (1970) 1 All ER 365.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-10", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "22. But it has been explained that these misgivings have no true basis. Prof. Street on Law of Damages (1962) Ed. Page 111) shows that the House of Lords had earlier allowed the use of the annuity tables in 1880 in order to value reversionary interests in property M Donald v. M Donald (1880) 5 A.C. 519. These tables are widely used in computation of death duties or for evalution of pensionary benefits of a person unlawfully dismissed. In fact, Lord Denning advocated the actuary's assistance in Hodges v. Hindland & Wolff Limited (1965) 1 WLR 523 as follows:\n\"The Judges do take actuarial considerations into account. They often take a number of years' purchase. If the evidence of an actuary would be helpful in any case, I know of no rule o law which prevents it being entertained.\" \nThe British Law Commission has clearly accepted the use and relevancy of the annuity tables prepared by actuaries in its Working Paper No. 27 (1970-71). It observed: \n\"The actuarial method of calculation, whether from expert evidence or from tables, continues to be technically relevant and technically admissible but its usefulness is confined, except perhaps in very unusual cases, to an ancilliary means of checking a computation already made by the multiplier method.\"", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-11", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "And also recommended legislative action to reaffirm the efficacy of the actuarial tables or the evidence of actuaries (vide Actuarial Assessment of Damages. The Thalidomide case - by Mr. J. H. Prevett in Vol. 35 Modern Law Review (1972) (P. 140 at P.146). Kemp & Kemp on 'Quantum of Damages' (1967) have compared the multiplies chosen by Judges from experience and found a close proximity between them and those arrived at from the annuity tables. \n23. The position in the United States is no different. In the American Restatement of the Law of Torts (Vol. 4) (1939) it is stated at para 924.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-12", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "\"For this purpose, it is permissible to use mortality tables and other evidence as to the average expectation of life.\" \nIn fact, some American States such as North Carolina and Wisconsin have laid down statutory tables for use in personal injury actions. Actuarial tables are widely used by Courts in the U.S., Canada, Australia and Sought Africa (Street, 1962 PP. 114, 137). Using life-expectancy, pension plans compute differently for men and women were held by the American Supreme Court to be discriminatory City of Los Angeles v. Manhart (1978) 435 U.S. 702.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-13", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "24. We are adverting in detail to the Tables only for the purpose of enabling across-check of the Judge's multiplier chosen from experience. \n25. We shall now advert to the scientific basis on which these annuity tables are prepared combining (i) mortality tables, and (ii) the formula for reduction of the prospective loss to its 'present value'. Munkaman's Damages (3rd Ed. P.54) has set out the actuarial basis of these tables. A detailed analysis is also given in 'Judicial Attitudes towards actuarial evidence by M/s. K. Richanrds and R. Kidner in Vol. 124. New Law Journal (1974) page 105 as set out hereunder:", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-14", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "26. They explain that these tables are prepared after taking into account the chances of premature death of the deceased at any later date and after making suitable deduction for a lump sum payment. They first direct the estimation of the annual dependency (we shall deal with it in detail later) taking into account the future salary increments and inflation, at 5% compound interest per annum. From the English Mortality Table No. 12 (1960-62) the probability of a male aged 30 surviving until age 35 can be calculated as 0.989 (i.e. he has got 98.9% chance of reaching that age until 50 is 0.95; until age 60 is 0.83 and so on. Th3se figures help in calculating the 'Expected value' of the dependency in any year i.e., the estimate of the dependency multiplied by the probability that the man would have remained alive to provide it for his wife and family. If the annual dependency of a lecturer, on date of his death at 30 years is 4, 500, the probability of his living to provide for his family till 35 years is 0.989 and the expected value of the dependency in the 35th year will be 4, 451 (0.989 X 4, 500). For each future year, this expected value is to be calculated till (say) 65 years of for life.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-15", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "27. But before totalling them, each expected-value for 'each' of the future years has to be reduced to its 'present value'. Since a pound received in future is not equivalent to a pound received now. Pounds in the future must be discounted. For example if a 100 is invested at 5% p.a. for one year, it will be worth 105. The 'discounted' or present value of 105 received in one year's time at a rate of discount of 5% is 100. Similarly the present value of 100 to be received in the 5th year from now, using a discount rare of 5% will be 78.35 (by using the compound interest or equivalent formula).", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-16", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "28. We have seen that if the annual dependency in the 30th year is 4500, the estimated value of the dependency in the 35th year is 4451. Reducing it to its present value, it will be 4451 X 0.7835, giving 3487. It is these reduced values that are to be totalled for the 31st, 32nd, 33rd, 34th, 35th and so on till the 65th year, to provide a final present value of damages for all these years. \n29. These two processes i.e., probabilities of death and the conversion to present value are combined into a single annuity table providing a multiplier which will, when applied against the annual dependency, give the present value of the total 'expected values' or prospective loss. Mr. J.H. Prevett in his Article already referred to (Vol. 35 Modern Law Review) stat4es that the association of a survival probability and a rate of discount lies at the root of the actuary's technique of arriving at the 'present value'. The tables (prepared by Mr. J.H. Prevett) are set out in Kemp & Kemp 'Quantum of Damages (1967 Ed. Pp. 40 to 51) and the authors observe (at page 36):\n\"It will be apparent that in the preparation of these tables both discount and mortality have been taken into account.\" \nAnd that once the multiplier is chosen form the Table, we have only to provide for other 'contingencies' and adjust the multiplier suitably.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-17", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "30. There are several tables provided in Kemp & Kemp on 'Quantum of Damages' (1967 Ed) as also fresh tables in their 1982 Ed. The multipliers in the latter edition are higher in view of the improved health conditions in England. Having regard to Indian conditions, we are of the view that the Table No. IV (General Mortality Males) in the 1967 Ed. And which is prepared by calculating present value at 51/2 discount rate are useful for cross checking the multiplier which the Court might otherwise fix from its experience Table No. IV gives multipliers for those earning up to the end of their life and also those who learn up to 65 years. We are extracting the table in so far as those earning up to 65 years and the multipliers in cases of those earning for life i.e., beyond 65 years are mentioned in brackets. Conversely, if the earning capacity is to cease at the 55th or 60th year the multipliers in Table IV have to be slightly reduced. The Table is based on mortality figures for males and in cases where the deceased is a female, the multipliers from the Table are to be slightly reduced. \n31. The other tables which adopt lesser rates of interest between 3% to 5% for reduction Value in Rupees of prospective loss of Rs.100/- per annum payable monthly or weekly.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-18", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "Age  Males (ceasing at age 65 )    Multiplier             Earners for life \n20  1649     16.49    (17.00) \n21              1639    16.39    (16.92)\n22  1628     16.28    (16.85)\n23  1616    16.16    (16.76)\n24  1604    16.04    (16.68)\n25  1592    15.92    (16.59)\n26  1578    15.78    (16.49)\n27         1564    15.64    (16.39)\n28  1549    15.49    (16.28)\n29  1533    15.33    (16.16)\n30  1516    15.16     (16.04)\n31  1498    14.98    (15.91)\n32  1480    14.80    (15.78) \n33  1460    14.60    (15.64)\n34  1440    14.40    (15.49)\n35  1418    14.18    (15.34)\n36  1396    13.96    (15.18)\n37  1372    13.72    (15.02)\n38  1348    13.48    (14.84)\n39  1322    13.22    (14.66)\n40  1295    12.95    (14.48)", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-19", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "40  1295    12.95    (14.48) \n41  1267     12.67    (14.28)  \n42  1237    12.37    (14.08)\n43  1206    12.06    (13.87)\n44  1174    11.74    (13.65)\n45  1140    11.40    (13.43)\n46  1105    11.05    (13.20)\n47  1069    10.69    (12.96)\n48  1030    10.30    (12.72)\n49   991     9.91    (12.47)\n50   949     9.49    (12.21)\n51   906     9.06                   (11.95)\n52   860     8.60           (11.68)\n53   813     8.13     (11.40)\n54   763     7.63           (11.13)\n55   712     7.12           (10.85)\n56   658     6.58           (10.57)\n57   601     6.01    (10.28)\n58   541     5.41    (10.00)\n59   478     4.78      (9.72)\n60   412     4.12     (9.43)\n61   341     3.41     (9.15)\n62   265     2.65     (8.88)\n63   184     1.84     (8.60)", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-20", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "63   184     1.84     (8.60)\n64    96     0.96     (8.32)\n65   ---     ----     (8.05)", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-21", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "of the annual dependency to 'present values' give higher multipliers than those in Table IV. It will be noticed that the higher the interest rate adopted (for reduction to present values), the lower will be the multiplier and vice versa. We have adopted the table No. IV prepared at 51/2% compound interest rate as being applicable to our country inasmuch as this rate can be treated as in vogue during stable periods of our country as pointed out by Lord Diplock in Mallet v. Mc. Monagle (1970-AC 166). We shall revert to this aspect while dealing with the question of 'inflation'.  \n32. The assumption of certain critics that the multipliers from the Table are likely to be on the high side because they do not take into consideration (i) the chances of the deceased dying earlier than heir normal life span or (ii) the factum of a lump sum payment are, from what we have seen to be the basis of the Tables, not correct as explained by several leading writers (see Street, Law of Damages 1962 Ed. O, 120 and the two articles, one by Mr. J.H. Prevett in (1972) 36 Modern law Review p. 140 at p.150 and the other by M/s K. Richards & R. Kidner (1974)124 Net law Journal passages 105 at 106 already referred to). \n\n33. But the critics are justified in stating that the multipliers from the Tables are to be adjusted or reduced for certain other 'contingencies' and this is fully accepted by the authors of the tables and the actuaries.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-22", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "34. Contingencies which are 'negative' or necessitate a reduction in the multiplier chosen from the Table are:       \n(i) the chances of premature death of the dependents:\n(ii)the chance of marriage or remarriage of the female dependents; (iii) the chance of the deceased falling sick or his earning coming down due to holidays, strikes, unemployment, sickness and industrial disablement etc. According to Prof. Street, the items in the last contingency (iii) require a reduction of the multiplier by 2% to 6%\n \n\n35. The 'contingency' which has a positive content is the one pertaining to 'inflation' as stated by this Court in Polavarapu Somarajyam v. A.P.S.R.T.C. where this Court referred to the three earlier rulings of the House of Lords in Mallet v. Mc. Monagle (1970 AC 166). Taylor v. O' Connor (1070- 1 All ER 365) and Cookson v. Knowles (1977-3 WLR 279). In the first of these cases that is Mallet's case (1970-AC 166) Lord Dilpock stated that in computing damages under the Fatal Accidents Act. 1885, it was more practicable for Courts.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-23", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "\"..........to leave out of account the risk of further inflation.......... On the other hand.......money should be treated as retaining its value at the date of judgment and in calculating the present value of annual payments which would have been received in future years interest rates appropriate to times of stable currency such as four per cent to five per cent should be adopted.\" \nViews to the same effect were expressed in the second case Taylor v. O' Connor (1970-1 All ER 365) by Viscount Dilhorne and Lord person but Lord Reid different. However on the facts of Taylor's case (1970-1 All ER 365) it was found that the award being sufficiently large, investment thereof by the dependents in interest-earning investments might result in charge to income tax on the interest and the multiplier was therefore slightly increased to compensate for tax rather than for inflation. In the third case Cookson v. Knowles (1977-3 WLR 279) Lord Diplock reiterated his views in Mallet's case (1970-AC 166) that future inflation is taken care of in a rough and ready way because the conventional multipliers applied by Judges \"are higher as being the result of applying an interest rate of 4 to 5 per cent\" whereas, actual rates of interest are much higher and higher interest rates would have otherwise yielded smaller multipliers.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-24", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "36. We have seen that the 'conventional multipliers, used by Judges from experience or those taken from annuity tables are based on a interest rate between 3% to 51/2% per annum compound - for reducing prospective earnings to present values. It would be anomalous, as pointed out by Lord Diplock, to take advantage of a higher multiplier obtained by use of lower rates of interest obtaining during stable periods of currency and asking for a further increase of the multiplier for offsetting inflation and higher rates of interest obtaining or obtainable in future. The reason is that the multiplier would have otherwise been smaller if current rates of interest at 8% to 10% granted by Nationalised Banks are used for reducing future earnings to their 'present value'. However in exceptional cases such as Taylor's case (1970-1 All ER 365) where the award is huge and investment in current deposits would result in liability to income tax it would be permissible to increase the multiplier slightly to off set the deduction.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-25", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "37. Recently in Lim poh Choo v. Camden and Islington Area Health Authority (1980) A.C. 174, the House of Lords speaking through Lord Scarman reviewed the above cases and accepted the vi3w of Lord Diplock in Mallet's case (1970-A.C. 166), that the conventional multiplier takes care of inflation but in exceptional cases such as Taylor's case (1970-1 All ER 365) where there was chance of incidence of income -tax, the multiplier could be increased and to that extent inflation was relevant. The approach of Lord Diplock has been accepted by the British law Commission in the Report on personal Injury Litigation Assessment of Damages (No. 56 paras 217, k227 to 230 and Working paper 41, para 190) which recommended that the inflation-factor should be included in the actuarial tables. We have already seen that interest rates and multipliers are in inverse proportion.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-26", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "38. We shall now proceed to deal with the computation of the 'annual dependency' which is the multiplicand. Start with the deceased net income at the date of his death, estimate how much of this he spends on himself, and then, if his pattern of life justifies the assumption take the remainder as his net income as being spent for the benefit of his dependents (kemp & Kemp 4th Ed, 1975. Vo. 1, pp. 235-236). In Adsett v. West (1983) 3 WLR 437, Mc. Cullough J. pointed out that customary calculations and estimates which have been made for many years in cases under the Fatal Accidents Act reveal that the deceased would roughly have spent only about a third or less of his income upon himself. In our view, this may vary between 35% to 50%. Further the deceased's liability to income-tax must be taken into account in arriving at his net annual income (British Transport Corporation v. Gourley (1956) A.C. 185).  \n39. The product of the multiplier and the multiplicand gives the compensation payable under the Fatal Accidents Act. The said product need not be reduced by the collateral benefits received by the dependents on the event of the death of the victim - such as insurance, provident fund etc. Parry v. Cleaver (1970) A.C. 1. The compensation under the Fatal Accidents Act is not to be distributed equally among the recipients but is to be apportioned (as we shall explain later) according to their needs and expected tenure of life.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-27", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "40. In case the recipients under the Fatal Accidents Act. 1855 receive any amounts from the estate, the award under the former is to be reduced by the share from the estate. \n\n41. In Graham v. Dodds (1983) 2 All ER 953 the House of Lords held that in fatal accident cases the multiplier and the annual dependency have to be worked out with reference to the date of death of the victim and not as on date of trial. \n\n42. We shall work out an illustration. Assume that the age of the deceased at his death was (say) 24 years. Taking the monthly value of the total income at Rs.800/- P.M. taking into account the usual deductions and the absence of income-tax at that level the amount which the deceased would have spent upon himself may be around Rs.350/- leavingRs.450/- towards monthly dependency. The annual dependency could be Rs.5400/-. The multiplier from the table would be 16.04 for a person earning up to 65 years. Assuming that the deceased would have retired from service at 55 years, and that he does not belong to the classes of law or high mortality groups, and taking into consideration the chances of his widow or children dying early, the chances of the deceased falling sick or earning less, etc. a multiplier of 14 would be proper. The award under the Fatal Accidents Act would be Rs.75, 000/- as being the present value of the prospective loss. As we shall point out below this is to be apportioned between the widow and children according to their needs and expected life span and if these persons should get a share from the loss to the estate', the same is to be deducted from the amount apportioned under the Fatal Accidents Act.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-28", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "(A) Loss To The Estate:\n43. The loss to the estate is to be recovered by these who are entitled to the estate under the law - the heirs on intestacy or the legatees administrators or executors in cases of testamentary succession. The right survives the deceased in England under the provisions of the Law Reform (Miscellaneous Provisions) Act, 1934 and in India under the Legal Representatives' suits Act, 1855 read with S.306 of the Indian Succession Act, 1925. Under S.2 of the Fatal Accidents Act, 1855 a claim for the estate and a claim for the dependency can be combined in the same action. \n\n44. The loss to the estate comprises of damages that are payable to the deceased towards physical injuries sustained by him as representing pain and suffering (see Compensation for pain & suffering by Arye Miller at p.554 of International & Comparative law Quarterly, 1982, p.554) and for loss of amenities for the period between the time of accident and the time of death, together with a conventional small sum towards loss of expectation of life. These are all treated as non-pecuniary benefits.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-29", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "45. But in the decision in Pickett v. Gritish Rail Engineering Ltd. (1980) A.C. 136 = (1979) 1 All ER 774 (HL) the House of Lords added to this head, a separate item called the 'lost earnings' for the 'lost years'. Their Lordships held that a person's interest in his 'good health' and 'sound earning' is a valuable assets distinct from his 'expectation of life' and that he should be duly compensated for the 'loss of earnings' for the 'lost years'. Damages wee awarded to the widow under this head for the deceased's pain and suffering, loss of expectation of life and also 'loss of earnings' for the 'lost years'. The loss of earnings had to be calculated by arriving at the annual loss of earnings for the future years and applying the multiplier formula and reducing the same to the present values. This was applied by the house of Lords in Gammel v. Wilson (1982) A.C. 27= (1981) 1 All ER 578 to the case of the death of the victim of the accident. \n46. In cases where the recipients of the dependency and the recipients of the estate were the same, it was found as a result of these rulings that they would receive more under the claim to the estate in an action under the Law Reforms Act, 1934 rather than under the Fatal Accidents Act for the multiplier under the claim to the estate need not be reduced for the contingency of the chances of death or marriage or remarriage of the legal heirs. Thus the status quo ante before Gammel v. Willson (1982 A.C. 27) was again restored.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-30", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "47. We are of the view that it is not necessary or desirable to adopt the English rule in Gammel v. Willson (1982 A.C. 27) in our law. The results in England were found unsatisfactory and had to be eliminated by statute. We therefore hold the loss to the 'estate' cannot be increased by computing the 'lost earnings' for the 'lost years'. We respectfully dissent from the contrary view taken by the Madhya pradesh High Court in Ramesh Chandra v. M.P.S.RAT.C. . The other items under this head already adverted to however remain. \n(A) Deduction for Avoiding Double-Benefit", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-31", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "48. During the course of our discussion we have pointed out that in cases where the recipients of the dependency under the Fatal Accidents Act and the loss to the estate are the same, the compensation obtained by a person under the Fatal Accidents Act, after apportionment, is to be reduced by the amount he receives as heir to the 'loss to the estate'. The balance that remains payable under the Fatal Accidents'. Award has of course to be added to the share obtainable towards 'loss to the estate' and the sum total is recoverable from the defendants. In case however the recipients under the Fatal Accidents Act are different from those of 'the loss to the estate', there is no question of such a deduction. This is clear from the decisions in Rose v. Ford (1973) A.C. 826 at 835. And Davis v. Powell Dufferyn Collieries (1942-A.C. 601). The deduction procedure is accepted by our Supreme Court in Gobald Motor Service Limited v. R.M.K. Veluswamy where Subba Rao, J. (as he then was) observed:\n\"If the claimants under both the heads are the same, and if they get compensation for the entire loss caused to the estate, they cannot claim again under the head of personal loss to capitalised income that might have been spent on them if the deceased were alive\". \nThat leads us to the question as to who the recipients under the head of 'loss to the dependency' and 'loss to the estate' should be. \n\n(A) Who Are Persons Entitled Under (A) and Under (B):\n49. The next question that arises for consideration is: \"Whether the apportionment of the dependency under the Fatal Accidents Act, 1855 is to be limited to the enumerated class of persons under S.1-A of the Fatal Accidents Act, 1855?\"", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-32", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "50. Under S.1-A of the said Act the apportionment of the dependency is to be made between the wife, husband, parent and child, if any, of the deceased. Section 4 of the said Act states the word 'parent' shall include the father, mother, grandfather and grandmother and that the word 'child' shall include the son, daughter, grandson, granddaughter, step-son and step-daughter. \n51. It is contended by Sri K.F. Baba, the learned counsel for the respondents that the provisions of S.110-B of Motor Vehicles Act are wider in scope than the provisions of S.1A of the Fatal Accidents Act, 1855, that the apportionment under the Motor Vehicles Act is at the discretion of the Court and that therefore the brothers and sisters of the deceased, if they are otherwise legal representatives of the deceased according to their personal law, would also be entitled for an apportionment of the dependency. \n52. Section 110-B of the Motor Vehicles Act provides that the tribunal shall hold an enquiry into the claims of the parties and shall make an 'award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid'.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-33", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "53. In our view the provisions under S.110B of the Motor Vehicles Act, 1939 not only empower the Tribunal to make an award which is 'just' but also empower the said Tribunal to specify the person or persons to whom the compensation shall be paid, thereby permitting apportionment of compensation payable under the Fatal Accidents Act to persons other than those enumerated in the Fatal Accidents Act 1855. In our view all the legal representatives of the deceased according to the personal law applicable to the deceased will be entitled to apportionment of the dependency according to their needs and according to their age and that apportionment is not limited to the class of persons enumerated under S.1-A of the Fatal Accidents Act read with S.4 thereof. The observations of their Lordships of the Supreme Court in relation to the wider scope of S.110-B of the Motor Vehicles Act 1939 in Sheikpura Transport Company v. N.I.T. Insurance Company are in our view apposite. Hegde, J. of the Supreme Court observed:\n\"Under S.110-B of the Motor Vehicles Act 1939 the Tribunal is required to fix such compensation which appears to it to be just. \n The power given to the Tribunal in the matter of fixing compensation under that provision is wide. Even if we assume (we do not propose to decide that question in this case) that compensation has to be fixed on the same basis as required to be done under the Fatal Accidents Act 1855 (Act 13 of 1855), the pecuniary loss to the aggrieved party would depend upon data which cannot be ascertained accurately but must necessarily be an estimate or even partly a conjecture. (Emphasis ours).", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-34", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "54. The liberal view permitting apportionment of the dependency between all the legal representatives of the deceased - without being restricted to the persons enumerated under the Fatal Accidents Act - taken by us has also been taken by a Full Bench of the Punjab & Haryana High Court consisting of Chinnappa Reddy, M.R. Sharma and Harbanslal, JJ. In Jokhiram v. Naresh Kantha, , Damayant Devi v. Sita Devi, 1972 ACCC.J. 334 (Punj & Har) and by a Division Bench of the karnatka High Court in K.S.R.T. Corporation v. Peerappa, , by the Madras High Court in Mohd. Habibullah v. Seethammal, , the Himachal Pradesh High Court in State v. Dole Ram, and the Gujaat High Court in Megjibhai v. Chaturbhai, . The liberal vies which we have adopted was also taken earlier by a Division Bench of this Court in Vanguard Insurance Company v. C. Hanumantha Rao (1975-1 Andh WR 327). \n55. For the reason given above, we respectfully dissent from the judgments of the following High Courts viz., Delhi High Court in Dewan Hari Chand v. Delhi Municipality, AIR 1981 Delhi 71, the kerala High Court in P.B. Kader v. Thatchamma the Madhya Pradesh High Court in Budha v. Union of India, and the Madras High Court in Perumal v. Elluswamy Reddiar (1974 1 Mad LJ 292 = 1974 Acc CJ 82.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-35", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "56. The learned counsel for the appellant placed reliance upon another judgment of the Supreme Court in N.I. Insurance Company v. Shanti Misra . A reading of the judgment would show that their Lordships were only concerned with Ss. 110-A and 110-F of the Motor Vehicles Act and held that the said two sections only dealt with the procedural law and not with the substantive law relating to compensation. In our view that judgment was concerned with the question as to the forum before which a claim under the Motor Vehicles Act should be adjudicated and was confined to two sections viz., S.110-A and 110-F and is therefore clearly distinguishable. In our opinion the decision of the Supreme Court in Sheikpura Transport Company v. N.I.T. Company (AIR 1917 KLSC 1624) which directly deals with S.110-B is in point and binding on us. \n57. We may point out that in England and list of statutory dependents has been periodically enlarged ksubs3quent to 1846 in several statutes such as the Fatal Accidents Act. 1959, the Fatal Accidents Act 1976 and the Administration of Justice Act, 1982. Under the English statutory law the brother, sister, uncle or aunt of the deceased and the persons related by adopted or half blood and the illegitimate off-spring are entitled to the apportionment of the dependency. The recipients are in three classes viz., the dependents, the mourners, apart from the beneficiaries of the estate (see New law Journal. Vol. 133 pp. 307 and 321 by Mr. Tom Harvery).", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-36", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "58. We have also pointed earlier that under S.1-A of the Fatal Accidents Act. 1855 the Court may give such \"damage as it may think proportioned to the loss resulting from such death to the par4ie respectively, for whom and for whose benefit such action shall be brought and the amount so recovered......shall be divided amongst the before-mentioned parties or any of them, in such shares as the Court by its judgment or decree shall direct.\" \n\nThe Court therefore has the power to apportion the dependency between the recipients individually. The entitlement of each person is to a separate award and not just to a joint-interest in a global sum. \n\n59. The compensation payable to the dependents of the deceased is determined and apportioned by the Tribunal constituted under the Motor Vehicles Act. 1939 but the survival of the right in respect of the damages to the dependents and to the legal heirs could only be traced to the Fatal Accidents Act, 1855 read with S.306 of the Indian Succession Act. 1925. Once the right survives, the Tribunal exercises various powers of the Motor Vehicles Act. 19939. Under S.110-B of the Act, it has power to \"make an award determining the amount of compensation which appears to it to be just and specifying the person or persons to whom compensation shall be paid.......\" \nThe Tribunal therefore has power to apportion the dependency among the dependents under the Fatal Accidents Act, 1855 in accordance with their needs and life-span. But so far as the 'loss to the estate' is concerned, the Tribunal has to divide the same in accordance with the personal law applicable to the deceased in case of intestacy or to the legal representatives, administrators, executors or legatees in accordance with law or any other testamentary directions. \n\n60. We shall now proceed to apply the above principles to the facts of the case.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-37", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "60. We shall now proceed to apply the above principles to the facts of the case. \n\n61. The first step is to determine the annual dependency of the 'multiplicand'. In our view, the evidence of P.W. 1. the mother of the deceased and of P.W. 2, the husband of one of the married sisters is to the effect that the deceased was having a carpentry and painting workshop and that he was earning, on an average, about Rs.400/- to Rs.500 P.M. at the time of his death. We determine the average monthly net earning at Rs.400 and consider that the deceased would have given Rs.200/- P.M. to his dependents. The annual dependency thus works out to a sum of Rs.2, 400/-. We are not inclined to go by the rough figure of Rs.1500/- P.A. mentioned by the claimants for that figure is clearly contrary to the conventional figure is clearly contrary to the conventional figure adopted towards the dependency. Thus the annual dependency will be Rs.2, 400 and for such an income there is no incidence of income-tax.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-38", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "62. The next step is to arrive at the appropriate multiplier. The decesed having died at the age of 22 years, we consider that a multiplier of 16 would be reasonable. \n63. We now proceed to cross-check the multiplier with reference to the annuity tables. The deceased not being a salaried employee liable to retirement, it is reasonable to assume that his earning capacity extends beyond 65 years. For a person dying at 22, and earning beyond his 65th year, the multiplier would be 16.85. This multiplier has to be reduced for the 'contingencies' - namely, the chances of the mother dying, the sisters marrying soon, the deceased falling sick or his earning capacity being diminished. We are of the view that the multiplier of 16.85 from the Table is to be reduced to 16. Thus the multiplier of 16 selected by us compares favourably with the one arrived at by use of the actuarial or annuity tables. Therefore it is clear that the multiplier of 48 adopted by the Tribunal is hopelessly arbitrary.     \n64. The compensation payable to the dependency under the Fatal Accidents Act, 1855 comes to Rs.2400 x 16 = Rs.38, 400/-.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-39", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "65. As the same is not high when apportioned, it is not likely to result in any diminution towards income-tax on any investments so as to fall within the exception in Limpoh Choo's case (1980-A.C. 174). As the multiplier of 16 is arrived at by reducing the prospective loss to its 'present value' by applying a standard rate of 51/2% compound for future years, it will not be reasonable to treat any investment of the dependency at rate higher than 51/2% so as to provide further for inflation or income-tax. \n66. The next question is the loss to the estate. We confirm the loss to the estate at Rs.500/-  \n67. The further question is as to who are entitled to receive these sums. The dependency, according to the liberal view accepted by us, is to go to all the legal heirs of the deceased who died interstate. The heirs are the mother and sister, married and unmarried. But the married sisters, not being any longer dependent get nothing. The dependency goes to the mother and the unmarried sisters. \n68. The dependency of Rs.38, 400/- has however to be apportioned between the mother and the unmarrieds isters according to their needs and span of life. The loss to the estate, namely Rs.500/- has to be divided according to Mahomedan law between the mother and sisters of the deceased. Therefore, the amount received by each of the claimants from the estate has to be deducted from the amount each is apportioned from the dependency.  \n69. On the facts of this case, the claimants having already withdrawn 'jointly' one half of the award of Rs.72, 500 - with interest, we do not propose to make the above calculation. Suffice it to say that the amount receivable by the claimants 'jointly' would be as follows:", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-40", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "(a) towards dependency under Fatal accidents Act, 1855 (Rs.38, 400 - Rs.500) Rs.37, 900.00\n (b) towards the loss to the estate Rs. 500.00 ___________ Total Rs.38, 400.00 ___________", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-41", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "70. In the result, the award made by the Tribunal is set aside and the appeal allowed in part and an award of Rs.38, 400 with interest at 6% P.A. from 5-6-78, the date of the petition, is substituted. There shall be no order as to costs in the C.M.A.    \n71. With regard to the mode of payment of compensation award under the Motor Vehicles Act, 1939, it would in our opinion, be desirable that the Tribunals should issue payments under 'Account-payee' cheques or similar orders, directly to the parties or their legal guardians upon verification of their identity. \n72. Compensation cases raise issue of social, economic and financial policy not amenable to Judicial reform but can be resolved by the legislature only after full consideration of factors which cannot be brought into clear focus, or be weighed and assessed, in the courses of the forensic process. The judge - however wise, creative, and imaginative he may - is \"Cabi\" c. cribb'd confin'd bound in not as was Macbeth, to his \"saucy doubts and fears\" but by the evidence and arguments of litigants. It is this limitation, inherent in the forensic process, which sets bounds to the scope of judicial law reform (per Lord Scarman at .1813 of Lim Poh Choo's case (1980-A.C. 174).", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-42", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "73. The reform must therefore come from Parliament. The Fatal Accidents Act, 1855 requires to be made up to date in the light of the experience of the English Fatal Accidents Acs of 1959 and 1976. Similarly the legal Representatives Suits Act 1855 and S.306 of the Indian Succession Act 1925 require to be brought in line after examining the amendments to the Law Reforms (Miscellaneous Provisions) Act, 193 (Sic). The widespraed reforms made under the Administration Justice Act 1982 have also to be taken into account. The law has to be simplified and adjusted to suit Indian conditions.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "8e72595b72e2-43", "Titles": "The Chairman, A.P.S.R.T.C., ... vs Shafiya Khatoon And Ors. on 24 August, 1984", "text": "74. Lord Hailsham, while introducing the Administration of justice Bill, 1982 spoke of the need for 'darning' the statute from time to time, like darning old socks. Perhaps, as pointed out by M/s. Andrew Borkowski & K. Stanton (Vol. 46, Modern Law Review, 1983, P. 191) it is necessary to buy 'new socks' rather than darn the old ones. \n75. Appeal partly allowed.", "source": "https://indiankanoon.org/doc/532350/"}
+{"id": "a16dd6a67cf7-0", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "JUDGMENT Chinnappa Reddy, J.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-1", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "1. The respondent-assessee, a firm, failed to file its returns for the years 1965-66 to 1969-70, within the time stipulated by the Act. The firm submitted an explanation that the returns could not be filed in time because the person who was in-charge of the accounts of the firm was unable to attend to its affairs for some time owing to some personal reasons. The Income-tax Officer did not accept the explanation. He levied penalties. The assessee preferred revision petitions before the Commissioner of Income-tax. Before the Commissioner it was represented that the delay was due to family troubles. The Commissioner did not accept the explanation. He rejected the revision petitions. The assessee filed writ petitions in the High Court. Obul Reddy J. (as he then was) quashed the orders of the Commissioner on the ground that penalties could only be imposed if it was found that the assessee acted deliberately in defiance of the law or was guilty of contumacious or dishonest conduct or acted in conscious disregard of his obligations and not otherwise. He directed the Commissioner to reconsider the matters. The Commissioner has preferred these writ appeals. \n 2. We find it extremely difficult to agree with the view expressed by Obul Reddy J, But that view was approved by a Division Bench of this court consisting of Obul Reddy C J. and Punnayya J. in Additional Commissioner of Income-tax v. Narayanadas Ramkishan . In the circumstances, we think that the question should be resolved by a Full Bench.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-2", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "3. We would, however, like to express our view in the matter. Section 271(1)(a) of the Income-tax Act provides that if the Income-tax Officer is satisfied that any person \"has without reasonable cause\" failed to furnish the returns of total income, etc., he may levy a penalty on such person. All that the Income-tax Officer has to be satisfied about is that the failure of the assessee to submit return is \"without reasonable cause\" neither more nor less. Parliament has thus prescribed an objective test to determine the mental state of the person proposed to be proceeded against. There is no reason for importing the doctrine of mens rea into a situation where the requisite mental state is already defined. More about it later. Nor is there any reason for qualifying the failure to furnish a return with expressions like \"contumacious\", \"dishonest\", \"in deliberate defiance of law\", etc. To do so is to rewrite Section 271(1)(a). \n 4. The doctrine of mens rea, in origin and in practice, is a rule of construction. In England, in 18th and 19th centuries, with the growth of statute law, a conflict arose between the common law and the statute law. The common law judges and lawyers evolved a rule of construction to avoid the conflict. They said : \n \"It is a sound rule to construe a statute in conformity with the common law rather than against it, except where and so far the statute is plainly intended to alter the course of the common law.\" \n Now, it was one of the principles of English common law that mens rea was an essential ingredient of an offence. An application of the rule of construction to this principle meant that there was no presumption that mens rea was excluded from statutory offences. This led to the development of a presumption stated thus by Wright J :", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-3", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"There is a presumption that mens rea, an evil intention or a knowledge of the wrongfulness of the act, is an essential ingredient in every offence, but that presumption is liable to be displaced either by the words of the statute creating the offence or by the subject-matter with which it deals, and both must be considered.\" [Sherras v. De Rutzen [1895] 1 QB 918 (QB)]. \n This presumption or rule of construction is a sound rule to apply where traditional crime is given statutory form or where a new crime is added to the general criminal law. But it has no application or it is of very weak application to offences created by modern, social, industrial, fiscal and economic legislation. Some judges have altogether denied the existence of any such presumption in the case of modern statutory offences while other judges have \"manifested a marked tendency to readily displace or minimise the application of the presumption\". Vide Stephen J. in Cundy v. Le Cocq [1884] 13 QBD 207 (QB), Kennedy L.J. in Hobbs v. Winchester Corporation [1910] 2 KB 471 (CA) and Donovan J. in Regina v. St. Margaret's Trust Ltd. [1958] 1 WLR 522 (C Cr App). We may refer here to Bruhn (Jacob) v. The King [1909] AC 317, 324 (PC), where dealing with a case arising out of a contravention of revenue laws, Lord Atkinson said: \n \"In many cases connected with the revenue certain things are prohibited unless done by certain persons, or under certain conditions. Unless the person who does one of these things can establish that he is one of the privileged class, or that the prescribed conditions have been fulfilled, he will be adjudged guilty of the offence, though in fact he knew nothing of the prohibition.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-4", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "In. Lim Chin Aik v. The Queen [1963] AC 160 (PC), the Privy Council recognised that where \"public welfare offences\" (which most modern statutory offences are) were concerned there was a presumption of strict liability and the presumption of mens rea was displaced. In Indo-China Steam Navigation Co. Ltd. v. Jasjit Singh [1964] 34 Comp Cas 435 (SC) the Supreme Court attached great importance to the social purpose of the legislation rather than to the so called presumption relating to mens rea. In State of Maharashtra v. Mayer Hans George [1965] 35 Comp Cas 557 (SC) the Supreme Court expressed the view that the rule of construction laid down by the Court of Criminal Appeal of England in Regina v. St. Margaret's Trust Ltd. [1958] 1 WLR 522 (C Cr App) was nearer to the point having regard to the objects and purposes of the legislation with which they were dealing. In Nathulal v. State of Madhya Pradesh , Subba Rao J. held that mens rea was an essential ingredient of a criminal offence but, all the same, accepted the position that the rule relating to mens rea was a rule of construction. He observed:", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-5", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"It is, however, a sound rule of construction which is adopted in England and also accepted in India, to construe a provision which creates an offence in conformity with the common law rather then against it except where the statute expressly or by necessary implication excludes mens rea.\" If the true position is that the principle of mens rea is a rule of construction raising a presumption that criminal intent is not to be considered as excluded unless so excluded expressly or by necessary implication, it must follow that where the requisite mental state is defined by the statute itself (as, for instance, in the present case) there is no scope for the application of the doctrine of mens rea. In India, the requisite mental state is almost always defined by the statute itself, and generally, there is no scope for application of the doctrine of mens rea. The question of the application of the doctrine of mens rea arises only in cases where the requisite mental state is not defined by statute. In such cases, it is necessary first to consider the words in their true and natural sense; to consider the object of the statute; if necessary, to consider further the attendant circumstances such as the nature of the duty imposed and on whom, whether a particular construction will render the Act effective or ineffective to achieve its object, whether it will permit the observance of the statute. If the evidence afforded by these considerations is insufficient to conclude whether mens rea is included or excluded as an ingredient of the offence then only recourse should be had to the presumption. As we said earlier, in the present case. Parliament has provided an objective test to determine the mental element. There is, therefore, no occasion to invoke the doctrine of mens rea. \n We would further like to point out that it is wrong to classify proceedings for levy of penalty under taxation statutes as offences of a criminal nature. In Corpus Juris Secundum, Vol. 85, p. 580, it is said.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-6", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws. \"  \n In Ummali Umma v. Inspecting Assistant Commissioner of Income-tax [1967] 64 ITR 669, 676 (Ker), Mathew J. said : \n \"I cannot say that the penalty imposed under Section 28 of the repealed Act or under Section 271 of the Act was or is imposed on the basis that it was or is an offence. For the offence punishment was or is prescribed such as imprisonment, fine or both. The imposition of penalty on the basis of an act or omission by an assessee is not because the act or omission constitutes an offence, but because that act or omission would constitute an attempt at evasion. Therefore, penalty is exacted not because an act or omission is an offence but because it is an attempt at evasion of tax on the part of the assessee.\" \n In R.C.No. 64/1970 [Commissioner of Income-tax v. Maduri Rajeswar [1977] 107 ITR 832, 836 (AP)] a Division Bench of this court of which one of us was a member observed : \n \"The objects of the two provisions appear to be different: the one entailing the prosecution and punishment is to vindicate public justice by punishing the offender, whereas the object of penalty proceedings is to render evasion unprofitable and to secure to the State the compensation for damages or attempted evasions.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-7", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "In W.Ps. Nos. 7974 and 7839/1973 [Kashiram v. Income-tax Officer ] the question of the constitutional validity of Section 140A(3) was raised before us. In that case, we had occasion to point out that the provision of levy of penalty for failure to pay the tax on self-assessment was no more than a mere provision ensuring compliance with Sub-section (1), making such non-compliance unprofitable. We also observed as follows : \n \"Now, there are provisions in the Income-tax Act providing for levy of penalties for non-compliance with the provisions relating to filing of return, non-furnishing of accounts or particulars, failure to pay advance tax, concealment or evasion of income-tax, etc. Criminal prosecution is also provided for by Chapter 22 of the Act in certain cases which, inter alia, include failure to file a return of income, failure to produce accounts and documents, making of false statements and declaration, failure to deduct and pay tax when required to do so. These provisions relating to levy of penalties and criminal prosecutions are twin sanctions provided by law for ensuring compliance with law on the part of the assessees.\" \n We may mention that in Abraham v. Income-tax Officer , the Supreme Court held that the character of penalty was that of an additional tax. In Collector of Malabar v. Ebrahim Hajee [1957] 32 ITR 124 (SC), the Supreme Court held that even the provision for arrest for nonpayment of taxes was only a measure to compel payment of taxes and not a measure of punishment.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-8", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "5. Obul Reddi C.J. referred to the observations of the Supreme Court in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26, 29 (SC), where, dealing with the provision for levy of penalty under the Orissa Sales Tax Act, the Supreme Court observed: \n \"Under the Act penalty may be imposed for failure to register as a dealer: Section 9(1), read with Section 25(1)(a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the company in failing to register the company as a dealer acted in the honest and genuine belief that the company was not a dealer. Granting that they erred, no case for imposing penalty was made out.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-9", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "We think that the Supreme Court was merely trying to explain the possible manner in which discretion may be exercised for imposing a penalty. They were emphasising that mere failure to register as a dealer ought not to attract a penalty. In each case the discretion to levy penalty had to be exercised, not mechanically, but, judicially after taking into account all the facts and circumstances of the case relevant for the exercise of discretion. It is no authority for the proposition that under Section 271(1)(a) of the Act the Income-tax Officer must find some extra mental element in addition to finding that the assessee had failed to furnish a return \"without reasonable cause\".  \n The views expressed by us are shared by a Full Bench of the Kerala High Court in Commissioner of Income-tax v. Gujarat Travancore Agency [FB] and a Full Bench of the Orissa High Court in Commissioner of Income-tax v. Gangaram Chapolia [FB]. \n 6. In the light of this discussion we are unable to agree with the view expressed by Obul Reddy C.J. and Punnayya J. in Additional Commissioner of Income-tax v. Narayanadas Ramkishan . We, therefore, direct that the papers may be placed before the Honourable the Chief Justice for the constitution of Full Bench. \nJUDGMENT Sambasiva Rao, J.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-10", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "7. Is there an occasion to introduce the doctrine of mens rea into Section 271(1)(a) read with Sub-clause (i) of that section of the Income-tax Act, 1961? Seeking an answer to this question, these four writ appeals have been directed by Chinnappa Reddy and Jeevan Reddy JJ. to be placed before a Full Bench.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-11", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "8. It is not necessary for answering the question and also for the adjudication of the four appeals before us to go into the facts in minute detail. Broadly stated, the material facts are : The respondents are assessees which are firms. They failed to file their returns for the years 1965-66 to 1969-70 within the time prescribed under the Income-tax Act, 1961 (hereinafter referred to as the Act). An explanation was tendered for this delay saying that the person who was in charge of the accounts of the firms was unable to look after the affairs of the firms for some time owing to some personal reasons. The Income-tax Officer was not inclined to accept this explanation and levied penalties for late submission of the returns. The respondents preferred revision petitions before the Commissioner of Income-tax. Before him, the reason for the delay was stated as family troubles. He rejected the revision petitions as he did not accept the explanation. Thereupon, writ petitions were filed in this court by the respondents. Obul Reddy J., as he then was, quashed the orders of the Commissioner, holding that the penalties could be imposed only when it was found that the assessee acted deliberately in defiance of the law, or was guilty of contumacious or dishonest conduct, or acted in conscious disregard of his obligations and not otherwise. The learned judge sent back the matters to the Commissioner for reconsidering them in the light of the observations he made and the observations of the Supreme Court in Hindustan Steel Ltd. v. State of Orissa . The department preferred these writ appeals challenging the learned judge's order. \n 9. The view expressed by Obul Reddy J., sitting single in these writ petitions, was later reiterated and approved by a Division Bench consisting of Obul Reddy C.J. and Punnayya J. in Additional Commissioner of Income-tax v. Narayanadas Ramkishan .", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-12", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "10. It was after rendering of the above Bench decision, these four writ appeals came before Chinnappa Reddy and Jeevan Reddy JJ. The learned judges observed that it was extremely difficult to agree with the view taken by Obul Reddy J., sitting single, which was reiterated in Narayanadas Ramkishan's case .", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-13", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "11. While stating this, the learned judges gave their reasons for their disagreement. According to them, penalty could be imposed for the delayed filing of the return under Section 271(1)(a) of the Act, when the Income-tax Officer is satisfied that the assessee has \"without reasonable cause\" failed to file it within the prescribed time. While imposing such a penalty, what all the Income-tax Officer is to be satisfied about is that the delay occurred \"without reasonable cause\". The provision of law requires nothing more or nothing less. Parliament itself has thus provided an objective test to determine the mental state of the person proposed to be proceeded against. There is no reason for importing the doctrine of mens rea into a situation where the requisite mental state is already defined. There is no justification for qualifying the failure to file a return with the expressions, \"contumacious\", \"dishonest\", \"in deliberate defiance of law\", etc. Then the learned judges proceeded to give the reasons in detail for the conclusions they had reached. Since this view is in conflict with the decision of the earlier Division Bench in Narayanadas Ramkishan's case , they decided that the conflict should be resolved by a Full Bench. While commending the appeals and the view propounded by Chinnappa Reddy and Jeevan Reddy JJ., in their order referring the appeals to a Full Bench, Sri Polavarapu Rama Rao pressed his brief in the following manner : The doctrine of mens rea is a rule of construction. It is a sound rule to construe the statute in conformity with the common law in so far as it is possible. However, where the statute plainly intends to alter the course of the common law, the statutory provisions should prevail. Mens rea is an essential ingredient of an offence. However, the general presumption that mens rea is an essential ingredient of an offence can be displaced either by the words of the statute creating the offence or by the subject matter with", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-14", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "offence can be displaced either by the words of the statute creating the offence or by the subject matter with which it deals, in which case both must be considered. It may be that mens rea is a necessary ingredient in every traditional crime which is given statutory form. But it has very limited application, and in some cases, it has no application at all to offences created by modern, social, industrial, fiscal and economic legislation. The Indian Income-tax Act is one such modern fiscal legislation. As a piece of modern fiscal and economic legislation, the Act provides for deterrents in many shapes and forms for not acting in accordance with its provisions. It may rest content with collecting interest for delayed submission of returns. In some other cases, it goes a step further and provides for levy of penalty, and in still some other cases, it treats the delayed filing of the returns an offence making the offender liable to punishment. May be, that one of the three modes of deterrents laid down by the Act for preventing delayed filing of the returns is imposition of a penalty under Section 271(1)(a). Penal proceedings are quasi-criminal in their nature. But Section 271(1)(a) itself providing for imposition of penalty, clearly lays down the test and the basis for its imposition and that is the satisfaction of the Income-tax Officer that the delay has occurred \"without reasonable cause\". There is no warrant or justification for inducting into this provision the concept of mens rea, when the provision itself is abundantly clear, laying down the objective tests for imposition of penalty. On the other hand, the third mode of preventive action is provided under Section 276C. Section 276C considers delayed filing of a return as an offence, which is punishable with rigorous imprisonment for a term which may extend to one year or with a fine, when the assessee has wilfully failed to furnish in due time the return of his income. In such cases alone the concept of mens rea could be", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-15", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "due time the return of his income. In such cases alone the concept of mens rea could be introduced, and it will have to be established by the revenue that the assessee's conduct in filing the return after due date was wilful; in other words, he deliberately acted in defiance of law or was guilty of contumacious or dishonest conduct or acted in conscious disregard of his obligations. But that is not required in a case under which action is taken under Section 271(1)(a) and penalty is imposed. In order to do so, it would meet the requirement of law if the Income-tax Officer or the Appellate Assistant Commissioner is satisfied that the assessee has \"without reasonable cause\" failed to furnish the return of his income within the time allowed. So, the learned counsel for the revenue argued that the existence of mens rea, i. e., contumacious conduct is not a necessary ingredient for a proceeding under Section 271(1)(a). Only the satisfaction of the concerned officer that the delay has occurred \"without reasonable cause\" is sufficient.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-16", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "12. On the other hand, Sri Dasaratharama Reddy, for the assessees-respondents maintained that Section 271 occurs in Chapter XXI which has the title \"Penalties imposable\". Penalty is a penal imposition. That means the proceeding is in the nature of a criminal proceeding. Mens rea is always a necessary ingredient of a criminal proceeding. That apart, the section itself is sufficiently indicative of the intention of Parliament that mens rea has been made a necessary part of a proceeding under Section 271. He relies on the Explanation to Sub-clause (iii) of Section 271(1), which requires a person whose return of his total income is less than eighty per cent. of the total income as assessed under Section 143 or 144 or 147 to prove that his failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part. In the absence of such proof emanating from him, the Explanation deems him to have concealed the particulars of his income or to have furnished inaccurate particulars of his income. The Explanation thus introduces into Section 271 the need to prove existence or absence of fraud or any gross or wilful neglect. If the returned total income is less than 80 per cent. of the total income as finally assessed, it would be for the assessee to prove absence of fraud or gross or wilful neglect. From this, it must logically follow that if the returned income is not less than 80 per cent. of the finally assessed income, the burden would lie on the revenue to show that the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income on account of fraud or gross or wilful neglect. Such being the position in regard to the cases arising under Clause (c) of Section 271(1) there is no reason whatever to exclude the ideas of fraud or gross or wilful neglect from the other two clauses of the", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-17", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "whatever to exclude the ideas of fraud or gross or wilful neglect from the other two clauses of the self-same section, namely, (a) and (b). In the submission of the learned counsel, this idea must be extended even to delayed filing of the returns. He further relied on Sub-section (4A) of Section 271, which he claimed as another indication of the existence of mens rea in the entirety of Section 271. It was argued that under Sub-section (4A), the Commissioner may reduce or waive the amount of minimum penalty imposable on a person for delayed filing of the return \"without reasonable cause\", if it is seen that the assessee has, prior to the issue of the notice to him under Sub-section (1) of Section 139, voluntarily and in good faith made full disclosure of his income. The use of the phrases \"voluntarily\" and \"in good faith\" clearly points to the proof of existence of the mental attitude on the part of the assessee which smacks of mens rea, before he is visited with penalty by the appropriate authority. Thus, either going by the general principles that apply to penalty proceedings or going by the language of the statute, so, learned counsel submitted, it is sufficiently clear that mens rea is an ingredient of a penalty proceeding under Section 271(1)(a). Therefore, without showing that the assessee acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct or acted in conscious disregard of his obligations while filing the return after time, the appropriate taxing authority cannot impose penalty under Section 271.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-18", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "13. Let us first notice Section 271, excluding the irrelevant portions thereof, as a first step in the process of finding out whether mens rea has been made an ingredient for imposing penalty for filing returns after due dates. It occurs in Chapter XXI under the caption \"Penalties imposable\". The heading given to Section 271 is \"Failure to furnish returns, comply with notices, concealment of income, etc.\" The heading itself classifies the subject with which it deals into (1) failure to furnish returns, (2) failure to comply with notices, and (3) concealment of income. Since incidental matters are also included in the section, the word \"etc.\" is added at the end. \n 14. Then Section 271 says: \n \"271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person- \n (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under Sub-section (1) of Section 139 or by notice given under Sub-section (2) of Section 139 or Section 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by Sub-section (1) of Section 139 or by such notice, as the case may be, or", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-19", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "(b) has without reasonable cause failed to comply with a notice under Sub-section (1) of Section 142 or Sub-section (2) of Section 143, or", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-20", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "(c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,-- \n (i) in the cases referred to in Clause (a), in addition to the amount of the tax, if any, payable by him, a sum equal to two per cent. of the assessed tax for every month during which the default continued, but not exceeding in the aggregate fifty per cent. of the assessed tax. \n Explanation.--In this clause \"assessed tax\" means tax as reduced by the sum, if any, deducted at source under Chapter XVII-B or paid in advance under Chapter XVII-C ; \n (ii) in the cases referred to in Clause (b), in addition to any tax payable by him, a sum which shall not be less than ten per cent. but which shall not exceed fifty per cent. of the amount of the tax, if any, which would have been avoided if the income returned by such person had been accepted as the correct income ;  \n (iii) in the cases referred to in Clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed twice, the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-21", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "Explanation,--Where the total income returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under Section 143 or Section 144 or Section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of Clause (c) of this sub-section......  \n (4A) Notwithstanding anything contained in Clause (i) or Clause (iii) of Sub-section (1), the Commissioner may, in his discretion- \n (i) reduce or waive the amount of minimum penalty imposable on a person under Clause (i) of Sub-section (1) for failure, without reasonable cause, to furnish the return of total income which such person was required to furnish under Sub-section (1) of Section 139, or", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-22", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "(ii) reduce or waive the amount of minimum penalty imposable on a person under Clause (iii) of Sub-section (1), if he is satisfied that such person- \n (a) in the case referred to in Clause (i) of this sub-section has, prior to the issue of notice to him under Sub-section (2) of Section 139, voluntarily and in good faith, made full disclosure of his income ; and in the case referred to in Clause (ii) of this sub-section has, prior to the detection by the Income-tax Officer of the concealment of particulars of income in respect of which the penalty is imposable or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars ; \n (b) has co-operated in any enquiry relating to the assessment of such income; and  \n \n\n (c) has either paid or made satisfactory arrangements for payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year : \n Provided that- \n (i) if in a case the minimum penalty imposable under Clause (i) of Sub-section (1) for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate of the minimum penalty imposable under the said clause for those years, exceeds a sum of fifty thousand rupees, or", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-23", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "(ii) if in a case falling under Clause (c) of Sub-section (i), the amount of income in respect of which penalty is imposable for the relevant assessment year, or, where such disclosure relates to more than one assessment year, the aggregate amount of such income for those years, exceeds a sum of five hundred thousand rupees, no order reducing or waiving the penalty shall be made by the Commissioner unless the previous approval of the Board has been obtained. \n (4B) An order under Sub-section (4A) shall be final and shall not be called in question before any court of law or any other authority.\"   \n Clause (iii) of Sub-section (1) and Explanation to Sub-section (1) of Section 271 were amended by way of substitution and insertion by the Amendment Act, 1973. \n 15. In these writ appeals, we are called upon to deal only with the nature of penalty that is imposable on the assessee for filing his returns after due dates and we are not concerned with either failure to comply with notices or with concealment of income which are also matters dealt with by Section 271. Therefore, we shall confine our consideration of the matter only to the failure to furnish returns within the time allowed. We do not propose to deal with other matters included in the section, as failure to comply with notices and concealment of income, excepting to the extent that they will be necessary to arrive at the actual intent and content of Clause (a) of Section 271(1) read with Sub-clause (i), on a comparative appraisal of the different provisions of the section.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-24", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "16. Does Section 271(1)(a) take in its amplitude the requirement that the appropriate taxation authority should be satisfied before imposing penalties on an assessee for his filing returns late not only that he had reasonable cause but also that he acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct or acted in conscious disregard of his obligation ? In other words, is it necessary for the appropriate authority to arrive at the conclusion that the conduct of the assessee in filing the delayed return has been vitiated by mens rea. What all Clause (a) expressly requires is that the officer or the Appellate Assistant Commissioner has to be satisfied that the assessee has, without reasonable cause, failed to furnish the return within the time allowed. Mens rea is evil intention or knowledge of the wrongfulness of the act that a person commits. That is, the person has a guilty mind in committing the act. It is only when such mental attitude is present in an act, the person who commits it is said to have acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct or acted in conscious disregard of his obligation.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-25", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "17. Mens rea is an essential ingredient of an offence. However, it is a rule of construction. If there is a conflict between the common law and the statute law, it has always been held that it is a sound rule to construe a statute in conformity with the common law. But it cannot be postulated that a statute cannot alter the course of the common law. Parliament in exercise of its constitutional powers makes statutes and in exercise of that power it can affirm, alter or take away the common law altogether. Therefore, if it is plain from the statute that it intends to alter the course of the common law, then the plain meaning should be accepted. The existence of mens rea as an essential ingredient of an offence has to be made out by the construction of the statute. This is what Wright J. said in Sherras v. De Rutzen [1895] 1 QB 918, 921 on the subject ; \n \"There is a presumption that mens rea, an evil intention, or a knowledge of the wrongfulness of the act, is an essential ingredient in every offence ; but that presumption is liable to be displaced either by the words of the statute creating the offence or by the subject-matter with which it deals, and both must be considered.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-26", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "Absolute liability for an offence in order to presume mens rea should be established. In order to find out whether means rea, i.e., a guilty mind is an ingredient or not, reference has to be made to the language of the enactment, the object and subject-matter of the statute and the nature and character of the act sought to be punished. It should also be borne in mind, while considering the question of mens rea, that even in cases where there is an absolute prohibition, absolute liability is not to be presumed but has to be clearly established. Adopting the view of Wright J. in Sherras v. De Rutzen [1895] 1 QB 918 and the view expressed in Brend v. Wood 110 JP 317; [1946] 62 TLR 462, Lord Du Parcq observed in Srinivas Mall v. Emperor ILR 26 Pat 460; AIR 1947 PC 135. \n \"It is... ...of the utmost importance for the protection of the liberty of the subject that a court should always bear in mind that, unless the statute, either cleaily or by necessary implication rules out mens rea as a constituent part of a crime a defendant should not be found guilty of an offence against the criminal law unless he has got a guilty mind.\" \n It Hariprasada Rao (Ravula) v. State this rule regarding presumption of mens rea and construction of the statute was approved by the Supreme Court, and it was once again reiterated by the majority view in State of Maharashtra v. M.H. George .", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-27", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "18. Subba Rao J. (as he then was) expressed the view in Nathulal v. State of Madhya Pradesh that the rule of construction was adopted in England and accepted in India to construe a statutory provision which creates an offence, in conformity with the common law rather than against it. At the same time, the learned judge pointed out an exception, and that is where the statute expressly or by necessary implication excludes mens rea. In the light of these authoritative opinions expressed in the judicial pronouncements of the Supreme Court, it can be unhesitatingly concluded that mens rea or criminal intent is a necessary ingredient in a criminal offence. A presumption exists that criminal intent is not excluded unless the statute excludes it either expressly or by necessary implication.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-28", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "19. Then it has to be considered what precisely is the nature of penalty proceeding. Is it possible to say that simply because the word \"penalty\" is used in a statute, it has classified that proceeding as a proceeding of a criminal nature ? When a statute provides for imposition of penalty, it will have to be found out from the scheme of the Act and the particular provision under which penalty is imposable, whether imposition of penalty is provided as a punishment for an offence. Simply because something more than the usual payment of tax that is payable by an individual is imposed on him, could it be said that a punishment is inflicted on him for an offence he has committed ? Once again, it will have to be kept in mind that as human values have been changing and changing at a fast pace, a spate of social legislation has been taken up by all countries, particularly developing countries like India. Taxation statutes have two purposes. They are intended not only to collect revenues for the State, but also for bringing about social justice and to enable the State to implement social welfare schemes undertaken by it. Consequently, several taxation statutes, if not all, have taken great care in making provisions for collection of taxes imposed, as speedily as possible. If there is a delay on the part of the taxpayer to pay his taxes, taxation statutes have provided for not only remedial and coercive proceedings, but also punishments treating certain tax delinquencies as offences. These several measures should not be confused with each other. The position has been explained thus in Corpus Juris Secundum, Volume 85, at page 580 : \n \"A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws.\" \n In the same page, it proceeds to state :", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-29", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "In the same page, it proceeds to state : \n \"In some jurisdictions it is held that the penalty becomes, by operation of the statute imposing it, a part and parcel of the taxes due, and in other jurisdictions penalties are a type of tax. In still other jurisdictions, however, it is held that the penalty is not a part of the tax, and that will not be regarded as a legal incident to a tax. It is merely a method of enforcing payment of the tax.\" \n It was held by the Supreme Court of the United States dealing with the nature of penalties in Guy T. Helvering v. Charles E. Mitchell (303 US 391) ; \n \"Where civil procedure is prescribed for the enforcement of remedial sanction, the accepted rules and constitutional guarantees governing the trial of criminal prosecutions do not apply.\" \n Once again, the Supreme Court of the United States, dealing with penalties imposed for evasion or avoidance of payment of income-tax, observed in Murray R. Spies v. United States (317 US 492 at 495):", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-30", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"The penalties imposed by Congress to enforce the tax laws embrace both civil and criminal sanctions. The former consist of additions to the tax upon determinations of fact made by an administrative agency and with no burden on the Government to prove its case beyond a reasonable doubt. The latter consist of penal offences enforced by the criminal process in the familiar manner. Invocation of one does not exclude resort to the other... The failure in a duty to make a timely return, unless it is shown that such failure is due to reasonable cause and not due to wilful neglect, is punishable by an addition to the tax of 5 to 25 per cent. thereof depending on the duration of the default... The offence may be more grievous than a case for civil penalty. Hence, the wilful failure to make a return, keep records, or supply information when, required, is made a misdemeanour, with regard to existence of a tax liability.\" \n The Supreme Court, while considering the nature of penalty levied under Section 28(1)(c) of the Income-tax Act, observed in C. A. Abraham v. Income-tax Officer that penalty is only an additional tax. Mathew J,, sitting single in Kerala High Court, in P. Ummali Umma v. Inspecting Assistant Commissioner of Income-tax [1967] 64 ITR 669 (Ker), after referring to the two decisions of the Supreme Court of the United States, observed at pages 675 and 676:", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-31", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"No conviction for any offence is involved in the imposition of a penalty. Article 20(1) of the Constitution will have application only when a person is subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence. This would indicate that commission of an offence and a conviction thereof are necessary in order that the provisions of the article may be attracted... A penalty, therefore, would come within the purview of Article 20(1) only if the earlier part of the clause is attracted, i.e., there must have been a conviction for an offence. Unless there is a conviction, no question of the latter part of the article applying will arise... The imposition of penalty on the basis of an act or omission by an assessee is not because the act or omission constitutes an offence, but because that act or omission would constitute an attempt at evasion. Therefore, penalty is exacted not because an act or omission is an offence but because it is an attempt at evasion of tax on the part of the assessee. Article 20(1) of the Constitution can have no application to a case where a penalty is imposed not as punishment for an offence but for some other collateral purpose.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-32", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "Chinnappa Reddy and A. D. V. Reddy JJ. expressed, in their judgment in R.C. No. 64 of 1970 (Commissioner of Income-tax v. Maduri Rajes-war ), dated 24th of November, 1971, the viewthat the proceedings entailing penalty under the Income-tax Act are to be equated to prosecutions attracting punishment cannot be accepted, as no conviction for any offence is involved in the imposition of a penalty. They found that Article 20(1) of the Constitution was not applicable to the proceedings imposing penalty under the Income-tax Act. While coming to this conclusion, they followed the decision in Spies v. United States (317 US 492). \n The above considerations would demonstrate that imposition of penalty for tax delinquency cannot be equated to imposition of punishment for an offence.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-33", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "20. Sri Dasaratharama Reddy, however, pointed out that penalty proceedings are quasi-criminal in nature and are not of civil character. He endeavoured to point out that taxation laws do not maintain such distinction between offences and penalties and generally they make penalties leviable for offences. An offence necessarily must have, as one of its essential ingredients, guilty mind or mens rea. He referred to Section 30 of the Andhra Pradesh General Sales Tax Act, 1957, which deals with \"offences and penalties\". That section provides for imposition of penalties, including imprisonment and fine, on conviction for tax delinquencies. Taxation laws, therefore, do not keep up any marked distinction between penalty and punishment for an offence, so the learned counsel submitted. Likewise, he invited our attention to Section 10 of the Central Sales Tax Act, 1956, which provides for imposition of penalties like simple imprisonment and fine for tax offences. Our attention was also invited to Section 9 of the Andhra Pradesh Cinemas (Regulation) Act, 1970, under which penalties are leviable for certain offences. \n 21. Relying on these provisions, it was argued that at least in so far as taxation enactments are concerned, there is not much of a distinction between penalty for taxation delinquency and punishment for taxation offence. It is in this view, Sri Dasaratharama Reddy submitted, the observations of Shah, Actg. C.J., in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 at page 29 (SC) should be understood. There the learned Acting Chief Justice was considering, as one of the questions, whether imposition of penalties for failure to get registered as a dealer was justified under the Orissa Sales Tax Act of 1947. The learned Chief Justice observed at page 29:", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-34", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"Under the Act penalty may be imposed for failure to register as a dealer : Section 9('l), read with Section 25(1)(a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation.\" \n Resting on these observations of the Supreme Court, the argument was advanced that imposition of penalty is the result of a quasi-criminal proceeding and such being the nature, it shall not be imposed unless the assessee either acted deliberately in defiance of law, or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of his obligation.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-35", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "Indeed, this is the observation which is the fountain source from which the concept of mens rea or guilty mind being an ingredient of a penalty proceeding under the Income-tax Act sprang up. These observations have set the ball rolling and injected into penalty proceedings the idea of mens rea or guilty conduct.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-36", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "22. In the light of what we have said above, we will now proceed to consider whether this argument of Sri Dasaratharami Reddy is tenable. As we have pointed out, we are limiting the consideration only to cases which fall under Section 271(1)(a) of the Income-tax Act, i.e., cases of levy of penalty for late filing of income-tax returns. We will consider the question on the assumption that imposition of penalty is in the nature of a quasi-criminal proceeding. Even so, is it necessary or does it inevitably follow that guilty mind should be an ingredient that should be established before imposing penalty for filing income-tax return late ? We have already recorded our conclusion that mens rea, though an essential ingredient of an offence, is a rule of construction. The presumption that evil intention or mens rea is an essential ingredient in every offence is liable to be displaced by the words of the statute creating the offence. A statutory provision which creates an offence will have to be considered in conformity with the common law presumption that guilty mind is an ingredient of an offence. However, where the statute which provides for penalty or quasi-judicial proceeding, as it may be, expressly or by necessary implication, lays down its own objective tests for levying penalty and excludes mens rea, then the statute should prevail. We may go even a step further. Even supposing that mens rea is treated by the statute as a necessary ingredient of a penalty proceeding, then it will have to be examined, whether the relevant statutory provision or provisions provide for any objective criteria for adjudicating upon the liability of an individual for the imposition of penalty. In other words, it is the statutory provision which deals with imposition of penalty, in the light of the general scheme of the Act, that should be looked into to find out whether guilty mind is necessary for imposition of penalty. If that is not done, and if penalty proceeding is conducted on general common law principles alone,", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-37", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "If that is not done, and if penalty proceeding is conducted on general common law principles alone, it would result in ignoring and even contravening the provisions of the statute itself, under which penalty is imposed.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-38", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "23. We will now examine how the Income-tax Act, 1961, had dealt with late filing of the returns. Practically all taxing statutes lay down their own procedure and machinery for enforcing implementation of their provisions. It must be remembered that all these taxation laws are intended to fetch revenue for the State to enable it to run its administration and to implement welfare programmes. There shall be neither evasion of tax, nor delay in the procedure relating to assessment and collection of taxes. In order to see that payment of tax is not evaded, that there is no delay in assessment or in the collection of tax imposed, every taxation statute lays down a clear cut procedure. While doing so, the statute may treat minor delinquencies lightly, some other delinquencies which are not simple in nature slightly harshly and delinquencies of grave nature very severely. The Indian Income-tax Act adopts the same policy. If the Act is analysed, it could be seen that it has dealt with returns of income and the delays relating thereto in three different ways. Section 139 which occurs in Chapter XIV relating to \"Procedure for assessment\" deals with \"Return of income\". Sub-section (1) prescribes the time before which returns should be filed. Further sub-sections also lay down the manner in which extension of time for filing returns may be sought \"and granted. Subsection (8) makes the assessee liable to pay simple interest at twelve per cent. per annum on the amount of the tax payable on the total income as determined on regular assessment, if there was delay in filing the return. This is one way of enforcing compliance with the requirements of the law for filing the returns in time. Even here, the proviso to Sub-section (8) confers power on the Income-tax Officer to reduce or waive the interest payable by any assessee, in such cases and under such circumstances as may be prescribed. Then Chapter XXI deals with \"Penalties imposable\". Unlike the Sales", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-39", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "as may be prescribed. Then Chapter XXI deals with \"Penalties imposable\". Unlike the Sales Tax Act of Andhra Pradesh, the Indian Income-tax Act deals with \"penalties imposable\" separately and in a different chapter. Section 271(1)(a) which we have already extracted, makes penalty imposable if the Income-tax Officer or the Appellate Assistant Commissioner is satisfied, in the course of any proceeding under the Act, that any person has without reasonable cause failed to furnish the return of total income which he was required to furnish under Section 139(1) or in response to a notice given under Section 139(2). When the Income-tax Officer or the Appellate Assistant Commissioner is satisfied that a person has, without reasonable cause, failed to furnish returns in time, he may direct that such person shall pay by way of penalty, as provided in Sub-clause (i), in addition to the amount of the tax, a sum equal to two per cent. of the assessed tax for every month during which the default continued, but not exceeding in the aggregate fifty per cent. of the assessed tax.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-40", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "24. It is important to note the difference between the imposition of interest under Section 139(1) and the imposition of penalty under Section 271(1)(a). If there is delay in filing the return, interest is chargeable under Section 139(1) and in appropriate cases the Income-tax Officer is given power to remit the whole or part of it. Section 27l(1)(a) goes a step further and deals with somewhat graver situations. A penalty as provided in Clause (i) may be imposed only when the Income-tax Officer or the Appellate Assistant Commissioner is satisfied that the delay has occurred without reasonable cause. Every cause cannot explain away the delay in filing the return. If a cause, which is reasonable, in other words, a cause which appeals to or satisfies any reasonable mind, does not exist, then alone penalty can be imposed. The quantum of penalty is heavier than the interest that is collectable under Section 139(8). But, as Sub-clause (i) to Sub-section (1) of Section 271 now stands, it may be anything between two per cent. of the assessed tax for every month during which the default continued, and fifty per cent. of the aggregate thereof. It is very much noteworthy that for failure to comply with a notice under Section 142(1) or 143(2) without reasonable cause, Section 271(1)(b) read with Sub-clause (ii) provides for the higher rate of penalty starting from ten per cent. of the tax. When it comes to concealment of particulars of income or furnishing of inaccurate particulars of income, the penalty under Section 27l(1)(c) is still more severe. We are pointing out this to highlight the distinction kept by the statute between various degrees of seriousness of failures and concealments. It is also significant to note that Clause (i) says that what is imposed thereunder is \"in", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-41", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "is also significant to note that Clause (i) says that what is imposed thereunder is \"in addition\" to the amount of the tax.\" Section 274, occurring in the same Chapter XXI, says :", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-42", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard.\" \n Therefore, before penalty is imposed a reasonable opportunity should be given to the assessee to make a representation. If he then succeeds in satisfying the appropriate assessing authority that he was prevented by reasonable cause from filing the return in time, no penalty may be imposed on him. It is manifest that the statute has intended that a safeguard by a reasonable opportunity should be afforded to the assessee before any penalty is imposed. That is the second mode postulated by the Act for enforcing compliance with its provisions. \n 25. The third mode is contained in Chapter XXII which bears the caption \"Offences and prosecutions\". It makes several contraventions, offences, like failure to make payments or deliver returns or statements, or to allow inspection (as made in Section 276), failure to comply with the provisions of Section 178(1) and (3) (as made in Section 276A) and also failure to deduct and pay tax (as shown in Section 276B), failure to furnish returns of income (made punishable under Section 276C). Section 276C reads as follows : \n \"If a person wilfully fails to furnish in due time the return of income which he is required to furnish under Sub-section (1) of Section 139 or by notice given under Sub-section (2) of Section 139 or Section 148, he shall be punishable with rigorous imprisonment for a term which may extend to one year or with fine equal to a sum calculated at a rate which shall not be less than four rupees or more than ten rupees for every day during which the default continues, or with both.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-43", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "We are not here concerned with the proviso to the section. It can be immediately noticed that this section treats only wilful failures to furnish returns in due time as punishable offences. This is clearly and patently distinct from failure to furnish returns in time \"without reasonable cause\". Certainly, the expression \"without reasonable cause\" and the expression \"wilful failure\" cannot be equated. It is important to note that the word \"wilful\" was introduced with effect from April 1, 1971, by Act 42 of 1970. Until then, the words which appeared were \"without reasonable cause\". For the change, the reason, as could be seen from Taxation, Volume 30, at page 101, is that the Joint Select Committee felt that \"in accordance with the accepted canons of criminal jurisprudence failure to furnish returns or produce documents, etc., should be made punishable only when such failure is wilful\". It is thus manifest that the word \"wilful\" has been deliberately introduced to incorporate into the provision and to clearly specify the idea of mens rea. That is absent in Section 27l(1)(a). Thus, it is seen that the Act postulates three modes of enforcement of the statutory requirement of filing the income-tax return in time, (1) by levying interest, (2) by imposing penalty if the delay has been occasioned without reasonable cause, and (3) by punishing the assessee treating failure to file the returns as an offence if it was proved that it was caused by wilful failure. These are the three varying degrees of non-filing of returns within time and the statute clearly keeps up the distinction between the three modes. While it rests content by imposing only penalty on reaching satisfaction as to the absence of reasonable cause, it insists upon the presence of wilful failure to furnish returns in due time to make it an offence punishable with imprisonment or fine. There is another equally significant distinction between the word", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-44", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "to make it an offence punishable with imprisonment or fine. There is another equally significant distinction between the word \"penalty\" as contemplated by Section 271(1)(a) and the punishment posited by Section 276C. The penalty leviable under Section 271(1)(a) is a payment \"in addition to the tax\" and is calculated in relation to the amount of the assessed tax. It means that the penalty imposed under that provision is in that way related to tax. What is imposed under Section 276C is altogether different in nature. It is a punishment wholly unrelated to the tax amount. The offender can be visited with rigorous imprisonment for a term which may extend to one year or with fine equal to a sum calculated at a rate which shall not be less than four rupees or more than ten rupees for every day during which the default continues, or with both. The fine that is imposable has to be reckoned on the basis of the duration of the default and not on the basis of the tax. All this clearly demonstrates the difference which the statute maintains between the penalty imposable under Section 271(1)(a) and the punishment that is leviable under Section 276C. While for imposing a penalty, absence of reasonable cause has to be shown, for imposing punishment under Section 276C, wilful failure has to be demonstrated. \"Wilful failure\" certainly brings in the element of guilty mind, while absence of \"reasonable cause\" does not. Thus, the statute has kept up the dichotomy between a penalty proceeding and a prosecution proceeding for failure to furnish returns in due time. This is clear enunciation by the statute itself of the three different modes of enforcing its provisions. It contains clear indication of the growing gravity of the three situations dealt with, not only through the severity of the additional amounts or the punishments that are imposable, but also through the language employed in Section 139(1), Section", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-45", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "punishments that are imposable, but also through the language employed in Section 139(1), Section 271(1)(a) and Section 276C. Thus, it is clear that the element of guilty mind is made an ingredient for an action under Section 276C and not for penalty proceeding under Section 271(1)(a).", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-46", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "26. Sri Dasaratharania Reddy pointed out the difference in the language between rule 117A(v) of the Income-tax Rules, 1962, and Section 146 of the Income-tax Act on one side and Section 271(1)(a) on the other. In the first set of provisions, the phrase \"sufficient cause\" is used, while in Section 271(1)(a), the expression \"reasonable cause\" is used. Section 146 relates to \"reopening of assessment at the instance of the assessee\", and enables the assessee to seek cancellation of the assessment on the ground that he was prevented by \"sufficient cause\" from making the return required under Sub-section (2) of Section 139. His attempt was that the expression \"sufficient cause\" used in Section 146 is analogous to the same language used in Section 5 of the Limitation Act or Order 9, rule 9, or Order 9, rule 13, of the Civil Procedure Code and that it is different from the expression \"reasonable cause\" used in Section 271(1)(a). The cause being sufficient or otherwise does not indicate the guilty element but the expression \"without reasonable cause\" would suggest its presence. He amplified the argument by saying that by the words \"without reasonable cause\" it is meant that cause should not be unreasonable. In other words, if a cause is unreasonable, then it indicates a certain element of guilty mental attitude on the part of the assessee. It was, therefore, argued that the words \"without reasonable cause\" would bring in the element of guilty mind. For this, reliance was placed on the decision of the Madras High Court in V. Ramanathan v. Commissioner of Income-tax [1966] 62 ITR 293 (Mad). There, the Division Bench said :", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-47", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"There is some difference in the language employed in Section 27 and Section 28 (of 1922 Act). While in the case under Section 27 the requirement is only a sufficient cause to enable the cancellation of the assessment, to justify the imposition of the penalty under Section 28 the absence of reasonable cause has to be established. Again, in an application under Section 27 of the Act, the onus is upon the assessee to establish sufficient cause, while under Section 28, before a penalty could be imposed, it is for the department to show that the assessee who failed to submit the return did so without reasonable cause.\" \n We are unable to agree with this. We do not think that there is any material difference between the expressions \"sufficient cause\" and \"reasonable cause\". What is sufficient cause is always a reasonable cause. As stated in Strand's Judicial Dictionary, \"the word 'reasonable' has in law the prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know\". If a cause is reasonable having regard to the circumstances in which it has occurred and with reference to the person who has conducted himself in the course of the act which is under examination and if that act or cause is found to be reasonable in the light of the circumstances by a reasonable mind, it is accepted as sufficient cause. We cannot, therefore, agree that there is any substantial difference between \"reasonable cause\" and \"sufficient cause\". We derive support for this view from a decision of the Division Bench of this court in Repaka Seetharamaswamy v. Commissioner of Income-tax [1961] 42 ITR 829 (AP). It cannot, therefore, be accepted that the occurrence of the words \"without reasonable cause\" in Section 271(1)(a) would indicate the requirement of a guilty mind.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-48", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "27. At the same time, we must take notice of the use of the expression \"without reasonable cause or excuse\" in some of the offences for which prosecutions can be levied under the Act. As we have said, Chapter XXII relates to \"offences and prosecutions\". Sections 276, 276A and 276B make offences of failure to make payments or deliver returns or statements or allow inspection, failure to comply with the provisions of Sub-sections (1) and (3) of Section 178 and failure to deduct and pay tax \"without reasonable cause or excuse\", and they are punishable with either fine or imprisonment. These sections, using the above said expression, occur in the Chapter relating to \"Offences and prosecutions\" and expressly declare that, if these acts are done without reasonable cause or excuse, they would be punishable offences. It is noteworthy that immediately following these sections and occurring in the same Chapter, Section 276C, which deals with \"failure to furnish returns of income\" in due time, clearly declares that such failure becomes an offence when it is wilful. There cannot be a more eloquent testimony to the intention of Parliament to maintain the distinction between the offences covered by Sections 276, 276A and 276B on the one hand, and the one under Section 276C on the other. While, in the former, absence of reasonable cause and excuse has to be established, in the latter to make an offence of failure to file returns of income in due time wilful failure has to be proved.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-49", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "28. Even so, Sri Dasaratharama Reddy urged that the very Section 271, when understood in a broad perspective of all its provisions, indicates that guilty mind has to be established even in regard to late filing of returns of income. In the first place, he relies on the Explanation to Clause (iii) to contend that the element of fraud, gross negligence or wilful neglect on the part of the assessee is clearly made an ingredient of an action to be taken under Section 271 for imposition of penalty. The said Explanation is in these terms : \n \"Where the total income returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under Section 143 or Section 144 or Section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as deduction), such person shall, unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of Clause (c) of this sub-section.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-50", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "In the submission of the learned counsel, though fraud or gross or wilful neglect on the part of the assessee is made an element of the penalty proceedings under Clause (c) of Section 271(1), it should be understood that this ingredient of fraud, etc., runs through all the other clauses. When three eventualities, for which penalties could be levied under the section, are mentioned one after another and proof of fraud or gross or wilful neglect is made an essential ingredient of one of them, there is no reason, so maintained the learned counsel, to suppose that the said ingredient is confined or limited only to Clause (c). If the total income returned by the person is less than eighty per cent. of the total income as assessed finally, the Explanation places the burden of proof on him, in order to escape from penalty, of establishing that his failure to return the correct income does not arise out of gross or wilful neglect on his part. If he does not make any attempt to do so, a presumption is raised by the explanation that he has concealed the particulars of his income or furnished inaccurate particulars of such income. By parity of reasoning, the learned counsel argued, when the total income\" returned is not less than eighty per cent. of the total income as finally assessed, then the burden would be on the department to prove that the failure to return the correct income was due to fraud or gross or wilful neglect on the part of the assessee. Likewise, Clauses (a) and (b), which deal with failure to furnish returns in due time and failure to comply with reasonable notices, should also be construed as placing the burden on the department to prove fraud or wilful neglect on the part of the assessee in committing the two acts mentioned in the two clauses. Our attention was invited to a decision of the Patna High Court in Commissioner of Income-tax v. Patna Timber Works [1977] 106 ITR 452 (Pat).", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-51", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "v. Patna Timber Works [1977] 106 ITR 452 (Pat). That is a case relating to penalty levied for concealment. It was found there that there was a difference of more than 20 per cent. in the income returned and the total income as assessed, and, therefore, Clause (c) came into operation by the rule of presumption. It was observed that by the rule of evidence engrafted in the Explanation, it is for the assessee to prove that the failure to return the correct income did not arise from any fraud or gross or wilful neglect on his part. This gives the key to the interpretation of the main provisions contained in Clause (c) after its amendment. If a case is not covered by the Explanation, then charge of furnishing inaccurate particulars of income can be founded by recording a finding that the assessee had furnished such particulars due to his fraud. That means the department has to show that such furnishing was a result of gross or wilful neglect on his part. Unless such ingredient is proved and found, penalty cannot be levied on the mere finding that there was a difference in the particulars given and the figure of the income assessed. This is the substance of the Patna decision.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-52", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "Our attention was also invited to the decision of the High Court of Punjab and Haryana in Addl. Commissioner of Income-tax v. Karhail Singh V. Kaleran [1914] 94 ITR 505 (Punj). The learned judges explained the purposes of the Explanation as being to differentiate the two types of assessees-those who have reported correct income up to eighty per cent. of the assessed income and those who have not. In the case of the first type the onus lies on the department to prove fraud or gross or wilful neglect in not returning the correct income, and in the case of the second type the onus is on the assessee to establish that the failure to return the correct income was not on account of any fraud or gross or wilful neglect on his part. The learned judges referred to Anwar Ali's case and then observed that the principles enunciated by the Supreme Court in that case that Section 271 is penal in character is still applicable. In the same strain and to the same effect practically, are the decisions of the Kerala High Court in Commissioner of Income-tax v. Sankar-sons & Co. , that of the Allahabad High Court in Saeed Ahmed v. Inspecting Assistant Commissioner of Income-tax , that of the Gujarat High Court in Commissioner of Income-tax v. S.P. Bhatt , the one of Gauhati High Court in Rajputana Stores v. Inspecting Assistant Commissioner of Income-tax and the decision of the Orissa High Court in Commissioner of Income-tax v. K.C. Behera , which were brought to our notice by Sri Dasaratharama Reddy. All these decisions of the various High Courts examined the scope of the Explanation to Sub-clause (iii) and its impact on the main provision contained in Clause (c) of Section 271(1). It must be noted that none of them relates to the other clauses of Section", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-53", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "271(1). It must be noted that none of them relates to the other clauses of Section 271(1). The decisions pointed out that the object behind the enactment of the Explanation was to check more effectively the evasion of income-tax. Obviously, the main purpose of the Explanation is to place the burden of establishing want of fraud or gross or wilful neglect in the matter of income-tax return filed by the assessee on him, where the difference revealed between the returned income and assessed income is more than twenty per cent. But in case the difference is less than twenty per cent. then the assumption postulated by the Explanation would not arise, and it shall be for the department to establish that the assessee had concealed the particulars of his income or furnished inaccurate particulars of such income. This is the burden of all the aforesaid decisions.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-54", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "29. In our opinion, these decisions throw light on the question of burden of proof in so far as Clause (c) and Sub-clause (iii) read with its Explanation are concerned. None of the decisions goes further and says that the element of fraud, or gross or wilful neglect is engrafted into Clauses (a) and (b) as well. These decisions do not, therefore, help Sri Dasaratharama Reddy in sustaining his contention that the principle of the Explanation to Sub-clause (iii) should be read into Clauses (a) and (b) of Section 271(1). \n 30. In his endeavour to show that the existence or absence of reasonable cause is made an ingredient of Clauses (a) and (b), the learned counsel relied on the decision of the Gujarat High Court in Morvi Cotton Merchants' Industrial Corporation Ltd. v. State of Gujarat [1975] 36 STC 347 (Guj). A Division Bench of the Gujarat High Court was considering the scope of the phrase \"without reasonable excuse\", in Section 10(d) of the Central Sales Tax Act, 1956. The court held: \n \"The expression... ...is a necessary ingredient of the offence mentioned therein and that ingredient has to be alleged and proved by the department and on which the authority imposing the penalty has to give a finding. It is only when that ingredient is pleaded and proved by the department, by way of presumptive proof, that the onus shifts on to the dealer to rebut that presumption.\" \n It was further held : \n \"In the absence of a finding by the department about the absence of reasonable excuse, no penalty under Section 10(d) read with Section 10A can be imposed.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-55", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "This decision is again of no avail to the learned counsel. It was Section 10A which provides for offences under Clause (b) or Clause (c) or Clause (d) of Section 10 of the Central Sales Tax Act. Thus, Section 10(d) is clearly incorporated in Section 10A. Further Section 10(d) itself makes using of the goods purchased for the purposes specified in Section 8(3)(b) without reasonable excuse, an offence punishable with imprisonment or fine or with both. Thus, it is more in the nature of Sections 276, 276A and 276B of the Income-tax Act, which treat certain things done without reasonable cause or excuse as offences. When the statute itself expressly treats them as offences, there cannot be any ambiguity about it. But Section 271 is only a provision under which penalties could be imposed in some eventualities. It is true, penalty, as the very name suggests, implies penal proceeding. It was so held in Hindustan Steel Ltd.'s case , and the character of a penal proceeding was also made clear by a Division Bench of this High Court in T. Venkata Krishnaiah & Co. v. Commissioner of Income-tax . The learned judges were dealing with the distinction between charging of interest and imposition of penalty and observed that interest was civil in nature while penalty was penal and so both could be levied.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-56", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "31. Sri Dasaratharama Reddy further endeavoured to reinforce the above argument by referring to the circumstances that by the Finance Act of 1964, the word \"deliberately\" was deleted from Clause (c) which was there earlier before the words \"furnished inaccurate particulars of such income\". How he developed the argument is, when once the word \"deliberately\" was deleted, the very act of furnishing of inaccurate particulars of income is treated as a ground for imposition of penalty. When mere furnishing inaccurate particulars of income is treated as a case for imposing penalty, the learned counsel argued, there is no reason to suppose that failure to furnish returns of income before due date without reasonable cause is not placed on the same footing as the former act. If fraud or any gross or wilful neglect is made an ingredient of furnishing inaccurate particulars for which penalty can be imposed, in the submission of the learned counsel, the same ingredient should be applicable to failure to furnish the return in due time without reasonable cause.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-57", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "32. Besides these submissions, the learned counsel also relied on Sub-section (4A) of Section 271. We have extracted the sub-section even at the threshold of our judgment. Under this provision, the Commissioner is given power, notwithstanding anything contained in Clause (i) or Clause (iii) of Sub-section (1), to reduce or waive the amount of minimum penalty in regard to cases referred to in Clause (i) of Section 271(1)(a), if he is satisfied that, prior to the issue of notice to him under Sub-section (2) of Section 139, the assessee had voluntarily and in good faith made disclosures of his income. The use of the words \"voluntarily and in good faith\" with reference to imposition of penalty under Sub-clause (i) was very much emphasized by the learned counsel. From this, an attempt was made to spell out that the failure to furnish the return of income in due time without reasonable cause would mean that the failure to file the return is vitiated by lack of good faith. According to the learned counsel, Sub-section (4A) imports into Clause (a) of Sub-section (1), the element of bad intention or presence or absence of good faith.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-58", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "33. On a careful examination of the argument and the provision of Section 271, we are unable to uphold this understanding of Section 271 and the further contention that the element of fraud or gross or wilful neglect contained in the Explanation could be engrafted into Clause (a) also. The Explanation to Sub-clause (iii), in telling phrases, makes it clear that the principle in regard to proof for gross or wilful neglect is in regard to concealment of particulars of income or furnishing inaccurate particulars of income. What is more, the Explanation further declares that it is \"for the purpose of Clause (c) of this sub-section\" (i.e., Sub-section (1)). When the language of the Explanation is so express and explicit, there is no possibility for any doubt that its operation is limited only to cases which come under Clause (c). Otherwise, the application of fraud and gross or wilful neglect to cases of concealment of particulars of income and the words \"for the purpose of Clause (c) of the sub-section\" would be meaningless. If it was intended by the Explanation that its principle should govern all the three clauses of Sub-section (1), Parliament could have said so. Instead of saying it, it specifically restricted and limited its application only to cases falling under Clause (c). Therefore, there is no warrant whatever for extending the principle of the Explanation to Clause (a).", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-59", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "34. Further, though all the three varieties of cases mentioned in Sub-section (1) in Clauses (a), (b) and (c) are grouped together, the section treats each one of them separately and distinctly. While the words \"without reasonable cause\" occur in Clauses (a) and (b), they do not appear in Clause (c). Furthermore, all the three categories of delinquencies are separately dealt with. Had the intention been to impose a similar penalty for all those delinquencies, there was no need for Parliament to provide three varying degrees of penalties. Sub-clause (i) which refers to delinquencies mentioned in Clause (a) provides for the least burdensome penalties; Sub-clause (ii) which refers to those in Clause (b) imposes a little heavier penalties, while Sub-clause (iii) which refers to cases in Clause (c) provides highest penalties. Obviously and patently, Parliament intended to treat the concealment of the particulars of income and furnishing inaccurate particulars of income as grave matters and that was manifestly why heaviest of the three penalties was imposable in such cases, and the burden of proof where the returned total income is less than eighty per cent. of the assessed income, is also placed on the assessee himself to show that the concealment, etc., did not arise from any fraud or any gross or wilful neglect. \n 35. Equally important is the circumstance that Sub-clause (i) has its own Explanation giving the meaning of \"assessed tax\" used therein. Obviously, that Explanation applies only to cases which come under Clause (a). It cannot be postulated that its application can be extended to other clauses. By parity of reasoning and also for the reasons which we have stated above, the Explanation to Sub-clause (iii) should be limited in its scope to cases which come under Clause (c) alone.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-60", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "36. Coming to Sub-section (4A), it confers powers on the Commissioner to reduce or waive the amount of minimum penalty. Sub-clause (a) of Sub-section (4A) lays down the guidelines for the exercise of that power by the Commissioner. There is no duty cast on him to necessarily reduce or waive the amount of minimum penalty. The discretion is conferred on him and Clause (a) lays down the manner in which that discretion has to be exercised in so far as cases referred to in Clause (i) are concerned. In cases relating to failure to furnish the return of total income in due time, the Commissioner may reduce or waive the amount of penalty if he is satisfied that the assessee has voluntarily and in good faith made full disclosure of his income. The words \"voluntarily and in good faith\" apply to the full disclosure of the income prior to the notice under Section 139(2), and do not in any way refer to the furnishing of the return of income in due time. Indeed, the expression \"without reasonable cause\" is repeated and reiterated in Clause (i) of Sub-section (4A) while referring to failure to furnish the return of total income. Whatever the meaning that expression has, when used in Clause (a) of Sub-section (1), the same meaning should be attributed when it occurs in Clause (i) of Sub-section (4A). The reasonable understanding of Sub-section (4A) would be that the Commissioner should see in cases of failure to furnish the return of income without reasonable cause, before he reduces or waives the amount of minimum penalty, whether the assessee had acted voluntarily and in good faith and made full disclosure of his income prior to the issue of notice to him under Section 139(2). The presence or absence of good faith cannot be extended to the late filing of returns of income. Otherwise, the sub-section would have said so clearly. Apart from that, Sub-section", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-61", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "of income. Otherwise, the sub-section would have said so clearly. Apart from that, Sub-section (4A) deals only with reduction or waiver of the amount of minimum penalty imposable which can be granted by the Commissioner while Clause (a) refers to a situation which arises in the course of any proceedings under the Act dealt with by the Income-tax Officer or the Appellate Assistant Commissioner.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-62", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "37. For these reasons, we are unable to agree with Sri Dasaratharama Reddi in his submission that Section 271 itself gives a definite clue to import the element of mens rea into Clause (a).", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-63", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "38. Now, having reached this conclusion, let us have a general conspectus of the provisions of the Act dealing with delay in filing the return. Section 139(8) provides for charging of interest for delay. Section 271(1)(a) read with Sub-clause (i) provides for imposition of penalty if the delay has occurred without reasonable cause. Section 276C considers failure to furnish the return of income in due time as an offence if the failure is wilful. Why does the statute keep this distinction ? In the first case the very occurrence of delay is sufficient to enable the officer to charge interest. In the second case, the requirement is that he should be satisfied that the assessee has failed to furnish the return in time without reasonable cause. In the third case, wilful failure has to be established. The statute has clearly kept up this difference between the three proceedings and has indicated the growing gravity of the failure on the part of the assessee in the three cases. If contumacious conduct, which must necessarily be wilful failure, is the requirement of Section 271(1)(a) also, then what is the difference between it and Section 276C ? On the other hand, to keep the distinction between imposition of penalty and imposition of punishment, the statute has used different languages and different words. The words \"wilful default\" or contumacious conduct are conspicuous by their absence in Section 271(1)(a) while \"wilful failure\" is expressly stated in Section 276C. By a comparative understanding of these three provisions relating to the delayed returns of income, it must necessarily follow that Section 271(1)(a) does not take in contumacious conduct, or to put it in other words, mens rea.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-64", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "39. We derive support to this view from the decision of the Supreme Court in Indo-China Steam Navigation Co. Ltd. v. Jasjit Singh Dealing with the provisions of the Sea Customs Act, the court said that \"section 52A read with Section 167(12A) makes it clear that the legislature intends, by necessary implication, the exclusion of mens rea in dealing with the contravention of Section 52A\". That was on the ground that \"in column (1), Section 167(12A) reproduces the material words of Section 52A and does not add the words ' knowingly or wilfully '.\" \n 40. In State of Maharashtra v. M.H. George the majority held that: \n \"Unless the statute, either clearly or by necessary implication rules out mens rea as a constituent part of a crime an accused should not be found guilty of an offence against the criminal law unless he has got a guilty mind. Absolute liability is not to be lightly presumed but has to be clearly established.\" \n The court can only interpret the law as it finds it. Parliament's mind has to be gathered from the provisions it has incorporated in a statute. When all the relevant provisions in the Income-tax Act relating to failure to file the return of income before due date are considered, it cannot be held that contumacious conduct is made an ingredient of a proceeding under Section 271(1)(a). We go even a step further. By making wilful failure to file a return an offence under Section 276C and by the very language in Section 271(1)(a), it can safely be concluded that mens rea is not an ingredient of a proceeding under Sub-clause (a) of Section 271(1).", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-65", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "41. So far, we have not gone into any of the decided cases directly dealing with this aspect of the matter. That is because the true meaning of a provision will have to be found out first by reading that provision in the context of the scheme of the Act and the other relevant provisions. It is the statute that must be primarily looked into for deciding the nature of the proceeding ; the judicial precedents unless they are binding, come only later, that too only as a supplemental or reinforcing factor. Having endeavoured to find out the true import of Section 271(1)(a) and the real character of the proceeding thereunder and the ingredients of the proceeding, we will proceed to have a brief review of the cases on the point. \n 42. The catena of the case law relating to penalty started with the decision of the Supreme Court dated August 4, 1969, in Hindustan Steel Ltd.'s case . One of the questions posed and answered by the court in the case was, whether the imposition of penalty for failure to register as a dealer was justified, under the Orissa Sales Tax Act. Shah, Actg. C.J., made the following general observations at page 29 in regard to the penalty under Section 9(1) read with Section 25(1)(a) of the Act. It appears, there was another section which dealt with the imposition of penalty in that Act, but that was not referred to. The omission to refer to that particular provision is not of much consequence, in our view. The observations are as hereunder (page 29):", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-66", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"Under the Act penalty may be imposed for failure to register as a dealer : Section 9(1), read with Section 25(1)(a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose penalty will be justified in refusing to impose penalty when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the company in failing to register the company as a dealer acted in the honest and genuine belief that the company was not a dealer. Granting that they erred, no case for imposing penalty was made out\".", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-67", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "It can be immediately seen that these observations are of a general nature. May be, certain penalties can be imposed only if the party either acted deliberately in defiance of law, or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. For imposition of penalties in some other cases, contumacious conduct may not be necessary. Simply because it is called penalty, contumacious conduct cannot be automatically imported into its proceeding. As we have time and again observed above, relying on the Supreme Court decisions, it depends upon the statutory provisions. It may be that under Section 9(1) read with Section 25(1)(a) of the Orissa Sales Tax Act, contumacious conduct was necessary before a penalty would be imposed. But Section 271(1)(a) of the Income-tax Act clearly says, as distinct from Section 276C, that what should be established is absence of reasonable cause. So, the observations made in the Hindustan Steel Ltd.'s case will have to be understood in the light of the provisions of the law and the facts with which the court was dealing and it would be untenable to give a universal application to the observations to all penalty cases.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-68", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "43. Next is the decision of the Supreme Court dated April 29. 1970, in Commissioner of Income-tax v. Anwar Ali . Though this is a case decided later than the Hindustan Steel Ltd.'s case , it was reported in the Income Tax Reports earlier. In this case, the principal question which arose in the proceedings under Section 28(1)(c) of the Indian Income-tax Act, 1922, which provision corresponds to the present Section 271(1)(c), was burden of proof in regard to concealment of income. The first point which fell for determination by the court was the nature of the penal provision. The court held that the observations in Abraham v. Income-tax Officer that the true nature of penalty was additional tax, that those observations were made in a different context and with a different purpose. Then the learned judges referred to Hindustan Steel Ltd.'s case , and then observed that it was a settled law by then in the sales tax law, that an order imposing penalty was the result of a quasi-criminal proceeding. So, the learned judges observed that proceedings under Section 28 were penal in character. Proceeding to consider the burden of proof, the learned judges held that under Section 28(1)(c) the department must establish that the assessee had concealed the particulars of his income.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-69", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "44. As we have already pointed out, the fact that penalty proceedings are penal and quasi-criminal in nature would not necessarily make mens rea an essential ingredient of the proceeding. It will have to be decided on the basis of the relevant provision in the statute. The general observation made by Shah, Acting C.J., in Hindustan Steel Ltd.'s case led several High Courts to apply them to all penalty proceedings under Section 271(1)(a) also. They are Michael Fernandes v. Commissioner of Wealth-tax [1974] 95 ITR 532 (Mys), All India Sewing Machine Co. v. Commissioner of Income-tax [1974] 96 ITR 206 (Mys), Commissioner of Income-tax v. Alimohamad and Co. and Dawn & Co. v. Commissioner of Income-tax .", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-70", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "45. Obul Reddi C.J. and Punnayya J., in Additional Commissioner of Income-tax v. Narayanadas Ramkishan , had to consider a petition filed under Section 256(2) of the Income-tax Act. One of the questions posed was, whether the penal provisions of Section 271(1)(a) were not attracted to the facts, of the case. The Tribunal expressed the view that they did not find material let in by the revenue to show that the assessee wilfully defaulted, more especially, when it had been seen that the return was filed voluntarily without issue of notice under Section 139(2). Consequently, the Tribunal set aside the orders of the authorities below imposing penalty upon the assessee. After considering the case, in the course of the judgment, the learned Chief Justice referred to the majority view of the Supreme Court spoken by Subba Rao J., in Nathulal v. State of Madhya Pradesh , that mens rea is an essential ingredient of a criminal offence and only where it is absolutely clear that the implementation of the object of the statute would otherwise be defeated that mens rea may, by necessary implication, be excluded from a statute. Subba Rao J. also pointed out that the nature of mens rea implied in a statute creating an offence depends on the object of the Act and the provisions thereof. Then Obul Reddi C.J. observed [1975] 100 ITR 18, 25 (AP):", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-71", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"We are not inclined to agree that Section 271(1) excludes mens rea by necessary implication. Once it is held by us that mens rea is an essential ingredient for imposing penalty it follows that the onus is upon the department to show the element of guilty mind in the assessee.\" Then reference was made to the observations of Shah, Acting C.J. in Hindustan Steel Ltd.'s case and then of Grover J. in Anwar Ali's case . The learned Chief Justice proceeded to refer to the decisions of the High Courts of Mysore, Karnataka, Orissa and Kerala and finally observed : \n \"It is unnecessary to multiply decisions on this point. In view of what the Supreme Court has laid down in Hindustan Steel Ltd.'s case and in Anwar Ali's case , the statutory obligation is upon the department to show that the assessee had acted deliberately in defiance of law or was guilty of conduct, contumacious or dishonest, or acted in conscious disregard of its obligation.\"  \n In the light of the opinion we have expressed, the observations in the Hindustan Steel Ltd.'s case and in Anwar Ali's case have no universal application to all penalty proceedings and certainly not to penalty proceedings under Section 271(1)(a). Therefore, we are unable to agree with the view expressed by Obul Reddi C.J and Punnayya J. in Narayanadas Ramkiskan's case .", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-72", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "46. We may incidentally refer to a decision of the Madras High Court in V. Ramanathan v. Commissioner of Income-tax [1966] 62 ITR 293 (Mad), where a Division Bench held that it is for the department to show that the assessee who failed to submit the return did so without reasonable cause. The view expressed here is only on the question of burden of proof. Further, it said that what the department has to show is that the assessee had failed to submit the return without reasonable cause. It did not say further that contumacious conduct also should be established by the department. \n 47. We must also refer to a decision of Vaidya and Sriramulu JJ. in Mullapudi Venkatarayudu v. Union of India . It is also a case which arose under Section 271(1)(a). The learned judges held among other things: \n \"As there is no exclusion of mens rea either expressly or by necessary implication in Section 271, it has to be determined whether there was any mens rea in the assessee acting against the provisions of the statute, that is, whether the non-compliance with the provisions of Section 139(1) was with a wrongful intention or culpable negligence. In order to determine whether there was culpable negligence it will have to be determined whether the assessee did his best as a reasonable man to avoid the non-compliance. Where the Income-tax Officer came to the conclusion that the mere fact that the petitioner was under the impression that as in earlier years he would be served with a notice to file the return was not sufficient to hold that he had taken reasonable care to comply with the provisions of the section.\" \n For the reasons we have stated above, the position as stated by the Division Bench in this case cannot be accepted.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-73", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "48. Then came the Full Bench decision of the Kerala High Court in Commissioner of Income-tax v. Gujarat Travancore Agency [FB]. That is a case which directly arose under Section 271(1)(a). Gopalan Nambiyar J. spoke for the Bench. After comparing Section 18 of the Wealth-tax Act with Section 271(1)(a) of the Income-tax Act the Full Bench held that the provisions for the imposition of penalty under Section 271(1)(a) are independent of the provisions of prosecution and punishment under Section 276C, in the sense that the proceedings under the one will not bar action under the other. It was observed : \n \"The mere use of the expression 'without reasonable cause' cannot import a mental element or 'mens rea'. There is no justification for reading into Section 271, the requirements of any mens rea expressly provided for in Section 276C\". \n Nambiyar J. poined out that: \n \"It will not be correct to regard the ingredients of the misconduct under the two provisions, i.e., Sections 271 and 276C as identical. The imposition of penalty under Section 271 on the basis of an act or omission by an assessee is not because the act or omission constitutes an offence, but because that act or omission would constitute an attempt at evasion. Hence, the penalty provisions under the Act are not provisions of a criminal nature which warrant the requirement of mens rea in the sense in which the same is required for an offence by the criminal law. Hence, mens rea need not be established before imposition of penalty under Section 271(1)(a).\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-74", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "While coming to this conclusion, the Full Bench distinguished Hindustan Steel Ltd.'s case and overruled the earlier decisions of the Kerala High Court in Devassy v. Commissioner of Income-tax [1972] 84 ITR 502 (Ker) and Dawn & Co's case . The Full Bench also referred to the decision of the Punjab High Court in Addl. Commissioner of Income-tax v. Karnail Singh V. Kaleran [1974] 94 ITR 505 (Punj) and it was dissented from. \n 49. The Full Bench of the Orissa High Court in Commissioner of Income-tax v. Gangaram Chapolia [FB] considered the nature of the penalty proceedings under Section 27I(1)(a). Considering the question when exactly an assessee can be visited with a penalty under Section 271(1)(a), the Full Bench opined that if the assessee does not furnish any explanation or furnishes a cause which is not accepted as reasonable, penalty is leviable for not furnishing the return within the time allowed. Then the learned judges compared Section 271(1)(a) and Section 276C and observed at page 619 :", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-75", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"Wilful failure to file the return in due time is the gravamen of the offence under Section 271(1)(c) (obviously, a mistake for 276C). The burden of proof is on the revenue to establish beyond reasonable doubt that the failure to file the return in due time is wilful. There is a well-marked distinction between the meanings of the expressions 'without reasonable cause' and 'wilfully'. The word 'wilfully' in Chamber's Twentieth Century Dictionary carries the following meanings : 'governed only by one's will, obstinate ; done intentionally.' When a person acts wilfully he acts without reasonable cause, but the converse is not true. Not to carelessly or negligently file the return within the time allowed is an act without reasonable cause, but it may not be wilful. The word 'wilful' imports the concept of 'mens rea' while it is absent in the expression 'without reasonable cause'.\" \n Then the learned judges referred to the observations in the Hindustan Steel Ltd.'s case and distinguished it. Likewise, Anwar Ali's case was also referred to and it was observed that, apart from the conclusion that penalty proceedings are quasi-criminal in nature, Anwar Ali's case does not throw any lighten the point in issue in the case before the Full Bench. \n50. Sri Dasaratharama Reddi criticised these two Full Bench decisions pointing out that they did not notice the difference in the language used in Section 139(8) and its proviso, Section 146 and Section 271(1)(a). We do not think that this criticism is valid. The omission to compare the language of the above provisions with Section 271(1)(a) is immaterial. What is important is the comparison between Section 271(1)(a) and Section 276C. That was clearly pointed out by both the Full Benches.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-76", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "51. Then, in the order of reference to a Full Bench in this case, Chinnappa Reddi and Jeevan Reddi JJ. expressed a similar view. The view expressed by the Full Benches of Kerala and Orissa High Courts and that of the Division Bench in the order of reference are in accord with the view which we have taken. As we have already held, the view expressed in Narayana-das Ramkishans case is not correct.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-77", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "52. If mens rea is not an ingredient of the proceeding under Section 271(1)(a), the further question would remain on whom the burden of proof lies in regard to showing the absence of reasonable cause. In our opinion, reading Section 271(1)(a) and Section 274 together, the position would be made clear. Penalty under Section 271(1)(a) can be imposed only when the Income-tax Officer or the Appellate Assistant Commissioner is satisfied in the course of any proceedings under the Income-tax Act, that any person has without reasonable cause failed to furnish the return of total income which he was required to furnish in accordance with law. In other words, unless the concerned officer is satisfied that the delay has occurred without reasonable cause, no penalty can be imposed. In the first place, he will have to be satisfied that there is no reasonable cause and then only he can impose penalty. The responsibility of reaching that satisfaction is thus cast on the appropriate authority. Section 274 requires that before imposing a penalty, the assessee should be heard or should have been given a reasonable opportunity of being heard. Therefore, the position that emerges from the reading of Section 271(1)(a) and Section 274 together is: When an assessee files the return after the due date, the Income-tax Officer gives him an opportunity to explain the delay. If after considering the explanation of the assessee the Income-tax Officer is satisfied that there is no reasonable cause for the delay, he levies the penalty. The burden is upon the Income-tax Officer to be satisfied that there is no reasonable cause. Even if the assessee, when given an opportunity, does not avail himself of that opportunity it is for the Income-tax Officer to go through the records and satisfy himself that there was no reasonable cause. It is the responsibility of the officer concerned to examine the reason advanced and find out whether it is reasonable in the circumstances of the case. If he is satisfied", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-78", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "reason advanced and find out whether it is reasonable in the circumstances of the case. If he is satisfied that it is reasonable cause then he cannot impose a penalty. He can impose penalty only if he is satisfied that the delay has occurred without reasonable cause. Though the preliminary responsibility is that of the assessee to advance some cause, it is the task of the Income-tax Officer or the Appellate Assistant Commissioner to satisfy himself whether the cause advanced is reasonable or not. To put it in other words, no penalty can be levied unless the satisfaction of the concerned officer is indicated that the delay was not due to any reasonable cause. If, for instance, the assessee does not give any cause at all, either by himself or when given an opportunity under Section 274, then it is the task of the Income-tax Officer or the Appellate Assistant Commissioner to satisfy himself whether the circumstances which emerge from the record indicate any reasonable cause or not. When no reason at all has been advanced by the assessee, the task of the officer concerned in reaching that satisfaction becomes very very light. In such cases, generally speaking, unless something concrete emerges from the record itself, the concerned officer may reach the satisfaction that the delay occurred without reasonable cause. When some reason has been advanced, it is his duty to examine it and find out whether it is reasonable or not in the circumstances of the case and the situation of the assessee. Even in regard to the task of reaching his satisfaction, the assessee cannot escape the primary responsibility of advancing a cause and if he does not do it, he runs the risk of the officer coming to the conclusion that there was no reasonable cause for the delay. Take for instance, the case in John v. Humphreys [1955] 1 All ER 793 (QB) where a person was prosecuted for driving without licence. Certainly, the burden was on the prosecution to prove that the accused was driving without licence. They could only be expected to prove that", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-79", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "the prosecution to prove that the accused was driving without licence. They could only be expected to prove that when the accused was detected he was asked for his licence, he did not show it, he was given an opportunity to produce it, but he did not produce it. It would be unreasonable to put further burden on the prosecution to prove that the driver had at no time secured any licence or if he had secured one that had expired. Whether he had a subsisting licence or not is a matter which is within the special knowledge of the accused and it is for him to show that. Likewise, in these matters of reaching satisfaction as to the existence or absence of reasonable cause, the matters which are within the special knowledge of the assessee should be disclosed by him. If he fails to disclose them, then what all the Income-tax Officer, or the Appellate Assistant Commissioner can do and is expected to do, to reach the satisfaction that is required under Section 271(1), is to examine the entire record relating to the proceeding and to find out whether the delay has been occasioned on account of any reasonable cause or without reasonable cause. This, in our view, is the scope of the burden or satisfaction that rests with the Income-tax Officer or the Appellate Assistant Commissioner.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-80", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "53. It 'may also be emphasised that, having regard to the penal consequences, the expression \"reasonable cause\" has to be liberally construed in favour of the assessee. Construing Section 5 of the Limitation Act there is a long line of cases beginning with Krishna v. Chathappan [1889] ILR 13 Mad 269, which was approved by the Supreme Court in Ramlal v. Rewa Coalfields , that the word \"sufficient cause\" should receive a liberal construction so as to advance substantial justice. This is particularly true with regard to a case where non-submission of return in time results in penal consequences.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-81", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "54. Having expressed our opinions as to the nature of the proceeding under Section 271(1)(a) and the scope of the burden in reaching the satisfaction, we will now proceed to examine the merits of the case. The assessees, which are firms, failed to file their returns for the years 1965-66 to 1969-70 within the time prescribed under the Indian Income-tax Act. In the first place, the explanation given before the Income-tax Officer was that the person who was in charge of the accounts of the firms was unable to look after the affairs of the firms for some time on account of his personal grievance. In the revision petition before the Commissioner, the reason for the delay was stated as family troubles. The family troubles obviously must be taken to be those of the members of the firms. They did not care to state what the family troubles were, when they occurred, how long they persisted and when they ended. It is not as if they did not have opportunity to do so. They had ample opportunity when they preferred revision petitions before the Income-tax Commissioner. A mere vague and bald statement that \"family troubles\" prevented the filing of the returns in time did not naturally appeal to the Commissioner as a reasonable cause. So, he did not accept the explanation and rejected the revision petitions. Since we have held that the view taken by Obul Reddi J. (as he then was) while quashing the orders of the Commissioner and remitting the matters back to him that the penalties could be imposed only when the assessee either acted deliberately in defiance of law, or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation and not otherwise, is not warranted by Section 271(1)(a), the question remains, whether the decision of the Commissioner in holding that the explanation given by the assessees for filing the returns after due time, is right or not. We have already pointed out that", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-82", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "for filing the returns after due time, is right or not. We have already pointed out that though the burden is on the Commissioner to reach the satisfaction as to the existence or absence of reasonable cause for the delayed filing of returns, the assessee must place before the appropriate authority, matters which are within his exclusive knowledge. Here, the assessees rested content with merely saying that they were prevented by family troubles. The nature and duration of the troubles which stood in the way of filing of the returns in time were within the peculiar special knowledge of the assessees and were not disclosed. Neither the Income-tax Officer nor the Commissioner is expected to make a separate enquiry by himself as to what those family troubles were and how long they lasted and whether they really prevented the assessees from filing the returns in time, when obviously no further material was available from the record to show cause for the delayed filing of the returns. In these circumstances, we are satisfied that the Commissioner was right in refusing to accept these bald and unexplained family troubles as the reasonable cause for the delayed filing of the returns.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-83", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "55. We, therefore, uphold the decisions of the Commissioner in rejecting the revision petitions of the assessees, set aside the order of Obul Reddy J. (as he then was) quashing the order of the Commissioner of Income-tax and allow these writ appeals. It is, however, open to the assessees to approach the Commissioner under Section 271(1)(4A) for appropriate relief. We would also like to make it clear that what we have decided is only in respect of the proceedings under Section 271(1)(a) and not in regard to Section 271(1)(c). \n 56. In view of the unsettled law on the subject so far, we direct the parties to bear their own costs throughout. \nLakshmaiah, J.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-84", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "I agree with the conclusion of my learned brother that these writ appeals should be allowed, but having regard to the general importance of the question raised which we are informed by the learned counsel appearing in this case, was not raised anywhere in this form, I propose to give my own reasons: \n The question formulated by my learned brother for being answered is: \n \"Is there an occasion to introduce 'the doctrine of mens rea into Section 271(1)(a) read with Sub-clause (i) of that section of the Income-tax Act, 1961?\"  \n Section 271(1)(a)(i), in so far as it is material, reads thus: \n \"271. Failure to furnish returns, comply with notices, concealment of income, etc.--(1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person- \n (a) has without reasonable cause failed to furnish the returns of total income which he was required to furnish under Sub-section (1) of Section 139 or.........  \n he may direct that such person shall pay by way of penalty,-- \n (i) in the cases referred to in Clause (a), in addition to the amount of the tax, if any, payable by him, a sum equal to two per cent. of the tax for every month during which the default continued, but not exceeding in the aggregate fifty per cent. of the tax.\"   \n Facts: \n For failure to furnish within the stipulated time the return of total income which the respondent-assessee was required under Section 139(1), the Income-tax Officer in exercise of the powers conferred upon him by Sub-section (1) of Section 271 of the Act imposed penalty.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-85", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "A Division Bench of this court consisting of the honourable the Chief Justice and Punnayya J. in Additional Commissioner of Income-tax v.Nara-yanadas Ramkishan was of the view that penalties under Section 271(1)(a) could only be imposed, if it was found that the assessee acted deliberately in defiance of the law or was guilty of contumacious or dishonest conduct or acted in conscious disregard of his obligations and not otherwise. \n 57. Another Division Bench of this court, consisting of Chinnappa Reddi and Jeevan Reddi JJ., found it difficult to agree with that view of Section 271. According to that Bench [1977] 107 ITR 850, 854 (AP): \n  \"Parliament has prescribed an  objective test to determine the mental state of the person proposed to be proceeded against.    There is no reason for importing the doctrine of mens rea into a situation where the requisite mental state is already denned.........Nor is there any reason for qualifying\nthe failure to furnish a return with expressions like 'contumacious', 'dishonest', 'in deliberate defiance of law, etc.' To do so, is to rewrite Section 271(1)(a).\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-86", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "It is for the purpose of solving that conflict this Full Bench is constituted. The problem presented for solution is essentially one of interpretation or construction of statutes necessitating thus a consideration of- \n   \n\n (I) the nature, subject matter, object and policy of the Income-tax Act, 1961, and  \n \n\n (II) the common law tradition of judicial approach towards modern legislation.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-87", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "(I)(a). The Income-tax Act: nature and subject-matter.--This Act was enacted by Parliament in exercise of the exclusive power conferred upon it under Articles 245 and 246 of the Constitution of India to make law with respect to matters enumerated in the Union List, particularly in entry 82 dealing with \"taxes on income other than agricultural income\", in entry 93 dealing with \"offences against laws with respect to any of the matters in this list\", and in entry 95 dealing with \"jurisdiction and powers of all courts except the Supreme Court with respect to any of the matters in this List\". That exclusive power extends to making any law with respect to any matter not enumerated in the Concurrent List or State List and such power includes the power of making any laws imposing a tax not mentioned in either of those Lists. (See Article 248 and entry 97 in the Union List).  \nParliament has concurrent power with the legislature of a State to make laws with respect to \"criminal law\" (entry I) and \"criminal procedure\" (entry II) of the Concurrent List. \n 58. The scope of criminal law is explicated by including within its ambit \"all matters included in the Indian Penal Code at the commencement of this Constitution but excluding offences against laws with respect to any of the matters specified in List I or List II......\" The expression \"criminal procedure\" in entry II comprehends within its ambit \"all matters in the Code of Criminal Procedure at the commencement of this Constitution\". \n 59. It is thus manifest that the framers of the Constitution intended that offences against laws contained in the Income-tax Act, 1961, should be excluded from out of the purview of \"criminal law\", whatever else that expression \" criminal law \" may comprehend.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-88", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "60. Offence--Definition.--The expression \"offence\" is not defined in the Constitution but ^hat expression is defined by Section 3(38) of the General Clauses Act, 1897, which is rendered applicable through Article 367 for the interpretation of the Constitution to mean \"any act or omission made punishable by any law for the time being in force\". \n 61. Indian Penal Code.--The word \"offence\" is denned by Section 40 of the Indian Penal Code, among other things, to denote a thing made punishable by the Indian Penal Code. In the second paragraph of that section, we find the word \"offence\" being described to denote a thing punishable under the Code or under any special or local law as hereinafter defined. In the last paragraph of that section, we find the word being defined as having the same meaning when the thing punishable under the special or local law is punishable under such law with imprisonment for a term of six months or upwards, whether with or without fine. \n 62. Section 41 defines \"special law\" as law applicable to a particular subject and Section 42 defines \"local law\" as law applicable only to a particular part of India. \n 63. Section 53 deals with punishments and provides thus : \n \"53. Punishments.--The punishments to which offenders are liable under the provisions of this Code are,-- \n Firstly,--Death; \n Secondly,--Imprisonment for life; \n Thirdly--(Repealed by Act XVII of 1949); \n Fourthly,--Imprisonment, which is of two descriptions, namely :-- \n (1) Rigorous, that is, with hard labour ; \n (2) Simple; \n Fifthly,--Forfeiture of property; Sixthly,--Fine.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-89", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "Fifthly,--Forfeiture of property; Sixthly,--Fine.\"  \n Criminal Procedure Code.--Section 4(o) of the Code of Criminal Procedure, 1898, defines the expression \"offence\" to mean\" any act or omission made punishable by any law for the time being in force ; ...... \"  \n Section 5 deals with \"Trial of offences under Penal Code and against other laws\" and reads thus : \n \"5. (1) All offences under the Indian Penal Code shall be investigated, inquired into, tried and otherwise dealt with according to the provisions hereinafter contained. \n (2) All offences under any other law shall be investigated, inquired into, tried and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.\"  \n Sections 28 and 29 deal with the powers of the Code with respect to offences both under the Penal Code as well as under the other laws, and they read as follows: \n \"28. Offences under Penal Code.--Subject to the other provisions of this Code any offence under the Indian Penal Code may be tried- \n (a) by the High Court, or", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-90", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "(b) by the court of session, or", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-91", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "(c) by any other court by which such offence is shown in the eighth column of the Second Schedule to be triable.  \n 29. Offences under other laws.--(1) Subject to the other provisions of the Code any offence under any other law shall, when any court is mentioned in this behalf in such law, be tried by such court. \n (2) When no court is so mentioned it may be tried by the High Court or subject as aforesaid by any court constituted under this Code by which such offence is shown in the eighth column of the Second Schedule to be triable.\"  \n The distinction is thus maintained under the Code between offences under the Indian Penal Code and offences under other laws, as mentioned in the Second Schedule appended to the Code. \n 64. There are provisions in the Code of Criminal Procedure, 1973, corresponding to those that were mentioned above. \n 65. Income-tax Act: Offences.--So far as the Income-tax Act, 1961, is concerned, we find Chapter XXII being devoted to the subject-matter of \"offences and prosecutions\". Contraventions of provisions of the Act mentioned in the various sections under that Chapter were rendered punishable with rigorous imprisonment extending from six months to two years with a further liability to fine also. So far as failure to furnish return of income under Sub-section (1) of Section 139 is concerned, Section 276C says that, if a person wilfully fails to furnish in due time the return of income which he is required to furnish under Sub-section (1) of Section 139 ...... he shall be punishable with rigorous imprisonment for a term which may extend to one year or with fine equal to a sum calculated at a rate which shall not be less than four rupees or more than ten rupees for every day during which the default continues, or with both. (The proviso is not relevant).", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-92", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "66. Section 279 deals with the subject-matter of prosecution to be at the instance of the Commissioner and provides that a person shall not be proceeded against for an offence among other things under Section 276C except at the instance of the Commissioner. Sub-section (2) provides for a compounding of any offence by the Commissioner either before or after the institution of the proceedings. \n 67. Section 292 of the Act deals with cognisance of offences and provides that no court inferior to that of a presidency magistrate or a magistrate of the first class shall try any offence under this Act. \n Income-tax Act: Penalties:-- \n Chapter XXI of the Income-tax Act deals with penalties imposable wherein Section 271 occurs. It has already been noticed that under Section 271(1)(a), the Income-tax Officer or the Appellate Assistant Com missioner has power subject to the fulfilment of the conditions mentioned therein to direct any person to pay by way of penalty for failure to furnish, among other things, the return of total income under Sub-section (1) of Section 139. Sub-section (4A) of that section empowers the Commissioner to reduce or waive the amount of minimum penalty imposable on a person under Clause (i) of Sub-section (1) for failure, without reasonable cause, to furnish the return of total income which such person was required to furnish under Sub-section (1) of Section 139. Section 274 provides for the procedure to be adopted for passing an order imposing a penalty under Chapter XXI according to which no order imposing a penalty under that Chapter shall be made unless the assessee has been heard or has been given a reasonable opportunity of being heard. \n I(b). Income-tax Act--Object and policy : Taxation--Directive principles of State policy: \n \"(c) Redistributive techniques--taxation and social services.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-93", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"(c) Redistributive techniques--taxation and social services. \n Taxation is no longer just a way of raising revenue. Since the end of the nineteenth century, it has become in conjunction with the social services an increasingly important way of redistributing income according to need.\" (Social Principles and the Democratic State by S. I. Benn and R. S. Peters at page 153).  \n Robert Murray Haig in a brilliant article in Encyclopaedia of the Social Sciences referring to the views of Wagner, said at page 533 of Volume XIV thus : \n \"In all his writing in the field of taxation Wagner gave great weight to 'socio-political principles'. He considered it a primary function of Government to regulate the distribution of wealth and urged the use of taxation as a means not only of raising sufficient revenue to meet the fiscal needs of the State but of consciously levelling the inequalities of distribution brought about by the workings of the market. Indeed even in defining taxation he stresses this function 'of regulating and correcting the distribution and use of private property '. \" \n Julius Stone in his classic work Social Dimensions of Law and Justice (1966) observed at page 324 thus : \n \"Taxation as the source of the public revenue is, of course, a foundation of all political institutions. The 'public interest of substance', therefore, is really but one aspect of the social interest in political institutions. The greater revenue required for modern expanded State functions has extended and intensified the need for protection of the public purse. Taxes, more than ever, are the life blood of government....... \n Peacetime taxation is increasingly directed to social welfare and services, and countering economic cyclical movements or conjectures as distinct' from the rudimentary functions of law, order, external defence or serving the monarch's pleasure of the seventeenth century'.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-94", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "Taxation is one of the most important weapons by which the State can mitigate the two objectionable aspects of unrestricted private property: first, the inequalities of wealth, and secondly, the power to use property for private profit, and without regard to community purpose. In popular consciousness the first aim still predominates. By graded taxation and surtax on high incomes, gross inequalities of wealth are evened out more easily than by the equalisation of incomes or the abolition of private property. But the second aspect of taxation policy is becoming increasingly more important. On the one hand, taxation is a cheap means by which the State finances its costly social service scheme. Under the British National Health Service Act, 1946, medical services are free for all. The cost of medical services is no longer met by millions of contributions of varying magnitude from private pockets, but out of public revenue. This means that income and property taxes largely pay for the medical services of the poorer classes. To the extent that the State contributes to the cost of national insurance (National Insurance Act, 1946) the same applies.\" (Law in a Changing Society by W. Friedmann at page 85).  \n My learned brother is also of the view that the taxation statutes are intended not only to collect revenue for the State but also for bringing about social justice and to enable the State to implement social welfare schemes undertaken by it.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-95", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "68. Directive principles--Fundamentality, Enforceability and Judicial process.--This device of taxation policy in raising revenues both for the extended and expanded functions of the modern welfare State as well as for securing the redistribution of wealth, was utilised by the founding-fathers of the Constitution through making provision for the enactment of taxation laws by formulating the same as one of the Directive Principles of State Policy, as is manifest from Article 39 of the Constitution, particularly from Clauses (b) and (c) thereof, registering thus the shift of emphasis in the conception of State from what it was--\"an instrument of power\"--to what it has come to be \"an agency of service\" and further emphasising the factum of the movement in the society away from individualism towards collectivism. \n 69. Part IV deals with Directive Principles of State Policy. The framers of the Constitution visualised a welfare State. The State, including Parliament, shall have to strive to promote the welfare of the people by securing and protecting, as effectively as it may, a social order in which justice, social, economic and political, shall have to inform all the institutions of the national life (Article 38). \n 70. The responsibility for the ushering in of such a welfare State is committed to the care of Parliament. Parliament is required to accomplish that objective through the process of law. While making law, Parliament is required to apply the principles laid down in Part IV. Those principles are declared to be fundamental in the governance of the country though the provisions containing those principles in that Part are rendered unenforceable by any court (Article 37).", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-96", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "71. Certain principles of policy comprehending tax policy as well, to enumerate only a few, to be followed by the State are then mentioned in Article 39, as per which the State shall have to, \"in particular, direct its policy towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment\". \n 72. Note the constitutional mandate in Article 37 :\n \"It shall be the duty of the State to apply these principles in making laws\", principles declared to be fundamental in the governance of the country. \n The process of the governance of this country as per Article 37 of the Constitution is to be carried on by law-making instrumentalities by applying the Directive Principles of State Policy as laid down in Part IV, while making laws and by law applying and enforcing instrumentalities, by interpreting and construing such laws embodying such principles. There is a duty cast on the courts to interpret the Constitution and the laws to further the Directive Principles. While interpreting the laws, the courts shall have to make a functional and pragmatic approach to the problems in terms of utility and social consequences. That is the sociological approach. It is only through this approach, that the aspirations of the people, enshrined in the Preamble and embodied in Part IV of the Constitution, can be realised.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-97", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "73. It is a mistake to suppose that the Directive Principles in Part IV are subordinate to the rights conferred by Part III because of articles like 32 and 226 providing for the enforceability of rights and of Article 37 providing for the unenforceability of provisions contained in Part IV. In the first place, there is nothing in common between rights and principles to be compared and contrasted. In the second place, the distinction between the provisions contained in Part IV rendered unenforceable by any court and the principles laid down therein with a constitutional declaration that they are fundamental in the governance of the country with a duty cast upon Parliament to apply those principles in making laws is too vital and too fundamental to be lost sight of. \n 74. The provisions contained in Part IV are as much unenforceable by any court, as any other provision contained in any other part of the Constitution, say like those contained in Part XI, in the sense that they cannot be enforced. At best it is only a neutral circumstance. But that is not to say that the principles contained in law made by Parliament are unenforceable. There is no warrant to project the inhibition of unenforceability of provisions into the principles contained in laws made by Parliament. \n 75. Directive Principles, the founding-fathers of the Constitution declared through Article 37 in Part IV as fundamental, but no such constitutional reckoning is accorded through any of the articles contained in the Constitution to the rights conferred by Part III. These rights, as a matter of fact, are referred to even in Articles 32 and 226 not as fundamental rights but merely as rights conferred by Part III. The rights are also not absolute. The principles in Part IV, therefore, are fundamental but not the rights in Part III. The fundamentality of the principles shall have to be maintained by courts through interpretative process.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-98", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "76. That is the nature, subject-matter, object and policy of the Income-tax Act, 1961. That takes us to the next aspect of the matter as regards the nature of judicial approach towards this legislation. \n II.    COMMON LAW TRADITION OF JUDICIAL APPROACH  TOWARDS MODERN LEGISLATION :", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-99", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "The emphasis of the common law was on freedom of property, freedom of contract and freedom of the person. Interference with these freedoms was not to be countenanced.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-100", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "77. The common law antedates Parliament and the legislative process. It did not and could not by its own process of development meet all the challenges of changing society. The remedy had to be found in the legislature which evolves the legislative process passing into law its own statutes. Certain rules of common law and equity we find in their statutorised form in England in Acts like the Bills of Exchange Act, 1882, Sale of Goods Act, 1893, and Law of Property Act, 1925. There are other statutes containing welfare legislation adding new dimensions to the law, creating rights and obligations where before there were none. The common law is treated as a private law system, concerned essentially with the person, the property, and the reputation of the individual. Its primary concern has been to defend private property and to distribute justice between individuals in disputes with each other. The business of the courts has thus been distributive justice, the interest of the State being to do justice between man and man. From that outlook and approach, there has arisen the common law's lack of concern with public law which is concerned with the rights and obligations of the State in the setting of municipal law. The welfare State is challenging the relevance, or at least the adequacy of the common law's concepts and classifications and rules and principles. (See Sir Leslie Scarman English Law--The New Dimension). \n \"A body of law which will satisfy the demands of the society of today cannot be made of the ultra-individualist materials of eighteenth century jurisprudence and nineteenth century common law based thereon...\" (The Spirit of Common Law by Roscoe Pound at page 190).", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-101", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"Indeed fundamental changes have been taking place in our legal system almost unnoticed, and a shifting was in progress in our case law from the individualist justice of the nineteenth century which has passed so significantly by the name of legal justice, to the social justice of today even before the change in our legislative policy becomes so marked.\" (The Spirit of Common Law by Roscoe Pound at page 185). \n Lord Wright said in Rose v. Ford [1937] AC 826 (HL): \n \"I venture respectfully to think that the view of the Court of Appeal illustrates a tendency common in construing an Act which changes the law, that is, to minimise or neutralise its operation by introducing notions taken from or inspired by the old law which the words of the Act were intended to abrogate and did abrogate.\" \n G.W. Paton in his A text book of Jurisprudence, third edition, at page 218, said: \n \"When an individualist common law is modified by collectivist legislation, we sometimes see an unsympathetic construction. Thus, the real basis of housing legislation is a sacrifice of private rights of ownership in order to make possible a planned attack on the problem of the provision of suitable accommodation--hence an over-emphasis on the presumption against interference with the private rights of the landowner sometimes in the past lead to a defeat of the real purpose of an Act. Pennsylvania has attempted to overcome rigid interpretation by a Statutory Construction Act which abolishes the rule that statutes in derogation of the common law are to be strictly construed.\" \n \"The common lawyer is at his worst when confronted with a legislative text \". (Roscoe Pound, Future of Common Law, page 18).  \n Julius Stone, in his Legal System and Lawyers' Reasonings, said at page 348 thus:", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-102", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"It is certainly clear that there has long been a canon of construction requiring, within vague limits, that statutes 'in derogation of' the common law shall be strictly construed. The effects of such canon today when legislation is a major (perhaps the major) source of law, must obviously be serious. It has been well said that English courts have often inhibited themselves from 'seizing the spirit of institutions and situations which are in substance the creatures of modern legislation'. These effects have been the subject of critical comment in connection with many major fields of legislation, for instance public health, the emancipation of married women, and the related matter of family life insurance policies, road traffic legislation, workmen's compensation legislation, industrial safety legislation, industrial reorganisation legislation, trade union legislation, criminal law, sale of goods legislation, housing legislation, town planning legislation, legislation on the adoption and custody of infants, and many others......\" \n \"The antithetical relationship between the common law and statute law, the law deposited and preserved in the hearts of the judges and law propounded by Parliament\" is admirably brought out in a brilliant essay written as early as in the year 1908 and published in 21 Harvard Law Review at page 383 by Roscoe Pound under the heading\" Common Law and Legislation\" : \n \"Four ways may be conceived of in which courts in such a legal system as ours might deal with a legislative innovation : \n (1) They might receive it fully into the body of the law as affording not only a rule to be applied but a principle from which to reason, and hold it, as a later and more direct expression of the general will, of superior authority to judge-made rules on the same general subject; and so reason from it by analogy in preference to them.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-103", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "(2) They might receive it fully into the body of the law to be reasoned from it by analogy the same as any other rule of law, regarding it, however, as of equal or co-ordinate authority in this respect with judge-made rules upon the same general subject. \n (3) They might refuse to receive it fully into the body of the law and give effect to it directly only ; refusing to reason from it by analogy but giving it, nevertheless, a liberal interpretation to cover the whole field it was intended to cover. \n (4) They might not only refuse to reason from it by analogy and apply it directly only, but also give to it a strict and narrow interpretation, holding it down rigidly to those cases which it covers expressly.  \n The fourth hypothesis represents the orthodox common law attitude towards legislative innovations. Probably the third hypothesis, however, represents more nearly the attitude towards which we are tending. The second and first hypothesis doubtless appeal to the common law lawyer as absurd. He can hardly conceive that a rule of statutory origin may be treated as a permanent part of the general body of the law. But it is submitted that the course of legal development upon which we have entered already must lead us to adopt the method of the second and eventually the method of the first hypothesis.\"  \n According to Morris Cohen, \"the meaning of a statute consists in the system of social consequences to which it leads or the solutions to all the possible social questions that can arise under it. In essence, then, statutory interpretation involves a choice between uncertainties, and sociological jurisprudence suggests that the choice should be made in the light of the social consequences of decision, rather than in terms of judicial like or dislike of the particular statute or statutes generally.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-104", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "Roscoe Pound finds no justification whatever for the maxim that statutes in derogation of the common law are to be strictly construed, and says that the rule has survived because of judicial jealousy of the reform movement. The judge should not substitute his will for that of the legislature, said Hand, even though he might have more wisdom, because statutes embody the will of the elected representative of the people. Sociological jurisprudence insists, as a matter of value, that the social advantage of the rule is its major test, since the welfare of society is the general aim of the law. (From Society and the Law). \n 78. The joint report of the two Law Commissions, i.e., Law Commission and Scottish Law Commission Report on the Interpretation of Statutes of 1969 says that \"the rule in Heydon's case [1584] 3 Co Rep 7a, while not without merits, is somewhat outdated, because it assumes that statute is subsidiary or supplemental to the common law, whereas in modern conditions many statutes mark a fresh point of departure rather than a mere addition to, and qualification of the principles of common law.\" (From Introduction to Jurisprudence by Lord Lloyd of Hampstead, third edition, at page 741). \n 79. One of the rules deduced by Sri L. Scarman from the speech of Lord Herschell in Vagliano v. Bank of England [1891] AC 107, 145 (HL) is \" The law is to be deduced from an examination of the language of the statute. It is improper to try to make the language comply with the old law.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-105", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "80. Doctrine of mens rea: One of the cardinal principles of English criminal law is expressed in the maxim actus non facit reum nisi mens sit rea, i.e., that \"a person cannot be convicted and punished in a proceeding of a criminal nature unless it can be shewn that he had a guilty mind\" [Chisholm v. Doulton [1889] 22 QBD 736, 739 (QB)]. \n \"At common law, mens rea was an essential element of every crime and there would seem to be no case in which Parliament in giving statutory form to an old common law crime has dispensed with the need for mens rea. Nevertheless there is a long line of authorities which hold that Parliament has intended in one particular field or another to penalise persons, whether or not it can be said that they had mens rea for the particular offence. Offences of this kind are known as offences of strict or absolute liability, and in such cases it has been held that the belief, intention or state of mind of the accused person is immaterial and irrelevant if he has in fact done the actus reus. which constitutes the offence...... \n The reason for the creation of offences of strict liability is an obvious one. Where mens rea is constitutent of an offence, the burden of proving it is upon the prosecution ; and while the proof of the actus reus is generally effected by merely calling witness to the facts, the burden of proving mens rea is often a difficult and onerous one.\" (From Harris's Criminal Law at pages 40 & 41).  \n The maxim actus non facit reum nisi mens sit rea is not of general application to modern statutes, though it is a maxim generally applicable to offences at common law and possibly also to offences under the earlier statutes which are to be treated on the same basis as offences under the common law.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-106", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "81. Wills J. in R. v. Tolson [1889] 23 QBD 168 (QB) suggested at pages 172 to 177 that \"an element in determining whether or not mens rea is required is the nature and extent of the penalty attached to the offence, and that it will normally be required in construing a statute constituting an offence entailing severe and degrading punishment.\" \n 82. W.T.S. Stallybrass in his article The Eclipse of Mens Rea in (1936) The Law Quarterly Review at page 66 referring to the maxim actus non facit reum nisi mens sit rea held the view that \"In the case of modern statutory offences the maxim has no general application and the statutes are to be regarded as themselves prescribing the mental element which is a prerequisite to a conviction\". The learned author suggests that much of the confusion can be avoided if reference to mens rea in modern statutory offences is avoided. \n83. In Hobbs v. Winchester Corporation [1910] 2 KB 471, 483 (CA) Kennedy L.J. said that : \"There is a clear balance of authority that in construing a modern statute this presumption as to mens rea does not exist.\" \n 84. Donovan J. in R. v. St. Margaret's Trust Ltd. [1958] 1 WLR 522, 527 (C Cr App) said that \" modern statutes create offences where knowledge on the part of an offender is not essential, and that accordingly there is no universal prior presumption of mens rea \". \n 85. In Urn Chin Aik v. R. [1963] AC 160, 174 (PC) Lord Evershed said about the strict liability with respect to statutory functions thus :", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-107", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"Where the subject-matter of the statute is the regulation for the public welfare of a particular activity--statutes regulating the sale of food and drink are to be found among the earliest examples--it can be and frequently has been inferred that the legislature intended that such activities should be carried out under conditions of strict liability.\" \n Among the exceptions to the rule underlying the doctrine of mens rea, revenue legislation is one, as observed by Wright J. in Sherras v. De Rutzen [1895] 1 QB 918. 921, 922 (QB) :", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-108", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"...the principal classes of exceptions may perhaps be reduced to three. One is a class of acts which, in the language of Lush J. in Davies v. Harvey [1874] LR 9 QBD 433 (QB) are not criminal in any real sense, but are acts which in the public interest are prohibited under a penalty. Several such instances are to be found in the decisions on the Revenue Statutes, e.g., Attorney-General v. Lockwood [1842] 9 M&W 378, where the innocent possession of liquorice by a beer retailer was held an offence. So under the Adulteration Acts, Reg v. Woodrow 15 M & W 404 as to innocent possession of adulterated tobacco; Fitzpatrick v. Kelly [1873] LR 8 QBD 337 (QB) and Roberts v. Egerton [1874] LR 9 QBD 494 (QB) as to the sale of adulterated food. So under the Game Acts, as to the innocent possession of game by a carrier: Rex v. Marsh [1824] 2 B & C 717. So, as to the liability of a guardian of the poor, whose partner, unknown to him, supplied goods for the poor: Davies v. Harvey [1874] LR 9 QBD 433 (QB). To the same head may be referred Reg v. Bishop [1880] 5 QBD 259 (QB), where a person was held rightly convicted of receiving lunatics in an unlicensed house, although the jury found that he honestly and on reasonable grounds believed that they were not lunatics. Another class comprehends some, and perhaps all, public nuisances : Reg v. Stephens [1866] LR 1 QB 702 (QB) where the employer was held liable on indictment for a nuisance caused by workmen without his knowledge and contrary to his orders; and so in Rex", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-109", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "for a nuisance caused by workmen without his knowledge and contrary to his orders; and so in Rex v. Medley [1834] 6 C&P 292 and Barnes v. Akroyd [1872] LR 7 QB 474 (QB). Lastly, there may be cases in which, although the proceeding is criminal in form, it is really only a summary mode of enforcing a civil right: See per Williams and Willes JJ. in Morden v. Porter [1860] 7 CB (NS) 641 as to unintentional trespass in pursuit of game; Lee v. Simpson [1847] 3 CB 871 as to unconscious dramatic piracy; and Hargreaves v. Diddams [1875] LR 10 QB 582 (QB) as to a bona fide belief in a legally impossible right to fish.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-110", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "The doctrine of mens rea may be the foundation of liability in criminal law but need not necessarily be under statutory law. \n 86. Speaking about the offences of absolute liability, J.C. Smith in his article \"The Guilty Mind in the Criminal Law\" [I960] 76 Law Quarterly Review says at page 78 and at page 97, thus: \n \"Not only are these offences a departure from the principle discussed above in that they do not require mens rea, but it is not even necessary to prove negligence, the usual criterion of liability in the civil law. A person may be convicted of one of these even though he was taking all reasonable care. All that the prosecution have to do is to prove that D (defendant) caused the actus reus by a voluntary act...\" \n R.M. Jackson in his article \"Absolute Prohibition in Statutory Offences\" published in [1936] VI Cambridge Law Journal, at page 83, said : \n \"In all common law crimes, other than common nuisance, it appears that some culpable mental element or mens rea is required. The mental element is 'culpable' in the sense that the actus is only criminal when it is coupled with a realization of the probable consequence of the act or omission. In statutory offences this rule does not hold good; the actus may be prohibited in such language that a person may be liable for doing an act whether or not he did, or could, have foreseen the consequences. Such offences create what is commonly called Absolute Liability ...... The statutory offences of absolute liability depend on the particular wording of the statutes by which they are created ; the elements of each offence must be ascertained by construing the statute.\"", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-111", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"The conclusion to be drawn is that in statutory offences nothing more, and nothing less, is required than that the statute should be carefully read and the rules of construction properly applied in each case.\" (at page 92).  \n Brett J. in R. v. Prince [1875] LR 2 CCR 154 at page 163 said that the doctrine of mens rea is not applicable to revenue statutes. \n 87. A Division Bench of the Calcutta High Court in Legal Remembrancer v. Ambika Charan Dalai [1946] ILR 2 Cal 127 observed at page 129 regarding the applicability of mens rea doctrine of common law to India, as follows: \n \"The maxim does undoubtedly embody a fundamental principle of English common law ; and the common law, modified and supplemented by statute, is still the law in England. But the English common law is not the criminal law in force in India. Every offence, of which the Indian courts take cognizance, is clearly denned by statute. The Indian legislature has embodied many of the principles of English common law modified to suit Indian conditions in the criminal law of India. But instead of enacting a general principle such as nemo est reus nisi mens sit rea, the Indian legislature has included in the definition of each offence a clear statement of the mental condition necessary to constitute the offence. If, in any case, the Indian legislature has omitted to prescribe a particular mental condition, the presumption is that the omission is intentional.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-112", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "Where an Indian statute is ambiguous or its meaning obscure, it is proper to refer to the principles of English common law to resolve the ambiguity or to elucidate the meaning ; but where the statute is free from ambiguity and the meaning is clear, the courts are not justified, in my opinion, in importing words into the statute, or refusing to give effect to the clear meaning of the statute, or giving a forced or unnatural meaning to the words of the statute in order to make it conform with the principles of the common law.\"  \n M.C. Setalvad in The Hamlyn Lectures on The Common Law in India, summed up very neatly the position as regards the applicability of the maxim actus non facit reum nisi mens sit rea to statutory offences in India thus at pages 139 to 141 :", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-113", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "\"Unlike in England all offences in India, excepting contempts of the courts of record like the Supreme Court and the High Courts, are statutory. The offences defined in the Penal Code and also in various other statutes incorporate in the definition of the offence itself the guilty mind needed in order that the crime may be committed. Under the English common law mens rea may vary from crime to crime. So does it vary in the Indian statutory definitions of crime (page 139). What the Indian Code seems to have done is to incorporate into the common law crime the mens rea needed for that particular crime so that the guilty intention is generally to be gathered not from the common law but from the statute itself. This may be regarded as a modification of the common law worked into the Code of Macaulay and his colleagues to make it suit Indian conditions. By adopting this course they have also avoided the doubt and obscurity which has not infrequently arisen in regard to the mens rea required for certain common law crimes like homicide, assault and false imprisonment. It has been pointed out that the English system, in which changes in the law are made gradually by judicial decisions, has often created a situation in which old and new doctrines have been employed in the course of the same period, according as the judges are inclined one way or the other, giving rise to conflicting principles with puzzling results. Such uncertainty cannot exist in India as the necessary guilty mind is indicated in the statutory definition of the crime.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-114", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "In a sense, therefore, it may be said that the maxim actus non facit reum nisi wens sit rea has, as a maxim, no application to offences under the code. By specifying the varying guilty intention for each offence the code has in effect built the maxim into each of its definitions and given it statutory effect. Where the code omits to indicate a particular guilty intent, the presumption, having regard to the general frame of the definitions, would be that the omission must be intentional (page 140). In such cases it would perhaps not be permissible to import the maxim in arriving at a conclusion whether the person charged with that particular offence has been guilty.\" (page 141).", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-115", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "What flows or follows from the foregoing discussion is that the Income-tax Act of 1961 is a self contained one. It contained within itself the provision for its enforcement. Chapter 21 deals with penalties imposable under Section 271. The Income-tax Officer or the Appellate Assistant Commissioner, in the course of any proceeding under the Act, if satisfied that any person has without reasonable cause failed to furnish the return of total income as required under Section 139(1) of the Act within the time stipulated therein, he may direct that such person shall pay penalty. Failure to furnish return within time is the occasion for the levy of penalty and the authorities concerned, if satisfied that the failure of the assessee is attributable to unreasonable cause, may levy the penalty. There is a procedure prescribed for the levy of penalty under Section 274. There are also further provisions contained in the same Chapter either to reduce or waive the amount of penalty imposable. That Chapter is self-contained as regards the occasion for the levy of penalty as well as with respect to the procedure for the imposition of the same with a remedy to have the said penalty reduced or waived. When the framers of the Act have defined all the ingredients of the penalty, there is absolutely no need to import into this something which is not there. The doctrine of mens rea is, therefore, not applicable to the situation contemplated under Section 271 of the Act. The infringement of the law cannot be considered to be a crime or an offence in the nature of a crime as to attract the applicability of the doctrine of mens rea.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-116", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "88. The next Chapter XXII provides for offences and prosecutions. Even there, the ingredients of the offence have been defined statutorily. The punishment is indicated. They are rendered compoundable too. The person at whose instance and the court before whom proceedings shall have to be initiated were indicated therein. The contravention of provisions of the Act mentioned in various sections under that Chapter were rendered punishable with rigorous imprisonment ranging from six months to two years with further liability to fine also. Having regard to the definition of offence, as contained in the General Clauses Act, 1897, in the Indian Penal Code and the Code of Criminal Procedure the offences in Chapter XXII are offences under any other law as envisaged by Sub-section (2) of Section 5 of the Code of Criminal Procedure to be investigated, inquired into, tried and otherwise dealt with according to the provisions of law contained in the Income-tax Act. The contravention of the provisions of the Act were rendered punishable and the expression 'punishment' described in Section 53 of the Indian Penal Code takes within its ambit imprisonment and fine. The framers of the enactment utilised the machinery envisaged in the Code of Criminal Procedure subject to what is contained in the Income-tax Act for securing the implementation of the provisions of the Act through the sanctions recognised under the criminal law. The principles of common law applicable to common law crimes and offences are, therefore, to be taken to have been not applied as offences under the Act are clearly defined and, therefore, the extent to which the nature and ambit of the offence under the Act was defined, to that extent the applicability of the common law presumptions must be taken to have been excluded.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-117", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "89. If the doctrine of mens rea is to be applied to the penalties imposable under Chapter XXI of the Income-tax Act, 1961, there will be cast a heavy burden upon the department to prove the mens rea and the importation of that doctrine. Under those circumstances, far from furthering the object of the Act, it would certainly defeat it and any such construction which has the effect of not effectuating the purpose of the Act should not be indulged in. \n To sum up : (1) The Income-tax Act, 1961, was enacted by Parliament, with a view to securing the implementation of the Directive Principles of State Policy, particularly those embodied in Clauses (b) and (c) of Article 39 of the Constitution, providing among other things, for the redistribution of wealth, and providing further for the raising of revenue for the extended and expanded functions of the welfare State visualised by the Constitution. \n (2) Unlike in the United Kingdom, we have a written Constitution. Unlike in the United States of America, we have the Directive Principles of State Policy Chapter in our Constitution. Unlike in both those countries, we have \"social justice\" proclaimed in the preamble and transformed into Directive Principles of State Policy. The process of governance of this country is to be carried on by law-making instrumentalities by applying the Directive Principles of State Policy, while making laws and by law applying and enforcing instrumentalities by interpreting and construing such laws enforcing those principles embodied therein.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-118", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "(3) Individualism and collectivism: The key note of the nineteenth century thought was individualism. The emphasis of common law was on freedom of property, freedom of contract and freedom of the person. Interference with those freedoms was not to be countenanced. That concept was carried into the American Constitution. This reflects the philosophy underlying Part III of our Constitution. With the changes in the purpose and function of Government from its traditional role which is negative to the modern role which is positive, laissez faire died with the dawn of the 20th century and today the State has to concern itself with the welfare of its members. This reflects the philosophy underlying Part IV of the Constitution. \n (4) Legislative innovation and judicial approach: The judiciary shall have to receive the legislative innovations into the body of the law as affording not only a rule to be applied but a principle from which to reason and hold it as a later and more direct expression of the general will of superior authority to judge made rules on the same general subject and so reasons from it by analogy in preference to them. \n (5) It is archaic and anachronistic to apply the principles of common law with its individualist outlook to the interpretation or construction of modern welfare legislation with its collectivist outlook. Such an approach far from furthering the object of legislation frustrates the same. The welfare State is challenging the relevance or at least the adequacy of the common law concepts and classifications and principles. The meaning of a statute consists in the system of social consequences to which it leads, and sociological jurisprudence insists as a matter of value that the social advantage of the rule is its major test since the welfare of society is the general aim of the law.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-119", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "(6) The Income-tax Act, 1961, is sufficiently self-sufficient as not to need any supplementing or supplanting from the principles of common law for its interpretation, construction or application. It provides both for the imposition of penalties by Chapter XXI and infliction of punishment by way of imprisonment and fine by Chapter XXII. The doctrine of \"mens rea\" is of common law origin developed by judge-made law. It has no place in the legislator's law where offences are defined with sufficient accuracy. There is involved no element of infliction of punishment by way of imprisonment or fine or loss of liberty in the imposition of penalty under Chapter XXI, even to answer the description of \"offence\" as defined under the General Clauses Act, 1897, or under the Indian Penal Code or the Code of Criminal Procedure. \n (7) The presence of Chapter XXII dealing with \"Offences and prosecutions\" immediately after Chapter XXI dealing with \"Penalties imposable\", indubitably establishes the intention of the framers of the Act that \"penalties\" are not intended to be dealt with as offences to which provisions of the Criminal Procedure Code can be applied. \n (8) Even otherwise, there is no universal prior presumption of mens rea. Every statute is to be considered according to its own terms. The law of the land does not allow creation of offences through judicial construction or interpretation. Reading the requirement of mens rea into Section 271 either as an ingredient of the concept of offence or as a presumption of law, results in imposing heavy and impossible burden on the revenue to, be discharged resulting in the practical nullification of this taxing statute which has for its object the implementation of Directive Principles of State Policy as embodied in Article 39(b) and (c). The status of fundamentality secured constitutionally to the Directive Principles could be impaired if not imperilled if such a construction of Section 271 is permitted.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-120", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "There is absolutely no justification, judged by whatever canon of construction it be, to read into Section 271 qualifying the failure to furnish a return with expressions like \"contumacious\", \"dishonest\", \"in deliberate defiance of law\", etc.,", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "a16dd6a67cf7-121", "Titles": "Addl. Commissioner Of Income-Tax ... vs Dargapandarinath Tuljayya & Co. on 10 December, 1975", "text": "90. For the aforesaid reasons, I hold, agreeing with my learned brother, that there is no occasion to introduce the doctrine of mens rea into Section 271(1) of the Income-tax Act, 1961, and that these appeals should be allowed.", "source": "https://indiankanoon.org/doc/809429/"}
+{"id": "2b2a02f30f90-0", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "JUDGMENT Anjaneyulu, J. \n 1. At the instance of the Commissioner of Income-tax these reference were made by the Income-tax Appellate Tribunal under s. 256(1) of the I.T. Act, 1961. The question referred in all the three cases is identical and it will be convenient to deal with the same in this common judgment. \n 2.The Andhra Pradesh State Electricity Board (for short, \"the Electricity Board\"), the respondent in these reference made certain payments to non-residents against the purchase of machinery and equipment and also against the work executed by the non-residents in India of erecting and commissioning the machinery and equipment. The question arose whether the Electricity Board was under an obligation to deduct tax at source from these payments under s. 195 of the I.T. Act, 1961 (for short \"the Act\"). The payments were made by the Electricity Board without deduction of tax at source. The ITO held that the Electricity Board was under an obligation to deduct tax at source under s. 195. Owing to the failure of the Electricity Board to deduct such tax, the Electricity Board was deemed to be an assessee in default in respect of the tax deductible at source under s. 195. Consequently, the ITO passed orders determining the tax, which according to him, was deductible at source under s. 195 and required the Electricity Board to pay such amounts. These facts briefly constitute the origin for the subsequent appeals to the AAC and the Income-tax Appellate Tribunal and the present reference before this court.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-1", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "3. R.C.No. 203 of 1978 relates to the payment made by the Electricity Board to M/s. Charmilles Engineering Works Ltd., Geneva, Switzerland. Two separate agreements were entered into with the above non-resident. One was for the purchase of Nos. 95,000 BHP Francis Turbines. Another was for the purchase of 2 Nos. Butterfly Valves. This equipment was for the Upper Sileru Hydro-Electric Scheme, Visakhapatnam District. There were also two more contracts with the same non-resident for the assembly erection and testing and commissioning of the above equipment at Sileru. It appears under the contracts for erection and commissioning above referred to, the Electricity Board paid the following sums to the nonresident company : \n Financial Year                               Amount paid\n                                                Rs.\n1966-67                                      3,65,237\n1967-68                                      8,01,079\n1968-69                                      1,63,602\n1969-70                                        38,832\n1970-71                                        51,001\n1971-72                                         7,700\n1972-73                                        45,000\n                                           --------------\n                                            14,72,451\n                                           --------------", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-2", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "4. On the ground that, under these contracts the amounts were payable to the non-resident free of income-tax the ITO grossed up the net payments. He seems to have arrived at the corresponding gross amounts which, after payment of tax by the non-resident under the provisions of the Act, would yield the net amount paid and treated the difference between the gross amount and the net amount paid as tax deductible at source under s. 195. The difference between the gross amount and the net amount is held to be the tax deductible at source as apparently the Finance Act for the relevant assessment year authorises such deduction. For instance, in the financial year 1966-67, the net amount paid was Rs. 3,65,237. The ITO arrived at the corresponding gross amount at Rs. 18,25,805. He observed that under the Finance Act, 1966, the tax deductible at source under s. 195 was 30% income-tax and 3% surcharge. Even so, the tax deductible on the gross amount of Rs. 18,25,805 was not determined at the aggregate amount of 33% prescribed by the Finance Act, 1966, but was determined at the difference between the gross amount of Rs. 18,25,805 less the net amount paid viz., Rs. 3,65,237. By this process, the ITO held that the Electricity Board was under an obligation to deduct tax of Rs. 14,60,568. For the failure to deduct and pay the tax to the Central Government the ITO had also charged interest under s. 201(1A) from the date on which such tax was deductible. For instance the corresponding amount of interest payable on the tax of Rs. 14,60,568 held to be deductible under s. 195 is Rs. 12,77,996. The result has been that in respect of a net", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-3", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "is Rs. 12,77,996. The result has been that in respect of a net amount of Rs. 3,65,237 paid, the ITO determined the tax deductible at source together with interest thereon at the aggregate figure of Rs. 27,38,564. A very curious result indeed. The ITO determined the tax deductible at source as well as the interest for the subsequent financial years 1967-68 to 1972-73 (both inclusive) in the same manner. It is not necessary to set out the details. It is sufficient to state that in respect of net payments aggregating to Rs. 14,72,451 made by the Electricity Board during the financial years 1967-68 to 1972-73 (both inclusive), the ITO determined the tax deductible at source under s. 195 at Rs. 58,32,260 and the corresponding interest thereon under s. 201(1A) at Rs. 46,30,034 aggregating to Rs. 1,04,62,294.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-4", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "5. We shall now briefly refer to the facts in R.C. No. 205 of 1978 as the orders of the ITO in R.C. Nos. 203 and 205 of 1978 follow the same pattern. The Electricity Board entered into an agreement with Oerliken Engineering Co., Zurich, Switzerland for the purchase of 2 Nos. 60 MW generators and Indoor Switchgear for the Sileru Hydro Electric Scheme. Another contract was also entered into with the non-resident for the assembly, erection and testing and commissioning of the above equipment at Sileru. It appears that under the erection contract, the Electricity Board paid the following sums to the non-resident company : \n Financial year                           Amount paid \n              Rs.\n1966-67                                    1,95,877\n1967-68                                   13,70,529\n1968-69                                    1,34,378\n                                            ---------------\n                               Total      17,00,784\n                                            ---------------", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-5", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "6. On the same basis followed in respect of payments made to Charmilles Engineering Works Ltd. in R.C. No. 203 of 1978, the ITO held that the Electricity Board was under an obligation to deduct tax from the payments made to Oerliken Engineering Company. On the ground that the payments in this case were also made by the Electricity Board free of income-tax the ITO grossed up the net payments to arrive at the corresponding gross amounts. He accordingly arrived at the corresponding gross payments which aggregated to Rs. 89,02,338. Deducting therefrom, the aggregate amount of net payments of Rs. 17,00,784 made, the ITO arrived at the tax deductible at source under s. 195 at Rs. 72,01,554. He also determined the interest payable under s. 201(1A) at Rs. 58,55,747. The tax deductible and the interest payable thus amounted in all to Rs. 1,30,57,301. The ITO required the Electricity Board to pay the above amount pursuant to his order dated September 24, 1975 under s. 201. It is only necessary to state that the ITO followed the same pattern for determination of tax deductible at source in R.C. Nos. 203 and 205 of 1978.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-6", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "7. R.C. No. 204 of 1978 relates to payments made by the Electricity Board to M/s. Sacheron Works Ltd., Geneva, Switzweland. It appears, a contract was entered into with the above said non-resident for the purchase and erection of 7 Nos. power transformers for the Sileru Hydro Electric Scheme. Under the contract for the purchase of power transformers, the Electricity Board paid to the non-resident in the financial year 1966-67 a sum of Rs. 27,57,736. Under the contract for erection charges the Electricity Board paid to the non-resident the amounts of Rs. 1,19.279 Rs. 48,591 and Rs. 474, respectively, in the financial years 1967-68 1968-69 and 1969-70. The ITO held that in respect of payments made towards the price of transformers, net profit to the non-resident could be estimated at 5% of the sale price; he also estimated the net profit in respect of payments made to the non-resident on account of erection charges at 25%. The ITO accordingly determined the income forming part of the sums paid to the non-resident as above mentioned. The ITO determined the tax deductible at source under s. 195 at Rs. 2,99,111 in respect of the above payments. The ITO's order does not show whether the net payments were grossed up as was done in R.C. Nos. 203 and 205 of 1978; it does not also show where the tax deductible at source was determined at Rs. 2,99,111 with reference to such gross figure. It may be mentioned that the order under s. 201 in respect of the payments made to this non-resident was passed by the ITO on May 10, 1976.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-7", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "8. Against the ITO's orders dated September 22, 1975 and September 24, 1975, respectively in R.C. Nos. 203 and 205 of 1978, the assessee filed appeals before the AAC of Income-tax and urged that the ITO's orders were illegal. A number of contentions were raised before the AAC challenging the correctness of the orders passed by the ITO. It is not necessary to refer to all these contentions. It may, however be mentioned that the AAC rejected the various contentions raised by the assessee challenging the correctness of the orders passed, but cancelled the orders accepting one basic contention. That contention was to the effect that the provisions of S. 195 of the Act are applicable in cases where the sums paid were \"pure income profits\", that is to say, the sums paid represented wholly income. It was urged that the provisions of s. 195 of not come into operation in a case where the non-resident was paid under contracts sums of money, a part of which only may represent income chargeable under the I.T. Act. The above contention appealed to the AAC. Accepting the above contention, the AAC held that the words \"Any other sum........... chargeable under the provisions of this Act\" occurring in s. 195 of the Act do not contemplate inclusion of trading receipts in their ambit. The AAC was of the view that in terms section 195 applies only to cases where the sums paid are \"pure income profits\". Holding the above view the AAC cancelled the orders passed by the ITO, under s. 201 of the Act, which are the subject-matter of consideration in R.C. Nos. 203 and 205 of 1978. The ITO did not accept the decision of the AAC cancelling the above-mentioned orders on the above ground and filed appeals before the Income-tax Appellate Tribunal.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-8", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "9. After the AAC cancelled the orders passed by the ITO dated September 22, 1975, and September 24, 1975 in R.C. Nos. 203 and 205 of 1978 and while the appeals filed by the ITO against the cancellation by the AAC of such orders were pending before the Income-tax Appellate Tribunal the ITO passed the third order date May 10, 1976, under s. 201 in R.C. No. 204 of 1978. After passing this order the ITO seems to have pressed for the payment of tax determined whereupon the Electricity Board filed a writ petition in this court for say of the tax. While disposing of the writ petition filed by the Electricity Board, this court directed the AAC to dispose of the appeals within two months from the date of the order of this court and, consequently, the AAC disposed of the appeal against the ITO's order dated May 10, 1976, in R.C. No. 204 of 1978, by his order daed August 16,1976. Although the ITO followed a different pattern for determining the tax deductible at source, the AAC proceeded on the basis that his earler decion cancelling the orders of the dated September 22, 1975, and September 24, 1975, in R.C. Nos. 203 and 205 of 1978, holds good even in respect ofs the order dated May 10,1976, in R.C. No. 204 of 1978, and accordingly cancelled the order of the ITO. The ITO once again filed an appeal to the Income-tax Appellate Tribunal against the order of the AAC.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-9", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "The Income-tax Appellate Tribunal disposed of the three appeals filed by the ITO by its order dated September 30, 1977. Before the Tribunal, the assessee supported the order of the AAC not only on the ground, which appealed to the AAC, but also on the carious grounds which were negatived by the AAC. The Tribunal negatived the various contentions urged by the assessee, but upheld the order of the AAC on the same ground on which the AAC cancelled the three orders. Thus, the Income-tax Appellate Tribunal affirmed the order of the AAC concelling the three orders of the ITO on the ground that the provisions of s. 195 of the Act are not applicable to payment of sums to a non-resident, which are not \"pure income profits\". The Tribunal held that there was no sanction to deduct tax from out of gross sums of money, a moiety of which alone represents the income chargeable under the I.T. Act. In the above view, the Tribunal dismissed all the three appeals filed by the ITO against the order of the AAC. Thereupon the Commissioner of Income-tax filed reference applications under s. 256(1) of the Act requiring the Tribunal to refer the cases to this court for its opinion. That is how the Tribunal made the three references under consideration. it may perhaps be relevant to refer at this stage to the question of law referred in each reference for the opinion of this court under s. 256(1) of the Act. \n 10. R.C. No. 203 of 1978 : \n \"Whether, on the facts and in the circumstances of the case, the Superintending Engineer Civil, Circle, Upper Sileru, is liable to deduct income-tax under section 195 of the Income-tax Act, 1961 on the payments made to the non-resident company ?\"", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-10", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "11. R.C. No. 204 of 1978 : \n \"Whether, on the facts and in the circumstances of the case, the Superintending Engineer, Civil Services Circle, Upper Sileru is liable to deduct income-tax under section 195 of the Income-tax Act, 1961 on the payments made to the non-resident company for the assessment years 1966-67, 1967-68 and 1968-69 ?\" \n 12. R.C. No. 205 of 1978 : \n \"Whether, on the facts and in the circumstances of the case the Superintending Engineer, Civil Circle Upper Sileru, is liable to deduct income-tax under section 195 of the Income-tax Act, 1961 on the payments made to the non-resident company for the assessment years 1966-67, 1967-68, 1968-69 and 1969-70 ?\"", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-11", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "13. Learned standing counsel for the Revenue Sri M. Suryanarayana Murthy, contended that the Tribunal was in error in holding that the provisions of s. 195 of the I.T. Act were not applicable to cases where sums of money were paid to non-residents, the entirety of which does not represent the income chargeable under the I.T. Act. The learned standing counsel points out that the language of s. 195 does not lend support to the Tribunal's view that s. 195, either expressly or by necessary implication referred only to sums which are \"purely income profits\". According to the learned standing counsel, s. 195 is applicable even in respect of sums paid during the course of trading operations to a non-resident. It is stated that s. 195 does not contain any limitations on its application. Learned counsel also referred to s. 195(2) of the Act which enables the person responsible for paying the sums to the ITO to determine the appropriate proportion of the sum chargeable to income-tax in respect of which only income-tax at source is deductible clearly supports the view that s. 195 is applicable to sums paid in the course of trading operations subjects only to one condition that where the entire sum paid is not income chargeable under the I.T. Act, it is open to the assessee to require the ITO to determine the relevant proportion of the sum paid which is not income chargeable under the I.T. Act, it is open to the assessee to require the ITO to determine the relevant proportion of the sum paid which is chargeable under the Act and deduct tax only in respect of that portion. Learned standing counsel urged that the Electricity Board failed to make an application under s. 195(2) to the ITO to determine the proportion of the sum chargeable in respect of sums paid to M/s. Charmilles Engineering Works Ltd., in R.C. No. 203 of", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-12", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "paid to M/s. Charmilles Engineering Works Ltd., in R.C. No. 203 of 1978 and M/s. Oerliken Engineering Co, in R.C. No. 205 of 1978. In the absence of any application from the Electricity Board the learned standing counsel contends the ITO had no option but to enforce deduction of tax at source with reference to the entirety of the sums paid. According to the learned standing counsel, the ITO cannot exercise power to determine the relevant proportion of the sum chargeable unless an application is made by the person responsible for making the payment. If the person responsible for making the payment does not file an application under s. 195(2), the ITO can enforce deduction of tax at source in respect of the entire sum paid to the non-resident and that is what happened in respect of the payments made by the Electricity Board to the above-referred two companies. The learned standing counsel, therefore supported the orders passed by the ITO in respect of the payments made to the above-mentioned two concerns. The learned standing counsel also pointed out that in respect of payments made by the Electricity Board to M/s. Sacheron Works Ltd., in R.C. No 204 of 1978, the Electricity Board made an application under s. 195(2) of the Act and consequently in exercise of his power the ITO determined only 5% of the price paid for the transformers and 25% of the sum paid in respect of the erection contract as the sum chargeable under the Act. The ITO enforced deduction of tax at source only in respect of that portion of the sum determinated by him as chargeable under the Act for purposes of deducting tax at source under s. 195. The learned standing counsel complained that the AAC as well as the Income-tax Appellate Tribunal failed to notice that, in so far as it concerns the payments made to M/s. Sacheron Works", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-13", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "notice that, in so far as it concerns the payments made to M/s. Sacheron Works Ltd., in R.C. 204 of 1978, the ITO followed, a pattern of enforcing tax deduction at source only with reference to that moiety of the sum chargeable under the Act. the learned standing counsel contended that the AAC as well as the Tribunal failed to notice the clear difference in the pattern followed by the ITO in respect of payments made to M/s. Sacheron Works Ltd. and proceeded on a mistaken view, that in respect of payments made to M/s. Sacheron Work Ltd. also, the ITO enforce tax deduction at source in respect of the entirety of the sums paid to the non-resident as was done in the case of payments made to M/s. Charmiles Engineering Works Ltd., in R.C. No. 203 of 1978 and to M/s. Oerliken Engineering Company in R.C. No. 205 of 1978. The learned standing counsel pointed out that there can be no grievance on the part of the assessee at least in so far as the ITO's order in respect of payment made to M/s. Sacheron Works Ltd., in R.C. No. 204 of 1978 is concerned.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-14", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "14. Learned counsel for the Revenue relied on the decisions of the Calcutta High Court in Anglo-Indian Jute Mills Co. Ltd. v. S. K. Dutt [1956] 30 ITR 525, P. C. Ray and Co. (India) Private Ltd. v. A. C. Mukherjee, ITO [1959] 36 ITR 365. He also relied on the decision of the Bombay High Court in CIT v. Bhaidas Cursondas & Co. [1963] 50 ITR 429, and on the decision of the Allahabad High Court in Raza Textiles Ltd. v. ITO [1962] 46 ITR 466. Reliance was placed on these decisions by the learned standiang counsel in support of his proposition that : (a) provisions of s. 195 of the I.T. Act are applicable even in respect of sums paid to a non-resident during the course of trading operation, and (b) the sums paid to the non-resident need not represent wholly pure income profits and only a part of such sums paid may represent income chargeable under the Act.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-15", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "15. Sri M. Chandrasekhara Rao, learned standing counsel for the Electricity Board, reiterated the submissions made before the lower authorities. It is urged that taking the entire scheme of the Act into account, the provisions of s. 195 apply only to cases where the sums paid to cases where the sums paid to a non-resident represented pure income profits, that is to say, where the entirely of the sum paid represented income. Accordings to the learned counsel s. 195 can have no application in respect of sums paid during the normal course of trading operations such as payment of purchases price of materials. Learned counsel urged that it is impossible to predicate whether the sum paid consisted of even a small moiety chargeable under the Act because a trading tansaction does not always result in income or profit. Learned counsel, therefore, urged that because of the inherent difficulty in determining whether any particular sum paid during the course of trading operations to the non-resident consisted of income chargeable under the I.T. Act the provisions of s. 195 render themselves inapplicable to cases where sums are paid to the non-resident in the regular course of trading operations. According to the learned counsel, s. 195(2) is not a pointer to support that the sum paid to the non-resident need not wholly represent pure income profit. It is urged that the power to determine the proportion of income chargeable under the Act arises only where the sum paid to the non-resident bears income character and is not wholly chargeable under the provisions of the Act, but only a portion of which is chargeable. In such cases, it will be open to the ITO to determine the proportion of the sum chargeable. Learned counsel submits that, in order to apply s. 195(2) for purposes of apportionment, the sum paid to the non-resident must basically represent pure income profit and not a trading receipt, a part of which only may be income", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-16", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "must basically represent pure income profit and not a trading receipt, a part of which only may be income chargeable. The learned counsel accourdingly suported the orders of the Income-tax Appellate Tribunal cancelling the order passed by the ITO in all these references. Without prejudice to the basic contention that s. 195 of the Act is not at all applicable in respect in respect of trading receipts learned counsel further submitted that in any event the ITO was under an obligation to ascertain the portion of income chargeable under the Act forming part of the trading receipts and enforce deduction of tax at source under s. 195 only in respect of such portion chargeable to income-tax. The action of the ITO in R.C. Nos. 203 and 205 of 1978, the learned counsel contended, in enforcing deduction of tax at source on the entirety of the trading receipts is unsupportable.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-17", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "16. We have perused the records and considered the submission of the learned counsel on either side. Two fundamental question arise for consideration and they are : (a) whether the provisions of s. 195 of the Act are applicable to cases where the sum paid to the non-resident does not wholly represent income : and (b) if s. 195 is applicable to such cases, whether the ITO could enforce deduction of tax at source on the gross amount of trading receipts or only in respect of that portion of the trading receipts which may be chargeable as income under the Act. The question referred to us deals with only the first aspect mentioned above. The second aspect is an integral part of the first aspect and it is necessary to reframe the question in order to bring the real controversy between the parties, which we shall do, before furnishing the require answers. We shall examine both the aspects as they are the subject-matter of consideration by all the authorities below and the counsel for both sides addressed elaborate arguments on these two aspects.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-18", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "17. Part B of Chapter XVII of the Act enumerates the provisions relating to deductions of tax at source. Section 192 deals with the obligation of the person responsible for paying income chargeable under the head \"Salaries\" to deduct tax from the salary. Section 193 deals with the obligation to deduct tax of the person responsible for paying income chargeable under the head \"Interest on securities\". Section 194 deals with the obligation of the principal officer of a company to deduct tax at source from \"dividends\" paid. Section 194A deals with the obligation to deduct tax of any person responsible for paying to any person \"interest\". Section 194B deals with the obligation to deduct tax of the person responsible for paying to any person income by way of \"winnings from any lottery or crossword puzzles\". There is no doubt that the salary, interest on securities, dividend, interest other than interest on securities and winnings from any lottery or crossword puzzles above referred to constitute wholly income for purposes of the Act. It is relevant to examine in this context the provisions contained in s. 194C of the Act. Under these provisions any person responsible for paying any sum to any resident contractor and sub-contractor is under an obligation to deduct tax at 2% of the sums so payable to the contractor or sub-contractors. It will not at once be seen that obligation to deduct tax under s. 194C is in respect of the sums paid to the contractors and sub-contractors which decided on not wholly represent income. The rate at which the tax has to be deducted from out of such sums paid to the contractors and sub-contractors is mentioned in s. 194C itself. We are referring to this provision for the purpose of pointing out that the scheme of tax deduction at source applies not only to sums like salaries, dividends, interest on securities interest other than interest on securities and winnings from any lottery or crossword puzzles, which wholly represent income but also", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-19", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "other than interest on securities and winnings from any lottery or crossword puzzles, which wholly represent income but also gross sums paid to persons. Section 194C bring in this clear intention of the Legislature to enforce tax deduction at source even in respect of gross sums, the whole of which do not represent income chargeable under the Act. Then again, the provisions of s. 194D lay an obligation to deduct tax on the person responsible for paying \"insurance commission\", the whole of which does not represent income. It must be borne in mind that for the purpose of earning insurance commission, a person may incur expenditure and therefore the entire gross commission may not be chargeable. Even so the provisions of s. 194D oblige the person responsible for paying the insurance commission to deduct tax at source from the gross sum of insurance commission. We shall now examine the provisions of s. 195 of the Act which fall for consideration in these references. Sub-section (1) of s. 195, to the extent it is relevant lays an obligation on any person on securities or any other sum not being dividends chargeable under the provisions of the Act, to deduct tax at source at the rates in force. Sub-section (2) of s. 195 provides that where the person responsible for paying any such sum chargeable under the Act to a non-resident considers that the whole of such sum would not be income chargeable in the case of the recipient, he may make an application to the ITO to determine by general or special order, the appropriate proportion of such sum so chargeable and upon such determination, tax shall be deducted under sub-s. 195 as they are not relevant for our purpose. We are unable to find in the language of s. 195 any support for the argument that the expression \"any other sum\" occurring in the section refers necessarily to sums which represent wholly income or profits. As we have already pointed out the scheme of tax deduction at source applies not only to amounts", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-20", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "profits. As we have already pointed out the scheme of tax deduction at source applies not only to amounts paid which wholly bear \"income\" character but also to gross sums, the whole of which is not income or profits to the recipient such as payments to contractors and sub-contraction under s. 194D. That being so it is not possible to accept the contention of the learned counsel for the Electricity Board that there is not sanction to deduct tax at source from sums which do not represent wholly income or profit or other sums, which may not so represent. In our opinion, the provisions of s. 195(2) make the intendment of the Legislature very clear that what was required to be considered for purposes of tax deduction at source under s. 195(1) is not wholly income or profit. We are not impressed with the argument that s. 195 expressly refers to \"any other sum chargeable under the provisions of the Act\" and consequently the whole of such sum must be chargeable as income under the Act. In other words, what is contended is that where the sum paid to any person is not wholly chargeable under the provisions of the Act, then the application of s. 195 is ousted. If this contention is to be accepted, s. 195(2) will be rendered otiose because if the obligation to deduct tax in respect of \"any other sum\" attaches only to sums which are wholly chargeable under the Act, then the necessity for the person responsible for paying such sums making an application to the ITO under sub-s. (2) to determine the appropriate proportion of such sum so chargeable does not arise. If the entirety of the sum as contended by the learned counsel for the Electricity Board, should be taxable for s. 195 coming into operation than sub-s. (2) of s. 195 becomes entirely ineffective. We cannot accept an argument which renders a legislative provisions a dead letter. If, on", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-21", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "entirely ineffective. We cannot accept an argument which renders a legislative provisions a dead letter. If, on a harmonious construction of the relevant provisions, it is possible to make effective all the provisions contained in a statute, courts must always lean in favour of such interpretation. This is an established rule of interpretation. Taking note of the scheme of tax deduction at source, which we have already mentioned above, it would be entirely consistent if the expression \"any other sum\" occuring in s. 195(1) is interpreted as referable not only to a sum which is wholly income chargeable under the Act, but also to a sum which is not wholly income so chargeable. Then the provisions of sub-s. (2) of s. 195 will become fully effective. For the aforesaid reasons, we must prefer the interpretation which renders s. 195(2) effective without making it a dead letter. We do not also find anything inconsistent in the scheme of the Act or in the exigencies requiring deduction of tax at source to protect the interests of the Revenue from out of the sums consisting of only a small moiety of income. The safeguard provided in sub s. (2) of s. 195 protects the interests of the person receiving such sums because an application can always be made to the ITO to determine the appropriate proportion of the sum chargeable under the Act, so that tax deduction at source can be confined only to such appropriate proportion and not to the gross amount. It should also be borne in mind that whatever tax is deducted at source under s. 195 from out of the gross sum is to irretrievably lost to the recipient. It is only a provisional payment which will be made to the Central Government to the credit of the recipient. is a resident or non-resident to file a return of income in the regular course and prove to the satisfaction of the ITO the income chargeable under the Act. After such determination if the tax provisional deducted", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-22", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "of the ITO the income chargeable under the Act. After such determination if the tax provisional deducted at source under any of the provisions contained in Part B of Chapter XVII is in excess of what is required to be paid, the ITO is bound to grant refund of the excess tax deducted at source with interest to the recipient. Thus, the interest of the recipient are fully protected under the scheme of the Act. We do not see any ground for the person responsible for making the payment to object to the deduction of tax at source provisionally either from sums which represent wholly income or from sums which represent only a part of the income chargeable under the provisions of the Act, so long as the recipient is clearly told that the tax deducted at source from out of the sums paid are liable to be refunded by the Income-tax Department to the recipient if by any chance the tax deducted at source is more than the tax properly chargeable on the total income of the recipient. We, therefore, uphold the contention of the Revenue that the provisions contained in s. 195 of the Act take in their sweep any sums paid to a non-resident which do not wholly represent income or profits chargeable under the Act but a portion of which only so represents.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-23", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "18. It is next contended that the obligation to deduct tax at source under s. 195 cannot be held to extend to sums paid to non-residents during the course of regular trading operations, that is to say, where the sums paid to the non-residents represented value or cost of goods, purchased in the course of regular trade. It is urged that, if the provisions contained in s. 195 should be interpreted as sanctioning the deduction of tax of source from out of gross sums paid to non-resident by way of cost of goods it would lead to serious hardships in the course of international trade. While we agree that some amount of inconvenience and hardship is bound to be felt by the non-resident by reason of deduction of tax at source from sums referable to trading operations that cannot be a ground for arriving at an interpretation of the provisions of s. 195 to exclude sums paid to non-resident during trading operations. The language of the section is very clear and unambiguous and effect must be given to the clear provisions of law irrespective of hardships and inconveniences. We are conscious of the fact that the process of making regular assessments on non-residents, after deduction of tax at source under s. 195 may taken time and the non-residents may not be able to get back refund of excess tax deducted at source if any till the regular assessment is completed determining the tax payable by the non-resident on the total income chargeable under the provisions of the Act. We an only express the hope that the Central Board of Direct Taxes given instructions to all the ITOs to expedite regular assessments on non-resident from whom tax is deducted at source, giving top priority and facilitate smooth course of international trade involving a large magnitude of trading operations. The tax authorities will do well to make an accelerated assessment on non-residents under s. 194 of the Act, should circumstances require such a course in order to ensure that the non-resident get back", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-24", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "the Act, should circumstances require such a course in order to ensure that the non-resident get back expeditiously excess amounts of tax if any deducted at source under s. 195.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-25", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "19. We may refer to the decision of the Calcutta High Court in Anglo-Indian Jute Mills co. Ltd. v. Dutt [1956] 30 ITR 252. Referring to s. 18(3B) of the 1922 Act, which is analogous to s. 195 of the 1961 Act, the Calcutta High Court observed that a sum of money paid to a non-resident as the price of the shares was \"a sum chargeable under the provisions of the Act\" within the meaning of s. 18(3B) even though the whole of the price paid was not chargeable to tax and only the profit made by the transaction was so chargeable. There is yet another decision of the Calcutta High Court in Ray and Co. (India) Private Limited v. Mukherjee, ITO [1959] 36 ITR 365, which has reiterated the same view. Dealing with s. 18(3B) of the 1922 Act, again the Calcutta High Court held that it contemplated not merely amounts, the whole of which was taxable with out deduction but amounts of a mixed composition a part so which only might turn out to be taxable income as well; and the disbursements, which were of the nature of gross revenue receipts were yet sums chargeable under the provisions of the I.T. Act, and the disbursements which were of the nature of gross revenue receipts were yet sums chargeable under the provisions of the I.T. Act and came within the ambit of s. 18(3B) of the Act. We are in respectful agreement with the view expressed by the Calcutta High Court in the above cases. No other decision taking a contrary view has been brought to our notice. The learned counsel for the Revenue drew our attention to the decision of the Allahabad High Court in Raza Textiles Ltd.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-26", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "Revenue drew our attention to the decision of the Allahabad High Court in Raza Textiles Ltd. v. ITO [1962] 46 ITR 466. Having perused this decision, we do not think this decision deals with the point under consideration. In that case, the court was concerned with the obligation to deducted tax from out of commission payable, the whole of which is income chargeable under the Act. This case is, therefore, not relevant. The learned counsel for the Revenue also relied on the decision of the Bombay High Court in CIT v. Bhaidas Cursondas & Co. [1963] 50 ITR 429. In our opinion, this again is a case where the obligation to deduct tax was in respect of a sum of Rs. 1,40,000 the whole of which presented income. There is a clear finding in the above case that the amount paid to the non-resident represented the profit made on the sale of cotton. This case also does not consider the point with which we are concerned in the present references.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-27", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "20. For the reasons aforesaid, we are clearly of the opinion that the provisions of s. 195 relating to the deduction of tax at source come into operation in respect of sums paid to non-resident, whether or not such sums represent wholly income or profits and even if such are paid to then non-resident during the course of regular trading operations.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-28", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "21. We now turn to the second aspect of the matter, viz., whether s. 195 requires a person responsible for paying any sum to the non-resident chargeable under the I.T. Act to deduct tax on the gross sum of money. The answer is clearly found in the language of s. 195 itself. The obligation to deduct tax relates only to the appropriate portion of the gross sum, which would be chargeable as income in the hands of the recipient. We have already referred to the provisions of s. 195(2) of the Act, which affirm the above legal position. We have also noticed earlier that in the orders passed concerning the payment of sums to M/s. Charmilles Engineering works in R.C. 203 and to M/s. Oerlikon Engineering Company in R.C. 205, the ITO required the company to pay tax on the gross sum of money. The reason was simple. The assessee did not make an application requiring the ITO to determine the appropriate proportion of the sum paid to the non-resident, which is chargeable under the I.T. Act. The learned counsel for the Revenue contends that, in the absence of any such application, it is not open to the ITO to himself make an apportionment and, consequently, the ITO was helpless and had to call upon the assessee to pay tax in respect of the entire gross sum. The learned counsel relied on the decision of the Calcutta High Court in Czechoslovak Ocean Shipping International Joint Stock Company v. ITO , in support of the above proposition. We have also observed earlier that in the order passed by the ITO concerning the payments made to M/s. Sacheron Works Ltd., in R.C. No. 204, the ITO proceeded to determine the tax deductible with reference only to the appropriate portion of the gross sum which, in his opinion, is chargeable under the Act. The ITO held that", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-29", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "gross sum which, in his opinion, is chargeable under the Act. The ITO held that in respect of the amount of cost price paid for the power transformers, the profit could be estimated only at 5% of the gross sum and in respect of the erection charges paid, the profit could be estimated at 25%. There is thus a clear acceptance by the ITO himself that the obligation of the assessee to deduct tax is only in respect of that proportion of the gross sum which is chargeable as income under the Act and does not extend to the entirely of the gross sum. We are unable to accept the contention of the learned counsel for the Revenue that, because the assessee did not file an application under s. 195(2), the ITO is empowered to call upon the assessee to pay tax under s. 195 in respect of the entirety of the gross sum. It should be borne in mind that a person may be honestly under the impression that no part of the gross sum payable to the non-resident is chargeable to tax as income under the Act and, hence, he does not find it necessary to make an application under the Act and hence he does not find it necessary to make an application under s. 195(2). The ITO, on the other hand may be again honestly under the impression that the gross sum of money includes some portion chargeable under the I.T. Act. Could it be said that, under such circumstances, the person responsible for making the payment could be punished or penalised by requiring him to pay the tax deductible on the entirety of the gross sum ? The answer is clearly in the negative. We cannot acced to the contention of the learned counsel for the Revenue that the ITO is entitled to call upon the learned counsel for the Revenue that the ITO is entitled to call upon the Electricity Board to pay tax deductible under s. 195 in respect of the entirety of the payments made to M/s.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-30", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "tax deductible under s. 195 in respect of the entirety of the payments made to M/s. Oerlikon Engineering Company in R.C. 203 and to M/s. Oerlikon Engineering Company in R.C. 205. It must be remembered that the order was passed under s. 201 of the Act. For the purpose of determining the tax in respect of which the person responsible for making the payment could be deemed to be in default the ITO must determine the tax only on the appropriate proportion of income chargeable under the Act. There is no prohibition in s. 201 of the Act against the ITO so determining the tax. Indeed, the power to determine the appropriate amount of tax deductible at source under s. 195 is implicit in s. 201 of the Act. In the face of the ITO's own acquiescence that in respect of erection charges paid to the other companies, the net profit could not exceed 25% it is not possible to uphold the ITO' action in determining the tax with reference to the gross sums of money in R.C. 203 and R.C. 205. As already mentioned the power to determine the appropriate amount of tax is referable to s. 201 of the Act and the fact that the assessee did not file an application under s. 201 of the Act and the fact that the assessee did not file an application under s. 195(2) for determination of such appropriate proportion is not relevant for the purpose. In any event this is the only way the provisions contained in s. 195 and s. 201 can be harmoniously interpreted. We, therefore, hold that the power of the ITO under s. 201 of the Act to deem the person responsible for paying any sum to the non-resident under s. 195 as being in default extends only to the proportion of income chargeable under the Act and forming part of the gross sum of", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-31", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "extends only to the proportion of income chargeable under the Act and forming part of the gross sum of money.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-32", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "22. We have perused the judgment of the Calcutta High Court in Czechoslovak Ocean Shipping International Joint Stock Company v. ITO [1971] 81 ITR 162 relied on by the learned counsel for the Revenue and we do not find in that judgment any support for the view that, in the absence of an application under s. 195(2), the ITO is empowered to enforce deduction of tax from the gross sum of money. That is a case where the person responsible for making the payment required the ITO to furnish a \"no objection certificate\" required by the Reserve Bank of India for remitting certain sums of money to a non-resident. The ITO to furnish a \"no objection certificate\" required by the Reserve Bank of India for remitting certain sums of money to a non-resident. The ITO treated the application filed for \"no objection certificate\" as an application under s. 195(2) and proceed to determine the appropriate proportion of income chargeable under the Act included in the gross sum. The High court found fault with the order of the ITO on the simple ground that the application filed for a \"no objection certificate\" could not be treated as an application under s. 195(2) and, consequently, quashed the order passed by the ITO. That case is quite different on facts.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-33", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "23. All that now remains to be said is that, in respect of the order passed by the ITO concerning the payments made to M/s. Sacheron Works Ltd. in R.C. No. 204, the learned counsel for the revenue is right in his contention that both the AAC and the Income-tax Appellate Tribunal feel into the error of thinking that the ITO's order in this case also followed the same pattern as in the case of M/s. Charmilles Engineering Works Ltd. and M/s. Oerlikon engineering Company in R.C. No. 203 and R.C. No. 205, respectively. We have already shown that, pursuant to an application made by the Electricity Board, the ITO determined the appropriate proportion of income chargeable in the payments made to M/s. Sacheron Works Ltd. and required the Electricity Board to pay tax only in respect of that appropriate portion. Obviously, the ITO's order is in accordance with the provisions of s. 195 and the AAC and the Income-tax Appellate Tribunal were in error in cancelling the order of the ITO.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-34", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "24. A word about the grossing-up made by the ITO for purpose of determining the final amount of tax deductible at source under s. 195. The ITO observed that, in all these cases, the Electricity Board agreed to pay all the tax liabilities to the non-resident companies arising on account of the supply of materials and the execution of the erection and the commissioning of the equipment of Sileru. The ITO, therefore, held that the net payments made had to be grossed up to determine the tax following the decision of the Mysore High Court in Tokyo Shibaura Electric Co. Ltd. v. CIT [1964] 52 ITR 283. The assessee has questioned the correctness of the grossing-up in principle and the AAC as well as the Income-tax Appellate Tribunal upheld the view that the payments made to be grossed up. We have perused the orders in all the three cases to find out on what basis the grossing-up has been made. There is no guidance in the orders of the ITO as to how the figure was arrived at. It is not known whether the ITO adopted the system of grossing-up by working out tax on tax until he arrived at a \"O\" figure. If that was the basis followed, we do not think it is proper. The decision of the Orissa High Court in CIT v. American Consulting Corporation [1980] 123 ITR 513, sets out correct principal on which grossing-up should be done in cases like this. The Orissa High Court held that, in a case where, under the contract, the tax that would be leviable on the profit in the hands of the non-resident was to be paid by the Indian company, the arrangement entered into between the non-resident and the Indian company did not admit of a system of tax on tax. What was available to be added under the contract was addition of that benefit which the", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-35", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "tax on tax. What was available to be added under the contract was addition of that benefit which the non-resident had enjoyed by being free from the liability to income-tax. In other words, the value of the benefit or perquisite, which arose to the non-resident by way of its tax liability having been met by the Indian company, had to be limited to the amount of actual tax due and the gross figure determined accordingly. In the present case, the ITO himself clearly observed that, as per clause 13 of the agreement entered into with the non-resident and the tax deductible at source determined with reference to the gross figure arrived at as above. While passing an order conformably to our judgment in R.Cs. Nos. 203 and 205, the Tribunal will look into this question and determine the figures appropriately.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-36", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "25. We have earlier stated that the question of law referred to in all these three references does not bring out the real controversy and the question has to be reframed. We, accordingly, reframe the question common to all the three references to bring out the real controversy as under : \n \"Whether, on the facts and in the circumstances of the case, the Superintending Engineer, Civil Circle, Upper Sileru, is liable to deduct income-tax Act under section 195 of the Income-tax Act, 1961, in respect of payment made to non-residents, viz., M/s Charmilles Engineering Works Ltd., M/s. Sacheron Works Ltd. and M/s. Oerlikon Engineering Company and, if so, whether the tax deductible is liable to be determined on the gross sum of money paid to the non-residents ?\" \n26. Having reframed the question as above, we answer the same to the following effect : \n (1) The respondent-assessee, who made the payments to the three non-residents above referred, was under an obligation to deduct tax at source under s. 195 of the Act in respect of the sums paid to them under the contracts entered into. \n(2) The obligation of the respondent-assessee to deduct tax under s. 195 is limited only to the appropriate proportion of the income chargeable under the Act forming part of the gross sums of money paid to the three non-residents above referred.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "2b2a02f30f90-37", "Titles": "Commissioner Of Income-Tax, ... vs Superintending Engineer, Upper ... on 2 March, 1984", "text": "(3) While the ITO was correct in the determination of tax under s. 195 in respect of the payments made to M/s. Sacheron Works Ltd. in R.C. No. 204, he was in error in determining the tax deductible under s. 195 in respect of the gross sums of money paid to M/s. Charmilles Engineering Works Ltd., in R.C. No. 203 and M/s. Oerlikon Engineering Company in R.C. No. 205.  \n 27. Based on our above answers, we hold that the Income-tax Appellate Tribunal was in error in cancelling the orders passed by the ITO under s. 201 of the Act. While the order of the ITO passed in R.C. No. 204 concerning the payments made to M/s. Sacheron Works Ltd., should be upheld in toto, the orders passed by the ITO in respect of payments made to M/s. Charmilles engineering Works Ltd. (R.C. No. 203) and M/s. Oerlikon Engineering Company (R.C. No. 205) have to be modified in the light of our above findings and the Tribunal shall do necessary modification while passing orders conformably to our judgment under s. 260(1) of the Act. \n 28. We, accordingly, answer the three references. In the facts and circumstances of the case, we direct the parties to bear their own costs. Advocate's fee Rs. 500 in each of the references.", "source": "https://indiankanoon.org/doc/1911637/"}
+{"id": "1cfafcd1e4ab-0", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "JUDGMENT S. Parvatha Rao, J.  \n 1. The sole question in this referred case referred for the decision of this court under sub-section (1) of section 256 of the Income-tax Act, 1961 (hereinafter referred to as \"the Act\"), at the instance of the assessee, i.e., Messrs. Bakelite Hylam Ltd., Hyderabad, is :  \n \"Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that the assessee was not entitled to interest under section 214 of the Income-tax Act, 1961, on Rs. 4,29,219 which was the excess amount of tax paid in the financial year 1971-72 (relevant to the assessment year 1972-73) over the tax determined on regular assessment for the assessment year 1972-73 ?\"  \n 2. It is covered by the decision of a Division Bench of this court in Kangundi Industrial Works (P.) Ltd. v. ITO against the assessee. However, when this referred case came up for final disposal on March 10, 1988, before G. Ramanujulu Naidu and Y. V. Anjaneyulu JJ., learned counsel for the assessee represented that.... the said decision of this court required reconsideration as the High Courts of Bombay, Madhya Pradesh, Kerala and Gujarat dissented from the view of this court. The learned Judges felt that, in view of the importance of the matter, it was desirable to refer the matter to a Full Bench and that is how this referred case is before us.", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-1", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "3. The facts are in a narrow compass. The relevant assessment year is 1972-73 and the relevant previous year is the calendar year ending on December 31, 1971. The assessee made payments of advance tax on June 15, 1971, September 15, 1971, and December 15, 1971, aggregating to Rs. 9,07,500. On March 10 and 14, 1972, the assessee paid further amounts aggregating to Rs. 6,71,000 as advance tax. By an assessment order dated May 23, 1976, the Income-tax Officer assessed the income of the assessee at Rs. 19,43,750 and computed the Income-tax payable thereon by the assessee as Rs. 11,49,281 and arrived at the amount refundable to the assessee as follows : \n                                               Rs.            Rs.\n\"Income assessed                       19,43,750\n                                       ---------\nTax thereon                            11,49,281\nLess : advance tax paid                 9,07,500       2,41,781\n                                       ---------\nLess : tax paid in the nature of\ndeposits                                               6,71,000\n                                                       --------\nRefundable                                             4,29,219\"\n                                                       --------", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-2", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "4. He did not treat the amounts aggregating to Rs. 6,71,000 paid by the assessee on March 10th and 14th, 1972, as advance tax and, therefore, did not allow any interest under section 214 of the Act on the said refundable amount of Rs. 4,29,219 On further appeals by the assessee questioning the non-allowance of interest under section 214 of the Act on the said refundable amount of Rs. 4,29,219, the Commissioner of Income-tax (Appeals) and the Tribunal held against the assessee in view of the said decision of this court in Kangundi Industrial Works (P.) Ltd. v. ITO . \n5. Learned counsel for the assessee placed before us a long catena of cases of various High Courts taking a view different from that of this court in Kangundi Industrial Works' case , and holding that interest under section 214 of the Act had to be paid on the excess advance tax paid during the relevant financial year even though the instalments were paid within the time specified.", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-3", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "6. The Kangundi Industrial Works' case arose on a writ petition. The assessee in that case paid the entire advance tax during the relevant financial year, i.e., 1974-75, but it had not paid the second and third instalments on the due dates, i.e., December 15, 1974, and March 29, 1975. The assessee was not paid interest on the excess amount of advance tax, i.e., Rs. 1,47,095 paid by it, on the ground that it had not been paid on the due dates. Contending that it was entitled to interest on the said excess amount under section 214 of the Act, the assessee approached this court by way of a writ petition. In a short judgment, a Division Bench of this court held as follows (at page 341) :", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-4", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "cording to us, the assessee can claim interest under section 214 of the Act only if he has complied with the requirement specified under section 211 of the Act. A careful reading of section 214 of the Act will indicate that the stress is not on the question whether all in instalments of advance tax were paid during the financial year, but the stress is that the instalments must have been paid before the due dates fixed for payment if the assessee was to be given the right to claim interest under section 214 of the Income-tax Act, 1961. Section 214 of the Income-tax Act has to be read along with section 218 of the Act. Under section 218 of the Income-tax Act, if the instalment of advance tax was not paid by the specified date, the assessee shall be deemed to be an assessee in default in respect of such instalment and the Revenue is given the right to impose penalty on such assessee for not paying the instalment before the due date. It is not disputed that the Department could have proceeded against the petitioner and levied the penalty for the delay..... Under the Explanation to section 221 of the Income-tax Act, an assessee shall not cease to be liable to any penalty merely by reason of the fact that before the levy of such penalty he has paid the tax. When once the company committed default in paying the instalments before the specified dates, it cannot claim interest on the excess of tax paid over the tax determined on regular assessment.\"  \nIt is obvious from the above that the Division Bench viewed section 214 in the shadow case by sections 211 and 218 of the Act and not in the light of all the relevant provisions. \n8. Syed Hasan Rasul Numa v. Union of India, , the Supreme Court observed (at page 714) :", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-5", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "t in matters of interpretation, one should not concentrate too much on one word and pay too little attention to the other words. No provision in the statute and no word in the section may be construed in isolation. Every provision and every word must be looked at generally and in the context in which it is used.\"  \nSub-section (1) of section 214 of the Act has to be interpreted keeping in view the above principles of construction. Sub-section (1) of section 214 of the Act is as follows : \n Interest payable by Government. - (1) The Central Government shall pay simple interest at twelve per cent. per annum on the amount by which the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under sections 207 to 213 exceeds the amount of the tax determined on regular assessment, from the 1st day of April next following the said financial year to the date of the regular assessment for the assessment year immediately following the said financial year, and where any such instalment is paid after the expiry of the financial year during which it is payable by reason of the provisions of section 213, interest as aforesaid shall also be payable on that instalment from the date of its payment to the date of regular assessment : \n vided that in respect of any amount refunded on a provisional assessment under section 141A, no interest shall be paid for any period after the date of such provisional assessment.\"", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-6", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "The answer to the question before us in this referred case turns on the interpretation of \"the aggregate sum of any instalments of the advance tax paid during any financial year in which they are payable under sections 207 to 213\" occurring in sub-section (1) of section 214. It will be noticed that reference is made to a fasciculus of sections from 207 to 213 and not to one section 211 only, under which the instalments of advance tax are payable. The second aspect to be noticed is that the said sections are referred to only as provisions under which the instalments are payable under the said sections. As regards the actual payment of instalments of advance tax, the requirement is that they should be paid during the relevant financial year. Another aspect to be noticed is that, whatever the date on which the instalments of advance tax are paid during the relevant financial year, sub-section (1) of section 214 provides for interest on the said payments only from the first day of April next following the said financial year and not from the date of actual payment of each of the instalments. Keeping these several aspects in view, we find it difficult to sustain the view of the Division Bench of this court in Kangundi Industrial Works' case : that \"a careful reading of section 214 of the Act will indicate that the stress is not on the question whether all the instalments of advance tax are paid during the financial year, but the stress is that the instalments must have been paid before the due dates fixed for payment if the assessee was to be given the right to claim interest under section 214 of the Act\". An examination of the various relevant provisions including sections 207 to 213 specifically referred to in sub-section (1) of section 214 does not support the view of the Division Bench.", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-7", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "9. Sections 207 to 213 occur in Part C of Chapter XVII of the Act which deals with \"Collection and recovery of tax\". Part A of Chapter XVII has the heading \"General\". It begins with section 190. Sub-section (1) of section 190 provides that \"notwithstanding that the regular assessment in respect of any income is to be made in a later assessment year, the tax on such income shall be payable by deduction at source or by advance payment, as the case may be, in accordance with the provisions of this Chapter\". Part B of Chapter XVII deals with \"deduction at source\". Part C deals with \"advance payment of tax\" and begins with section 207. Sub-section (1) of section 207 provides that \"tax shall be payable in advance in accordance with the provisions of sections 208 to 219 in the case of income other than\" certain specified categories of income with which we are not concerned here; and sub-section (2) states that such tax is referred to in Chapter XVII as \"advance tax\". Sub-section (1) of section 208 requires, inter alia, that advance tax shall be payable during the financial year. Section 209 provides for computation of advance tax payable by an assessee in the financial year. Sub-section (1) of section 210 provides that the Income-tax Officer may, on or after the 1st day of April, in the financial year, by order in writing, require a person who has been previously assessed, to pay advance tax determined in accordance with the provisions of sections 207, 208 and 209. Sub-section (1) of section 211 provides that advance tax shall be payable in three equal instalments on the specified dates like the 15th day of June, the 15th day of September, the 15th day of December, and the 15th day of March. Section 212 provides for the filling of estimates of", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-8", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "and the 15th day of March. Section 212 provides for the filling of estimates of advance tax by the assessee. And section 213 provides for deferment of payment of advance tax on income of the nature of commission to the date on which such income would be normally received or adjusted and, in such cases, the assessee is required to communicate to the Income-tax Officer the date to which such payment is deferred.", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-9", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "10. Sections 207 to 213 thus provide for advance payment of tax during the financial year, in all its facets - for the computation of the tax so payable, for the instalments in which such tax is payable, for the dates on which such instalments are to be paid, and in certain cases for the deferment of payment even beyond the financial year. The tax payable in advance is compendiously referred to as \"advance tax\" - Section 207(2). Therefore, when sub-section (1) of section 214 refers to sections 207 to 213, there is no justification for looking only at section 211 and to conclude that unless the instalments are paid strictly as per section 211, interest is not payable under section 214 on the excess amount of advance tax paid during the financial year, ignoring section 208 which provides that advance tax shall be payable during the financial year.", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-10", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "11. There is no justification also for relying on the provisions of sections 218 and 221 for interpreting section 214. Section 218 specifically deals with defaults in payment of instalments of advance tax on the dates specified under section 210 or in section 211. If an assessee does not pay any instalment of advance tax on the date specified in section 210 or in section 211, under section 218, he is deemed to be an assessee in default in respect of such instalment or instalments and penalty will be leviable under section 221. But from that it does not follow that instalments of advance tax cannot be paid after the specified dates or that amounts paid as advance tax after the specified dates though, during the financial year, are not to be treated as advance payment of tax. The Division Bench in Kangundi Industrial Works' case noticed the Explanation to sub-section (1) of section 221 which clarifies that an assessee shall not cease to be liable to any penalty merely by reason of the fact that, before the levy of such penalty, he has paid the tax. But the Division Bench failed to see that this illustrates that tax can be paid even after the default attracting the levy of penalty and that a fiction is created under sub-section (1) of section 218 thereby attracting the levy of penalty under section 221. The Division Bench also failed to notice the second proviso to sub-section (1) of section 221 which is as follows : \n \"Provided further that where the Income-tax Officer is satisfied that the default was for good and sufficient reasons, no penalty shall be levied under this section.\"", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-11", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "The fact that has to be kept in view here is that the assessee is deemed to be in default in respect of one or more instalments of advance tax because he has not paid them on the specified dates during the financial year and thus committed default. If the Income-tax Officer is satisfied that the default is for good and sufficient reason, no penalty shall be levied as per the said proviso. It is obvious from this that instalments of advance tax can also be paid after the specified dates without the default attracting penalty, if there is good and sufficient cause. \n12. Another Division Bench of this court in CIT v. P. Ramagouda Satyam Reddy and Co. , considered the meaning of the Explanation to clause (i) of sub-section (1) of section 271 of the Act which is as follows (at page 492) : \n \"Explanation. - In this clause 'assessed tax' means tax as reduced by the sum, if any, deducted at source under Chapter XVII-B or paid in advance under Chapter XVII-C;\"  \nThe question referred to this court for decision under section 256(1) of the Act was (at page 492) : \n \"Whether, on the facts and in the circumstances of the case, the advance tax paid beyond due date should be deducted from the tax payable for the purpose of calculating the penalty under section 271(1) (a) ?\"  \nDealing with the various provisions of Chapter XVII-C, B. P. Jeevan Reddy J. (as he then was), speaking for the Division Bench, observed as follows (at page 492) :", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-12", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "\"Section 214 provides that where the advance tax paid during any financial year exceeds the amount of tax determined on regular assessment, interest shall be payable by the Central Government to the assessee on such excess amount from the 1st day of April next following the relevant financial year to the date of the regular assessment for the said assessment year. Similarly, section 215 provides that where during any financial year, the assessee has paid advance tax which is less than 75 per cent. of the assessed tax, interest at the prescribed rate shall be chargeable up to the date of the regular assessment on such advance amount. Where, however, no advance tax is paid on the prescribed dates, he will be treated as a defaulter and he will be liable to the levy of penalty under section 221. Section 219 provides that any sum paid by or recovered from an assessee as advance tax in pursuance of the said Chapter shall be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment year next following the financial year in which it was payable and credit therefor shall be given to the assessee in the regular assessment. This, in short, is the scheme of payment of advance tax. One feature to be noticed is that the concept of advance tax is tied up with the financial year relevant to the assessment year and not with the previous year adopted by the particular assessee for the said assessment year...... The question of imposition of penalty under section 271 arises only after the financial year is over and only where the return is not filed within the prescribed period. For such delay or default, as the case may be, penalty is levied and this penalty is calculated on the basis of the tax assessed. But the tax deducted at source and tax paid by way of advance are deducted from out of the tax assessed for the purpose of calculating the penalty. Having regard to this context, it would be reasonable to hold that all", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-13", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "purpose of calculating the penalty. Having regard to this context, it would be reasonable to hold that all the tax which is paid as advance tax during the relevant financial year should be deducted. All such amounts should be treated as advance tax paid under Chapter XVII-C for the purpose of the Explanation to section 271(1) (a). It would not be reasonable to say that any instalment of advance tax not paid on or before the prescribed date but paid after the due date but during the relevant financial year shall not be treated as advance tax and shall not be deducted as contemplated by the aforesaid Explanation. Having regard to the purpose, object and context of section 271(1) (a), the proper course is to treat all tax paid as advance tax during the financial year as tax paid in advance under Chapter XVII-C and deduct the same from out of the assessed tax as contemplated by the Explanation to section 271(1) (a).\"", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-14", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "13. The learned judge steered clear of the Kangundi Industrial Works' case , observing that certain decisions were placed before them, but none of them dealt with the Explanation with Which they were concerned. A Division Bench of the Calcutta High Court also in CIT v. Surajbhan Mahawar took a similar view dealing with the very same Explanation and observed as follows (at page 402) : \n \"There is no warrant for the interpretation that any amount paid after the date on which the last instalment of advance tax was payable will not be an amount paid in advance under Chapter XVII-C of the Act. Section 211 of the Act, reliance on which was placed by Shri Chakraborty, only lays down the dates on which the advance tax instalments are required to be paid. There is nothing in this section to suggest that any payment made after the last of these dates will cease to be payment of advance tax. This section, as pointed out by Shri Singh, says that the advance tax shall be payable on the dates mentioned in the section. The argument adopted by the Department, if accepted, may even mean that payments made before those dates (and not on these dates) will not be payments of advance tax. The argument is plainly illogical.\"  \n14. Another Division Bench of this court in CIT v. T. N. Viswanatha Reddy , addressing itself to the question whether there was scope for controversy or debate in regard to the interpretation of section 214 of the Act observed as follows (at page 270) :", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-15", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "\"Section 211(1) sets out the time schedule for the payment of advance tax instalments. In Kangundi Industrial Works (P.) Ltd. v. ITO , this court took the view that unless the instalments have been paid before the due dates fixed for payment, the assessee forfeits the right to claim interest under section 214. In that context, the Division Bench referred to section 218 of the Act and observed that, if the instalment of advance tax was not paid by the specified date, the assessee shall be deemed to be in default in respect of such instalment and becomes liable to pay penalty. The other view is based upon the plain and literal interpretation of the section. On such an interpretation, it is possible to say that it would be sufficient compliance with section 214 if the advance tax is paid during the financial year though such payment is strictly not in accordance with section 211 of the Act..... We have already made a reference to another judgment of this court in CIT v. P. Ramagouda Satyam Reddy and Co. , which had struck a different note while interpreting more or less similar language employed in the Explanation to section 271(1) (a). This casts a further cloud on the correctness of the decision of this court in Kangundi Industrial Works (P.) Ltd. v. ITO .\"  \nY. V. Anjaneyulu J., speaking for another Division Bench of this court, observed in J and J Dechane v. CIT as follows (at page 349) :", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-16", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "\"We have earlier referred to the provision contained in section 209 which provides that the amount of advance tax is payable by an assessee in the financial year, which lends support to the contention (of the learned counsel) that, even if the advance tax instalment is not paid on the due date, it should be taken into account if it is paid during the financial year preceding the assessment year.\"  \nThus, in subsequent decisions of this court Kangundi Industrial Works' case , does not find support. We are also unable to agree with that decision. On a fair and reasonable interpretation of sub-section (1) of section 214, we are of the view that, if the requirement of payment during the financial year is satisfied and the aggregate sums of such payments exceed the amount of tax determined on regular assessment, on the excess amount the assessee is entitled to interest under sub-section (1) of section 214 from the first day of April next following the financial year to the date of the regular assessment. \n15. A number of High Courts have taken a view different from that of the Division Bench in Kangundi Industrial Works' case . In Chandrakant Damodardas v. ITO , a Division Bench of the Gujarat High Court considered the very same question in a writ petition and, after detailed discussion of the various relevant provisions, held as follows (at page 753) :", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-17", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "\"The question is of the financial year in which the instalments are payable under sections 207 to 213. The Legislature in our opinion has deliberately omitted to use the words 'paid in accordance with sections 207 to 213'. The Legislature has used the words 'payable under sections 207 to 213'. That being the case and since there is no other indication in section 214 that the dates of instalments are strictly to be adhered to and if they are not adhered to interest will not be payable, the contention urged on behalf of the Revenue cannot be accepted. We would be required to do violence to the language used by the Legislature if we read into section 214 the requirement that for the purpose of earning interest from the 1st day of April, following the end of the financial year in question, the assessee must have paid all the instalments of advance tax on the dates referred to in section 211...... In view of the language used in section 214 particularly with reference to the 1st day of April and not with reference to the dates on which the instalments are actually paid by the assessee, it is clear that what the Legislature intended to do is to provide that irrespective of the dates on which instalments of advance tax are paid, interest will be payable if the entire amount of advance tax which was paid up in the assessment. If these two conditions are satisfied interest must be paid to the assessee. The further requirement which the Revenue wants us to read, namely, the third condition which it also wants us to read in section 214, namely, that instalments of advance tax must have been paid on or before the due dates mentioned in section 211 for the payment of instalments, cannot be read looking to the language of section 214. Looking to the purpose and the scheme of section 214 which we have analysed above, it is obvious that the stand taken by the Revenue is entirely untenable. The payability is", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-18", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "it is obvious that the stand taken by the Revenue is entirely untenable. The payability is one aspect and the dates on which the amounts of instalments are required to be paid is another aspect altogether. As we have indicated earlier, failure to pay the instalments on due dates might involve an assessee in payment of penalty if the other conditions regarding payment of penalty are satisfied, but the concept under section 214 being totally unconnected with any concept of deprivation of interest in the case where penalty is incurred, the interest referred to in section 214 must be paid if the two conditions are satisfied, namely, that all the instalments of advance tax are paid in the course of the financial year exceeds the amount of tax determined on regular assessment. There is no third condition to be read in section 214 as one of the conditions qualifying for the payment of interest in respect of excess from the 1st day of April following the end of the financial year in question up to the date of the regular assessment.\"", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-19", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "16. When the same question arose again before another Division Bench of the Gujarat High Court in Anup Engineering Ltd. v. ITO , the decision of this court in Kangundi Industrial Works' case was relied upon by the Departmental counsel and the Gujarat High Court did not agree with the view taken by this court in that case. Even though the decision of this court in Kangundi Industrial Works' case , found favour with a learned single judge of the Kerala High Court in A. Sethumadhavan v. CIT , on appeal, a Division Bench of that court reversed the judgment of the learned single judge in Santha S. Shenoy v. Union of India , disagreeing with the decision in Kangundi Industrial Works' case and agreeing with the view of the Gujarat High Court in Chandrakant Damodardas' case . The Division Benches of the Madhya Pradesh High Court in CIT v. Jagannath Narayan Kutumbik Trust and of the Madras High Court in CIT v. T. T. Investments and Trades Pvt. Ltd. and of the Gauhati High Court in Moheema Ltd. (No. 1) v. CIT disagreed with the decision of this court in Kangundi Industrial Works' case and agreed with the view of the Gujarat High Court in Chandrakant Damodardas's case . A Division Bench of the Karnataka High Court in CIT v. Karnataka State Warehousing Corporation Ltd. agreed with the view of the Gujarat High Court in Chandrakant Damodardas's case and held that interest under section 214 was rightly allowed on the instalment of advance tax paid after the specified date on March 20, 1978. A Division Bench of the Calcutta High Court in CIT v. Ajoy Paper Mills Ltd. , held that, under sub-section (1) of section 214, interest shall be payable by the Central Government if two conditions were satisfied : firstly, instalments", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-20", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "interest shall be payable by the Central Government if two conditions were satisfied : firstly, instalments of advance tax must have been paid during the financial year in which they are payable under sections 207 to 213; secondly, the agreed sum of instalments should exceed the amount of tax determined on regular assessment. Rejecting the contention of the Revenue that the assessee cannot claim interest under section 214 unless payments have been made in accordance with the provisions of the Act within the time provided under the law, it was observed as follows (at page 457) :", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-21", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "\"There is no reference in section 214(1) about the dates on which instalments are payable under section 211 of the Act. This section does not prescribe that, to be eligible for interest, advance tax has to be paid on the date(s) stipulated under section 211 for payment of such instalments. It only provides that instalments must have been paid during the financial year in which they are payable. It is true that section 214 refers to instalments payable under sections 207 to 213 which include section 211 but there is no reference in section 214 about the manner of payment of instalments. We cannot persuade ourselves to read the mandate of section 211 in section 214 which is only concerned with the payments made during the financial year and not payments made on the specified date(s) during the financial year would qualify as advance tax. If credit is given by the Department for the belated payments made during the financial year in calculating the tax due on regular assessment. If the Revenue, for the purpose of determining the tax due on regular assessment, cannot ignore such payment, then for the purpose of calculating interest also, such payment cannot be kept out of consideration.\"", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-22", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "17. In CIT v. Traub (India) P. Ltd. , it was contended before a Division Bench of the Bombay High Court that, in order to be entitled to interest under the provisions of section 214 of the Act, the payment of advance tax must have been made in accordance with the schedule prescribed under sections 207 to 213 and since the schedule had not been adhered to, but there had been a default (though only of a period of two days), the assessee would not be entitled to interest under section 214, and the Division Bench observed (at page 527) : \"The question whether this is a proper reading of section 214 is debatable\". The Division Bench did not further enquire into the question in view of the finding on the facts of that case that the delayed payment by the assessee was accepted by the Department as payment of advance tax instalment and that as all the other requirements of section 214 were satisfied, the assessee was entitled to interest in respect of the excess of the advance tax so paid by it and that, therefore, the facts did not give rise to any question of law. However, a learned single judge of the Bombay High Court in Pfizer Ltd. v. K. N. Anantharama Aiyar, CIT , while dealing with the question whether delayed payments of advance tax could be ignored under section 215 of the Act, also considered the provisions of section 214 and observed as follows (at page 464) :", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-23", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "\"The concept of section 214 of the Act (which has been held by a Full Bench of this court in CIT v. Carona Sahu Co. Ltd. [FB] to be the counterpart of section 215) was the concept of the aggregate amount of the instalments of advance tax paid during the particular financial year. There was no indication in section 214 that the dates of the instalments were strictly to be adhered to and, if they were not adhered to, interest would not be payable. It would be doing violence to the language used in section 214 if the requirement were to be read into it that, for the purpose of earning interest from 1st April following the end of the financial year in question, the assessee must have paid all the instalments of advance tax on the dates referred to in section 211. ... There is nothing in section 215 which requires the payments of instalments of advance tax to be made on or before the due dates thereof before the provisions of that section can apply. I cannot, with great respect, agree with the reasoning of the Andhra Pradesh High Court that, because the assessee has rendered himself liable to penalty for late payment of an instalment of advance tax, he becomes disentitled to the recovery of interest under section 214 if the amount paid by him as advance tax is in excess of the amount assessed to be due. I see no reason to link the provisions of the Act in regard to the payment of interest and the provisions which impose a penalty for late payment of instalments of advance tax. The payment of interest is to recompense the party who has unlawfully been deprived of moneys due to it. Interest does not in any way partake of the nature of a penalty. To make an assessee pay interest on an amount he has already paid to the Revenue would be to impose upon him a penalty which is not the purpose of section 215. A penalty for late", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-24", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "to impose upon him a penalty which is not the purpose of section 215. A penalty for late payment of an instalment of advance tax is provided for elsewhere in the Act.\"", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-25", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "18. A Division Bench of the Punjab and Haryana High Court also in CIT v. Roadmaster Industries of India (P.) Ltd. [1992] 193 ITR 639, did not agree with the decision of this court in Kangundi Industrial Works' case and preferred to follow the preponderance of judicial opinion to the contrary. In that case, an additional argument was sought to be advanced on behalf of the Department, based on the proviso added to section 211 of the Act by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1988. The said proviso reads as follows (at page 641) : \n \"Provided that any amount paid by way of advance tax on or before the 31st day of March shall also be treated as advance tax paid during the financial year ending on that day for all the purposes of this Act.\"  \nThe contention advanced was that, prior to the introduction of the proviso, the intention of the Legislature was otherwise and that, therefore, any amounts paid subsequent to the dates specified in section 211 could not be treated as advance tax. The learned judges of the Punjab and Haryana High Court rejected the said contention observing that the said amendment was only clarificatory in nature and must be construed as such. We agree with this view.", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "1cfafcd1e4ab-26", "Titles": "Bakelite Hylam Ltd. vs Commissioner Of Income-Tax on 16 June, 1992", "text": "19. For the reasons stated above, we overrule the decision of the Division Bench of this court in Kangundi Industrial Works (P.) Ltd. v. ITO , and hold that, under sub-section (1) of section 214 of the Act, any amount paid towards advance tax during the financial year in which it is payable will have to be taken into account for arriving at the aggregate and it is sufficient if the instalment of advance tax is paid during the financial year even though not on the specified date. It is not in dispute that, in the present case, the assessee paid the further sum of Rs. 6,71,000 as advance tax during the previous year in question, i.e., by March 31, 1972. There is no provision in the Act to treat the said payment of tax as in the nature of deposit and refuse interest thereon under section 214. of the Act. The Income-tax Officer seems to have anticipated a possible contention that may be advanced on behalf of the assessee that, once the payment is accepted as payment of advance tax instalment, it would not be open to the Department to treat it as anything else for purpose of section 214 of the Act. \n20. In the circumstances, the question referred to us is answered in the affirmative, in favour of the assessee and against the Department.", "source": "https://indiankanoon.org/doc/347120/"}
+{"id": "e8177f193f24-0", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "ORDER T.N.C. Rangarajan, J.    \n 1. This batch of writ petitions relate to the question of deduction of tax at source with reference to the income chargeable under the head 'Salaries'. \n Pleadings : \n 2. Writ Petition No.27804/1995 has been filed by the Officers in the Research and Development Division of Bharat Heavy Electricals Limited. (A Government of India Undertaking). They obtained House Building Advance from H.D.F.C., L.I.C., and other Financial Institutions in respect of which monthly instalments are deducted from their salary. The difference between the rate of interest charged by the Financial Institutions and the rate of interest at which the House Building loans are generally sanctioned by the Company was reimbursed to the petitioners. On 23-3-1995, the Central Board of Direct Taxes (for short 'C.B.D.T.') informed the Chief Commissioner of Income-tax, Hyderabad that where the employer directly bears a part of the interest burden of the employees by reimbursing a portion of the interest payable by the employee in respect of building loans, such reimbursement is taxable as income from 'Salaries' under Section 17(2)(iii) of the Income-tax Act. This was forwarded to the Deputy Commissioner of Income-tax of each zone and circulated to the Company. This writ petition challenges that letter by claiming that the interest on reimbursement is not a perquisite and prays for a declaration that the said letter is illegal and ultra vires the provisions of the Income-tax Act.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-1", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "3. Writ Petition No.26797/1997 has been filed by the trade union of the workers of Bharat Heavy Electricals Limited. It is stated that an order under Section 201 was passed on 21-3-1995 against the Company for the assessment years 1989-90 to 1993-94 raising a demand of Rs.1,61,16,601/-with penalty of Rs.72,94,881/-. Consequently, the Company issued a Circular on 5-7-1995 intimating the employees that the interest subsidy will be treated as a perquisite for deducting the tax at source. It is stated that a similar order for earlier year was set aside in revision and yet the Income-tax Department was persisting and for that reason it is prayed that there should be a direction not to treat the interest subsidy as a perquisite while deducting the tax at source. \n 4. Writ Petition No.35660/1997 has been filed by the Executive Association of BHEL for the same relief.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-2", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "5. Writ Petition No.27328/1995 has been filed by the Electronics Corporation of India Limited Officers Association. It is stated that for the assessment year 1990-91, the Income-tax Officer treated the interest subsidy as a perquisite and passed an order under Section 201 for the assessment year 1990-91 treating the' ECIL as an asscssec in default for not treating interest subsidy as perquisite for deduction of tax at source. ECIL filed a revision to the Commissioner of Income-tax under Section 264 which was allowed on 20-3-1992 and that order became final. It is also stated that in the case of Hindustan Aeronauticals Limited, the Karnataka High Court allowed the Writ Petition No.8726/1993 on 13-1-1994 holding that interest subsidy is not a perquisite and consequently the Commissioner, Income-tax, Bangalore, issued a letter dated 24-2-1995 to the H.A.L., stating that interest subsidy need not be treated as perquisite while deducting the tax at source in respect of salaries. A similar letter was issued by the Income Tax Officer, Ward-4, TDS, Hyderabad to HAL, Hyderabad. But for the assessment years 1991 -92 to 1993-94 an order under Section 201 was passed by the Income-tax Officer, Ward 5(7), Hyderabad, in respect of ECIL raising a demand for Rs.35,64,652/-and penalty of Rs. 10,02,108/-. The appeal was rejected by the Commissioner of Income-tax (Appeals). Consequently, the ECIL informed the employees that the tax will be deducted at source on interest subsidy inasmuch as further proceedings by ECIL against the appellate order was getting delayed. In this situation, this writ petition has been filed for a direction not to treat the interest subsidy as perquisite while deducting the", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-3", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "petition has been filed for a direction not to treat the interest subsidy as perquisite while deducting the tax at source.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-4", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "6. Writ Petition No.8217/1997 has been filed in respect of assessment year 1995-96. \n 7. Writ Petition No.21832/1997 has been filed by the trade union of the ECIL employees for the assessment years 1995-96 and 1996-97 for the same relief. \n 8. Writ Petition No.20647/1997 has been filed by the ECIL Officers Association for the assessment years 1996-97 and 1997-98 for the same relief. \n 9. Writ Petition No.24932/1997 has been filed by the Association of the Officers employed by Mishra Dhatu Nigam Limited (for short 'MIDHANI') (a Government of India Undertaking). It is stated that on 24-3-1995, an order under Section 201 of the Act was passed against the Company for the assessment year 1993-94. Consequently, the Company issued a circular on 24-9-1997 proposing to take into account the interest subsidy for deducting the tax at source. Hence, this writ petition has been filed for a direction not to do so. \n 10. Writ Petition No.288/1998 has been filed by the Employees Association of Bharat Dynamics Limited, a Government .of India Undertaking. It is pointed out that for the assessment year, in the case of ECIL, the Commissioner of Income-tax had accepted that the interest subsidy is not a perquisite and yet for the subsequent years the Department was treating it as a perquisite. Consequently, this writ petition also prays for the same relief. \n Arguments for the Petitioner :", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-5", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "Arguments for the Petitioner : \n 11. The learned Counsel for the petitioner submitted that the interest subsidy is not a perquisite as held by the Karnataka High Court in the case of P. Krishna Murthy v. C.I.T., (1997) 224 ITR 183 and consequently in the case of Employees of Bharat Electronics Limited such interest subsidy was not treated as a perquisite for deduction of tax at source. It is stated that the position is the same in respect of HAL also. Secondly, it was submitted that it is discriminatory on the part of the Department to treat such interest subsidy as perquisite in the cases of identically placed assessees, and even employees of the same company working in different States. Thirdly, it was submitted that there was no machinery for adjudicating this issue at the time of deduction of tax at source whereby the petitioners, who were the employees and who were ultimately to bear the burden, were driven into expensive and unnecessary litigation for getting the relief to which they were entitled. It was submitted that in these circumstances, there should be a declaration that the interest subsidy should not be treated as a perquisite for deduction of tax at source. \n Arguments for the Revenue : \n 12. The learned Standing Counsel for Revenue vehemently opposed this claim of the petitioners. He took us through the relevant provisions of the Act and stated that the interest subsidy will be a perquisite and that the decision relied on by the petitioners requires reconsideration. In order to appreciate this argument, we have to go into the history of the legislation in this regard. \n Statutory Provisions : \n 13. Section 15 charges, salaries to income-tax. Section 17 defines salary as including any fees, commissions, perquisites or profits in lieu of, in addition to any salary or wages. Sub-section (2) defines perquisites to include the listed items :", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-6", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "\"(2) \"Perquisite\" includes - \n (i) the value of the rent free accommodation provided to the assessee by his employer; \n (ii) .... \n (iii) the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases. \n (a) by a Company to any employee who is a director thereof; \n (b) by a Company to an employee being a person who has a substantial interest in the Company; \n (c) by any employer (including a Company) to an employee to whom the provisions of paragraphs (a) and (b) of this sub-clause do not apply and whose income under the head \"Salaries\" (where due from, or paid or allowed by, one or more employers), exclusive of the value of all benefits or amenities not provided for by way of monetary payment, exceeds twenty-four thousand rupees. \n Explanation : For the removal of doubts, it is hereby declared that the use of any vehicle provided by a Company or an employer for journey by the assessee from his residence to his office or other place to his residence, shall not be regarded as a benefit or amenity granted or provided to him free of cost or at concessional rate for the purposes of this sub-clause. \n (iv) any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee; \n (Rest of the sub-clauses arc not relevant for this case). \n Sub-section (3) defines profit in lieu of salary. \n \"(3) Profits in lieu of salary\" includes - \n (i) the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the modification of the terms and conditions relation thereto.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-7", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "(ii) any payment other than any payment referred to in clause (10), clause (10A), clause (10B), clause (11), clause (12), clause (13) or clause (13A) of Section 10, due to or received by an assessee from an employer or a former employer or from a provident or other fund not being an approved superannuation fund, to the extent to which it does not consist of contributions by the assessee or interest on such contributions.\"  \n The Fact Situation : \n 14. The Facts in respect of which these provisions are to be applied arises from a welfare measure by the Central Government for providing funds for acquisition of houses by its employees. As far as the Central Government employees arc concerned house building loans are sanctioned by the Government at a concessional rate. As far as the Public Sector Undertakings owned by the Government arc concerned, similar schemes were in vogue. It was found that the Public Enterprises had to use the available funds in their own enterprises and their internal resources were not large enough to meet the weeds of the employees for housing loans. At the same time, Financial Institutions were also granting loans for building houses but at a rate which was higher than the rate at which the Government was granting house building advances. The Ministry of Industry considered this situation and by icltcr dated 2 (37)/85/ BPE (WC) dated 12-11-1986 decided that the Public Enterprises should adopt a scheme of interest subsidy to pay the difference between the rate of interest charged by specialised agencies and the rate of interest charged by the Central Government under House Building Advance Rules. Consequently, large Public Sector Undertakings framed their own rules providing for granting subsidy to the employees who had taken loans from other Financial Institutions instead of being granted loans by the Public Sector Undertaking itself. \n The Legal Position :", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-8", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "15. The question whether the grant of house building advances at a rate of interest below the market rate is a perquisite had been debated and the view of the Government itself was that the statutory provisions did not treat it as aperquisite. Consequently, Taxation Laws (Amendment) Act, 1984, introduced an amendment with effect from 1-4-1985 inserting sub-clause (vi) to include as a perquisite, the amount of interest where the loan is given interest free and the amount of difference between the interest charged and the notified rate where the loan is given at a rate less than the notified rate prescribed for Central Government House Building Advance. This generated an adverse reaction from the salaried class as it amounted to taking back by way of tax what is given as a welfare measure. Consequently, even before the amendment could take effect, the Finance Act, 19,85 withdrew the said amendment. This was explained by the memorandum explaining the provisions of the Finance Act, 1985 by Circular No.421, dated 12-6-1985 (1956 1TR Statute 138), hi spite of this legislative history, an attempt was made to tax the interest subsidy and the Calcutta High Court in C.I.T. v. Oberioi (P.R.S.), (1990) 183 ITR Cal., clearly held that such interest subsidy cannot be taxed. Later, flic CBDT issued Circular No.701, dated 23-3-1995 (4) consolidating the list of the exemptions available to the employees, but remained silent about this, leaving the field officers to again attempt the taxation of interest subsidy as perquisite. The matter came up once again before the Karnataka High Court in the case of P. Krishna Murthy v. C.I.T. . The Karnataka High Court referred to the Circular of the CBDT explaining the introduction and withdrawal of sub-clause (vi) in Section", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-9", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "the Circular of the CBDT explaining the introduction and withdrawal of sub-clause (vi) in Section 17(2) as well as its own decision in C.I.T. v. K. Vaidya, (1997) 224 ITR 185, and held that such subsidy cannot be taxed. Following that decision, circulars have been at issued by the Chief Commissioners at Karnataka and Hyderabad to HAL not to treat the interest subsidy as perquisite while deducting the tax at source. But in respect of other similarly placed employees of Public Sector Undertakings, action has been taken under Section 201 against the employers for failing to treat the interest subsidy as perquisite while deducting the tax at source in the case of ECIL a revision has been allowed by the Commissioner of Income-tax, whereas in the case of BHEL, an appeal was dismissed by the Commissioner (Appeals) and it is stated that a second appeal was also dismissed by flic Appellate Tribunal.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-10", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "Is interest subsidy part of \"salary\" as such : \n 16. The Revenue argued that the word \"salary\" being denned in an inclusive manner, any amount paid by the employer falls within its scope, whatever its character. He referred to various dictionaries to support this contention. The word \"salary\" as such is not defined in the Act. Words in a statute dealing with the matters relating to general public are presumed to be used in their popular sense. The Supreme Court observed in State of Orissa v. Titaghur Mills Co. Ltd., .\" \n \"The dictionary meaning of a word cannot be looked at where the word is statutorily defined or judicially interpreted. But when there is no such definition or interpretation, the Court may take aid of dictionaries to ascertain the meanings of a word in common parlance, bearing in mind that a word is used in different senses according to its context and the dictionary gives all the meanings of a word and the Court lias, therefore, to select a particular meaning which is relevant to the context in which it has to interpret the word.\" \n We find that the word \"salary\" according to Chambers Dictionary is: \n \"A periodical payment (usually at longer intervals than a week) for services other than mechanical According to Ramanatha Iyer it is \"Salary is a periodical allowance made as compensation to a person, for his official or professional services or for his regular work, an agreed compensation for services, payable at regular intervals; the periodical compensation due to men in official and other situations; an annual or periodical payment for services, a stipulated periodical recompense; a stipend wages; hire; an allowance. A fixed sum paid to a person for his services, yearly, half yearly, or quarterly; stipend; wages; annual or periodical wages or pay; hire; fixed regular wages, as by the year, quarter, or month.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-11", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "Salary is strictly an agreed compensation for service payable at regular intervals.\"  \n 17. Hence, the common understanding is that it is the periodical payments and does not include other special payments even though they may be from an employer to an employee and also because of that relationship. It is only with a view to bringing in such other payments into the scope of that word \"salary\" that it is defined to include perquisites and profits in lieu of salary. Thus, the context itself shows that the meaning of the word 'salary' is confined to what in the popular parlance is the monthly payment for service rendered and cannot include interest subsidy. \n Is interest subsidy a perquisite under Section 17 (2)(iv) ?", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-12", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "Is interest subsidy a perquisite under Section 17 (2)(iv) ? \n 18. The learned senior Standing Counsel for the Revenue sought to make a distinction between the cases where loans are given by the employer free of interest or at a lower rate of interest, from cases where the difference between interest paid by the employee to a Financial Institution and the rate of interest chargeable in respect of Central Government House Building Loan arc reimbursed to the employee. He submitted that the cases cited by the petitioners did not relate to such reimbursement which alone can be called a subsidy directly paid in cash by the employer to the employee. According to him this subsidy was never meant to be included in sub-clause (vi) which was introduced and withdrawn from Section 17(2) and therefore, the legislative history pertaining to the abortive sub-clause will not cover this issue. He submitted that it would fall under sub-clause (iii) of 17(2) as the value of any benefit or amenity granted to the employee if not under sub-clause (iv) as any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assesscc. However, it is well understood that clause (iv) relates to the payment by the employer to a third party in respect of an obligation undertaken by the employee such as club subscription and not payments to the employee direct. This argument is therefore rejected. \n Is Interest subsidy a benefit within Section 17 (2) (in) ?", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-13", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "19. It was then submitted that the interest subsidy would fall under sub-clause (Hi) as the value of the benefit or amenity granted to the employee. According to him, since the definition of perquisite was an inclusive definition, we can go the meaning of the word 'perquisite' itself to cover such interest subsidy. He cited the decision of the House of Lords in Owen v. Pook (Inspector of Taxes), 74 ITR 147, for the proposition that a reimbursement of an expenditure is a perquisite if it involves a personal advantage. In that case a doctor, who was on call, was reimbursed travelling expenses to make the visits on duty. The House of Lords held that reimbursement of that expenditure may amount to perquisite but for the fact that that expenditure was incurred as part of his duty. The second case cited is the decision of the Madras High Court in C.I.T. v. C. Kulandaivelu Konar, 100 ITR 629 where the unauthorised use of funds of the Company was treated as a perquisite of a director as conferring a benefit on him. This decision followed the case of C.I.T. v. A.R. Adaikappa Chettiar (Madras), , where the advantage taken by the director in view of his position was treated as a benefit or perquisite obtained. The same view was expressed in the Madras High Court in Addl. C.I.T. v. Late A.K. Lakshmi, (1978) 113 ITR 368). These cases refer to certain benefits enjoyed by the position held by the assesscc and do not relate to cash payments by the employer. On the contrary, in respect of actual cash payments, such as reimbursement of medical expenses, this Court held in C.I. T. v. Vazir Sultan Tobacco, 160 ITR 73, that it cannot be treated as a perquisite. The Special", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-14", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "160 ITR 73, that it cannot be treated as a perquisite. The Special Leave Petition Nos.SLP (Civil Nos. 14760 and 16796/1991 were dismissed by the Supreme Court. Again, in C.I.T. v. Warner Hindustan Ltd, , as well as C.I.T. v. Andhra Bank Limited R.C.No.5/79 dated 7-8-1989 and C.IT. v.Coromandal Fertilizers l.T.C.No. 8/1994 dated 24-12-1984, this Court held that cash payments to employees cannot be treated as a perquisite because there is no question of convertible into money where cash is paid. Special Leave Petition Nos.SLP (Civil) No.12383 of 1983, 11655-11655A of 1985 and 3483 of 1988 were dismissed. It may be noted that under Section 40-A(v) any expenditure incurred by a Company for provision of a perquisite to an employee, was subject to a ceiling whether convertibility into money or not. It is in that context, that these decisions were rendered and the Supreme Court also took the same view in C.I.T. v. Indian Engineering and Commercial Corporation, . Sub-clauses (iii)(c) also refers to all benefits or amenities not provided by way of monetary payments as the items to be excluded for the purpose of ascertaining the minimum salary that employee must get before they can be valued and ordered as a perquisite.. Thus, the scheme of the Act did not envisage the addition of cash payment as a perquisite in the nature of the benefit or amenity.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-15", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "Is interest subsidy a profit in lieu of 'salary ?", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-16", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "20. The Revenue then sought to bring the interest subsidy within the expression of \"profit in lieu of salary\" in Section 17(3). hi this context, he cited Hochstrasser v. Mayes, 1960 AC 376, where the employee was compensated for the loss incurred by selling his house due to his company transferring him to another factory. The house of Lords held that though the fact that the employment was causa sine qua non, it was not causa causans of the payment, and therefore, the compensation was taxable. The context, however, is the provisions of Section 156(2) of the Income-tax Act 1952 in England where the tax is charged on the profits and gains arising from any office or employment. But the present context is quite different as can be seen by a plain reading of Section 17(3) itself This provision was intended only to apply to all terminal benefits, the idea being that the employers should not camouflage salary or profits in lieu of salary, as terminal benefits. The items mentioned, are therefore, items which are paid on the termination of employment and they are exempted to the extent that they actually relate to the terminal benefits, and therefore, capital receipts. The Revenue submitted that this view of the Section was not shared by this Court in the case of M. Krishna Murthy v, C.I.T.. 152 1TR 163, where it was pointed out that the House Rent Allowance exempted under Section 10 (13-A) is mentioned in this Section and such House Rent Allowance is not a terminal benefit, and therefore, it would otherwise fall within the ambit of definition of profits in lieu of salary. That observation was, however, made for the purpose of treating leave encashment as \"profits in lieu of salary\", to understand the scope of that expression. We notice that Section 13-A was introduced in Section 17(3) simultaneously with its introduction in Section 10.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-17", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "was introduced in Section 17(3) simultaneously with its introduction in Section 10. Obviously, the draftsmen wanted to ensure that if it is not otherwise exempt under Section 10, it would be taxable under Section 16, for which, instead of inserting in Section 17(1), it has been inserted in Section 17(3). Such a mistaken insertion for the purpose of exclusion, cannot, in our considered opinion, change the meaning of the expression 'profit in lieu of salary'. Salary itself has been defined in Blacks Dictionary 'as a reward for recompense for services performed. In a more limited sense, a fixed compensation paid for services rendered. A stated compensation paid periodically as by the year, month, or other fixed period, in contrast to wages which are normally based on an hourly rate.' It is obvious that interest subsidy is not a reward or a periodically payment for services rendered. Nor is it paid in lieu of salary. We are, therefore, convinced that the interest subsidy which was given as a welfare measure to treat the employees of Public Sector Undertakings on par with the Central Government servants was never intended to be taxed.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-18", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "Is interest subsidy a perquisite as such ? \n 21. It was then argued that interest subsidy may be a perquisite as commonly understood without reference to the sub-clauses of Section 17(2) just as in the case of salary, the definition of 'perquisite' in Section 17(2) is an inclusive definition. It is, therefore, necessary to ascertain the popular meaning of that word. Chambers Dictionary gives the meaning as : \n \"A casual profit anything left over that a servant or other has by custom a right to keep : a tip expected upon some occasions.\" \n Ramanatha Iyer gives the meaning as : \n \"Perquisites. 'Perquisites means emolument, fee or profit attached to the office or position of an addition to salary or wages.\" \n 22. Therefore, one possible view is that interest subsidy is a perquisite because the employee gets it only because of his employment as incidental to his service conditions. But, the same benefit given indirectly has not been treated as a perquisite by the Revenue. If the employer takes a loan at a higher rate and advances it to the employee at a lower rate of interest, the difference is admittedly not treated as a perquisite. But where the loan is taken by the employee and the difference is reimbursed to the employee, it is sought to be treated as a perquisite. The Revenue submitted that the form makes a difference to the substance. But on the facts of the present case the benefit to the employee is the same whether given directly or indirectly. So when it is not taken as a perquisite in the first situation, it has to be considered in the same way in the second situation as otherwise it will be discriminatory. Even if two views are possible the one in favour of taxpayer has to be adopted as charging provisions have to be construed strictly. \n Declaration by Chairman CBDT :", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-19", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "Declaration by Chairman CBDT : \n 23. This position had been made clear by the Chairman of the CBDT by his letter dated 13-7-1990 to the Chairman of the Standing Conference of Public Enterprises in the following words : \n \"The question of taxation of public sector Undertakings has been examined in great detail by the Board as well as by various other organisations and for a variety of reasons, the view that has emerged is that there is no reason or justification to distinguish or discriminate between public and private sector in the matter of direct taxation. \n Wherever an employer has advanced any loan to its employee for the purpose of building a house or purchase of a house or site, the question of taxing any 'subsidy' by way of lower interest charged than that at which the employer itself might have taken loans from financial institutions like HDFC, does not arise. In this connection, 1 would draw your attention to sub-clause (vi) of clause (2) of Section 17 which was inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f 1st April, 1985 but was subsequently deleted by the Finance Act, 1985 w.e.f. the same date. If any Assessing Officer has actually treated such a differential as a perquisite or taxable income he is clearly in error. If this is happening on a large scale, the Board will also consider issuing suitable instructions in this regard.\"  \n 24. It is very strange that the Revenue should persist in contesting the issue inspite of such an unequivocal declaration.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-20", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "Technical Objections of the Revenue\n \n\n A.    Maintainability :", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-21", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "25. Finding that mere is no merit in the case of the Revenue and no justification for the action taken by the Department, the learned senior Standing Counsel raised various technical objections. He submitted tliat the Writ Petition No.27084/1995 been filed against an interdepartmental correspondence to which the petitioner could not have any access and since it is neither an order nor a statutory notice, the question of challenging the same cannot arise. We find that the said letter was the basis of the action taken by the employer to the detriment of the employees. The employers are coerced to deduct the tax at source by the penal action under Section 201. In the present case, unfortunate that even though such demands have been cancelled in one year, similar demands have been upheld by the Commissioner (Appeals) and the Appellate Tribunal in the subsequent years. The petitioners have also placed before us individual letters sent to the employees merely raising (he demand without any assessment. Such chaotic functioning of the Department works havoc on the salaried class which forms part of captive tax payers. In this situation, if the writ petition cannot be entertained to direct the Department to give proper guidance to the employers, the actual tax payers will be left without any speedy or effective remedy. \n B. Writ not a proper remedy :", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-22", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "26. It was then submitted that since it is the individual employees who are liable to tax, the proper remedy for them is to file a return and get a refund after adjudicating the issue whether the interest subsidy is taxable or not. He submitted that by filing the writ petition, the Revenue is denied the opportunity of properly adjudicating the issue after verifying the facts such as whether there is a scheme in the company for giving interest subsidy and the terms thereof. This is actually the crux of the case, namely, that the person, who is ultimately liable to pay the tax, is not given an opportunity to contest the liability before the tax is levied by deduction of tax at source. The alternative remedy can be an application for certificate under Section 197. But this will involve a great burden on the Income-tax Officer if thousands of employees were to make applications for such certificates as each employee has to make such individual applications. The burden is now placed on the employer to decide whether a particular amount paid is taxable or not and in view of the attitude of the Department with reference to Section 201, the employer is bound to decide the issues against the employees. In this case, itself we could see that having failed in the appeal against the order under Section 201, the employer indicated the intention to deduct the tax at source thus deciding the issue against the person liable to pay the tax. The remedy suggested by the Revenue that after deduction, the employee should file a return and seek refund would again involve thousands of appeals and long delay in granting refund by which a section of salaried class will be deprived of a portion of the salary due to them for a considerable time without any recompense. The scheme of deduction of tax at source is intended to be of benefit to the tax payer as well, apart from regularly collecting the tax painlessly. But such a scheme cannot be abused by collecting more than the tax leviable and driving the asscssees to wait indefinitely for", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-23", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "abused by collecting more than the tax leviable and driving the asscssees to wait indefinitely for refunds.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-24", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "C. Inconsistent claim : \n 27. It was submitted that in some of the returns filed by the employees, the entire amount paid as interest to the financial institutions has been claimed as a deduction under Section 24 which cannot be justified if the interest subsidy is not to be treated as a perquisite. The learned Counsel for the petitioners denied this. Even if in certain cases, the individual employees have made such a claim by mistake or otherwise, we do not think that a claim that the subsidy received is deductible under Section 24, will make it a perquisite under Section 17. The learned Senior Standing Counsel also pointed to the Regulations of ECIL wherein para 10.11 it was stated that : \n \"the amount of interest subsidy paid by the Company becomes part of the income of the individual employee and lie/she is liable for income tax.\" \n He submitted that this proved that both the employer and employee considered it as part of taxable salary. The question of taxability cannot be decided with reference to the assessee's approach. The Supreme Court in Kedarnath Jute Manufacturing Co. Ltd, 116 ITR 1 SC, observed : \n Whether the assessec is entitled to a particular deduction or not will depend on the provisions of laws thereto and not on the view which the asscssee might take of his right...\" \n Hence, this objection is also without any merit. \n D. Plea not supported by evidence :", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-25", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "D. Plea not supported by evidence : \n 28. The learned senior Standing Counsel submitted that the schemes of the several companies paying the interest subsidy was not available and even if a plea is taken, unless evidence is also put in the affidavit, it cannot be adjudicated. He relied on the decision of the Supreme Court in Bharat Singh v. State of Hatyana, . In that case, the Supreme Court pointed out that if a point which is ostensibly a point of law is required to be substantiated by facts, the petitioner must plead and prove such facts which must appear from the writ petition and the Court need not entertain that point if either the pleading or the evidence is not given. Though it is a salutary principle, we are of the view that it has no application to the facts of the present case. The respondent here is the Central Government represented by its officers and the petitioners have pleaded that they are employees of Central Government Undertakings governed by a notification issued by the Industries Ministry advising the Undertakings to evolve the interest subsidy Scheme. The relevant documents have been filed along with the writ petitions. Nothing prevented the respondents from calling for the information from the employer who is another respondent in the case. This objection is an after-thought and cannot be entertained. \n E. Cause of Action absent : \n 29. The Revenue contended that there is no cause of action at all as there was no question of jurisdiction and hence the writ petitions are not maintainable. This is also an argument which is to be stated only to be rejected. When an action is taken by the employer ostensibly for administering a statute adverse to a person at the instance of the Department a cause of action certainly arises to dispute the same. \n F.    Joint petition not maintainable :", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-26", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "30. It was contended that a joint writ petition cannot be filed. This is contrary to the decision of this Court in the case of M. Krishna Murthy v. C.I.T., . \n \n\n G.    Writ    by    Trade    Union    not maintainable : \n \n\n 31. The Revenue also submitted that a trade union cannot file a writ petition relating to tax matters of a member of the union. It was argued that it is none of the business of the trade union to interfere in the income-tax matters of the workers as the trade union was concerned only with the dispute between the workers and the management. This argument ignores the fact that this is really a dispute between the workmen and the management initiated by the Department. The management would not have been averse to treating the interest subsidy as not a perquisite but for the insistence of the Department that it should be treated as a perquisite. The deduction of tax at source reduced the take home pay, and hence, affects the workmen with reference to their service conditions. The objects of a trade union is to protect the interest of the workmen. If the action of the employer at the behest of the third party adversely affects the workmen, a trade union is certainly entitled to intervene. Section 15 of the Trade Union Act enables the trade union to spend its funds for the prosecution of any legal proceeding for the purpose of securing or protecting any rights arising out of the relations of any member of the union with any employer. Here the employer is acting as the agent of the revenue and is also an instrumentality of the State and the alleged violation of the Income-tax Act certainly involves the services conditions of the employees. We are convinced that the trade unions are entitled and justified in filing the writ petitions. \n H.    Loopholes cannot be plugged by Court : \n \n\n 32. The learned senior Standing Counsel submitted that if there was a lacuna in the Act", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-27", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "with reference to adjudication of a perquisite at the time of the deduction of tax at source, it will not grant jurisdiction to the Court to interfere. In order to see whether there is any such lacuna, we have to consider the scheme of the Income-tax Act with reference to the deduction of tax at source. The collection and recovery of tax is governed by Chapter XVII of the Income Tax Act by way of deduction of tax at source and advance payment. \n 33. Sections 192 to 194, 194-A, B, BB, C, D, E, EE, F, G, H, I, J, K. Sections 196A, B, C and D provided for deduction of tax at source in respect of various kinds of income. \n 34. Section 200 imposes a duty on the person deducting the tax to pay it within the prescribed time to the credit of the Central Government. \n 35. Section 201 provides that if the person so obliged to deduct, docs not deduct or, after deducting fails to pay the tax, he shall be deemed to be an assessee in default and liable to penalty under Section 221 as well as penal interest under 201 (1A). \n 36. Section 203 provides for the issue of a certificate for tax deducted which is to be given credit and Section 205 bars direct demand on the assessee in respect of the tax so deducted.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-28", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "37. Section 207 provides for advance payment of tax. The advance tax is calculated as the tax payable on the total income computed on the total estimated income of the previous year computed in accordance with the provisions of the Act reduced by the amount of the income tax which is deductible at source. Such advance tax is payable in three instalments under Section 211. Section 234-B provides for interest on defaults in payment of advance tax and Section 234-C for interest for deferment of advance tax at the rate of 1 1/2 per cent per month. If we look at these Sections, it will be apparent that an assessee has to calculate his advance tax and pay it in time taking into account the tax deducted at source. If less tax is deducted at source, he will have to pay more advance tax as otherwise, he will be liable to pay interest for deferment of advance tax inasmuch as advance tax is determined after reducing the tax deductible at source. The person who deducts the tax at source will be liable only if he fails to remit the tax after deducting the same. The Department appears to be under a misapprehension that where there is a shortfall in the deduction of tax at source, the employer can be treated to be an assessee in default and charged with penalty and interest. We may now read the provisions of Section 201. \n \"Section 201 : Consequences of failure to deduct of pay : \n (1) If any such person and in the cases referred to in Section 194, the principal officer and the Company of which he is the principal officer does not deduct or after deducting fails to pay the tax as required by or under this Act, he or it shall, without prejudice to any oiher consequences which he or it may incur, be deemed to be an assessce in default in respect of the tax :", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-29", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "Provided that no penalty shall be charged under Section 221 from such person, principal officer or Company unless the Assessing Officer is satisfied that such person or principal officer or Company, as the case may be, has without good and sufficient reasons failed to deduct and pay the tax, (1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or Company as is referred to in that sub-section docs not deduct or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest at fifteen per cent per annum on the amount of such tax was deductible to the date on which such tax is actually paid. \n (2) Where the tax has not been paid as aforesaid after it is deducted, the amount of the tax together with the amount of simple interest thereon referred to in subsection (1 A) shall be a charge upon all the assets of the person, or the Company, as the case may be, referred to in sub' section (1).\"", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-30", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "38. This Section has two limbs, one is where the employer does not deduct the tax and the second where after deducting, the tax fails to remit it to the Government. There is nothing in this Section to treat the employer as the defaulter where there is a shortfall in the deduction. The Department assumes that where the deduction is not as required by or under the Act, there is a default. But the fact is that this expression 'as required by or under this Act' grammatically refers only to the duty to pay the tax that is deducted and cannot refer the duty to deduct the tax. Since this is a penal section, it has to be strictly construed and it cannot be assumed that there is a duty to deduct the tax strictly in accordance with the computation under the Act and if there is any shortfall due to any difference of opinion as to the taxability of any item the employer can be declared to be an asscssee in default. \n 39. A reference to the provisions of Section 192 clarifies this issue further : \n \"Section 192 : Salary : \n (1) Any person responsible for paying any income chargeable under the head \"Salaries\" shall, at the time of payment, deduct income-tax on the amount payable at the average of income-tax computed on the basis of the rates in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year.\"", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-31", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "40. Therefore, the deduction of tax at source is not on any adjudicated figure, but on an estimated figure of salary income. Generally, there would be no need to make an estimate except where there may be some changes during the course of the year with reference to the salary payable. But a case of disputed liability could also fall within this estimate. Unfortunately, the section or the rules do not spell out the manner in which tills estimate has to be made and it is assumed by one and all and that it is the employer who has to decide the salary income that should be subject to deduction of tax at source, This assumption has led to all kinds of queries by distracted salary earners, as a casual glance at any tax advise columns of newspapers and magazines will reveal. The real position, however, is that it is for the employee to inform the employer about the estimated salary income that is liable for deduction at source. This can be gathered from the fact sub-section (2B) provides that where the employee is in receipt of other income, he may send to the employer, a verified statement to take that also into account for deduction of tax at source. There is no reason why such a verified statement should not be given for the purpose of reducing the salary income liable for deduction of tax at source. In doing so, the employee will be taking a great responsibility because if the income is otherwise taxable, he will be liable to pay larger advance tax and for default or deferment, such advance tax, will be liable to pay interest under Section 234-B and C. A reference to other Sections such as 197A indicates a common pattern of allowing the assesses to determine the liability for deduction of tax at source. Under Section 197A, no tax is to be deducted at source if the assessee gives a declaration in writing that his estimated total income will not be liable to tax. This stands to reason because it is the assessee who has to declare his taxable income", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-32", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "to tax. This stands to reason because it is the assessee who has to declare his taxable income and not the employer or the payer.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-33", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "41. The alternate remedy is for an assessee to apply to the Income-tax Officer for a certificate under Section 197 that the amount presumably is not subject to deduction of tax at source or should be subject to deduction at a lower rate. This Section may work well in the case of the unusual or extraordinary payments. But in the case of an interest subsidy payable to thousands of employees it would be meaningless to suggest that each employee should approach the Income Tax Officer for a certificate under Section 197. Some employees may be able to get it in time, some may not be able to get it. Some Income-tax Officers may grant certificates and some as in the present case deny certificates under some misunderstanding about the scope of the Section or the taxability of the amount in question. It must be remembered that the deduction of tax at source in respect of salary is done every month by averaging the tax that is payable for the entire year. This exercise is guided by a Circular of CBDT issued every year, (see 1992 ITR St. 226). The circulars of the relevant period do not contain any information about treatment of the interest subsidy as a perquisite. The CBDT is well aware of the fact that Public Sector Undertakings have been granting the interest subsidy under the directions of the Government of India as could be seen from the letter of the Chairman, CBDT dated 13-7-1990. It is unfortunate that the circulars do not give specific instructions about the excluding interest subsidy is computing the salary income liable for deduction of tax at source. It is quite significant that these circulars do not contain any warning about short deduction or action under Section 201 for that though they specifically mention the need to revise the amounts of deduction in case of pay revision as well as the action under Section 201 for failure to deduct any tax or pay the deducted tax in time. This indicates that the revenue is very well aware of the position that Section 201 docs not apply", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-34", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "This indicates that the revenue is very well aware of the position that Section 201 docs not apply to a case of deduction of tax at a lesser amount. Moreover, the circulars advise the Drawing and Disbursing Authority to satisfy itself that the computation of taxable salary income is in order with reference to deduction available to the employee. This does not convert him into an Income Tax Officer or an adjudicating authority as many erroneously believe. All that it means is that the assessee must declare his claim so that with reference to Section 201 proviso he can say that he had good and sufficient reasons not to deduct tax at source in respect of any income to avoid imposition of penalty. It is to be noted that the deduction is in respect of income computed under the head \"salary\" and not in respect of each component of it. Any difference of opinion about the computation has to be resolved by the employee at the risk of his paying interest under Section 234 B & C and not by the employer as Section 201 cannot be utilised to compel any such adjudication by him. Yet a misunderstanding of the provisions by the field officers and reluctance of the CBDT to clarify the matter has led to a situation where the employers have to carry on litigation in several High Courts or transfer the unnecessary burden to the employees who can hardly bear them. In our considered opinion the action taken under Section 201 was wholly illegal and not authorised by the statute. It amounted to an unreasonable coercion which has to be resisted only by invoking the extra-ordinary jurisdiction of this Court. There is thus no loophole which requires to be plugged. Perhaps, a better solution may be evolved. In this background, the contention of the learned senior Standing Counsel for the Revenue that there is an alternate remedy by way of assessment procedure is unacceptable.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-35", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "A Possible Solution :", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-36", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "42. It would have been really marvellous if the Department could have taken this as an occasion to reform the system on this question. The problem has arisen because the tax is deducted by the employer and the payee has no means to dispute the adjudication as to his liability to be taxed which is a sine quo non for the deduction of tax at source. The postponement of such adjudication to the time of assessment after filing a return involves considerable delay and loss of compensation for the amount due to the payee but withheld if it turns out to be wrongful. If taxes were not deducted at source, the Revenue would be, of course, put in a disadvantageous position of having to take separate steps to collect the same. Perhaps, a better solution would be to shift the stage of deduction to the hands of the payee. For instance, all payments can be made to a declared bank account of the payee where 10 per cent of the balance can be frozen until the assessment is made and an amount equal to the tax determined then transferred to the Department by the Bank. Such a scheme would benefit the taxpayer and the Revenue as well as the employees. As far as the taxpayer is concerned, the money will be in his account earning interest until a correct adjudication is made as to the liability and he does not have to lose it and seek refund. As far as Revenue is concerned, there will be a guaranteed security for the payment of tax until adjudication takes place. The employers can also be relieved of the unpaid burden of acting as the agent of the Government for collecting tax at source. It may not be realised that it involves a lot of paper work and manpower and the risk of being penalised on the one hand and the risk to the government and the employees of being defrauded by unscrupulous employers deducting tax and not remitting the same. It will also have the added advantage of encouraging the banking habit and the frozen funds will be available to", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-37", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "It will also have the added advantage of encouraging the banking habit and the frozen funds will be available to the Banks for lubricating the economy. Such a scheme can be evolved even on a pilot basis and operated by the CBDT itself by invoking provisions of Section 197(2A) without even the need for legislation and later extended to all kinds of other income. It would then relieve the uninitiated such as house owners from liability such as Section 194-1 and also widen the tax net by gathering data relating to total receipts in the hands of each recipient.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-38", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "43. The learned senior Standing Counsel submitted relying on the decision in R.K. Garg v. Union of India, 133 ITR 239, that even though there is an unintended disadvantage to the taxpayer in the present system it is for Parliament to intervene and not for the Court. That is the reason way, we are making this suggestion for Government to do some lateral thinking and solve the problem by legislation or otherwise. \n Attitude of the Department to this litigation : \n 44. The learned senior Standing Counsel argued this case vehemently and it should therefore be presumed that he has been instructed to do so. Advocates who are designated as senior Counsel have a duty to the Court higher than the duty to the client in the sense that they are expected to assist the Court in laying down the correct law even if it affects the interest of the client. They are also expected to advise the clients to follow the correct law and not to contest the matters where they arc concluded by precedents so that needless litigation is avoided and Courts are not burdened. In the present case, there are three decisions of the High Court against the Revenue and it has not been shows that any of them have been taken to the Supreme Court. When we sought information about it, we were told that such information is not available There was a practice in the Department to publish departmentally a list of decisions of the High Courts accepted by the Department so that the field officers may not rake up the subject again involving the Department in needless litigation. We are told that such a system has now been abandoned. Our own reference to the Judis Computer data bank indicates that no appeal is pending in the Supreme Court with reference to the interest subsidy. It is unfortunate that the Revenue should instruct the senior Standing Counsel to argue this matter in spite of having accepted the decision of the High Courts and in spite of the Chairman of the CBDT having issued a letter assuring action against officers acting to the contrary.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-39", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "45. In this context, we may refer to the decision of the Supreme Court in the case of Oil and Natural Gas Corporation, 61 ELT 3, where it was held that disputes between the Government and Government Undertakings should not be taken to Court. The Revenue would have been well advised to sort out this matter by a discussion with the Undertakings. As it appears that such a discussion had taken place and the Chairman, CBDT had given an assurance in this regard on 13-7-1990. hi spite of that, the Department had proceeded to instruct the employers on 23-3-1995 to treat the interest subsidy as a perquisite for deducting the tax at source. The comprehensive circular No.701 relating to TDS subsequently issued on 23-3-1995 being silent on this point, we have to appreciate the senior Standing Counsel for actually performing a public service by forcefully bringing out the internal contradiction between the letter of the Chairman dated 13-7-1990 given in conformity with the directions of the Supreme Court and the impugned letter of the CBDT dated 23-3-1995. \n Directions : \n 46. In the circumstances there shall be a direction to the respondents not to treat the interest subsidy as a perquisite while deducting the tax at source in respect of income under the head 'salaries' under Section 192 of the Income-tax Act. \n 47. The first respondent-Finance Secretary is directed to place this judgment before the Union Finance Minister so that he is apprised of the need for reform in the area of 'deduction of tax at source.'", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "e8177f193f24-40", "Titles": "P.V. Rajgopal And Ors. vs Union Of India And Ors. on 21 April, 1998", "text": "48. The writ petitions are allowed with costs of Rs.1,000/- each.", "source": "https://indiankanoon.org/doc/541211/"}
+{"id": "f9d7282d0aa7-0", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "JUDGMENT Jeevan Reddy, J. \n (1) The constitutional validity of sections 44AC and 206C of the Income-tax Act, 1961, is challenged in this batch of writ petitions. These two sections were inserted by the Finance Act, 1988. Section 206C was given effect to on and from June 1, 1988, and section 44AC from April 1, 1989. These two sections read as follows :  \n 206C Profit and gains farm the business of trading in alcoholic liquor, forest produce scrap etc., - (1) Every person, being a seller referred to in section 44AC shall, at the time of debiting of the amount payable by the buyer referred to in that section to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a cheque or draft or by any the mode, whichever is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table below a sum equal to the percentage, specified in the corresponding entry in column (3) of the said Table, of such amounts as income-tax on income comprised therein.  \n TABLE\n------------------------------------------------------------------------\nS. No.                    Nature of goods              Percentage\n(1)                            (2)                        (3)\n------------------------------------------------------------------------\n(i)    Alcoholic liquor for human consumption\n      (other than Indian made foreign liquor)          Fifteen per cent.\n(ii)   Timber  obtained under a forest  lease.         Fifteen percent.\n(iii)  Timber obtained by any mode other\n         than under a forest lease                     Ten per cent.\n(iv)  Any other forest produce not being\n              timber                                   Fifteen per cent.\n------------------------------------------------------------------------", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-1", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Provided that where the Assessing Officer, on an application made by the buyer, gives a certificate in the prescribed form that to the best of his belief any of the goods referred to in the aforesaid Table are to be utilised for the purpose of manufacturing, processing of producing articles or things and not for trading purposes, the provisions of this sub-section shall not apply so long as the certificate is in force.  \n (2) The power to recover tax by collection under sub-section (1) shall be without prejudice to any other mode of recovery.  \n (3) Any person collection any amount under sub-section (1) shall pay within seven days the amount so collected to the credit of the Central Government or as the Board directs.  \n (4) Any amount collected in accordance with the provisions of this section and paid under sub-section (3) shall be deemed as payment of tax on behalf of the person from whom the amount has been collected and credit shall be given to him for the amount so collected on the production of the certificate furnished under sub-section (5) in the assessment made under this Act for the assessment year for which such income is assessable.  \n (5) Every person collecting tax in accordance with the provisions of this section shall within ten days from the date of debit or receipt of the amount furnish to the buyer to whose account such amount is debited or from whom such payment is received, a certificate to the effect that tax has been collected, and specifying the sum so collected, the rate at which the tax has been collected and such other partriculars as may be prescribed.  \n (6) Any person responsible for collecting the tax who fails to collect the tax in accordance with the provision of this section, shall, notwithstanding such failure, be liable to pay the tax to the credit of the Central Government in accordance with the provisions of sub-section (3).", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-2", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "(7) Without prejudice to the provisions of sub-section (6), if the seller does not collect the tax or after collection the tax fails to pay it as required under this section, he shall be liable to pay simple interest, at the rate of two per cent. per month or part thereof on the amount of such tax from the date on which such tax was collectible to the date on which the tax was actually paid.  \n (8) Where the tax has not been paid as aforesaid, after it is collected, the amount of simple interest thereon referred to in sub-section (7) shall be a charge upon all the assets of the seller.\"  \n \"44AC. Special provision for computing profits and gains from the business of trading in certain goods. - (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee being a person other than a public sector company (hereafter in this section referred to as the buyer), obtaining in any sale by way of auction tender or any other mode, conducted by any other person of his agent (hereafter in this section refereed to as the seller), -  \n (a) any goods, in the nature of alcoholic, liquor for human consumption (other than Indian made foreign liquor), a sum equal to forty per cent. of the amount paid or payable by the buyer as the purchase price in respect of such goods shall be deemed to be the profits and gains of the buyer from the business of trading in such goods chargeable to to tax under the hear 'Profits and gains of business or profession';", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-3", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "(b) the right to receive any goods of the nature specified in column (2) of the Table below, or such goods, as the case may be, a sum equal to the percentage, specified, in the corresponding entry in column (3) of the said Table, of the amount paid or payable by the buyer in respect of the sale of such right or as the purchase price in respect of such goods shall be deemed to be the profits and gains of the buyer from the business of trading in such goods chargeable to tax under the head 'Profits and gains of business or profession.' TABLE\n-----------------------------------------------------------------------\nS.No.                    Nature of goods               Percentage\n (1)                            (2)                        (3)\n------------------------------------------------------------------------\n(i)     Timber obtained under a forest\n             lease                               Thirty-five per cent.\n(ii)    Timber obtained by any mode other\n            than under a forest lease            Fifteen per cent.\n(iii)   Any other forest produce not\n          being timber                           Thirty-five per cent.\n------------------------------------------------------------------------", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-4", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "(2) For the removal of doubts, it is hereby declared that the provisions of sub-section (1) shall not apply to a buyer (other than a buyer who obtains any goods from any seller which is a public sector company) in the further sale of any goods obtained under or in pursuance of the sale under sub-section (1).  \n (3) In a case where the business carried on by the assessee does not consist exclusively of trading in goods to which this section applies and where separate accounts are not maintained or are not available, the amount of expense attributable to such other business shall be an amount which bears to the total expenses of the business carried on by the assessee the same proportion as the turnover of such other business bears to the total turnover of the business carried on by the assessee.  \n Explanation. - For the purposes of this section, 'seller means the Central Government, a state Government or any local authority or corporation or authority established by or under a Central, State or Provincial Act, or any company or firm.\"", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-5", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Section 44AC determines the profits and gains of the buyer from the business of trading in certain specified goods, under the hear \"Profits and gains of business or profession\" at a given percentage of the purchase price Sub-section (1) begins with non obstante clause, \"nowithstanding anything to the contrary contained in sections 28 to 43C\". According to the sub-section, the profits and gains or a purchaser of \"goods in the nature of alcoholic liquor for human consumption (other than Indian made foreign liquor)\" shall be deemed to be a sum equal to 40% of the amount paid or payable by him therefore, i.e., of the purchase price lease,, the profits and gains are deemed to be 35% of the purchase price. In the case of timber obtained by any mode other than under a forest least, it is 15% while in the case of purchase of any other forest produce, not being timber, the profits and gains are deemed to be 35%.  \n Sub-section (2) clarifies that the rule incorporated in sub-section (1) shall not apply to second or subsequent sales of such goods.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-6", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Sub-section (3) is also clarificatory in nature. It says, where the business carried on by an assessee does not consist exclusively of trading in goods to which this section applies and where separate accounts are not maintained or are not available, the amount of expenses attributable to such other business shall be equal to the proportion the turnover of such other business bears to the total turnover of the business of the assessee. The Explanation defines the expression \"seller\". It takes in the Central Government, State Government, any local authority, a corporation or authority established by or under a Central, State or Provincial Act, or any company or firm. Section 44AC occurs in sub-Chapter D of Chapter IV. Chapter IV deals with \"computation to total income\" and sub-Chapter D with computation of \"profits and gains of business or profession\".", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-7", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Section 206C is inserted in Chapter XVII dealing with collection and recovery of tax. Sub-chapter A of Chapter XVII is general in nature. Sub-Chapter B contains sections 192 to 206B, which provide for deduction of tax at source. Section 206C is inserted with an independent sub-Chapter \"BB - Collection at source\". Sub-section (1) of section 206C obligates the seller of the specified goods to collect from the purchaser an amount equal to the percentage motioned in the Table as income-tax. The goods mentioned in the Table are the very same goods as are mentioned in section 44AC. In the case of sale of alcoholic liquor for human consumption other than Indian-made foreign liquor, the seller is required to collect, in addition to the purchase price 15% of the purchase price from the purchaser towards income-tax. In the case of timber obtained under a forest lease, it is 15%; in the case of timber obtained by any mode other than a forest lease, it is 10%; and in the case of any other forest produce not being timber, it is 15%. The proviso to the sub-section however, says that where the assessing officer gives a certificate in the prescribed from that the said goods are to be utilised for the purpose of manufacturing, processing of producing articles or goods and not for trading purposes, such collection at source shall not be effected. Sub-section (2) clarifies that the power of recovery of tax by collections under section (1) shall be without prejudice to any other mode of recovery. Sub-section (3) obliges the person collecting the tax under sub-section (1) to remit the same within one week Sub-section (5) further obliges the person collecting the tax to issue a certificate to the buyer evidencing such collection. The certificate should contain such particulars as may be prescribed.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-8", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Sub-section (4) says that any amount collected under section 206C shall be deemed to be payment of tax on behalf of the purchaser. It provides further that \"credit shall be given to him for the amount so collected on the production of the certificate furnished under sub-section (5) in the assessment made under this Act for the assessment year for which much income is assessable.\" Sub-sections (6), (7) and (8) are not relevant for our purposes.  \n Section 44AC is brought into effect from April 1, 1989 (assessment year 1989-90). Read with section 4, it means that the profits, and gains of the assessee from the business of trading in specified goods for the previous year relevant, to assessment year 1989-90, shall be computed in accordance with the said provision. It is, for this reason that section 206C was given effect to with effect from June 1, 1988.  \n The memorandum explaining the provisions in the Finance Bill, 1988, sets out the reasons for which,, and the objects to achieve which, these provisions were inserted. Paragraph 25 of the Memorandum reads thus (see [1988} 170 ITR (St.) 187) :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-9", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "\"New provisions to counteract tax evasion by liquor contractors, scrap dealers, dealers, in forest products, etc. - 25. Considerable difficulty has been felt in the past in making assessment of incomes in the case of persons who take contracts for sale of liquor, scrap, forest products. etc. It has been the Department's experience that for taking such contracts, firms or assertions of persons are specifically constituted and very often not trace is left regarding them or their members after the contract has been executed. Persons have also been found to have taken contracts, firms or associations of persons are specifically constituted and very often no trace is left regarding them or their members after the contract has been executed. Persons have also been found to have taken contracts in benami names by floating undertakings or associations for short periods. Since tax is payable in the assessment years in respect of the incomes of the previous years, the time by which the incomes from such sources become assessable, such persons are not traceable. At the time of assessment in these cases, either the accounts are not available or they are grossly incorrect or incomplete . Thus, even if assessments could be made on ex parte basis, it becomes almost impossible to collect the tax found due, either because it becomes difficult to establish the identity of the persons and trace them or because of the fact that the persons in whose names contracts are taken are men of no means.  \n With a view to combat large scale tax evasion by persons deriving income from such business, the Bill seeks to insert a new section 44AC to provide for determination of income in such cases. Taking into account the experience gained in the past regarding the ratio of profit to the sale consideration, the proposal is to provide that sixty per cent. of the amount paid or payable by such persons on sale would constitute income of the taxpayers, i.e., the buyer.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-10", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "The provisions of this section will apply only to an assessee, being a buyer of any goods in the nature of alcoholic liquor for human consumption (other than Indian-made foreign liquor) or any forest produce, scrap or waste, whether industrial or non-industrial, or such other goods, as may be notified by the Central Government, at the point of first sale. The word 'seller' connotes the Central Government, State Government or any local authority or corporation or authority established by or under a Central Act or any company. The provisions of this section shall not apply to any buyer in the second or subsequent sale of such goods.  \n This amendment will take effect from April 1, 1989, and will, accordingly, apply to assessment year 1989-90 and subsequent years.  \n Further, with a view to facilitate collection of taxes from such assessees, it is proposed to introduce a new section 206C to provide that any person, being a seller, referred to in section 44AC, shall collect income-tax of a sum equal to twenty per cent. of the amount paid or payable by the buyer, as increased by a surcharge for purposes of the Union calculated on the income-tax at the rates in force. Such sum is required to be collected either from the buyer at the time of debiting the said amount to the account of the buyer or at the time of the receipt of that amount from the buyer, whichever is earlier. This mode of recovery of tax shall be without prejudice to any other mode of recovery. The tax so collected by the seller shall be paid to the credit of the Central Government or as the Board directs, within seven days from the date of collection. It will be treated as tax paid on behalf of the person from whom the amount has been collected and credit shall be given for such amount in the assessment made under this Act on production of certificate.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-11", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "The new section also provides that if a seller does not collect or after collecting fails to pay the tax, he shall be deemed to be an assessee in default in respect of the tax and the amount of the tax together with the amount of simple interest, calculated at the rate of two per cent. per month or part thereof, shall be a charge upon all the assets of the seller.  \n A new section 276BB provides for prosecution of a person who fails to pay the tax collected at source for a period which shall not be less than three months but which may extend up to seven years and with fine.  \n These amendments will be made effective from 1 st June, 1988...\"   \n The Finance Minister, in his Budget Speech for 1988-89, described this as \"an anti-evasion measure\".  \n The Bill provided that the profits and gains of purchasers of specified goods shall be deemed to be 60% of the purchase price. It also provided for collecting 20% of the purchase price at source. This provision was sought to be made applicable not only to purchasers of alcoholic liquor for human consumption (other than Indian-made foreign liquor) and forest produce, but also to purchasers of scrap and waste as well. Parliament, however, confined the operation of the said provisions only to alcoholic liquor, timber and forest produce (referred to in this judgment as \"specified goods\"). It also altered the percentage of profits and gains, as well as the percentage of deduction, as mentioned hereinbefore.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-12", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "After the Finance Act, 1988, was passed, a Press Note was issued by the Press Information Bureau explaining sections 44AC and 206C. According to the Press Note, section 44AC is a special provision for computing profits and gains in the cases of persons engaged in the trading in specified goods. It applies only to persons \"engaged in the trading in goods\" specified in the section. If the goods are destroyed or lost subsequently, there would be no occasion for trading in such goods and, therefore, the tax collected under section 206C may have to be refunded on such loss being proved. On the meaning of the expression \"purchase price\", it says, \"the purchase price for this purpose will be the cost of the commodity inclusive of any excise duty, sales tax or any other levy, whatever its nomenclature, paid for by the buyer for obtaining the goods.\" Purchase price will not, however, include any freight or transportation charges. In the case of buyers of liquor, the purchase price will include cost of bottle, label and sealing charges, etc. It clarifies that the deductions provided by Chapter VI-A of the Income-tax Act would be permissible from the profit determined under section 44AC.  \n Soon after June, 1, 1988, the sellers of specified goods started calling upon the purchasers to deposit an additional amount in terms of section 206 by way of income-tax in addition to the purchase price. They refused to sell the said goods unless such amount was deposited. A batch of writ petitions was immediately filed questioning the provisions. They were admitted and certain interim orders made. The petitioners are not only purchasers of alcoholic liquor (other than Indian made foreign liquor) which in this State means purchasers of arrack, but also purchasers of timber and other forest produce.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-13", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Sarvasri Y. Ratnakar, N. V. Ranganadhan, R. Venugopal Reddy, Sarangan, M. R. K. Chowdary, v. Rajagopala Reddy, Lakshma Reddy and T. Raghunatha Reddy assailed the validity of the impugned provisions on the following grounds :  \n (i) Section 44AC is an arbitrary and discriminatory provision. It has arbitrarily selected the purchasers of specified goods and subjected them to grave discrimination. While the profits and gains of business of every other assessee are computed in accordance with sections 28 to 43C - which sections provide for several deductions, rebates and other advantages - the purchasers of specified goods are denied the benefit of the said provisions. Their profits and gains are assessed arbitrarily at 40% of the purchase price. Discrimination is writ large on the face of the very provision. There is no basis for presuming that every purchaser of, say, alcoholic liquor, earns an income equal to 40% of the purchase price. Some may suffer losses; some may make profit but less than 40% while some may earn profit of more than 40% . Creating a fiction to the effect that all such persons shall be deemed to have earned profits at 40% of the purchase price is plainly and manifestly arbitrary and unreasonable.  \n (ii) The measure of profits and gains prescribed by section 44AC constitutes an unreasonable restriction upon the petitioners'fundamental right guaranteed by sub-clause (g) of clause (1) of article 19. It cannot be justified as \"reasonable\" within the meaning of clause (6) of article 19. The assessment of profits and the provision relating to collection at source practically have the effect of killing the business in these goods.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-14", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "(iii) There ought to be income before tax is levied thereon. No income is derived unless the goods purchased are sold. Collecting income-tax, therefore, at the time of purchase of goods cannot be characterised as \"income-tax\". The goods purchased may not be sold; they may be lost or destroyed before they are sold. Taking the level of profits and gains of business to the purchase price is wholly impermissible and unreasonable. In the case of a given assessee, there may be no profits and gains at all; he may suffer loss from the said business. Yet, the impugned provisions presume a profit at the prescribed level and collect tax at the specified percentage thereon. Even assessees whose income may be below the taxable limit are not exempted from the operation of the said provisions.  \n (Besides the above contentions, there has been a good amount of controversy with respect to the meaning of the words \"purchase price\" occurring in section 44AC, and also with respect to the interpretation to be placed upon sub-section (1) of section 206C. It may be appropriate to refer to these contentions as well).  \n (iv) In the case of arrack, \"purchase price\" means issue price only. It does not take in the privilege fee or licence fee. The interim order of this court construing purchase price as inclusive of privilege fee and licence fee requires reconsideration; and", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-15", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "(v) The amount to be collected at source under section 206C is related to the income component of the purchase price, to wit, in the case of alcoholic liquor for human consumption, it is 15% of 40% of the purchase price and not 15% of the purchase price. This is evident from the words \"on income comprised therein\", occurring in sub-section (1) of section 206C.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-16", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "On the other hand, Sri M. Suryanarayana Murthy, learned standing counsel for the Income-tax Department, who appeared for the Union of India in these matters, disputed the correctness of the contentions urged by the petitioners. According to him, both sections 44AC and 206C are perfectly valid pieces of legislation enacted to meet a particular situation. They are intended to tackle tax evasion by those who may be called \"fly-by-night\" operators. It has been the experience of the Income-tax Department that persons engaged in the trading in specifed goods are an elusive type. Once the contract period is over, they become scarce. It is difficult to trace them. Very often, the business is done in the names of dummies, under fictitious names, or in the names of persons from whom nothing can be recovered. This measure was, therefore, brought in to plug loss of precious revenue. This provision is not novel one indeed. Similar provisions are already there on the statute book. The impugned provisions are not open to attack either on the ground of lack of legislative competence or on the ground of violation of any of the fundamental rights. \"Purchase Price\" in the case of arrack, no doubt, means only the issue price. However, in the case of Khammam and Cuddapah districts, for the excise year 1987-88, it would mean the total purchase price which may include rental and licence fee as well. Under section 206C, the amount to be deducted is tacked on to the purchase price and not to the income component thereof. In other words, in the case of purchasers of arrack, it would be 15% of the purchase price (issue price) and not 15% of 40% of the purchase price.  \n Legislative competence of Parliament to enact section 44AC and section 206C :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-17", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Legislative competence of Parliament to enact section 44AC and section 206C :  \n The Income-tax Act is an enactment relating to entry 82 in List I of the Seventh Schedule to the Constitution. Entry 82 empowers Parliament to make a law with respect to tax on income, other than agricultural income. The Constitution does not define the expression \"income\". Article 366 defines the expression \"agricultural income\", but not \"income\". The said expression has to be given its natural meaning, keeping in mind the fact that the various entries in the Seventh Schedule are legislative heads and ought to be construed liberally. The Income-tax Act no doubt defines the expression \"income\" in clause (24) of section 2, but that definition cannot be read back into entry 82. Even the said definition is an inclusive one and has been expanding from time to time. Several items have been brought within the definition from time to time by various amending Acts. The said definition cannot, therefore, be read as exhaustive of the meaning of the expression \"income\" occurring in entry 82 of List I in the Seventh Schedule. This, of course, does not mean that an amount which can, by no stretch of imagination, be called \"income\" can be treated as \"income\" and taxed as such by Parliament. It must have some characteristics of income, as broadly understood. So long as the amount taxed as income can rationally be called income as generally understood, it is competent for Parliament to call it \"income\" and levy tax thereon.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-18", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "In Navinchandra Mafatlal v. CIT , it was observed by the Supreme Court that the expression \"income\" has not \"acquired any particular meaning by reason of any legislative practice\".Reference was made to the observations of Lord Wright in Kamakhya Narain Singh v. CIT [1943] 11 ITR 513 that the word \"'income', it is true, is a word difficult and perhaps impossible to define in any precise general formula. It is word of the broadest connotation\". He opined that it would be wrong to interpret the word \"income\" occurring in entry 54 of List I of the Seventh Schedule to the Government of India Act, 1935 (corresponding to entry 82), in the light of any supposed English legislative practice, or, for that matter, in the light of legislative practice in any other country. It was observed that the entries in the Seventh Schedule must be given \"the widest possible construction according to their ordinary meaning\", and that they should not be read in a narrow or restricted sense. Each general word, it was observed, should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. Only where there are two conflicting entries in two legislative Lists, would it be permissible to cut down the meaning of the respective entries, with a view to harmonize them. The court also considered the \"ordinary, natural and grammatical meaning\" of the word \"income\", and observed that, according to the dictionary, it means \"a thing that comes in\" (See Oxford Dictionary, Vol. V, p. 162; Stroud, Vol. II, pp, 14-16). In the United State of America and in Australia both of which also are English-speaking countries, the word 'income' is understood in a wide sense so as to include a capital gain. Reference may be made to - Eisner v. Macomber", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-19", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "as to include a capital gain. Reference may be made to - Eisner v. Macomber [1919] 252 US 189; Merchants' Loan and Trust Co. v. Smietanka [1920] 255 US 509 and United States of America v. Stewart [1940] 311 US 60 and Resch v. Federal Commissioner of Taxation [1943] 66CLR 198. In each of these cases, very wide meaning was ascribed to the word 'income' as its natural meaning...\" It is on this reasoning, it was held, that capital gains constitute income and can be taxed as such and that a law providing therefor would be a law relating to tax on income.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-20", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Reference may also be made to the decision of the Supreme Court in Balaji v. ITO [1961] 43 ITR 393, which considered the validity of sub-section (3) of section 16 of the Indian Income-tax Act, 1922. Sub-clauses (i) and (ii) of clause (a) of section 16(3) provided for taxing an individual on the income of his wife or minor children ifhe carried on business in partnership with his wife, or if he admitted his minor children to the benefits of partnership. (Indeed, section 64(1)(iii) of the Income-tax Act, 1961, which no doubt, has been deleted with effect from April 1, 1989, provided that the income of a minor child of an assessee arising from the admission of the minor to the benefits of a partnership in a firm, shall be taxed in the hands of the assessee, even though the assessee himself was not a partner in that firm). The argument was that the Legislature was not competent to provide that the income of A can be taxed in the hands of B. Entry 54 of List I of the Seventh Schedule to the 1935 Act, it was argued, does not empower the Legislature to do so. Only the income of a person can be taxed in his hands, but not the income of another person. This argument was rejected holding that \"Entries in the Lists are not powers but are only fields of legislation, and that widest import and significance must be given to the language used by Parliament in the various entries\". Reliance was placed upon an earlier decision of the Supreme Court in Baldev Singh v. CIT [1960] 40 ITR 605, where it was held (at p. 397 of 43 ITR) :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-21", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "\"So entry 54 should be read not only as authorising the imposition of a tax but also as authorising in enactment which prevents the tax imposed being evaded. If it were not to be so read, then the admitted power to tax a person on his own income might often be made infructuous by ingenious contrivances.\"  \n The court then referred to the normal practice in this country where a husband or a father nominally takes his wife or minor son in partnership with him so as to reduce his tax burden. This was held to be a device to meet which the impugned provisions were made on the basis of the recommendations made by the Income-tax Enquiry Commissioner of 1936. After referring to the general practice of the business man in this country to induct his wife and minor children as partners with a view to reduce the tax liability, the court observed (at p. 400) \"when the Legislature of this country, which is assumed to know the conditions of the people and their requirements, with the awareness of this particular widespread fraudulent device in the matter of evasion of taxes, made a law to prevent the said fraud, it is difficult for this court, in the absence of any counterbalancing circumstances to hold, on the analogy drawn from American decisions, that the need for such a law is not in existence...\"", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-22", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Reference may also be usefully made to another decision of the Supreme Court in Navnit Lal C. Javeri v. K. K. Sen, AAC of I.T. [1965] 56 ITR 198. In this decision, the validity of section 12(1B) of the Indian Income-tax Act, 1922, was questioned. Section 12(1B) provided that a loan made to a shareholder by a private controlled company is taxable as dividend. It was recognised that merely because the loan is taxed as a dividend in the hands of a shareholder, the loan may not cease to be a loan, and that it would be open to the company to recover the loan by resorting to law. The petitioner's argument was that what is not income is being taxed as \"income\" and, therefore, it is beyond the legislative competence of Parliament. (The impugned provision was introduced by the Finance Act 15 of 1955). The argument was rejected in the following words (at p. 204) :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-23", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "\"In dealing with this point, it is necessary to consider what exactly is the denotation of the word 'income' used in the relevant entry. It is hardly necessary to emphasise that the entries in the Lists cannot be read in a narrow or restricted sense, and as observed by Gwyer C.J. in the United Provinces v. Atiqa Begum [1940] FCR 110; AIR 1941 FC 16, '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'. What the entries in the lists purport to do is to confer legislative powers on the respective Legislatures in respect of areas or fields covered by the said entires; and it is an elementary rule of construction that the widest possible construction must be put upon their words. This doctrine does not, however, mean that Parliament can choose to tax as income an item which, in no rational sense, can be regarded as a citizen's income. The item taxed should rationally be capable of being considered as the income of a citizen. But in considering the question as to whether a particular item in the hands of a citizen can be regarded as his income or not, it would be in appropriate to apply the tests traditionally prescribed by the Income-tax Act as such.\" The court reaffirmed the principles enunciated in Navinchandra Mafatlal v. CIT ; Baldev Singh v. CIT and Balaji v. ITO .", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-24", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "It is equally relevant to notice that in Baldev Singh , the validity of section 23A of the Indian Income-tax Act, 1922, was questioned. Section 23A provided that where the Income-tax Officer is a satisfied that in respect of any previous year, the profits and gains distributed as dividend by any company within the twelve months immediately following the expiry of that previous year are less than 60 % of the total income of the company of that previous year (as reduced by the amounts specified in clause (a), (b) and (c) of sub-section (1)), the Income-tax Officer shall, unless he is satisfied that, having regard to the 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, make an order in writing that the company shall, apart from the sum determined as payable by it on the basis of the assessment under section 23, be liable to pay super-tax at the rate specified by sub-section (1) of section 23A. This section was enacted to prevent avoidance of super-tax by shareholders of a company in which the public are not substantially interested. The assesses' argument was that since the company and shareholders are distinct entities, taxing the shareholders on dividends not distributed by the company, and not received by them, cannot be justified as a tax on income received by shareholders. This argument was repelled on the ground that the obvious intention of section 23A was to prevent evasion of tax, and that entry 54 in List I of the Seventh Schedule to the 1935 Act should be read not only as authorizing the imposition of a tax, but also as authorizing an enactment which prevents the tax imposed being evaded. It was also observed that section 23A dealt with a situation where shareholders did not deliberately distribute the accumulated profits as dividend amongst themselves and, therefore, provided that these", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-25", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "where shareholders did not deliberately distribute the accumulated profits as dividend amongst themselves and, therefore, provided that these accumulated profits will be deemed to have been distributed to the shareholders and tax levied against them on that basis.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-26", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "It is, therefore, idle to contend that the impugned provisions are not warranted by entry 82 of List I or that Parliament lacked the legislative competence to enact them Section 44AC was meant to provide for a certain category / class of assessees who are not amenable to the normal mode of assessment. Substantial public revenue was being lost every year. Hence, the said provision was made. It is a measure designed to check evasion of tax. It cannot be denied that, generally speaking, trade and business in specified goods produce income. The argument of lack of legislative competence must thus fail.  \n Indeed even prior to the introduction of section 44AC, there were some provisions in the Act similar in nature to it. Section 44 provides that \"notwithstanding anything to the contrary contained in the provisions of this Act relating to the computation of income chargeable under the head 'Interest on securities', 'Income from house property', 'Capital gains' or 'Income from other sources', or in section 199 in sections 28 to 43A, the profits and gains of any business of insurance, including any such business carried on by a mutual insurance company or by a co-operative society, shall be computed in accordance with the rules contained in the First Schedule\". The First Schedule to the Act contains rules prescribing the mode in which the profits of life insurance business and other insurance businesses are to be determined, where it is carried on by a resident and where it is carried on by a \"non-resident\".  \n Section 44B prescribes a special provision for computing profits and gains of shipping business carried on by a non-resident. It reads as follows :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-27", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "\"44B. Special provision for computing profits and gains of shipping business in the case of non-residents. - (1) Notwithstanding anything to the contrary contained in sections 28 to 43A, in the case of an assessee, being a non-resident. engaged in the business of operation of ships, a sum equal to seven and a half per cent. of the aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head 'Profits and gains of business or profession'.  \n (2) The amounts referred to in sub-section (1) shall be the following, namely :-  \n (i) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the carriage of passengers, livestock, mail or goods shipped at any port in India; and", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-28", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "(ii) the amount received or deemed to be received in India by or on behalf of the assessee on account of the carriage of passengers, livestock, mail or goods, shipped art any port outside India.\"   \n Similarly, section 44BB prescribes a social provision for computing profits and gains of the business of exploration, etc., of mineral oils, carried on by a non-resident. Sub-sections (1) and (2) of section 44BB read as follows :-  \n \"44 BB. Special provision for computing profits and gains in connection with the business of exploration, etc., of mineral oils. - (1) Notwithstanding anything to the contrary contained in sections 28 to 41 and sections 43 and 43A, in the case of an assessee, being a non-resident, engaged in the business of providing services or facilities in connection with, or supplying plant and machinery on hire used or to be used in the prospecting for, or extraction or production of, mineral oils, a sum equal to ten per sent. of the aggregate of the amounts specified in sub-section (2) shall be deemed to be the profits and gains of such business chargeable to tax under the head 'Profits and gains of business or profession' :  \n Provided that this sub-section shall not apply in a case where the provisions of section 42 or section 44D or section 115A or section 293 A apply for the purposes of computing profits or gains or any other income referred to in those sections.   \n (2) The amounts referred to in sub-section (1) shall be the following namely :-", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-29", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "(a) the amount paid or payable (whether in or out of India) to the assessee or to any person on his behalf on account of the provision of services and facilities in connection with, or supply of plant and machinery on hire used or to be used in the prospecting for, or extraction or production of, mineral oils in India; and", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-30", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "(b) the amounts received or deemed to be received in India by or on behalf of the assessee on account of the provision of services and facilities a in connection with,or supply of plant and machinery on hire used or to be used in the prospecting for, or extraction or production of, mineral oils outside India.   \n Explanation. - For the purposes of this section -  \n (i) 'plant' includes ships aircraft, vehicles, drilling units, scientific apparatus and equipment, used for the purposes of the said business;  \n (ii) 'mineral oil' includes petroleum and natural gas.\"   \n Section 44 BBA prescribes a special provision for computing profits and gains of business of operation of aircraft carried on by a non-resident. The provision is similar to section 44BB with the difference that the percentage in this case is 10, as against 7-1/2 in section 44B. Even with respect to deduction, a special rule is evolved and apllied in specified cases. Section 44D places a ceiling on the deductions to be allowed in the case of foreign companies. According to it, the deductions to be allowed shall not exceed 20% of the income by way of royalty or fees for technical service received.  \n Section 194C provides that any person responsible for paying any sum to any resident (contractor) for carrying out any work in pursuance of a contact, shall \"at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to 2% of such sum as income-tax on income comprised therein\". Section 195 provides for similar deduction in case of amount paid to non-residents. The deduction is to be made at the rates of income-tax for the time being in force.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-31", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Of course, sections 44B, 44BB, and 44BBA as also 44D are confined to non-residents carrying on business in India. Since their total world income cannot be assessed under our Act, their earnings in India are taken into account and tax is levied at a particular flat percentage without following the normal procedure applicable to ascertainment of such income. Section 194C applies to residents only. Its validity was assailed but upheld by a Bench of his court, of which one of us (Jeevan Reddy J.) was a member, in CIT v. Superintending Engineer [1985] 152 ITR 753, mainly on the ground that the said deduction is only provisional and is liable to be adjusted in the final assessment to be made in accordance with the provisions of the Act.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-32", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Yet another objection relating to the competence of Parliament to make the impugned provisions is based on the following reasoning : The Income-tax Act levies tax on income. Income arises only when the assessee sells the goods i.e., carries on business in the goods purchased by him. Tax can be levied on the profit earned by him from such sale or business, as the case may be. Levying that tax on purchase price, it is argued, cannot be characterised as tax on income and, therefore, is beyond the competence of Parliament. It is suggested that after arrack is purchased, it may be spilt, destroyed, or lost on the way; it may never be sold; the assessee may never carry on any trade or business in that commodity. More particularly, in the case of forest produce, it is argued, the timber purchased in a particular pervious year may not be sold in that year at all, with the result that no income arises from the trade or business in the said goods. In one case, the timber or other forest produce purchased in one year may be sold several years later. In another case, the goods purchased in one year may besold over several subsequent years. But, according to section 44AC, income is presumed in the year of purchase and not in the year or years of sale. This, it is argued, is contrary to the entire scheme of the Income-tax Act. Under the Income-tax Act, each assessment year is a unit by itself. Several assessment years cannot be clubbed into one unit, nor can a comprehensive or single assessment be made in respect of several assessment years, it is argued. In our opinion, this argument lacks substance.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-33", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Section 44AC clearly indicates that the profits and gains meant by it rate the profits and gains of the business of trading in specified goods. This is evident not only from the marginal note given to the section, but also from the words \"from the business of trading in such goods\", occurring in clauses (a) and (b) of sub-section (1) thereof. Tax is undoubtedly on the business income. For the sake of convenience and also having regard to the difficulty in making a normal assessment in the case of such assesses, it adopts the purchase price as the measure of tax. As laid done by several decisions of the Federal court and the supreme court in case arising under central excise laws, \"while the levy in our country has the status of a constitutional concept, the point of collection is located where the statute declares it will be\" (see paragraph 14 in Union of India v. Bombay Tyre International Ltd. [1986] 59 Comp Cas 460). The following observations in the said decision are apposite (at p. 474);", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-34", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "\"Section 3 of the Central Excises and salt Act provides for the levy of the duty of excise. It creates the charge, and defines the nature or the charge. That it is a levy on excisable goods, produced or manufactured in India, is mentioned in terms in the section Itself. Section 4 of the Act provides the measure by reference to which the charge is to be levied. The duty of excise is chargeable with reference to the value of the excissable goods and the value is defined in express terms by that section. It has long been recognized that the measure employed for assessing a tax must not be confused with the nature of the tax. In Ralla Ram v. Province of East Punjab [1948] FCR 207; AIR 1949 FC 81, the Federal court held that a tax on buildings under section 3 of the Punjab Urban Immovable Property Tax Act, 1940, measured by a percentage of the annual value of such building remained a tax on building under that Act even though the measure of annual value of a building also adopted as a measure for determining income from property under the Income-tax Act. It was pointed out that although the same standard was adopted as a measure for the two levies the levies remained separate and distinct imposts by virtue of their nature, In other words, the measure adopted could not be identified with the nature of the Tax. the distinction was observed by a special Bench of the Patna High Court in Atma Ram Budhia v, state of Bihar, , where a tax on passengers and goods was assessed as a rate on the fares and friehts payable by the owners of the motor vehicles. Atma Ram Budhiya AIR 1952 was referred to with approval by this court in Sainik Motors v. State of Rajasthan . This court, in the case repelled the contention that the levy was a though the measure of the tax is furnished by", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-35", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "the case repelled the contention that the levy was a though the measure of the tax is furnished by the fairs and freights, it does not cease to be a tx on a passengers and goods. The points considered by this court again in D. G. Gouse and Co. (Agents) P. Ltd. v. State of Kerala where reference was made to the measure adopted for the purpose of the levy tax of in building under the Kerala Building Tax Act. The court examined the different modes available to the Legislature for measuring the levy, and upheld the action of the Legislature in linking the levy with the annual value of the building and prescribing a the uniform formula for determining its capital value and for a calculating the tax. In the course of its judgment the court cited with approval a passage from Seervai's Constitutional Law of India, second Edition, Vol. 2, at page 1258 :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-36", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "'Another principle for reconciling apparently conflicting tax entries follows from the fact that a tax has two elements : the person thing or activity on which the tax is imposed and the amount of the tax. The amount may be measured in many ways; but decided cases establish a clear distinction between the subject-matter of a tax and the standard by which the amount of tax is measured. These two elements are described as the subject of a tax and the measure of a tax.' It is, therefore, clear that the levy of a tax is defined by its nature while the measure of the tax may be assessed by its own standard. It is a true that the standard adopted as the measure of the levy may indicate the nature of the tax but it does not necessarily determine is. The relationship was aptly expressed by the Privy Council in RE : A Reference under the Government of Ireland Act, 1920 and Section 3 of the Finance Act (Northern Ireland), 1934 [1936] AC 352, when it said :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-37", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "'........ It is the essential characteristics of the particular tax charged that is to be regarded and the nature the for machinery - often complicated - by which the tax is to be assessed is not of assistance, except in so far as it any throw light not the general character of the tax.' ....... It is apparent, therefore, that when a enacting a measure to serve as a standard for assessing the levy the Legislature need not contour it along lines which spell out the character of the levy itself. Viewed from this standpoint it is not possible to accept the contention that because the levy of excise is a levy on goods manufactured or produced the value of an accessible article must be limited to the manufacturing cost plus the manufacturing profit we are of opinion that a broader-based a standard of reference may be adopted for the purpose of determining the measure of the levy. Any standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis of for assessing the measure of the levy. In our opinion the original section 4 and the new section 4 of the Central Excises and salts act satisfy this test..............\"  \n Applying the principle aforsaid, we are of the opinion that merely because profits and gains are assessed adopting the purchases price as the measure the tax imposed does not cease to be a tax on income. It is none the less an assessment of the profits and gains of the business carried on by the assessee in the specified goods and cannot be termed as a tax on purchased of goods.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-38", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Now, coming to the other aspect of the argument no such problem can arise in the case of alcoholic liquors other than Indian-made foreign liquors). The goods purchased in an year have to be sold in that year only. All the unsold goods have to be surrendered to the Government at he end of the year. Of course, in the case of timber and other forts produce such a situation may arise. But in our opinion the date or year of sale is irrelevant - whether it is alcoholic liquors timebr or other forts produce - for the purpose money is permissible for levying income-tax it follows that tax will be levied in the years the goods are purchased. But that as it may this aspect becomes academic in view of our conclusion (being recorded hereinafter) that section 44AC does not bar a regular assessment of the business income of the assessee in accordance with sections 28 to 43C. There is no violation of the principle that teach year of assessment is a unit by itself. The only departure is that the tax collected under section 206C(1) at the time of the purchased of goods will be given credit for in the year in which those goods are sold. Until such sale the tax collected will be held over. This is what sub-section (4) of section 206C says and we seen on illegality insaying so. It must be remembered that this is an anti-evasion measure. It is a specific provision designed to meet a secifical situations. So long as the assessee trades in or does business in the goods purchased, tax can be levied and in the circumstances it will be levied in the year in which the goods are sold. It is on this principle that section 16(3)(a)(i) and (ii) section 12(1B) and section 23A of the Income-tax Act, 1922, were sustained in Balaji's case , and Baldev", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-39", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "the Income-tax Act, 1922, were sustained in Balaji's case , and Baldev Singh's case . The reasoning underlying the said judgment is equally relevant here and sustains section 44AC section 206C.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-40", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Whether section 44AC and section 206C violate Art. 14 and art. 19 (1) (g) : Article 14 : It is well sellted that while the application of aritcl 14 is not excluded in the case of tax laws, a large elbow-room ought to be conceded to the Legislature in the matter of classification, selection and rate of tax/. As explained by the Supreme Court in V. Venugopala Ravi Varma Rajah v. Union of India [1969] 74 ITR 49, the equal protection clause enshrined in article 14 is not an abstract proposition. Quite often laws are enacted with a view to solve specific problems or to achive define objectives buy specific remedies. |in such a situation, absolute quality or uniformity of treatment is impposible of achiuevemnt. \"Tax laws are aimed at dealing with complex problem of infinte variety necessitating adustment of several disparate elements. The court accordingly admit subject to and herence to the fundamental principle of the doctrine of equality a larger play to legislative discretion in the matter of classification. The power to classify may be exercised so as to and just the system of taxation in all proper and reasonable ways; the legislature may select persons rate for tax if the legislature does so reasonably. Protection if the equality case clauses does not predicate a mathematically precise or logically complete of sysmmetrical classification; it is not a condition of the guarantee of equal protection that all transactions properties object or person of the same genus must be affected by it or none at all. If the classification is rational the Legislature is free to chooses object of taxation, impose different rates, exempt classes of property to tax in different ways and adopt different modes of assessment. A taxing stature may contravenes article 14 of the Constitution if it seeks to impose on the same class of property, persons transaction or occupations similarly situate incidence of taxation which lead", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-41", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "impose on the same class of property, persons transaction or occupations similarly situate incidence of taxation which lead to obvious in equlaity. A taxing statue is not therefore exposed to attack not he ground of discrimination merely because different rates of taxation are perscribed fro different categories of persons, transactions occupations or objects.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-42", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "It is for the Legislature to determine the objects on which tax a shall be levied, a and the rates thereof. The courts will not strike down an act as denying the equal protection of laws merely because other object could have been but are not, taxed by the Legislature............\" This statement of law in our opinion encapsules the law on the subject. It is unnecessary to multiply the authorities.  \n Learned counsel for the petitioners, however, placed strong reliance upon the decision of the Supreme Courts in K. T. Moopil Nair v. State of Kerala, . Accroding to them the principle of the a said decision squarely governs the present case. It is, therefore, necessary to notice the facts and principle of this case in a little more detail. The Travancore-Cochin Land Tax Act, 1955, was enacted by the Kerala Legislature \"to provide for the levy of a low and unifrom rate of basic tax on all lands in the State of Travancore-Cochin\". Section 4 the charging section, read thus :  \n \"Subject to the provision of this Act, there shall be charged and levied in respect of a lands in the State, of whatever description and held under whatever tenure, a uniform rate of tax of to be called the basic tax.\"", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-43", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "The basic tax, which was prescribed at Rs. 2 per acre was payable on all lands nothwithstandffing any other law, contract, or agreement. Section 5A provided for a provisional assessment to be made later. The Act did not contain a provision for issuing notice or opportunity to he concerned landholder to make his submission before determining the tax. A uniform tax was imposed a on all lands. There was no provision for appeal. Indeed, there was no assessment of tax as such. The tax levied was payable irrespective of the quality of the land or its productive capacity and irrespective of the fact as to whether thee land yield any income or not. The petitioner who challenged the validity of the Act were governed by a Madras act which continued to govern them even after reorganization, until the impugned act come into force. The Madras act provided that the forests shall not be cut not the right in the forest produced sold, or otherwise alienated without the permission of the District Collector. A particular petitioner whose case was taken as representative of others, was deriving an income of Rs. 3,100 per year by lease of forest. The forest was assessed provisionally under section 5A of the impugned act to a tax of Rs. 50,000 per annum. Since it was na unsurveyed forest the District Collector conjectured the area of forest at 25,000 acres and on that bias determined the tax payable at Rs. 50,000. These petitioner's case was that he was being given permission to cut the forest only in instalments that this annual income was only Rs. 3,100, where as he was called upon to pay a tax of Rs. 50,000 per annum. It was also submitted that this forest had large areas of arid rocks, rivulets, a and gorges. The Supreme Court observed that ordinarily a tax on land or land revenue is assessed on the actual or potential", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-44", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "The Supreme Court observed that ordinarily a tax on land or land revenue is assessed on the actual or potential productivity of the land sought to be taxed, and that the tax has reference to the income actually made or which could have been made with due diligence. but the impugned Act, it pointe out, makes no such distinction. There may be sereval types of land; a particular alnd may be arid desertcapable of yielding an income by raising a crop after a dsiproportionately large investment of labor and capital. A third type of land yields just enough to pay for the incidenatla expenses labor charges and taxes, while the fourth type of land may be making large profit because it is every fertile and capable of yieding good crops. While the fourth category it a was pointed out, would easily be able to meet the burden of tax the third one might be just able to bear the tax burden. Because the tax is not paid the very land may be so, d for realizing the demand which would make the Act confiscator in nature. It was observed (at p. 558), \"there is no attempt at classification in the provisions of the Act............. It is one of those cases where the lack of classification creates inequality. It is, therefore, clearly hit by the prohibition to deny eqality before the law a contained in article 14 of the Constitution...............\". It was also observed that the act constitutes an unreasonable restriction upon the right to hold property, guaranteed by article 19(1)(f), a and being a disproportionate and unreasonable imposition was not saved by clauses (6) thereof.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-45", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "It is argued by learned counsel forth petitioners that section 44 A C suffers form the same vice as the Kerala act impugned in K. T. Moopil Nair's case . It is contended that a parson dealing in arrack may incur loses because of various reasons including competition illicit distillation and disturbance to law and order. Another person may make profits but it many be a small one and yet, another person may make a large the profit may be 20 %, 40 % or 60 %. There may be case where a person may be making even higher profit. Clubbing all the persons dealing in arrack all over the country into one class and determining their profit from the said business at 40 % is nothing but arbitrary, discriminatory and unreasonable. It is case where the absence of classification results in unequla treatment. It is pointed out that in the case of Khammam and Cuddapah districts for the excise years 1987-88, the Government had fixed both the purchased price as will as the selling price. While the purchased price was Rs. 35 per litre, the selling price was fixed at Rs. 38. The profit margin works out to less than 10 %. It is true that the selling price is not fixed for any of the districts for the current excise years 1987-88, nor is it fixed for any of the districts for the current excise year (1988-89), still, it is contended the determination of profit uniformly at 40 % is totally unreasonable and is confiscator in nature. Unable to bear the said additional burden, it is submitted, several contractors have already gone out of business. (The learned Government Pleader for excise too stated that during the current excise year, already about 10 % of the shops in the State have been resold on account of the inability of the original licensees to pay the rentals. He suggest that one", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-46", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "on account of the inability of the original licensees to pay the rentals. He suggest that one of the reasons for such large scale failure may be the provision contained in section 206 C). The grievance is that section 44 A C does not provide for a regular assessment, dispendsing sad it does, with all the provisions in sections 28 to 43 C. If an assessment is made according to law, it is argued the assessee can establish that his profits is very much less than 40 % or that he has actually suffered losses. Even if the said provisions are based upon the premise that these contractors are, what may be called 'fly-by-night' operators, not easy to locate, the provision contained in section 206 C is sufficient to nerve the purpose. Fifteen per cent. of the purchase price is collected in the case of arrack contractors. This amount would be lying with the Government. A regular assessment can always be made in the normal cores. It was not necessary it is argued to go further and make a harsh and confiscator provisions of the mature contained in section 44 A C.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-47", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Article 19 (1 (g); It is argued by the petitioners that they have a fundamental right to carry on the business - whether in arrack or in forts produce; at any ate the petitioners' fundamental right to trade in timber and other forest produce cannot be denied. The provision made in section 44 A C determining the profit of business in these goods arbitrarily at a particular percentage to thee purchased price of is wholly unreasonable. Even if it is assumed that the said provision a were conceived in the interest of public revenue and were designed to eradicate an evil (the evasion of tax by contracts dealing the in these goods) it is raged further that the avowed purpose is achieved by section 206 C and that section 44 A C is totally unwarranted and uncalled for. Having collected the tax in advance the Department can always made a regular assessment in accordance with the relevant provisions. The tax already collected would in a overwhelming majority of cases, satisfy the tax assessed. Only in a very few cases, probably, the tax assessed may be more than the tax already collected at source. Indeed, in many of the cases, the Department may be liable to refund the tax.  \n The law in this behalf's well-stated the celebrated case State of Madras v. V. G. Row, . The following observations of Patanjali Sastri C.J. have acquired the status of a classic statement (at page 200) :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-48", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "\"... the court should consider not only factors such as the duration and the extent of the restrictions, but also the circumstances under which and the manner in which their imposition has been athorised. It is important in this context to bear in mind that the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract, standard, or general pattern of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict. In evaluating such elusive factors and forming their own conception of what is reasonable, in all the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judges participating in the decision should pay an important part, and the limit to their interference with legislative judgment in such cases can only be dictated by their senses of responsibility and self-restraint and the sobering reflection that the Constitution if meant not only for people of their way of thinking but for all, and that the majority of the selected representatives of the people have, in authorising the imposition of the restrictions, considered them to be reasonable.\"", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-49", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "We find it difficult to say that the submissions of learned counsel for the petitioners based upon articles 14 and 19(1)(g) are without substance. Literally read, section 44Ac brings about a legislative assessment of the profits and gains of persons trading in specified goods. The normally applicable provisions, sections 28 to 43C, are dispensed with altogether. It is declared that the profits and gains of every person from the said business, irrespective of his circusmstances, volume of business,, finance, expenditure or other attendant matters, shall be deemed to be the specified percentage of the purchase price. All that remains to be done thereafter is to find out whether any of the deductions provided by Chapter VI-A are to be allowed and then make an assessment. We may agree with the respondents that the person trading in the specified goods form a class, inasmuch as they are difficult to trace once the contract period is over. We accept their submission that very often these contracts are taken in the names, of dummies, in facetious, names, or in the names of faceless person, or persons, of little means. We will also accept the respondents' submission that because of the above factors, the State was losing a good amount of revenue and the there was large scale evasion by these persons. We agree fully that this situation had to be remedied. Loss of revenue had to be plugged. But the remedy should be proportionate to the evil. It should be reasonable. It should not assume the character of a confiscatory measure. It would have been enought if section 206C had been enacted and it was provided that such collection shall be subject to a regular assessment of assessment of profits and gains of business as has been done by section 44AC. The percentages referred to in section 44AC (1) could have been indicated as merely explaining and justifying the level of collection in section 206C. Once the tax is collected, bases", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-50", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "and justifying the level of collection in section 206C. Once the tax is collected, bases upon the purchase price of the specified goods, it is really immaterial whether the business is carried on in the names of dummies, in fictitious names, or in the names of faceless persons, or persons of on means. The tax collected is already with the State. An assessment can be made in accordance with the provisions of law. If the tax assessed is more than the tax already collected, may be there is little likelihood of such collection; but, even with these provisions, the situation is the same. There is no reason behind saying that even where a person actually less profit than the specified one, or incurs loss,, even then his profits and gains should be arbitrarily fixed at 40% of the purchase price, or that he should not be allowed to establish his real income from the said business or trade. May be these persons do not maintain the books properly; but that is not an insuperable difficulty. If the books are not properly maintained, or are suspicious or unacceptable otherwise, they can away be rejected and a best judgment assessment made. The level or profits in such trade in a given area, region or State can always be kept in mind while making a best judgment assessment and /or while determining the truth or genuineness of accounts. The existence of some honest traders even in the specified good cannot be ruled out. It is in these circumstances that we called upon Sri. M. Suryanarayana Murthy, learned standing counsel appearing for the Union of India, to place before us the material on the basis of which the percentages referred to in the Bill and the various percentages referred to in the sections as enacted, are determined. This was done, inasmuch as, in the counter-affidavit filed by the Union of India, it was not explained on what basis the profits and gains of business in the specified goods were assessed at", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-51", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "it was not explained on what basis the profits and gains of business in the specified goods were assessed at 60% uniformly at the stage of the Bill, nor was it clear on what basis this percentage was altered to the several different percentages mentioned in section 44AC. It may be remembered that at the stage of the Bill, the percentage of profits and gains from the business was fixed at 60% of the purchase price and 20% of the purchase price was sought to be collected at the time of sale of these goods. The sections as enacted, however, prescribe different and lower percentages in both the sections. We also wanted to know on what basis the distinction between persons trading in arrack, persons trading in timber, persons, trading in other forest produce, and so on was made. In pursuance of our observation, learned standing counsel has placed before us certain material, to which we must now refer.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-52", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Before, however, we refer to the material, we may mention that the said material was produced before us along with a letter of the Commissioner of Income-tax, Andhra Pradesh-II, dated February 13, 1989, addressed to Sri. M. Suryanarayana Murthy, Advocate. The letter requested counsel to place the enclosed material before the court with a request not to quote them in our judgment, nor to reveal it in court. The ground upon which such a request was made was that they are \"part of the budget documents.\" It was stated that the said material was being furnished only to show that there was proper application of mind before the deemed rates of profit were prescribed. It was mentioned that a similar procedure was adopted in respect of the writs filed in the Kerala High Court and that the non'ble judges of the Kerala High Court had accepted this position and the procedure requested was followed. When this letter was brought to our notice, we intimated counsel that is may not be possible for us to accept the said request. If we are not be possible for us to accept the said request. If we not to refer to the said material in our judgment, there was no point in producing the said material. It is not enough that we are subjectively satisfied. It was also not brought to our notice as to in what manner the said request was acceded to by the Kerala High Court - except the statement in the letter to that effect. We, therefore, gave a choice to learned counsel either to place the material before us without such pre-condition or request or to withdraw the said material. After obtaining further instructions, Sri, M. Suryanarayana Murthy, placed before us another letter of the Commissioner of Income-tax dated February 14, 1989, agreeing to place the material before the High Court with the only request for not reading out the names of the person mentioned in the material, in court, nor to refer to", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-53", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "not reading out the names of the person mentioned in the material, in court, nor to refer to the names in the judgment. This restraint, it was stated, was imposed upon the Department by the provisions of section 138 of the Income-tax Act. We agreed to this course. We informed learned standing counsel that we would not disclose the names in the court, nor would we mention those names in the judgment. Instead of names, we would refer to them as A, B, C, D, and so on. Now, we may refer to the material.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-54", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "There annexures are furnished to us. Annexure-I mentions \"cases relating to country liquor\". Annexure-I is in two parts. The first part mentions the names of five assessee, whom we shall refer to us A, B, C, D, and E, respectively. A and B are from Madras. C is form Hyderabad; D from Vijayawada and E from Raipur (Madhya Pradesh). The following figures are given :  \n ------------------------------------------------------------------------\nSI.  Name and      Assessment Purchase     Income      Remarks\nNo.  address of    year                    assessed\n      the assessee\n------------------------------------------------------------------------\n                            Rs.              Rs.\n1         A         1984-85 13,05,039       6,07,980     The net profit\n                                                         works out to\n                                                          46% of the\n                                                          purchase\n                                                          price.\n2         B         1984-85 80,87,371       87,58,150\n3         C         1985-86  3,22,513        1,00,000    Assessed under\n                                                          section 143\n                                                          (1) at Rs.\n                                                        20,470. After\n                                                          search, disc\n                                                          losed income\n                                                        or Rs. 1,00,000\n                                                               . 31% of\n                                                           the purchase\n                                                           price.\n4        D   1985-86   74,52,925     37,97,219           44% of the\n                                                          purchase price\n5        E   1984-85  1,28,25,000   55,88,830           The assessed\n                                                          figure of Rs.\n                                                          55,88,830 has\n                                                          been accepted\n                                                          by the\n                                                          assessee.\n                                                          Net   profit\n                                                          is  43%   of\n                                                          the licence", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-55", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Net   profit\n                                                          is  43%   of\n                                                          the licence\n                                                          fees. Norma\n                                                          lly, amount\n                                                          of  purchase\n                                                          is less than\n                                                          the license\n                                                          fees. Perc\n                                                          entage    of\n                                                          profit\n                                                          will be\n                                                          therefore\n                                                          higher  than\n                                                         43%.\n------------------------------------------------------------------------", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-56", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Section 2 of annexure-I mentions three cases where undisclosed profits\nhave been surrendered/ detected. These three persons may be referred  to\nas F,G and H. Their particulars are as follows : \n   ------------------------------------------------------------------------\nSl.       Name of        Concealment              Remarks\nNo.       assessee       detected\n------------------------------------------------------------------------\nRs.\n1            F           1,78,56,000        Addition of Rs. 1,67,80,000\n                                            has been accepted by the\n                                            assessee.\n2            G             17,98,950         Commissioner  of\n                                             Income-tax (Appeals) has c                                                     onfirmed the addition.                                                          (1987-88)                          3            H           15,97,030         These additions are in two\n                                             different assessment\n                                             years.\n------------------------------------------------------------------------> \n \n\n Annexure-II mentions three cases relating to timber obtained  by  any\nmode  other  than under a forest lease. We shall refer  to  these  three\nassessee as I,J and K. Their particulars are as follows : \n   ------------------------------------------------------------------------\nSl.       Name and       Assessment  Purchase     Income      Remarks\nNo.       address of     year        price        assessed\nthe assessee\n---------------------------------------------------------------------\n                           Rs.        Rs.\n1           I            1987-88   3,17,450    91,270      Net\n                                                             profit\n                                                             28.75%\n                                                             of\n                                                             purchases.\n2          J             1986-87   22,17,741   3,38,019     Net profit\n                                                             15.24% of\n                                                             purchases.\n3          K             1985-86    15,86,061  1,92,270     Net\n                                                             profit\n                                              12.12% of\n                                                            purchase\n                                                             price\n------------------------------------------------------------------------", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-57", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Annexure-III mentions three cases relating to \"any other forest produce not being timber\". We shall refer to three assessee as L, M and N. Their particulars are as follows :  \n   ------------------------------------------------------------------------\nSl.          Name and      Assessment   Purchase   Income      Remarks\nNo.          address of    year         price      assessed\nthe assessee\n------------------------------------------------------------------------\n1              L          1983-84      14,26,360  10,06,887   Net\n                                                              profit\n                                                              comes  to\n                                                              70% of\n                                                              purchase\n                                               price.\n                                                          The assessee's\n                                                             business is\n                                                             purchase of\n                                                          tendu leaves\n                                                            from\n                                                             Madhya\n                                                             Pradesh and\n                                                             Maharashtra\n                                                             and sale\n                                                            there of.\n2           M             1987-88     9,15,700    3,81,481    Net\n                                                              profit is\n                                                              41% of\n                                                              purchase\n                                                              price.\n3           N             1987-88    11,72,181    3,59,458    Net\n                                                              profits\n                                                              is 30% of\n                                                              purchase.\n------------------------------------------------------------------------", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-58", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "This is all the material placed before us in response to our query. We are afraid, the material placed before us is too support a measure like section 44AC. Picking out eight cases of liquor contractors from all over the country, that too of major contractors, cannot be said to be a sufficient basis for such a harsh and unusual provisions. We are aware that we are not dealing with an executive act, but with a parliamentary enactment. We are equally aware of the limitations of this court. But the fact yet remains that we must be satisfied about the reasonableness of the measure - and this can be done only by placing the relevant material before us upon which the percentages referred to in section 44AC were fixed. One would have expected a more detailed enquiry and verification. Conditions may vary from State to State; indeed, even from one area of the State to another Even in the cases referred to in annexure-I, the net profit works out to 46% in the case of assessee 'C', 44% in the case of assessee 'D' and 43% in the case of assessee 'E'. The material hardly shows that all these persons made uniform profits. The material placed before us by the petitioners discloses that for the excise year 1987-88, the Government had fixed, in the case of two districts, Khammam and Cuddapah, not only the purchases price, but also the minimum selling price. In a case where the purchase price was Rs. 35, the minimum selling price was fixed at Rs. 38. Even this margin of Rs. 3 a cannot be said to be the net profit, it is only the gross profit. Arrack licences are given by auction or tender, at the case may be Particularly, for the current excise year, it is brought to our notice, the shops were not auctioned groupwise as was being done in the privious years.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-59", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "notice, the shops were not auctioned groupwise as was being done in the privious years. All the shops are stated to have been sold individual-shop-wise only. This was done with a view to eliminate and reduce the influence of big contractors, and to encourage the small dealers. Every shop was sold as a single shop. It is stated that this method of auctioning has resulted in a substantial accretion to the excise revenue of the State for this year. Can it indeed their number may run into a couple of lakhs - uniformly make profit at 40% or thereabout ? There may be some who may make profit at that rate; but is is difficult to believe that all of them would be earning at the rate of 40% or near about. If there were material to show that the profits of these persons generally range between, say, 35% to 45% or even 30% to 50% the fixation at 40% could have been said to be reasonable. Firstly, there is no adequate verification; secondly, even the material placed before us show that the profit ranges between 31% and 110% in the case of arrack. In the case of purchase of timber, other than under a forest lease, only three cases are looked into. Here the profits range from 12% to 28%; (Section 44AC fixes the profits in such a case at 15%). In the case of forest produce other than timber again only three cases are taken, and the profits range from 30% to 70% (Section 44AC fixes the profits in this category at 35%). It is true that none of the petitioners have disclosed their precise profits for the preceding year, if any. But, in our opinion, discrimination is writ large on the very fact of section 44AC. In any event, we have the material relating to excise year 1987-88 for two of the districts in", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-60", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "we have the material relating to excise year 1987-88 for two of the districts in this State, i.e., Cuddapah and Khammam, where the selling price was fixed at Rs. 3 higher than the purchase price, i.e., Rs. 38 and Rs. 35, respectively, which works out to less than 10% and that too gross profit. In our opinion, these facts bring these cases squarely within the principle of the decision in K. T. Moopil Nair, . We are also of the opinion that the imposition is likely to be characterized as disproportionate and, therefore, an unreasonable restriction upon the fundamental right guaranteed by article 19 (1) (g).", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-61", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "In such a situation we are left with the two options. One is to strike down section 44 A C and the other is to read it down t make it consistent with the guarantees in articles 14 and 19 (1) (g). We have considered the pros and cons of both courses and have cone to the conclusion, keeping in view the overall object underlying the provisions and the language in sub-section (4) of section 206 C, that it would serve the public interest more and further the intendment of Parliament if we read down the provision of section 44 A C instead of striking it down. A syndicated hereinbefore, section 206 C serves the purpose underlying these provisions. once the tax is collected the contractor cannot run away probably, only in case where the profit is far higher than 40 % would he make himself scarce. In all other case, he would come to the Department for an assessment of his income and the re is on reason why a regular assessment should not made in his cases. In others words we would read section 44 A C as on adjunct to and as explanatory to section 206 C. On this construction, section 44 A C does not dispense with sections 28 to 43 C absolutely. The non obstante clause in section 44 A C (1), \"notwithstanding anything to the contrary contained in section 28 to 43 C\" would be confined to the limited purpose of sustaining the deductions provided for in sections 206 C. The level of profits and gains would be relevant only for explaining and juistitying the level of deductions provided for in section 206 C. Collection will be made at the rates specified in section 206 C and then a regular assessment will be be made like in the case of any other assessee. So far as the percentages of collection at source mentioned in section 206 C are concerned we are of the opinion that they cannot be said to be unreasonable or excessive since according", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-62", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "C are concerned we are of the opinion that they cannot be said to be unreasonable or excessive since according to our construction, they would be only tentative collections, subject, to a final assessment. In such a situation, the reasoning given by this court in CIT v. Superintending Engineer would squarely balance would be refunded to the assessee. The excess collection, if any in such a case would be only temporary and for a short period, and would be refunded.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-63", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "We may mention that the theory of reading down is a rule of interpretation resorted to be courts where a provisions read literally, seems to offend a fundamental right or falls outside the competence of the particular Legislature. This was resorted to as far back as 1941 in In re Hindu Women's Right to Property Act, AIR 1941 FC 72. The expression \"property\" we capable of taking in agricultural lands a s will in which case it would trench a upon the field reserved or Provincial Legislature Exclusively (List II). The court referred to the presumption that a legislature must be presumed to be aware of its limitations and must also be attributed with an intention not to overstep its limits, and held accordingly that the act was never intended to and did not in fact apply to agriculatural lands. In All Saints' High School v. Govt. of A. P., , certain provisions of the A. P. Recongnised Private Educational Institution Control Act, 1975 were challenged as violating article 30. Dealing with the challenge, Kailasam J. (majority opinion) observed (at p. 1083) :  \n \"It is a well settled rule that in interpreting the provisions of a statute, the court will presume that the legislation was intended to be intra varies and also reasonable. The rule followed is that he section ought to be interpreted consistent with the presumption which imputes to the Legislature an intention of limiting the direct direct operation of its enactment to the extent that is permissible. Marwell on the Interpretation of Statutes, Twelfth Edition, p. 109 under the caption \"Restriction of Operation\" States :-", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-64", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "'Sometimes to keep the / Act within the limited of its scope and not to disturb the existing law beyond what he object requires, it is constured as operative between certain person, or in certain circumstance, or for certain proposes only, even though in language expresses on such circumscription of the field of operation.' ............ According to Holmes J. in Towne v. Eigner [1971] 245 US 418 ; 62 L Ed. 372, 376, a word is not crystal, transparent and unchanged; it is the skin of living though and may vary a greatly in colour and content accroding to the circumstances and the time in which it is used. Gwyer J. in Central Provinces and Berar Act [1939] FCR 18 at p. 42 held :  \n 'A grant of the power in general terms, standing by itself, would no doubt be construed in the wider sense; but it may be qualified by other express provisions in the same enactment, by the implication of the context, and even by the considerations arising out of what appears to be the general scheme of the Act.' To the same effect are the observation of this court in Kedar Nath Singh v. State of Bihar [1962] Supp (2) SCR 769 :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-65", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "'It is well settled that in interperting an anactment the court should have regard not merely to the literal manning of the words used, but also take into consideration the antecedent history of the legislation, its purpose and the mischief it seeks to suppress. (Bengal Immunity Co. Ltd. v. State of Bihar and R. M. D. Chamarbaugwalla v. Union of India [1975] SCR 930 cited with approval).' This court has, in sereval cases, adopted the principle of reading sown the provision of the statute. The reading down of a provision of a statute puts into operation the principle that so far as it is reasonable possible to do so, the legislation should be constured as being within tits power. It is has the principle effect that where an Act is expressed in language of a generality which makes it capable, if read literally, of applying to matters beyond the relevant legislative power, the court will construe it in a more limited a 'sense so as to deep it within power.\"  \n To the same effect are the observation of Krihna lYER J. Bhim Singhji v. Union of India :  \n \".............. reading down meaning of words with loses lexical amplitude is permissible as part of the judicial process. To sustain of a law by interpretation is the rule. To be trigger-happy in shooting at sight every suspect law is judicial legicide. Court can and must intrepret word and read their meaning so that public good is promoted and power misuse is interdicted. As Lord-Denning said : 'A judge should not be a servant of the word used. He should not be a mere mechanic in the power house of semantics..................\"", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-66", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "This rule of reading down was applied to ataxing statute in CST v. Radhakishan . We a recongnise at the same time that this rule cannot be employed to sustain a patently void provision.  \n On this aspect, we a may as well refer to the words \"in the assessment made under this Act\" sub-section (4) of section 206C. These words show that an assessment under the Act is still to be made even where tax is collected under section 206C. This in our opinion, is a strong indication suppoting our construction of section 44AC.  \n At one stage, some significance was sought to be read into the wording of the non obstancte clause in section 44AC (1). While in some sections preceding section 44 AC, the non obstance clause reads \"notwithstanding anything contained in any other provisions of this Act\" (see sections 43A and 43B) the non obstance clause insection 44AC (1) and certain other sections (see sections 44B, 44BB, and 44C) reads \"notwithstanding anything to the contrary contained in section 28 to 43C\". However on a fuller consideration, we find it difficult to deduce any significance therefrom relevant to our purpose.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-67", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "For the above reasons, we uphold the validity of section 206C. We also hold that section 44 A C is a valid piece of legislation, read in the manner indicated by us. Section 44 A C is not to be read as an independent provisions but as an adjunet to and as explanotrory to section 206 C. It does not dispense with a regular assessment altogether. After the tax is collect in the manner provided by section 206 C, a regular assessment will be made where the profits and gains of business in specified goods will be ascertained in accordance with sections 28 to 43 C.  \n Meaning of the expression \"Purchase price\" :  \n This question becomes relevant only in the case of arrack. So far as other specified goods are concerned, there is no room for any doubt about the meaning of the expression \"purchase price\"; it means the price at which timber or any forest produce is purchased. Indeed, in the case of timber obtained under a forest lease, the price paid for obtaining the said right is also expressly treated as purchase price. Now the controversy arises this way; Until the previous excise year 1987-88, these licenses in the state of Andhra Pradesh were auctioned in public. Before putting the shop or group of shops to auction, the minimum a quota of arrack which the licensee will have to lift during that year, was specified. Even if he failed to lift a part of the quota or whole of the quota he would still be liable to pay the issue price of the said minimum guaranteed quota. The person who offered to pay the highest rental for the month / year was given the license.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-68", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "There was also a small license fee. In short, the consideration comprised three components viz : (i) the annual rental. (ii) the issue price of the MGQ, and (iii) the license fee. However for the fist time a different system was tried out in tow districts for the previous excise year (1987-88). In Khammam and Cuddapah districts, for the said excise year, the licenses of shop were auctioned to the person who offerd to purchased the highest quantity of arrack of the year. But he had to purchase arrack at a price which was far higher than the issue price in the case of other districts. While the issue price in the case of other districts was RS. 8.50, the price of arrack in these districts was 30 or Rs. 35, as the case may be. |Now this figure of Rs. 30 or RS. 35, wa arrived at by aggrgatting the three previous years' rental and adding the same to the price of liquor. In short, though devised differently in effect the price of arrack in the case of the said two districts also took in the rental component. So far as the current excise year (1988-89) is concerned an altogether different system had been followed. The shops have been auctioned individaully and licenses granted to person who offered to purchased the highest quantity of arrack fro the shop the year. The issue price of arrack is fixed at Rs. 8.50 per liter. But, in addition to purchasing the quantity agreed to be purchased by him, he has also got to pay the privilege fee every month. This privilege fee is determined on the basis of the aggregate of rentals fetched for the shop for the previous three years. A small increase is effected upon the said increase and the privilege fee is fixed per litre again. There is also license fee in addition thereto.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-69", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "and the privilege fee is fixed per litre again. There is also license fee in addition thereto. It would thus be evident that the system remains the same in substance. Previously; the auction was in terms of rental and now it is in terms of the quantity of arrck. But the components remain the a same,. though under a different name.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-70", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "The contention of counsel forth petitioner is that the expression 'purchase price' means only the issue price and said not include the privilege fee or license fee. We find it difficult to agree. It is well settled that t' all right in regard to manufacture and sale of intoxicants vest in the State. It is open to the State to part with those right fro a consideration. The consideration for parting with the privilege of the State is neither excise duty nor license fee, but it is the price of the privilege.............. Thus reading section 17 and 23 the A. PO. Excise Act, together with the A P Excise (Lease of Right to Sell Liquor in Retail) Rules 1969, and the A P Excise (Retail Vend Special Conditions of Licensees) Rules the picture which emerges is that the privilege of selling liquor which includes the lease of the shop for an area and the license to sell liquor therein may be granted by the State by Public auction, subject to (i) payment of rental being the highest bid at the auction (it is to be noted here that rental is the rent payable in consideration of grant of lease for the said of liquor, but it is not the sole or exclusive consideration for the lease); (ii) the requirment that he licensee shall purchase arrack at the issue price; and (iii) the further requirements that the licensee shall purchase the minimum guaranteed quantity of arrack which he has to make good in cases of shortfall. The consideration for the grant of the privilege to sell liquor is not merely the rental to be paid by the lesses but also the issue price of arrck supplied, or treated a supplied in case of a shortfall which also to be paid by the lessee/licensee \"(vide paragraph 8 in the decision of Supreme Court in State of A. P. v. Y. Prabhakar Reddy ). We are of the opinion that the expression\" purchase price' occurring in section", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-71", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Reddy ). We are of the opinion that the expression\" purchase price' occurring in section 44AC and 206C should be understood in its ordinary and natural sense, uninfluenced by the particular system in force in a given state and / or a in a given year. In a given state, the excise revenue may be collected in a particular manner and in a different, manner in another state. The expression \"purchase price' is not defend in these two sections or in the Act. The said expression means nothing but what is referred to a consideration for the grant of the privilege to sell liquor in the decision of the supreme court aforesaid. The present system of deriving the excise revenue may be changed fro the next year. Indeed, for the previous excise year, two for districts in the state, the system was altogether different. There was one single integrated price fro arrack i.e., RS. 30 or Rs. 35 per litre. Now how can it be said that while the purchase price in the case of Khammam and Cuddapah districts for the excise year 1987-88 is Rs. 30 or Rs. 35 per litre, as the case may be, in case of all other districts it is Rs. 8.50 ? Learned standing counsel for the Revenue, appearing for the Union of India who supported the stand of the petitioner in this behalf could not explain this inconsistency and illogicality in the stand taken by the Department. (As we shall presently point out, the Income-tax Department is supporting the petitioners in this behalf). If \"purchased price\" means only the issue price then it should be equally so in the case of Khammam and Cuddapah districts for the excise year 1987-88. We are of the opinion that the expressions used or method \"purchased price\" should not depend upon the expression used or method devised for raising excise revenue", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-72", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "\"purchased price\" should not depend upon the expression used or method devised for raising excise revenue by a State Government from time to time. These sections are meant not only for Andhar Pradesh, but for the entire country. The expression cannot be understood in a different manner in each state. having regard to the excise revenue deriving system in force in that State. It must be understood in a uniform sense and the at can be done only by holding that purchase price means the consideration for the grant of privilege to sell liquor, which consideration in the State today comprises of three components namely, (i) issue price, (ii) privilege fee / annual rental and (iii) license fee. But, we are put in a strange position where both the petitioners and the respondents are at one in saying that purchased price in the case of arrack means the issue price only. ( Issue price includes cost price, excise duty and other inidental charges and is notified by the Government from time to time). A clarification issued by the Central Board of Direct Taxes, Communicated by the Commissioner of Income-tax to the petitioners, is placed before us, which reads as follows :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-73", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "\"GOVERNMENT OF INDIA OFFICE OF THE CHIEF COMMISSIONER OF INCOME-TAX, ANDHRA PRADESH, HYDERABAD. \n Ref. No. CC/LC(Tech)/27(2)/88-89d/-21-9-1988. \n To The Secretary, Andhra Pradesh Arrack Contractors' Association, Hyderabad, 3-6-369 / A 71, Himayat Nagar, Hyderabad-500 029. \n Sir, Sub : Collection of income-tax under section 206 C. \n Kindly refer to your letter dated 19-8-1988 addressed to the Chief Commissioner of Income-tax, Andhra Pradesh, Hyderabad. \n I have been directed to inform you that the provisions of section 206 C would be applicable only to the issue price and for this purpose, the privilege fee is not to be included. \n Yours faithfully, sd./-\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \n(P. Agarwal), Deputy Commissioner of Income-tax (Tech), O/o Chief Commissioner of Income-tax, Andhra Pradesh, Hyderabad........\"  \n This letter, it may be remembered, was written in continuation of the letter dated August 19, 1988, wherein the Chief Commissioner of Income-tax stated that he query put by the Secretary, A.P. Arrack Contractors' Association has been referred to the Central Board of Direct Taxes. Evidently, the clarification contained in the letter dated September 21, 1988, was supplied after receiving the clarification form the Central Board of Direct Taxes. Learned standing counsel for the Revenue says that the respondents are standing by the said clarification.  \n Even in the counter-affidavit filed in W.P. No. 11636 of 1988 (sworn to by Sri M. V. R. Prasad, Commissioner of \\Income-tax Andhra Pradesh-II), the following statement occurs :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-74", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "\"In the Press Not issued by the Central Board of Direct Taxes it has been clarified that the purchase price will be the cost of commodity inculsive of any excise duty, Sales tax or any other levy, whatever its nomenclature may be, paid by the buyer for obtaining the goods. In case of buyer of liquor the purchase price will also include the cost of bottle, label,, sealing charges, etc., However the purchase price will not inculde any consideration for the grant of exclusive privilege to vend from a particular point or points and any freight or transport charges. In the instant case, the petitioner has through auction, acquired the right to vend form a particular point or points and paid a certain amount as rent. The amounts paid as rental charges does not contain the element of profits' and also will not be taken into account for the purpose of determination of profits under section 44 A C. However any amount paid to acquire the right to receive a minimum guaranteed quantity fixed by the Excise Commissioner and guaranteed by the auction-purchaser to be lifted by him will have the element of profit embedded in it, and so will be taken into account for the purpose of determination of profits in accordance with the provisions of section 44 A.C.\"  \n So far as the Government of Andhra Pradesh in the Excise Department is concerned, they say that they are merely agents to collect the tax on behalf of the Income-tax Departments and that they will collect such amounts as they are asked to do.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-75", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Though it is not clear form the material placed before us as to whether the clarification issued by the Central Board of Direct Taxes can be treated as an order,, instruction or direction, within the meaning of section 119 of the Income-tax Act, we direct that so long as the said clarification issued by the Central Board of Direct Taxes stands the purchased price in the case of arrack shall be taken into account in determining the purchase price. We make it clear that we are giving the is direction not because we are satisfied about the correctness of the interpretation placed upon the expression 'purchase price' by the Central Board of Direct Taxes or by parties before us but because of the clarification issued by the Central Board of Direst Taxes and also because of the contesting parties are at one that the clarification issued by the Central Board of Direct Taxes should be followed.  \n we must also a say that in the case of Khammmam and Cuddapah districts fro the excise year 1987-88, purchase price shall be taken to be the 'issued price' as in the case of other districts for the said year. This direction is necessary to ensure equal treatment to similarly laced persons. Indeed, the respondent are guilty of inconsistency when they say that while in the case of other districts, \"purchase price\" means only the issue price in the case of khammama Cuddapah districts for the said excise year it means the total sale price which includes issue price and rentals.  \n The extent of collection at sources under section 206 C :", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-76", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "Section 206 C says that the seller of specified goods shall at the time of recipe of the purchase price from the purchaser collect, in addition to purchase price, a sum equal to the percentage specified in the corresponding entry in column 3 of the Table by way of income-tax For example in the case of alcoholic liquor (for human consumption) (other than Indian made foreign liquor), the collection at source is specified at 15 %. The contention of the petitioners is that this 15 % is of the amount specified as profit and gains of the said business in section 44 A C. To be more precise, the collection at source, according to the petitioners ought to be 15 % of the 40 % of the purchase price in the case of arrack. On the other hand the contention of the respondents is that the collection at source is 15 % of the purchase price. Though at he stage of interim orders we were inmpressed by the argument of the petitioner's we are of the opinion on a fuller consideration that the construction placed by the respondents is the correct one. The relevant words in section 206 C (1) are \"collect form the buyer of any goods of the nature specified in column 2 of the Table below. a sum equal to the percentage specified in the corresponding entry in column 3 of the said Table of such amount as income-tax on income comprised therein.\" The words underlined by us are relied upon by the petitioner to say that 15 % referred to in column 3 of the Table is 15% of the income comprised in the purchase price. We are not prepared to agree In our opinion the words \"on income comprised therein\" are merely descriptive in nature and do not convey the meaning sought to be ascribed to them by the petitioners. We may mention that identical words occur in the other provisions as well, and attributing such a restricted meaning to them would make those provisions unworkable. By way of illustration, we", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-77", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "such a restricted meaning to them would make those provisions unworkable. By way of illustration, we may refer to section 194 C. Sub-section (1) of section 194 C in so far as it is relevant reads, : \"any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work............ in pursuance of a contract ........ shall at the time of credit of such sum of the account of the contractor or at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier deduct an amount equal to 2 % of such sum as income-tax on income comprised therein...............\" It would be evident that at the time of making payments to the contractor the person, paying the sum cannot say or visualise how much of the said sum constitutes income in the hands of the contractor. it is indeed impossible for him to say so, it is thus clear that the said words are merely descriptive in nature. Moreover, the percentages referred to in section 206 C (1) would be intelligible only of they are related to the purchase price. If they are related to the percentage of profits and gains specified in sections 44 A C, the level of collection of at source provided by section 206 C (1) would be becomes practically meaningless. the collection would be at such a low level that it would not serve the object underlying the provision. We are, therefore, of the opinion the that percentages mentioned in column 3 and of the Table in sub-section (1) of section 206 C are relatable to the purchase price and not to the income component of the purchase price.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-78", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "We may now summarise our conclusions :  \n (i) Parliament was perfectly competent to enact sections 44 A C and 206 C;  \n (ii) section 206 C does not suffer form any a constitutional infirmity and is perfectly valid;  \n (iii) section 44 A C is not an independents provision It does not dispense with a regular assessment inaccordancde with the provisions of the Income-tax Act, Section 44 A C is merely an adjunt to and explains the provisions in section 206 C. A regular assessment has to be made in respect of an assessee dealing in specified goods in accordance with section 28 to 43 C. Read down in this manner, section 44 A C also does not suffer from any constitutional infirmity;  \n (iv) It is competent for parliament to adopt the purchase price as a measure for determining the income-tax. In this case the purchase price is taken as a measure for the limited purpose of determining the quantum of tax to be collected under section 206 C. Tax collected on specified goods will be given credit for in the year in which those goods are sold;  \n (v) In view of the clarification the Central Board of Direct Taxes; communicated by the Chief Commissioner of Income-tax, Andhra Pradesh, Hyderabad, and also in view of the concession made by the income-tax Department, it is directed that the expression \"purchase price 'in section 44 A C and sectarian 206 C shall mean, in the state of Andhra Pradesh in respect of arrack, only the 'issue price\" as understood in the Andhra Pradesh Excise act and the rules made the under now, in force in this state. The true meaning and content of the expression\" purchase price' is, however, different, as explained hereinbefore;", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "f9d7282d0aa7-79", "Titles": "A. Sanyasi Rao And Anr. vs Government Of Andhra Pradesh And ... on 7 March, 1989", "text": "(vi) The collection at source provided by section 206 C is relatable to the purchase price and not to the income component of the purchase price.   \n The wirt petitioners are, accordingly, disposed of in the above terms. There shall be no order is as to costs. Ineach wirt petition, advocate's fee is fixed at Rs. 75 for learned standing counsel for the Revenue and at Rs. 50 fro the learned Government Pleader for Excise.  \n Learned counsel for the petitioners makes an oral request for grant of leave to appeal tot the supreme court undrsrticle 132 of the constitution on the question of competence of parliament to encat the provision in questions. Since these case involve a substantial question of law as to intrepertation of the constitution and also because it is stated that identical matters are pending before the supreme court. we are inclined to grant a certificate as prayed for. A certificate shall accordingly issued under article 132 of the Constitution.  \n Learned standing counsel for the Revenue also makes as similar request, aggrived with the construction placed by us on section 44 A C. For the reasons recorded hereinabovee. a certificated shall also issue to the Revenue.", "source": "https://indiankanoon.org/doc/171368/"}
+{"id": "e35d88e3fb10-0", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "ORDER", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-1", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "1. The Government of Andhra pradesh introduced a scheme to supply rice to poorer sections of the society, at the rate of Rs. 2/- per Kilogram and in the interest of that scheme, issued certain orders restricting the export of rice outside the state and also calling upon the rice-millers and dealers in the state to sell a certain quantity of foodgrains with them, to the Andhra pradesh state civil supplies corporation. These orders are questioned in these writ pwtitions. The points raised in the batch of writ petitions are common. Though the prayer in the writ petitions calls in question the valdiity of Cls. 4-A 4-B and 4-c of the Andhra pradesh Rice procurement (Levy) and restriction of sale order, 1967 (hereinafter referred to as the \"Levy order), the said aspect was not urged before me. The arguments centred roung the interpretation of the various clauses, and the validity of the Government orders. In the light of the said Rules. For the sake of convenience I will set out the facts in W.P. No. 5445/83.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-2", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "2. The petitioners in W.P. No. 5445 of 1983 are licensed foodgrain dealers millers in krishna district who purchase paddy and mill the same in their mills. Under Cl. 3 of the levy order, they are obliged to supply the specified percentage of rice. So derived by them by way of levy to the state at the notified price. Currently, the levy quota is 50% for all the districts in the state the petitioners say that the remaining 50% they are entitled to sell whereever they like and at whatever price they can get and that no restriction can be placed by the state thereon. Their case is that for the Kharif season 1982-83, they have satisfied the levy quota targets fixed for them and that when they applied for permits for transport and sale of the remaining 50% of rice, the appropriate authorities have been denying and deliberately delaying the issuance of permits purporting to Act under the instructions of the Government impugned herein which permit export of only half of levy-free rice outside the state and whih instructions provide further that permits for sale of rice outside the state shall be issued only after the rice meant for sale inside the state is released. It is submitted that the petitioners are entitled in law to sell the entire levy -free rice (remaining 50%) outside the state if they so wish and that as and when they apply for such permits, the respondents are bound to issue the same. It is submitted that the petitioners cannot be compelled to sell the whole of it or any portion thereof, within the state. It is complained that under the impugned orders to which I shall presently refer - the Government has been compelling them to sell half the levy-free rice within the state. And following the export of only the other half without any authority of law. It is complained further that they are being compelled to sell the levyfree rice to the A.P.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-3", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "It is complained further that they are being compelled to sell the levyfree rice to the A.P. state civil supplies corporation at the price fixed by the Government which is resulting in huge losses to the petitioners. Even for the current Rabi season it is complained the authorities are compelling the rice-millers to deliver 2,50,000 tonnes over and above the levy quota and that such compulsion is equally unsustainable in law. This is short is the gravamen of the petitioners' complaint.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-4", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "The legal aspect. \n 3. The essential commodities Act has been enacted in the interest of general public for the control of production, supply and distribution of and trade and commerce in certain commodities, declared as essential commodities S. 3 (1) empowers the Central Government to provide by order for regulating or prohibiting the production, supply and distribution of any essential commodity and trade and commerce therein if in its opinion it is necessary or expedient so to do for maintainin or increasing or f or securing thier equality distribution and availability at fair prices. Subsec. (2) provides that without prejudice to the generality of the powers conferred by sub-sec (1) order made under S. 3 (1) may provide among others- \n   (a)  to (c)  xx                                   xx                     xx", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-5", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "(d)   for  regulating by  licences  permits   or otherwise   the storage  transport distribudisposal  acquisition  use or consumption   of any essential  commodity: \n (e)              xx                        xx                    xx                                xx\n\n \n\n (f)  for  requiring  any person  holding    in stock  or engaged in the production  or in the   business of  buying  or selling  of any   essential  commodity:- \n\n \n\n (a)  to sell  the whole   or a  specified   part  of the quantity  held   in stock  or  produced  or recived by him  or  \n\n \n\n (b)  in the case of any such   commodity  which is likely  to be   produced   or received  by him to sell the  whole or  a specified  part  of such commodity  when produced   or  received by him, \n\n \n\n To  the   Central  Government  or a state Government or to an officer or agent   of  such Government or to a corporation   owned   or controlled  by such   Government or to such other person or class of persons and in   such circumstances as may be specified  in the order\".  \n\n \n\n Clause (c)  of sub-sec. (2)  empowers  the  central   Government  to control  the price  at  which any  essential commodity  may  be bought  or sold.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-6", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "4.  Section 5 of  the Act   empowers  the central  Government to direct  by a  notified  order that   the  power  to  make orders  or  issue notifications under S. 3 shall in relation  to such matter.  And  subject to such  conditions   if any  as  may be  specified  in the  direction  be exercisable  by  the state Government  among  other authorities. \n\n \n\n   By  its  order  dated 24-7-1967  contained in G.S. R. 1111  published  in the Gazette of India, extraordinary, dated 24-7-1967  the central  Government  directed   that 'the  powers  conferred  on it  by sub-sec. (1)  of S. 3  of  the said  Act to make  orders  to provide  for   the matters specified    in Cls.  (A) (b) (c) (d) (e) (f) (h) (I) (ii)  and (j) of  sub sec.  (2) thereof shall, in  relation to food-stuffs  be exercisable  also  by a  state Government  subject to the conditions- \n\n   \n\n '(1)  that such powers  shall be  exercised by a state  Government  subject to such directions if any as may be issued  by the  central  Government in this  behalf:  and", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-7", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "(2)  that before  making  an order relating to any matter  specified  in the said cls.  (A)  and (c)  or in regard  to regulation  of  transport  of any food-stuffs  under the said cl.  (D)  the state Government shall  also obtain the prior   concurrence of the central Government .........'  \n\n \n\n Condition No. 2 was modified  by an  other order contained in G.s. r. 1508  dated 30-9-1967  condition  No. 2  substituted by this   order, reads:-", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-8", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "\"(2) that before making an order relating to any matter specified in the said cls. (A) (c) or (f) or in regard to distribution or disposal of food-stuffs to places outside the state or in regard to regulation of transport of any foodstuff under the said cl. (D) the state Government shall also obtain the prior concurrence of the central Government\". Yet another order has been issued in G.S. R. 800 dated 9-6-1978: but since the terms thereof in so far as they are relevant are identical with the earlier orders, it is not necessary to refer to the 1978 order.  \n 5. On 17-11-1967 the Government of Andhra pradesh made the \"Andhra pradesh Rice procurement (Levy) and Restriction on sale order. 1967\" which was published in the Gazette on 18th November 1967 This order purports to have been made under section 3 (2) (f) of the essential commodities Act read with sub-secs. (3) (3-B) and (5) of section 3, and the order of the Government of India contained in G. S. R. 1111 dated 24-7-1967 and also with the prior concurrence of the central Government clause 2 of this order defines certain expressions used in the order clause 3 provides for the levy. Sub-clauses (1) to (4) of Cl. 3, read as follows:- \n \"3. Levy on rice: (1) Every miller carrying on rice milling operations shall sell to the agent or an officer duly authorised by the Government in this behalf at the notified price and at such percentage of the total quantity of each variety of rice produced or manufactured by him in his rice mill every day as is specified for each district in the schedule.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-9", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "(2) Every dealer shall sell to the agent or an officer duly authorised by the Government in this behalf at the notified price and at such percentage of the total quantity of: \n (a) each variety of rice milled by him every day out of his stocks of paddy and", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-10", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "(b) each variety of rice purcahsed or otherwise acquired by him for the purpose of sale from persons other than millers or dealers as is specified for each district in the schedule I:  \n (provisos omitted) (3) every miller or dealer in a district who holds stock of rice on behalf of any person shall deliver to the agent or an officer authorised by the Government in this behalf such percentage of each variety of rice specified for the district in schedule -I on behalf of the person on whose behalf the miller or dealer holds the stock. \n (4) any person whose stock of rice is delivered to the agent or officer authorised by the Government under subcl. (3) shall not be entitled to recover from the miller or dealer on account of value of the stock so delivered notwithstanding any contract or instrument to the contrary. He shall forthwith approach the agent and state why such rice should not be levied from him by Government at the notified price and in case of such levy he shall be entitled to receive the payment of the cost of the rice taken by Government at notified price..............\"  \n It is not necessary to refer to Cls 3-A and 3-b which deal with levy of paddy and the price to be paid to the producer/agriculturist. Clause 4 places certain restrictions upon the sale and movement of rice. It reads as follows:- \n \"4. (1) No miller or delaer shall sell or agree to sell or otherwise dispose of the rice recovered by milling other than the quantity specified in Cl. 3 except in accordance with the permit issued by the collector or any officer authorised by the Government in this behalf.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-11", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "(2) Save as otherwise provided in sub-cl. (1). No person shall transport rice for sale from the premises of any rice mill except in accordance with the permit issued by the collector or any officer authorised by the Government in this behalf\".  \n It is not necessary to refer to Cls. 4-A and 4-B which provide for certain restrictions on sale and movement of paddy and broken-rice. \n 6. Clause 4-C empowers the Government to issue directions which shall govern the permits granted under cl. 4 and cl. 4-A It reads as follows:- \n \"4-C. Permits issued shall be subject to directions of Government Any permit issued under cl. 4 or cl. 4-A shall however be subject to such directions as the Government may give in this behalf\". \n It may be stated that Cl. 4-C was added by the state Government after obtaining the prior concurrence of the central Government in its telegram dated 6-10-1981.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-12", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "7. A reading of the above provisions makes the following position clear: section 3 of the Essential commodities Act empowers the central Government or its delegate to make orders for regulating the supply distribution trade and commerce in any essential commodity in the interest of maintaining or increasing the supply of such essential commodity or for securing its equitable distribution and availability at fair prices. Clause (d) of sub-sec. (2) empowers the central Government /State Government to make orders regulating, by permits inter alia, the disposal and acquisition of any essential commodity: while Cl. (F) empowers them to make an order directing any person holding instock any essential commodity to sell the same to the state or a state controlled corportation. The price at which such essential commodity is to be sold can also be fixed under an order made under Sec. 3 The levy order has been made under sec. 3 (2) (f) of the Act. When orginally made it did not contain Cl. 4 in the present form cl. 4 in the present form was introduced only in 1972 Cls. 4-A and 4-b were introduced in 1974 and Cl. 4-C in october 1981 Cl. 3 obliges every miller and dealer to deliver 50% of the rice milled by him or got milled by him on any day by way of levy to the state. The percentage of levy now in force is 50% cl. 4 restricts the sale and movement of levy-free rice, the heading of cl. 4 is relevant It is \"restriction on sale and movement of rice\". Cl. 4 expressly declared that no miller or dealer shall sell or agree to sell or otherwise dispose of the rice recovered by milling other than the quantity specified in Cl. 3 except in accordance with the permit issued by the collector or any officer authorised by the Government in this behalf\", While", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-13", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "accordance with the permit issued by the collector or any officer authorised by the Government in this behalf\", While subcl. (2) of Cl. 4 declares that \"save asotherwise provided in sub-cl (1), no person shall transport rice for sale from the premises of any rice mill except in accordance with the permit issued by the collector or any officer authorised by the Government in this behalf.\" In disputably. Therefore even the sale of levy-free rice is not free at the volition of the miller/dealer but subject to regulation. It can be sold or disposed of only in accordance with the permits issued by the collector. Or other authorised officer. In this connection the following circumstances deserve notice: Clause 4 in the present form was introduced by G.O. Ms. 1533 F & A (C.S. 1) dated 30-10-1972 published in the rules suplement to part II (Extraordinary) page 1. Of the Andhra pradesh gazette dated 31-10-1972 the preamble to this amendment order does not refer or recite cl. (F) of sec. 3 (2) of the Act, as is done by the original order made in 1967. It purports to have been made in exercise of the powers conferred by section 3 of the essential commodities Act\". In my opinion this was advisedly done for cl. 4 of the levy order is referable to cl. (D) in sec. 3 (2) secondly. I find that this amendment order has been issued with the prior concurrence of the central Government as recited in its preamble. Thus the requirement of G.s. R. 1508 dated 30-9-1967 and in particular of condition no. 2 thereof has also been satisfied Indeed the validity of cl. 4 was not challenged either in the writ petitions or in the arguments before me Now the avowed purpose of the", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-14", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "not challenged either in the writ petitions or in the arguments before me Now the avowed purpose of the amendment order is also found stated in the preamble. It reads Whereas the state Government is of the opinion that it is necessary and expedient so to do for maintaining supplies of rice produced in the state of Andhra pradesh and for securing equitable distribution and availability thereof at fair prices in the state of Andhra pradesh\". It is thus clear that cl. (4) is neither a formal provision nor an empty one. It is made with a definite purpose and must be understood and interpreted accordingly. The sale of rice produced in this state is sought to be regulated by means of permits in the interest of maintenance of supplies for securing their equitable distribution and for ensuring their availability at fair prices in this state The Rule-making authority could not have made its intention clearer than this over and above this, Cl. 4-C expressly declares that the permits issued under Cl. 4 shall be subject to such directions as the Government may give it is of course that the directions that the Government can give under Cl. 4-C must be warranted by the levy order and must be meant for and designed to further and advance its objects (see Laker Airway's case (1977) 2 All ER 182).", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-15", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "The orders of the Government impugned:- \n 8. Since cl. 3 of the levy order provides for collection of levy out of the rice milled or purchased every day by the millers/dealers the Government has for the sake of convenience of both the administration as well as the traders been following the practice of fixing a target for each district and the collector, in turn fixes the target for each rice-mill or dealer, as the case may be the Millers dealers are first required to fulfil the levy quota and only thereafter are they permitted to sell the levy-free rice. This system dispenses with the governmental supervision on every ricemiller's/dealer's business. Every day. The very fact that the millers/dealers never complained of such practice all these years is proof positive of the fact that the said practice is not in any way prejudicial to the interests of the millers/dealers Again for the sake of convenience the Government divides each year into two halves. Viz Kharif and Rabi the Kharif season begins with Ist of october and ends with the 31st of March while the Rabi season begins with 1st of April and ends with 30th of September the levy targets are fixed separately for both kharif and Rabi.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-16", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "9. In the begining of the Kharif season, 1982-83. The collector. Krishna District. Issued proceedings dated 23-10-1982. Contained in Rc. No. A 341/82,in pursuance of the Government memo dated 8-10-1982 referred to therein fixing the target for each rice-mill for the Kharif season and also stating further that (5) millers and dealers delivering levy will be eligible to sell levy-free stocks in proportion to mill levy delivered. Since the percentage of levy is 50 the millers and dealers will be eligible to sell levyfree stocks at 1:1 ratio\". This was of course, subject to revision if there are any changes in the policy of the Government", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-17", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "10. On 12-2-1983 the Government revised its procurement policy for 1982-83 in its circular No. P1/2896/83, wherein the state Government directed that with a view to ensure supplies to the people within the state and also to ensure against the rise in prices of rice the district administrations shall not allow any rice or paddy to go outside that state without the authority of the collector with a view to make the rice available to the people of this state in the first instance, the collectors of the surplus and deficit districts were directed to stop unauthorised movement of any kind across their districts. Among the instructions given the follwing instruction is relevant for the present purpose:- \n (1) In all the surplus districts not more that 50% of the levy-free rice only should be permitted to be transported outside the state. The other half shall be reserved for consumption within the state. Every collector shall make out a budget for releasing these permits for local sales in a controlled fashion till the end of November monthwise............In other words the levy-free eligibilty earned to the extent of 50% and which would be required in the open market will have to be released through permits in a controlled fashion taking care to release larger quantities in the lean months. This method is advocated so that we may not only ensure overall availability of rice but also help hold the price line.......\"", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-18", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "11. In pursuance of the above circular the commissioner of civil supplies issued instructions in his Memo dated 16-2-1983 by way of clarification stating that out of the levy free eligibility accrued the millers may be permitted to transport rice outside the state to the extent of hald of their eligibility the balance half has to be offered for sale in the domestic market as per the guidelines issued in the reference second cited; (circular dated 12-2-1983). Where such rice is not purchased for sale in the domestic market in a given month that also may be permitted to be sold outside the state as instructed in the reference second cited......Surplus district collectors are requested kindly to watch closely the price of paddy in this connection to ensure that prices of paddy do not go below suppor t price........under all circumstances paddy prices should be kept well above the notified prices. To this extent collectors should exercise their own discretion, but keep the commissioner informed immediately thereafter...........\" \n 12. Consequential instructions were issued to all the millers in Krishna district by the collector Krishna. \n 13. Now coming to the Rabi season 1982-83. The Government announced its Rabi procurement policy in Government memo No. 19844/A/CSI/83, dated 25-4-1983. In this memo it was stated:- \n \"The Rice Milling Industry shall pay an amount of not less than Rs. 20/- per quintal of paddy above the minimum support prices fixed by the Government of India during the Rabi season In other words the minimum price payable for Fair Average Quality paddy by the millers and dealers may be:-", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-19", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "(i)  common ......Rs.  142/- Quintal   \n\n \n\n (ii)  fine..............Rs. 146/- Quintal  \n\n \n\n (iii)  superfine....Rs.  150/-Quintal    \n\n \n\n During  Rabi    1982-83  the mill levy   percentage shall be  50%   and the entire  levy  free eligibility  earned   by   the millers  or  dealers  can be sold  anywhere in the  country...........\"  \n\n \n\n It was further directed that the millers and dealers shall also make available and sell an aggregate quantity of 2.50 lakh tonnes of rice for internal consumption within the state during Rabi 1982-83, in the open market at a price not exceeding Rs. 265/- per quintal of fair average quality rice. The mill -wise apportionment of this aggregate quantity will be made by the collectors in pro portion to the levy procured from each mill.....\" Another direction related to the unutilized stock of kharif season it was in the following words:- \n \"In respect of the Unutilized stocks of Kharif levy-free rice meant for sale within the state i.e, out of the 50% levy free eligibility of 1982-83 Kharif, and the 2.50 lakh tonnes of rice to be sold within the state by the millers during Rabi 1982-83 which comes to a total of 6,81.500 tonnes for the state as a whole, the month-wise budgeting of releases into the open market for the entire state shall be as follows:- \n April   1983             ..... 20,000 Tonnes\n\nMay   1983                    ..      70,0000  ,,\n\nJune  1983                  .....   1.10,000   ,,", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-20", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "June  1983                  .....   1.10,000   ,,\n\nJuly,    1983               ......   1.10,000   ,,\n\nAugust  1983              ....... 1,10,000   ,,\n\nSeptember 1983          ...... 1,10,000   ,,\n\nOctober  1983              ......1,04.500   ,,\n\nNovember  1983           .....   47.000   ,,\n\n                                   _______________\n\n                      Total      6.81.500  Tonnes\n\n \n\n .........These  quantities shall be sold by the millers at a price  not exceeding  Rs. 265/- per quintal. As had been  agreed  to by  them.   The entire  quantity  shall be  sold within the state  of andhra  pradesh  only  and  the collectors  shall ensure   this  by having  these stocks  lifted  as laid down  in the  circular  of the commissioner  (C.S.)  Ref.  P1/2896/ 82  dated 12-2-1983, fifth cited.........\"  \n\n \n\n With    respect  to the export   of  rice  outside the state it was  stated:-", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-21", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "\"Permits  for transport and sale  of rice eligible   to be sold    outside  the state  i.e,  the 25% levy  free eligibility   out  of the Kharif  levy   deliveries  and  the  quantity  of rice equal  to the levy   delivered in the Rabi   season  shall be issued only   after  the state's  internal    requirements  are released first.  This  shall be  done by  the  collectors, on a week  to week basis, where however  a miller would deliver his share of rice meant for internal consumption  within  the state of  andhra  pradesh in  full  he may  be given a permit for transport and sale outside the state ensuring  that the  ration  between  internal  sales  and  outside  the state by  him is not  disturbed\". \n\n \n\n 14.  On 25-5-1983  the Government issued  certain further orders  with respect to its   procurement policy  for rabi 1982-83  in this   memo  the Government  issued  the following   instructions:- \n\n   \n\n \"In order  to meet   the increasing demand for rice at Rs. 2/-  per  kg.,  from    the   green card  holders,  Government have decided to purchase through a.P.  state Civil   supplies corporation Limited levy-free  rice budgeted to be sold by  the  mills  in the months from April  1983   to November  1983  at the following  rates  as agreed to by  the  millers and distribute  the same  to  the  green   card  holders  at Rs. 2/-  per  Kg. \n\n \n\n Purchase rate  by  the   \n ____________________\n\nAPSCSCL  from the Mills:", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-22", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "Purchase rate  by  the   \n ____________________\n\nAPSCSCL  from the Mills:\n\n(1)  All first crop  common  Varities:         Rs.  250/- per  Qtl.\n\n(2)  All first crop  fine and superfine varieties :   Rs.   260/-   ,,\n\n(3)   second  crop  fine varieties  eo. G. Hamsa:     Rs.   245/-   ,,\n\n(4)   Second  crop   superfine  varities like  BPT 1235 etc. Rs.    255/-   ,,", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-23", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "The prices fixed above shall be forfair average quality rice. The A.P. State civil supplies corporation Ltd., shall purchase fair average quality rice from the levy free stocks available with the mills in the districts and move the stocks to the deficit districts as per the allotment made by the commissioner of civil supplies. The rice shall be delivered at the fair price shops at Rs. 200/- per quintal minus the retailer's margin as in the case of the Food corporation of India rice. \n Collectors shall issue permits for sale of levy free rice to the millers to enable them to sell the rice of the A.P. State civil cupplies corporation limited. Permits for movement outside the state shall be issued only after the stocks for sale within the state are released or an undertaking in writing is given to the effect that the concerned mills would release rice for local sales in full as and when it is demanded. \n The collectors shall ensure that the millers deliver to the maximum extent possible Kharif varieties towards Kharif eligibility. \n Collectors  shall issue  levy  free permits  against deliveries  made for  movement  outside  the state from  Rabi  crop  varieties  only  and no Kharif  variety  shall be  allowed    to move  outside  the state on levy  free  permits.......\"", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-24", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "15.  The  various   order  referred to  above disclose  the following   position:  In  the begining  of the kharif  season 1982-83, the only obligation of the millers/dealers  was to deliver 50%  of the levy  under Cl. 3 of the levy  order and then they were free to sell the levy-free  rice  whereever they liked  and the Government was to issue  permits  for  the sale of such levy-free  rice  at  the  request   of the Millers/dealers  who satisfied  the  levy    target  fixed    for them.  However  after the new   Government   came   into office in january   1983  this policy  underwent a change with a view to ensure   domestic supplies   and also to arrest  the rise in prices  the Government  directed  that  only   half the levy-free  rice  should  be allowed  to be transported   outside  the state which   means   that the remaining  half  should be sold only within   the state.  Further  with the same object in view  it was directed  that the permits  for sale to be issued    under  Cl. 4  of the Levy  order should be phased.  In other   words  permits  for  the  entire   levy-free  rice   would not be issued   at  once even it faked  for These   permits were to be issued  in a phased  manner   over  several  months.  This  was  undoubtedly  a policy. Change to the  prejudice  of the millers/  dealers  for the reason  that the prices  of  rice  outside the state are  far   higher   than the", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-25", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "the prices  of  rice  outside the state are  far   higher   than the   prices of rice prevailing  in this state.  Another  prejudice  to them was that they were not  to be issued permits for the entire levy-free  rice as  and when they asked  for  the   same but  that they   were to be issued  in a controlled fashion  the millers  complain that such a policy    has the effect of locking up   their capital    over   an unduly   long  period    the submission is that they  have  to raise substantial loans from their financiers  for purchasing  paddy  and  that  if they are not  allowed to sell the levy-free  rice also soon after satisfying   their levyquota  they will be obliged to pay   large amounts by way  of interest   to their  lenders  the submission  is that there  is  no legal authority  for  both these types   of restrictions viz  the restriction on sale of levy-free quota  outside  the state and also the  refusal  to issue  permits  for sale  of levy-free  quota   as and when asked   for .  it is  submitted  that by enforcing  these instructions the millers/  dealers  were disabled  and prevented   from selling  huge   quantities of levy-free  rice  of kharif  season   outside  the state,  and which quantity  is now  being  tagged  on to the  Rabi  quota.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-26", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "16.  Now  coming to the Rabi  season  the policy  for this  season  is slightly   different from the  policy followed  for the kharif.  The  mill levy  is 50%   and the millers/dealers  are held entitled to sell the  levy  free rice any where   in the  country  but  subject  to their  making  available an aggregate quantity  of  2.5 lakhs  tonnes of rice for  internal  consumption  in the state at a price not exceeding  Rs.  265/-  per  quintal.  This  2.5  lakh  tonnes of  rice is added  to the held  over   stocks  of levy   free rice    meant for sale within  the state and the total quantity  of  6.81.510  tonnes  is proposed to be released into the market in specified quantities every  month    permits  for sale  out side  the state are to be issued    only    after   the  state's   internal  requirements are released first.  The  price  at which  the  A.P.  state  civil  supplies    corporation  was to purchase  levy-free  rice meant  for  domestic  market  from  the millers/ dealers  was fixed   at Rs.  250/-  per  quintal  for all first  crop  common  varieties,  and  Rs. 260/-  for  all  first  crop  fine  and duperfine  varities,  similarly  for  second  crop  the  prices  were  fixed  at Rs. 245/-  and Rs. 255/-  per  quintal respectively  the permits  for sale  of  levy  free  rice outside the states", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-27", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "respectively  the permits  for sale  of  levy  free  rice outside the states  were  to be  issued  only after the stocks  meant for sale  within the state are released  indeed in  its memo  dated  25-5-1983  the Government directed  that no  Kharif variety  shall be  allowed  to move  outside  the state  on  levy-free   permits\".  The facility  given   in the circular  dated  12-2-1983  to sell the rice  remaining unsold   within the state in a given  month  outside  the  state was also  withdrawn.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-28", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "17. The petitioner's complaint with respect to the Rabi procurement policy is that not only the millers/dealers are made liable to supply 2.5 lakh tonnes of rice for internal consumption over and above the levy-quota but that they are obliged to sell the same as also the held -over stocks from the Kharif season to the state (A.P. state civil supplies corporation) at certain fixed prices which are far below the market prices. The petitioners contend that there was no such agreement between the millers and the Government as is recited in the Government memo dated 25-5-1983 and that in any event. There was no such agreement between the dealers (I. E. Dealers who are not millers) and the Government the said price has not been fixed or determined under any order made under S. 3 (2) of the Essential commodities Act. The avowed policy of issuing export permits only after the quotas meant for internal sale are satisfied and the altogether banning of export of rice of the Kharif season is complained to be totally without any authority of law and arbitrary contentions:", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-29", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "18. The first question is whether the state Government is empowered in law to direct that the millers/dealers shall sell half the levy free rice shall be granted only with respect to half the quota of levy-free rice I have dicussed hereinbefore extensively the object and purpose behind cl. 4 of the levy Order and also pointed out that it primarily deals with sale and disposal of levyfree rice and not with mere movement or transport as such Sub-cl. (2) of cl. 4 No doubt deals with transport of rice but it is not every transport that is governed by it but only 'transport of rice for sale from the premises of any rice mill\". In other words Cl. 4 of the the Levy order regulates the sale and disposal of rice in accordance with the permits issued by the collector or other officer authorised in that behalf as the case may be now, Cl. 4-C expressly declares that a permit issued under cl. 4 shall be subject to such directions as the Government may give in that behalf. Reading Cls. 4 and 4-c together. It is evident that the Government does have the undoubted power to regulate the sale and disposal of levy free rice for the purpose of maintainaing the supplies and securing equitable distribution and availability at fair prices, of essential commodites. Merely because the original levy order purports to have been made under section 3 (2) (f) of the Act, it does not mean that Cl. 4 is not referable to cl. (D) of S. 3 (2) as pointed out supra Cl. 4 as introduced in 1972 was made under S. 3 as such without specifying any particular clause in sub-sec (2) of S. 3 sub-sec (1) of S. 3 is very wide in its sweep and sub-section (2) of s ection 3 is merely and elucidation of sub-section (1)", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-30", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "(2) of s ection 3 is merely and elucidation of sub-section (1) of section 3. Therefore so long as the directions made or issued by the state Government under clause 4-c of the levy order are designed to achieve the objects asmentioned in sections 3 (1) of the Act and are underlying clause 4 of Levy order they would be perfectly waranted and unobjectionable in law.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-31", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "19. The main thrust of the petitioners' argument is that the Levy order is made under section 3 (2) (f0 of the Act and is designed and meant for compelling the millers/dealers to sell as portion of rice towards levy and once that purpose is achieved ther is no further purpose to be served by the said order. This in my opinion is an unwarranted interpretation of the scope and sweep of the levy order. As its title itself suggests the said order provides not only for levy but also for restriction on sale and trasnport of rice In other words the entire rice produced or acquired by a Milller/dealer is subject to control. Helf of its has to be delivered as levy at the notified price and the remaining half has to be sold in accordance with the permits issued by the specified authorities which permits shall however be subject to such directions as the state Government may issue in the interests of maintaining the supplies and securring equitable distribution and control of price. The levy order has to be releated no only to clause (f) of section 3 (2), but also to clause (d) of section 3 (2), as stated above. In other words while clause 3 is relatable to sec. 3 (2) (f) Cl. 4 is relatable to section 3 (2) (d). Once this is so the Government power to regulate the disposal and sale of rice in the interests of matters stated in subsection (10 of section 3 of the Act is unquestionalbe.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-32", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "20. The second question is whether the Government is empowered to direct that the permits for sale of levy-free rice shall be issued only in a phased and controlled manner In other words whether the petitioners are not entitled to permits for saleof levy-free rice as and when they ask for the same. This power to issue permits in a phased and controlled manner is again implicit in Cls. 4 and 4-c read together it is well known that one means of arresting the rise of prices is by regulating and maintaining the supplies at a sustained and certain level keeping in view the requirements of the populace. For this purpose; the state has been treated as a unit and it is so for the purpose of the levy order.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-33", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "21. The next complaint is that the policy of the Government not to issue permits for export until and unless the stocks for export until and unless the stocks of levy-free meant for in ternal consumption are released is arbitrary and incompetent it is contended that the millers have to raise huge sums by way of loans from financing agencies and that in the first instance they have to supply rice towards the levy quota; and if now they are required to sell half the levy-free quota within the state first and only thereafter to export it would result in subjecting the millers/ dealers to heavy financial burden and losses. It is complained that the held over Kharif quota (half the levy-free rice meant for sale within the state) is now directed to be sold to the A.P. state civil supplies corporation at a fixed price which is far below the price obtained outside the state. The learned Government pleader counters this arguments by saying that the price at which the held-over Kharif stocks are being asked to be sold to the A.P. state civil supplies corporation is still sufficiently remunerative to the millers /Dealers in the state though it may be that it is not as profitable as the pice obtained out side the state. It is contended that in the interest of maintaining the supplies and for preventing the price-rise within the state the Government orders in this behalf are perfectly competent and justified.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-34", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "22. Now there can be little doubt about the proposition that every power, including a statutory power has to be exercised reasnably. It should not be oppressive in its application. The power to give directions under Cl. 4-C of the levy order is also subject tot he above rider. So long as the state's requirements are being met there will be no reason to impose any other or further restriction upon the dealers' right to sell rice outside the state. Now the Government has a rough estimate of the levy-freerice available with the millers/ dealers. The very fact that the Government memo dated 25-4-1983 says that 4.31.500 tonnes of levy-free stock, pertainin to Kharif season meant for internal consumption is still available shows that the Government has already worked out the quantity available with the millers dealers on account of levy-free quota also. Part of it had already been sold by 25-4-1983, and still 4,31,500 tonnes was remaining to be sold within the state. It is indeed only after the issuance of the said memo that the Government directed the A.P. state civil supplies corporation to come forward and make purchases of this quantity as well as the quantity of 2.5 lakhs tonnes agreed to be delivered to the millers/dealers for the Rabi season. This would also mean that large stocks of levy-free rice are lying with the millers/dealers which they propose to sell outside the state. So long as the export of rice from this state is not altogether banned. The millers/dealers must be permitted to sell half the levyfree quota outside the state. The interests of the public of this state which the state Government is seeking to safeguard will not be jeopardized if the state Government maintains a parity in the matter of issuance of permits for sale both within the state and outside the state. In other words if a miller/dealer supplied 10", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-35", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "within the state and outside the state. In other words if a miller/dealer supplied 10 tonnes of rice to the A.P. state civil supplies corporation or sells the said quantity within the state as the case may be he should be given permit for export of 10 tonnes of rice. Indeed the position today apppears to be that a fair proportion of the stock proposed to be procured by the state Government from the levyfree quota has already been procured. In the circumstances. The direction given herein shall operate only prospectively the proportion of 1:1 as between the sale within the state and sale outside the state shall be implemented with respect to the supplies made hereinafter and once the internal quota as stated in its memo dated 25-4-1983 is satisfied, export permits shall be issued freely.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-36", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "23. Another major complaint appears to be about the price at which the held over stock of Kharif season and the 2.5 lakhs tonnes of Rabi season are directed to be sold to the A.P. state civil cupplies corporation as also the compulsion to sell to the A. P. State civil supplies corporation the complaint is that this price has not been fixed under any statutory order issued under the A.P. Paddy procurement (prices) order 1980 or any other order in that behalf. It is also denied that there is any agreement between the millers/dealers and the state Government as recited in the Government memo dated 25-4-1983, or Memo dated 25-5-1983 for that matter. Particularly, so far as the dealers are concerned it is contended, even the aforesaid memos do not recite that there is any such agreement between them and the state Government with respect to the price. It is also submitted that the direction to sell within the state does not mean and cannot empower the state Government to compel them to sell the rice to the A.P. state civil supplies corporation the further submission is that even if the Government does have the power to direct the millers/dealers to sell a particular quantity of rice within the state or to the A.P. State civil cupplies corporation they are entitled to be paid the market rate.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-37", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "24. Now so far as the argument relating to compulsion being exercised upon the millers/dealers to sell half the levy-free rice to the A.P. State civil supplies corporation is concerned I am unable to see any such compulsion the only Government Memo that refers to purchases by the A.P. state civil supplies corporation is the one dated 25-5-1983 and this Memo puts it on the ground of an agreement by millers/ dealers. Obviously sufficinet number of purchasers within the state are not coming forward for purchasing the entire quota meant for internal consumption: this may be for various reasons which cannot be gone into herein. It was therefore agreed that the A.P. state Civil supplies corporation shall purchase those stocks at a particular price, which both the Government and the millers/dealers agreed was a fair price. This is really a matter of agreemetn and not a case of compulsion it is always open to the petitioners if they do not a case of compulsion. It is always open to the petitioners if they do not want to sell the stocks meant for internal consumption to the A.P. State civil supplies corporation to sell the same anywhere within the state and at such price as they can procure the fact remains that the levyfree rice meant for internal consumption has to be sold within the state only whether to the corporation or to others. The prices mentioned in the Government memo dated 25-5-1983 are only the prices at which the Government has directed the corporation to purchase: because the corporation cannot negotiate the price with each individual or each day As I said it is really a matter of agreement and not a matter of any statutory obligation or compulsion.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-38", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "25. Now coming to the rabi season, the Government has agreed to permit the millers/dealers to sell rice in the proportion of 1:1 anywhere in the country. In other words if they deliver 10 tonnes of levy rice. They will be entitled to the issuance of sale permits for 10 tonnes anywhere in the country, they like but this is subject to their making available 2.5 lakhs tonnes of rice out of the levy-free rice for internal consumption In other words for the Rabi season the proportion of 50: 25: 25 applicable for Kharif season is not being followed it si 50:50 the latter 50 being subject to the supply of 2.5 lakhs tonnes for consumption within the state. Though the proportion is different essentially the position in law is the same. Instead of saying that they must supply half the levy-free rice fro sale within the state the state is now satisfied if the millers/dealers sell only 2.5 lakhs tonnes in this season withint he state and the A.P. state civil supplies corporation is prepared to purchase at the price said to have been agreed between the Government and the millers/dealers. The argument of compulsory purchase, or compulsory purchase at a fixed price is. Therefore equally untenable with respect to the Rabi season as well", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-39", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "26. So far as the petitioners' contention that there was no agreement between the millers/dealers and the Government at which the millers/ dealers should supply the held-over stock of Kharif season and 2.5 lakh tonnes of rabi season to the A.P. state civil supplies corporation is concerned the learned Government pleader has placed before me the relevant record. Though there does not appear to be any formal agreement to the above effect. I find a number of letters given by the president and other office-bearers of the Rice Millers' Associations agreeing to supply rice at the aforesaid rates. The learned Government pleader has indeed stated that a large part of the stock agreed to be sold to the corporation, his already been sold to it . be that as it may, it is not necessary fo me to pursue this enquiry further inasmuch as I have already clarified hereinbefore that such of the petitioners who say they are not bound by the said agreement are intitled to sell their rice any where within the state at such price as they can get.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-40", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "27. Another contention of Mr. P. Ramachandra Reddy is that Cl. 4 of the levy order must be deemed to have been rescinded by virtue of the central Government order contained in S. O 696 (E) dated sept 30, 1977. The said order was issued by the central Government under S. 3 of the Essential commodities Act by the said order, the Central Government rescinded with effect from 1-10-1977, \"(1) the orders issued by it as specified in schedule -a (2) the orders issued by the state Government as specified in schedule-b; and (3) any other order issued by ht e state Government and in force in relation to matters concerning regulation of or restriction/prohibition on movement or price of paddy, Neither the Levy order Nor Cl. 4 is mentioned either in Schedule A, or schedule-b. The contention is that it stands rescinded and repealed by virtue of cl. 3 of the said order. The reasoning in support as Cl. 4 concerns the regulation of and restriction on movement of rice it stands rescinded by virtue of Cl. 3 I am unable to agree I have repeatedly pointed out hereinbefore that Cl. 4 deals primarily no with the movement of rice, but with the sale of rice. Clause 4 regulates the sale of rice by permits as contemplated By S. 3 (2) (d) of the Essential commodities Act. Only sub-cl. (2) of Cl. 4 speaks of movement viz., transport but that too is not transport by itself, but transport of rice for sale from the premises of any ricemill. The real object or cl. 4 (2) is to regulate and restrict the transport of rice from the premises of any rice-mill for sale. It is therefore not possible to agree with Mr. Ramachandra Reddy that Cl. 4 of the Levy order stand s rescinded", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-41", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "Mr. Ramachandra Reddy that Cl. 4 of the Levy order stand s rescinded for the reasons suggested.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-42", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "28. A contention is urged by Mr. P krishna Reddy that the fixing of target is not wattanted either by the Act or the Levy order. I have already dealt with the said argument and I need not repeat the same here. \n 29. Mr. V. Rajagopal Reddy raised another contention that the circulars do not recite the power under which they are issued. And further that they are also not published in the Gazette as required by the Act. It is true that the circulars issued by the Government do not expressly recite that they are issued under clause 4-C of the Levy order but at the same time it cannot be denied that so long as the said circulars are referable to and can be sustained with reference to power vesting in the state Government they should be sustained. The learned Government pleader has clearly sought to sustain them with reference to clause 4-c, and I see no reason not to accede to the said argument. \n 30. Now so far as the contention that the said circulars were not published in the Gazette is concerned there is no doubt about the desirability of such publication: but the question with which I am now concerned is whether such non-publication leads to the said circulars becoming un-enforceable. The expressions \"notified order\" and \"order\" are defined by clauses (c) and (cc) respectively in section 2 of the Act. The definitions read as follows: \n \"(c) 'notified order' means an order notified in the official Gazette; \n (cc) order' includes a cirection issued thereunder\".", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-43", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "(cc) order' includes a cirection issued thereunder\".   \n Now the circulars issued by the state Government are the directions issued under a notified order viz., under the Levy order and therefore there is no obligation to publich them in the official gazette. Moreover they are directions issued to the permit-issuing authorities. Of course, as I have stated above since the circulars are of general application the desirability of their publication in the gazette or by some other popular means is undeniable.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-44", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "31. Mr. Vedula jagannadha rao raised yet another contention viz that so far as the kharif season is concerned, the ratio of 50:50 was prevaling until 12-2-1983 when the ratio of 50:25: 25 was introduced. He submits that in cases where the millers/dealers have already acquired eligibility for permits (for sale of levy-free rice) by virtue of their delivering the levy quota, they should be given permits for sale of the Levy-free rice outside the state inasmuch as the directions issued on 12-2-1983 do not and cannot have retrospective operation. It may firstly be seen that thought the restrictions were imposed on 12-2-1983 the petitioners have not chosen to question the same during the Kharif season, but have come forward only now i.e. in July 1983 raising the said contention. In the circumstances of the case. Where targets are fixed for each season. This delay certainly amounts to laches disentitling the petitioners to any relief. Secondly there is no question of any restrospective operation here inasmuch as the power under clause 4-C is the power to give directions which shall govern the permits issued on 12-2-1983 pertain to kharif season as such and are applicable to all the permits to be issued for that season. This is not a case of retrospective operation but one of a partial restriction being placed upon the sale of rice outside the state.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "e35d88e3fb10-45", "Titles": "Sri Rama Krishna Rice & Groundnut ... vs State Of Andhra Pradesh And Ors. on 8 August, 1983", "text": "32. For above reasons the writ petitions fail and are accordingly. Dismissed subject to the following clarifications and directions that (I) those of the petitioners who do not wish to sell the levyfree rice at the prescribed price to the A.P. state civil supplies corporation, cannot be compelled to do so: but that they have to sell the same within the state: they are entitled to sell the same at such price as they can get: and (ii) that herafter the issuance of permits for sale of rice pertaining to Kharif season outside the state shall be in the ratio of 1:1 as between the levy-free rice sold within the state and the levy-free to be exported outside the state. It is directed herewith that if and when the millers/dealers apply for permission for export of rice in terms of this clarification, they shall be issued forthwith the state being satisfied (iii) so faras Rabi season is concerned, export permits will be issued as soon as the quota of 2.5 lakh tonnes prescribed by the state is satisfied and procured. There shall be no order as to costs. Advocates' fee: Rs. 150/- in each. \n 33. Order accordingly.", "source": "https://indiankanoon.org/doc/1548644/"}
+{"id": "2b0591e9e0cb-0", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "JUDGMENT Kondaiah, J.  \n1. This is a reference made by the Income-tax Appellate Tribunal, Hyderabad Bench, at the instance of M/s. T, Venkata Krishnayya & Co., Guntur (hereinafter called \" the assessee \"), under Section 256(1) of the Income-tax Act, 1961 (hereinafter called \" the Act\"), for the opinion of this court on the following four questions :  \n \" (1) Whether, on the facts and in the circumstances of the case, the Income-tax Officer should be deemed to have granted extension of time for filing the return when he did not pass any orders on the assessee's application dated September 16, 1963 ?  \n (2) Whether, on the facts and in the circumstances of the case, by the levy of interest calculated under Clause (iii) of the proviso to Section 139(1) of the Income-tax Act, 1961, the Income-tax Officer must be deemed to have condoned the delay in filing the return of income ?  \n (3) Whether, on the facts and in the circumstances of the case, the Income-tax Officer had the power to levy a penalty under Section 271(1)(a) of the Act when he had already levied interest under Section 139 ? and (4) Whether, on the facts and in the circumstances of the case, the Income-tax Officer had jurisdiction to levy penalty under Section 271(1)(a) of the Act where a return was filed under Section 139(4) and penal interest was also levied under the provisions of this latter section ? \"", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-1", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "2. In order to appreciate the scope of the questions it is necessary to refer briefly to the material facts that gave rise to them. For the assessment year 1963-64, relevant to the accounting year ending on December 31, 1962, the assessee, a registered firm of six partners carrying on business in tobacco, had to file its return of income under Section 139(1) of the Act oa or before June 30, 1963. As the assessee did not file its return before the due date, a notice under Sub-section (2) of Section 139 issued by the Income-tax Officer was served on the assessee on August 16, 1963, calling upon it to file the return of its income for that year on or before September 16, 1963. No return of income was filed before September 16, 1963, but however an application for extension of time for the filing of the return till October 16, 1963, was filed before the Income-tax Officer on that day. That application was in fact received by the Income-tax Officer on September 18, 1963. No order thereon either rejecting or granting the extension prayed for by the assessee was passed by the Income-tax Officer. Nor had the assessee filed the return of its income on October 16, 1963, up to which date the extension was prayed for, in its application dated September 16, 1963. In fact the return of the assessee's income for the assessment year 1963-64 was filed only on August 3, 1964. The Income-tax Officer completed the assessment by his order dated September 15, 1964, under Section 143(3) of the Act determining its net income at Rs. 1,24,580. In the order of assessment, a sum of Rs. 3,908.48 towards interest under Section,", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-2", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "order of assessment, a sum of Rs. 3,908.48 towards interest under Section, 139 of the Act was added to the total demand raised thereon.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-3", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "3. After the completion of the assessment a notice under Section 274 read with Section 271 of the Act to show cause as to why a penalty for the default committed by the assessee-firm in tiling its return should not be levied, was issued by the Income-tax Officer. In response to the aforesaid penalty notice, the assessee by its letter, dated October 7, 1964, informed the Income-tax Officer that due to the illness of its accountant the return of income could not be filed within time. As the explanation submitted by the assessee was not found to be acceptable by the Income-tax Officer, a specific opportunity for personal appearance to explain the circumstances was afforded to the asses see. The authorised representative of the assessee appeared before the Income-tax Officer and stated that there was nothing more to be added to the original explanation already submitted in writing by the assessee. The explanation of the asses see that its accountant was ill was found to be not convincing, as, if that were the sole reason for not filing the return, it could have applied for extension of time. As it did not request for extension of time within the time required under Section 139(1), the Income-tax Officer was of the view that the assessee's explanation that the accountant was sick was only an after-thought. In any event, the Act had allowed a sufficient margin of time (six months) to enable the assessee to get the statements prepared and file returns of income within the time prescribed by law ; and it is for the assessee to make proper and appropriate arrangements to comply with the statutory provisions of Section 139. The fact that the assessee-firm had the assistance of a chartered accountant also was one of the factors taken into consideration by the Income-tax Officer to arrive at the conclusion that the assessee has without reasonable and sufficient cause failed to file the return of income within the prescribed time and levied a penalty of Rs.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-4", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "cause failed to file the return of income within the prescribed time and levied a penalty of Rs. 20,222 under Section 271(1)(a) of the Act. On appeal to the Appellate Assistant Commissioner against the order of penalty passed by the Income-tax Officer, it was contended that the failure on the part of the assessee to furnish the return within the time was due to illness of its accountant, that the previous record of the firm was very good, that the Income-tax Officer must be presumed to have granted extension of time when no order had been passed by him on its application dated September 16, 1963, that the Income-tax Officer must be presumed to have condoned the delay in filing the return when he levied penal interest under Clause (iii) of the proviso to Section 139(1) and the rebate in respect of exported goods to which the assessee-firm was entitled should have been taken into account by the Income-tax Officer in computing the penalty. None of the pleas raised by the assessee did find favour with the Appellate Assistant Commissioner. But, however, he was of the view that the assessee should be deemed to be in default only from October 16, 1963, as the Income-tax Officer had not rejected the application of the assessee filed for extension of time till September 16, 1963. He also took into account the reduction in tax demand which was made in the assessment appeal and directed the Income-tax Officer to reduce the penalty accordingly. Both the assessee and the department being aggrieved by the order of the Appellate Assistant Commissioner, preferred appeals to the Income-tax Appellate Tribunal. The finding of the Appellate Assistant Commissioner that the default should be deemed to, have occurred only from October 16, 1963, but not from July 1, 1963, as held by the Income-tax Officer was challenged by the department whereas the assessee", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-5", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "1963, as held by the Income-tax Officer was challenged by the department whereas the assessee questioned the very levy of penalty reiterating its grounds raised before the Appellate Assistant Commissioner. The Income-tax Appellate Tribunal, on a consideration of the entire facts and circumstances, came to the conclusion that the explanation offered by the assessee for the delay in filing its return was not acceptable. It found that the assessee was not prevented by any reasonable or sufficient cause from filing its return within the time permissible under Section 139(1). The contention of the assessee that by the issuance of the notice under Section 139(2) the Income-tax Officer must be deemed to have condoned the delay in filing its return of income under Section 139(1) and that by the omission on the part of the Income-tax Officer in not passing any orders on its application for extension of time by one month, it must be deemed that the extension of time as prayed for was granted did not find favour with the Tribunal. The Appellate Tribunal rejected the assessee's contention that the Income-tax Officer by the levy of penal interest must be deemed to have condoned the delay in filing the return of income. The other findings of the Tribunal not relevant to this reference need not be stated. Hence, this reference at the instance of the assessee.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-6", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "4. The answers to the questions turn upon the scope of the provisions of Section 271(1)(a) and Sub-sections (1), (2) and (4) of Section 139 read with other material provisions of the Act which we shall presently consider and their application to the facts of the present case. Chapter IV comprising of Sections 139 to 158 deals with the procedure for assessment. Section 139 prescribes the procedures for the filing of a return of total assessable income and the consequences of the failure or omission to file the same within the time allowed thereunder. Unlike the corresponding Section 22 of the Indian Income-tax Act, 1922, Sub-section (1) to Section, 139 does not provide for the issuance of the general or public notice. It expressly requires every person to furnish voluntarily a return of his total income or the income of any other person in respect of which he is assessable under the Act. If the income of any previous year exceeded the maximum amount exigible to tax, the return must be in the prescribed form and verified in the prescribed manner and shall furnish the requisite material particulars relating to income. The assessee under the present Act has a statutory duty and obligation to furnish a voluntary return of his total income on or before the 30th July or 31st December, as the case may be. However, the proviso to Sub-section (1) to Section 139 empowers the Income-tax Officer to extend the date for furnishing the return of income if an application thereof has been made in the prescribed manner by the assessee. The aforesaid power vested in the Income-tax Officer is discretionary. He is, therefore, not bound to exercise his discretion invariably in favour of the assessee as the word used is \" may \" but not \" shall\". In cases falling within Clauses (i) and (ii) of the proviso to Sub-section (1) to Section 139, the", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-7", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "and (ii) of the proviso to Sub-section (1) to Section 139, the Income-tax Officer is empowered to extend the time for filing the return without charging any interest; but where the Income-tax Officer extends the time up to any period falling beyond the dates specified in Clauses (i) and (ii) referred to above, interest shall be payable from the 1st day of October or the 1st day of January of the assessment year to the date of the furnishing of the return. The rate of interest payable under this proviso was only 6% prior to October 1, 1967, and, thereafter, it has been enhanced to 9% per annum. In the case of a registered firm or an unregistered firm assessed under Clause (b) of Section 183 interest must be calculated on the basis of the amount of tax which would have been payable if the firm had been assessed in the status of an unregistered firm and, in any other case, on the amount of tax payable on the total income. By virtue of the provision of Sub-section (1A) inserted by Section 8 of the Finance Act, 1963, with retrospective effect from the commencement of the Act, the interest imposed by the Income-tax Officer shall be reduced in accordance with the reduction of the amount of tax as a result of an order under Section 154 or Section 155 or Section 250 or Section 254 or Section 260 or Section 262 or Section 264 of the Act and the excess interest paid, if any, shall be refunded to the assessee.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-8", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "5. Under Sub-section (2) to Section 139, the Income-tax Officer may before the end of the relevant assessment year serve a notice upon any person whose total income is in his opinion assessable to tax requiring him to furnish within 60 days from the date of service of such notice a return of his total income. The proviso to Sub-section (2) also empowers the Income-tax Officer to extend the date for the furnishing of the return if the same, whether fixed originally or on extension, falls beyond the 30th day of September or the 31st day of December, as the case may be, of the assessment year on payment of interest as per the provisions of Clause (iii) of the proviso to Sub-section (1). Sub-section (4) provides for the furnishing of a return by an assessee who failed to file the same within the time allowed to him under Sub-section (1) or Sub-section (2) but he must do so before the completion of the assessment. In such a case the provisions of Clause (iii) of the proviso to Sub-section (1) empowering the Income-tax Officer to levy interest are attracted. Sub-section (5) provides for the furnishing, of a revised return by the assessee at any time before the assessment is made. Sub-section (8) has invested the Income-tax Officer with a power to reduce or waive the interest payable by any person under any provision of Section 139 in such cases and under such circumstances as may be prescribed therefor. Hence, it admits of no doubt that the Income-tax Officer is competent to waive or reduce the interest payable by any assessee under any provision of Section 139 in proper and appropriate cases. This power has been invested in the Income-tax Officer notwithstanding the provisions of Clause (iii) of the proviso to Sub-section (1).", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-9", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "6. We shall now advert to the intendment and purpose of Clause (iii) of the proviso to Sub-section (1) to sec'tion 139 and its applicability to cases falling under the proviso to Sub-section (2) and Sub-section (4) of Section 139. It is pertinent to notice that the expression used is \" interest \" but not penal interest. It is chargeable on the basis of the amount of tax which would have been payable by the assessee. The period for which such interest is exigible is from the 1st day of October or the 1st day of January, as the case may be, of the assessment year to the actual date of furnishing the return, It may be noted that the rate of interest payable under the aforesaid provision has been enhanced from 6% to 9% per annum from October 1, 1967. It is pertinent to notice that Section 140A provides for self-assessment whereas Section 141 provides for provisional assessment. Under Section 140A the assessee is obliged statutorily to pay the tax payable on the basis of the return of income furnished by him under Section 139 within 30 days thereafter. The amount of tax paid under self-assessment shall be taken into account when the provisional assessment under Section 141 or regular assessment under Section 144 will be made. Sub-section (3) to Section 140A makes every assessee who fails to pay the tax or any part thereof in accordance with the provisions of Sub-section (1) liable to pay penalty as directed by the Income-tax Officer although it (penalty) shall not exceed 50% of the amount of such tax or part, as the case may be. No doubt, the penalty referred to above shall be levied only after affording a reasonable opportunity of being heard to the assessee. Therefore, interest payable under Clause (iii) of the proviso to Sub-section", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-10", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "the assessee. Therefore, interest payable under Clause (iii) of the proviso to Sub-section (1) to Section 139 is nothing but simple interest or compensation that could accrue or would have accrued to the State, if the assessee had filed his return as required by Section 139 and paid the tax as per the provisions of Section 140A. It is not, therefore, correct to state that the interest so payable is penal in character. Nor does it amount to penalty of any kind levied under the Act. The very intendment and purpose of this provision to levy interest on the amount of tax payable by the assessee is to make the assessees feel their responsibility and statutory obligation to furnish the return of their incomes within the time provided under Section 139 of the Act. To put it differently, the assessees will not gain in any way by their failure in, or postponement of, furnishing the returns of their income with the hope that they can postpone the payment of tax to a later date and have the advantage of utility of such amount of tax during such period as they are made to pay interest on such tax demands.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-11", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "7. We shall now advert to Section 271 comprised in Chapter XXI dealing with penalties imposable under the Act. Section 271 empowers the Income-tax Officer and the Appellate Assistant Commissioner to impose penalty on such of the assessees if the conditions specified in Clause (a) or Clause (b) or Clause (c) thereof have been satisfied. Under Clause (a) of Sub-section (1) to Section 271 the Income-tax Officer or the Appellate Assistant Commissioner is competent to levy a penalty of a sum equal to 2% of the tax for every month during which the default continued. The aforesaid sum of penalty is in addition to the amount of tax payable by the assessee. However, the penalty so imposable shall not exceed in the aggregate 50% of the tax. In order to attract the provisions of Section 271(1)(a) the Income-tax Officer or the Appellate Assistant Commissioner must be satisfied that the assessee has without reasonable cause failed to furnish his return of income voluntarily within the time prescribed under subsection (1) to Section 139 or by notice given under Sub-section (2) to Section 139 or Section 148. The satisfaction of the Income-tax Officer or the Appellate Assistant Commissioner that the assessee has failed to furnish the return as required by the provisions of the Section must be in the course of the proceedings under the Act. Where any person failed to furnish his return within the time allowed under Sub-section (1) to Section 139 and in the manner required by a notice under Sub-section (2) to Section 139 he is liable to pay penalty under this Act. In other words the provisions of Section 271(1)(a) will be attracted if without reasonable cause a person fails to furnish a return voluntarily or as required by the notice under Section 139(2) if it was not filed within the time allowed and in the manner required by the", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-12", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "if it was not filed within the time allowed and in the manner required by the aforesaid provisions. The return filed must be in the prescribed manner furnishing the requisite particulars. Reasonable cause must be construed as sufficient cause. Clause (b) of Sub-section (1) of Section 271 is attracted when there is a failure without any reasonable cause on the part of any person to comply with a notice under Sub-section (1) of Section 142 or Sub-section (2) of Section 143. Where Clause (b) is attracted the minimum sum of penalty is 10% and the maximum is 50% of the amount of tax sought to be avoided by the assessee. Clause (c) is attracted in a case where the Income-tax Officer or the Appellate Assistant Commissioner is satisfied that any person concealed the particulars of his income or deliberately furnished inaccurate particulars of his income. This being a more serious one, the minimum penalty exigible is 20% and the maximum is one and a half times the amount of tax sought to be avoided. Section 272 provides for the levy of penalty on any person who fails to give notice of discontinuance of his business, whereas Section 273 provides for the levy of penalty for false estimate of or failure to pay advance tax. The penalty imposable under Chapter XXI cannot be made unless the assessee has been given a reasonable opportunity of being heard. Section 275 bars the income-tax authorities from imposing a penalty under Chapter XXI after the expiration of two years from the date of completion of the proceedings in the course of which the proceedings for the imposition of penalty have been commenced. Unlike under the 1922 Act, Section 275 of the present Act provides for the limitation of two years from the date of the completion of the proceedings in the course of which the proceedings for the imposition of penalty have been commenced for passing the order of penalty. Under Section 28 of the old Act, there was no time limit", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-13", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "passing the order of penalty. Under Section 28 of the old Act, there was no time limit to pass the order of penalty, if the Income-tax Officer or the Appellate Assistant Commissioner was satisfied in the course of any proceedings under the Act that the requisite conditions of Clause (a), (b) or (c) thereof have been established.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-14", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "8. The provisions of Sections 276 to 280 comprised in Chapter XXII provide for prosecutions and offences. The making of a false statement in a declaration under the Act is punishable under Section 277 with rigorous imprisonment for a period of not less than 6 months but which may extend up to two years. The persons who are liable to the imposition of penalty under Section 271 may also at the same time be liable to prosecution for any of the offences specified in Chapter XXII. Under the present Act if the levy of penalty exceeds Rs. 1,000 it is the Inspecting Assistant Commissioner that is empowered to complete the penalty proceedings but not the Income-tax Officer. However we may add that it is the Income-tax Officer who is competent to issue a notice under Section 274(1) as to why penalty should not be levied; and after receipt of the explanation or on a consideration of the facts and circumstances, if the Income-tax Officer prima facie finds that the minimum penalty exigible in any given case is Rs. 1,000 or more the file shall be transferred to the Inspecting Assistant Commissioner who shall deal with the case according to the provisions of the Act and complete it. The penal provisions have been provided to deal with contumacious or fraudulent assessees. The purpose and object of Clause (iii) of the proviso to Sub-section (1) to Section 139 is to provide for levy of interest on the amount of tax payable by the assessee for his failure to furnish the return of his income as provided in Section 139. Such interest can, under no stretch of reasoning, be held to be penalty or penal interest as the same is being charged because the State could or would have earned so much of amount, profit or interest on the amount of tax payable by the assessee if the return was filed as required under Section 139 and tax paid thereon as per the provisions of Section 140A. The purpose, intendment or", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-15", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "tax paid thereon as per the provisions of Section 140A. The purpose, intendment or object of levying interest under Clause (iii) of the proviso to Sub-section (1) of Section 139 is undoubtedly different from the levy of penalty under Section 271(1)(a), (b) or (c). Those provisions were made by the sovereign Parliament to meet with different situations and protect the interests of the revenue and at the same time make the defaulting or fraudulent assessees realise that they will not only not gain any advantage but also make themselves liable for penalty for their default or failure without reasonable cause to file the returns of income within the time prescribed under Section 139 or concealment of their incomes or deliberately furnishing inaccurate particulars of their incomes.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-16", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "9. In the light of the foregoing discussion we shall now examine the contention of the assessee that the Income-tax Officer must be deemed to have granted extension of time for filing the return when he did not pass any order on its application dated September 16, 1963. As pointed out earlier the application though dated September 16, 1963, was in fact received by the Income-tax Officer only on September 18, 1963. As the application for extension of time was not received by the Income-tax Officer on or before September 16, 1963, within which time the assessee was required as per the notice under Sub-section (2) to Section 139 to file his return, the Income-tax Officer was not bound under the provisions of the Act or any rules made thereunder to pass any order thereon. It is not open to the assessee to file an application beyond the period within which it was required to file its return as per the notice under Section 139, and, thereafter, make no effort to know what happened to its application. The assessee should not assume or presume that any application filed by it for extension of time to file the return of income would automatically be granted. It is the duty of the assessee to file in advance an application for extension of time and obtain the extension on or before the date on which it is required to furnish its return of income. It admits of no doubt that whether to grant or refuse to grant extension of time for filing the return of any person is within the discretion of the Income-tax Officer. This view of ours gains support from the very use of the words \" in his discretion \" in the proviso to Sub-section (1) to Section 139. This discretion vested in the Income-tax Officer, being a statutory one, must be exercised fairly, reasonably and objectively but not arbitrarily or with malice or caprice. There is no provision in the Act or the rules made thereunder which", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-17", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "malice or caprice. There is no provision in the Act or the rules made thereunder which requires the Income-tax Officer to pass an order on an application filed by an assessee subsequent to the time given to him for filing his return pursuant to a notice under Sub-section (2) to Section 139. The Income-tax Officer has to apply his mind to the facts and circumstances of each case and decide whether it was a fit case to grant extension of time or not. There is no hard and fast rule of universal application. We may add that there is no scope for presuming or assuming that an application filed by an assessee for extension of time must have been granted in its favour when no order has been passed on its application by the Income-tax Officer. There is no scope for such a presumption or deeming provision in a taxing statute. The Income-tax Act is a self-contained code. The provisions of the Act and the Rules made thereunder must specifically provide for such a deeming provision. Otherwise, the assessee cannot claim any advantage or derive benefit when the Income-tax Officer did not pass any order on its application filed beyond the time within which it was required to furnish its return. In any event we are clear in our minds that the assessee herein cannot compel the Income-tax Officer either to pass an order extending the time for furnishing the return or give reasons for refusal of the request. On the application of the aforesaid principles, the contention of the assessee that it must be deemed that the extension of time was granted when the Income-tax Officer did not pass any orders on its application merits rejection. We may add that the assessee did not even file its return on October 16, 1963, as prayed for in its application. The return was filed only on August 3, 1964, and it did not take any interest or steps to know what had happened to its application for extension of time by one month. For all these", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-18", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "steps to know what had happened to its application for extension of time by one month. For all these reasons, our answer, therefore, to question No. 1 must be in the negative and against the assessee.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-19", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "10. We shall now turn to questions Nos. 2 and 3. The contention of Sri Ramachandra Rao that the Income-tax Officer having levied interest under Clause (iii) of the proviso to Sub-section (1) of Section 139 must be deemed to have condoned the delay in filing the return of income of his client cannot be given effect to for reasons more than one. The Income-tax Officer is no doubt elnpowered to extend the time for furnishing the return of any person on his application in the prescribed manner beyond the dates within which he has to file the same. In cases falling under Clauses (i) and (it) of the said proviso, the officer may extend the time without charging any interest. However, where the case falls under Clause (iii) he shall levy interest as provided therein. The levy of interest, as stated earlier, does not ipso facto make the filing of the return by the assessee within the prescribed time. The Income-tax Officer, in his discretion, is competent to extend the date for furnishing the return up to any period falling beyond the dates mentioned in Clauses (i) and (ii) in which case interest at 6% for the assessment year 1963-64 shall be payable from October 1, 1963, to August 3, 1964. The intendment and purpose of levy of interest under Clause (iii) of the proviso to Section 139(1) is only to collect interest on the amount of tax due and payable by the assessee as per the provisions of the Act. It can by no stretch of reasoning be stated that the Income-tax Officer by the imposition of interest must be deemed to have condoned the delay in filing the return of income. This provision must be construed as a concession shown by the authors of the Act to the assessee to file their returns of income on payment of some interest; but nowhere it is stated either", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-20", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "assessee to file their returns of income on payment of some interest; but nowhere it is stated either in Section 139 or Section 271(1)(a) or any other provision of the Act or the rules made thereunder that there was no failure without reasonable cause on the part of the assessee to file the return as required by Section 139. No provision of the Act or the rules has been brought to our notice by Mr. Ramachandra Rao in support of his contention that the Income-tax Officer, by his levying interest, must be deemed to have condoned the delay in filing the return of income. The taxing provisions have to be construed strictly. Hence, we are unable to agree with the submission of Mr. Ramachandra Rao. The sovereign Parliament is competent to levy interest under Clause (iii) of the proviso to Section 139(1) while extending time for any assessee to furnish his return of income and also penalty for failure without reasonable cause to file the return within the time prescribed under Section 139. There is no prohibition under the Constitution for Parliament to provide for charge of interest, levy of penalty and institution of prosecution for certain commissions or omissions or defaults on the part of the assessees. Where the Act has specifically provided for charge of interest as well as levy of penalty, the courts have to give effect to the same. We may notice in this context the following observations of the learned judge/Grover J., who spoke for the court, in Jain Brothers v. Union of India, wherein the imposition of double taxation was justified :", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-21", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "\" It is not disputed that there can be double taxation if the legislature has distinctly enacted it.    It is only when there are general words of taxation and they have to be interpreted, they cannot be so interpreted as to tax the subject twice over to the same tax ..... The Constitution does\nnot contain any prohibition against double taxation even if it be assumed that such a taxation is involved in the case of a firm and its partners after the amendment of Section 23(5) by the  Act of  1956.    Nor  is there any other enactment which interdicts  such taxation ...... If any double\ntaxation is involved the legislature itself has, in express words, sanctioned it. It is not open to any one thereafter to invoke the general principles that the subject cannot be taxed twice over.\"", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-22", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "11. It is profitable to refer in this context to N. A. Malbary and Brothers v. Commissioner of Income-tax,  wherein it has been held that the jurisdiction of the Income-tax Officer to pass a second order of penalty was not lost because he had omitted to recall the earlier order even though both the orders could not be enforced simultaneously.  \n \n\n12. In the light of the foregoing discussion, we express our inability to agree with Mr. Ramachandra Rao, counsel appearing for the assessee, that the Income-tax Officer is not empowered to levy penalty under Section 271(1)(a) when once he has levied interest under the provisions of Clause (iii) of the proviso to Sub-section (1) to Section 139. The decision of a Division Bench", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-23", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "of this court in writ petition No. 1934/68 Kishan Lal Haricharan v. Income-tax Officer, dated March 5, 1970, relied upon by the assessee does not advance its plea as the facts of that case are distinguishable from those of the case on hand. As interest has been added by the Income-tax Officer, the assessee has raised this contention on the assumption that the Income-tax Officer must be deemed to have condoned the delay and extended the time for furnishing the return. The use of the word \" or\" in Section 271(1)(a) makes it abundantly clear that any one of the ingredients specified therein would attract the penal provisions thereof. In the instant case admittedly the assessee has without reasonable cause failed to furnish the return of its total income on or before June 30, 1963, as required by Sub-section (1) to Section 139. This one circumstance itself is sufficient to attract the provisions of Section 271(1)(a). We are conscious of the fact that the reference relates to the levy of penalty under Section 271(1)(a). We are not flow concerned in this reference with the validity or otherwise of the addition of interest under Clause (iii) of the proviso to Section 139(1) as the assesseee did not challenge the same either before the Appellate Assistant Commissioner or the Tribunal. We have therefore to confine in this reference to the question whether the Income-tax Officer is competent in law to levy the penalty under Section 271(1)(a) on the facts and in the circumstances of the case. As observed earlier the assessee has a statutory duty and obligation to furnish its return of income without any notice by or action on the part of the Income-tax Officer. In the present case no return has been filed by the assessee on or before June 30, 1963, as required by Section", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-24", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "filed by the assessee on or before June 30, 1963, as required by Section 139(1) of the Act. Indisputably, the provisions of Clause (a) of Sub-section (1) to Section 271 are attracted as the aforesaid fact which is not in dispute is itself sufficient to attract the same. This view of ours gains support from the decision of a Division Bench of the Madras High Court in C. V. Govindarajulu Iyer v. Commissioner of Income-tax, [1948] 16 I.T.R. 391 (Mad.). Therein the assessee failed to furnish a return of his total income as required by a general notice issued under Section 22(1) of the Indian Income-tax Act, 1922. No notice under Section 22(2) was issued by the Income-tax Officer within the year of assessment. Pursuant to the notice under Section 34, a return of income was filed by the assessee within the time given by the officer. However, after completing the reassessment, the Income-tax Officer levied penalty under Section 28(1)(a) corresponding to Section 271(1)(a) of the present Act for failure without reasonable cause to furnish a return pursuant to the notice under Section 22(1). The contention advanced on behalf of the assessee that as there was no notice under Section 22(2) and no action was taken by the Income-tax Officer during the year of assessment, the general notice under Section 22(1) and the default committed by him in not filing the return lapsed by the end of the year and hence no penalty could be levied under Section 28(1)(a) in the course of the reassessment proceedings, was rejected by the High Court. It was held therein that the assessment proceedings commenced with the general notice issued under Section 22(1) and where no order of assessment", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-25", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "proceedings commenced with the general notice issued under Section 22(1) and where no order of assessment or an order declaring that no assessment could be made was made the proceedings initiated under Section 34 must be deemed to relate to the proceedings which commenced with the public notice under Section 22(1). The penalty in those circumstances was sustained for the failure of the assessee to file its return as required by the notice under Section 22(1) even though the assessee had furnished his return within the time given by the notice under Section 34.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-26", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "13. It was held by a Division Bench of this court in K. P. Reddi v. Commissioner of Income-tax, [1968] 68 I.T.R. 638,645. 646 (A.P.) that the provisions of Section 28(1)(a) of the Indian Income-tax Act, 1922, are attracted where no return within the prescribed period has been filed by the assessee and such an assessee is liable for penalty in any proceedings the Income-tax Officer may initiate to assess his income be they on a notice under Section 28(2) or under Section 34. The learned judge, Jaganmohan Reddy C.J. (as he then was), who spoke for the court, observed thus :  \n \" If a return has been filed, not in compliance with a notice under Section 22(1) but after the expiry of the period prescribed in that notice, the mere fact that the return has not been accepted or that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, does not preclude the Income-tax Officer from taking action under Section 28(1)(a), if he so chooses.\"", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-27", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "14. In the present case it is found as a fact that the assessee did not furnish its return within the time given by the Income-tax Officer in his notice under Section 139(2). That apart, the request of the assessee for extension of time in its application dated September 16, 1963, and received by the Income-tax Officer on September 18, 1963, was only up to October 16, 1963. No return was filed until August 3, 1964. Judged from any angle we are clear in our minds that the provisions of Section 271(1)(a) are attracted in the instant case and the penalty has been rightly levied by the departmental authorities. On a careful examination of the provisions of Section 271(1)(a) read with the material provisions of Section 139, we are of the firm view that the Income-tax Officer was competent to levy a penalty under Section 271(1)(a) although he had levied interest under Clause (iii) of the proviso to Sub-section (1) of Section 139 as the intendment and purpose of both the imposts are different and distinct and they have been provided to meet different situations and contingencies. In our considered judgment both the penalty under Section 271(1)(a) and the interest under Clause (iii) of the proviso to Sub-section (1) of Section 139 are exigible and there is no illegality or unconstitutionality in the same. 'For all the reasons, our answer to question No. 2 is in the negative and to question No. 3 in the affirmative and against the assessee.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-28", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "15. We shall now advert to question No. 4. Section 139(4) permits any person to furnish the return of his income for any previous year at any time before the assessment is made but, however, he is made liable to pay interest from the date on which the return ought to have been filed under Section 139(1) to the actual date of the furnishing of the return. The mere fact that a return is permitted to be filed before the assessment is made or a revised return under Sub-section (5) of Section 139 could be filed at any time before the assessment is made, will not absolve such an assessee from the levy of penalty under Clause (a) of Sub-section (1) to Section 271. Section 271(1)(a) is attracted the moment the ingredients of that provision are established. The very provisions of Sub-section (4) will come into play only when no return has been furnished by the assessee within the time permitted under Sub-section (1) or within the time granted to him under Sub-section (2) of Section 139. If no return was fifed as required under Sub-section (1) of Section 139 or within the time permitted by notice under Sub-section (2) to Section 139 or Section 148, penalty can be levied by the Income-tax Officer under Section 271(1)(a). On a reading of the provisions of Section 271(1)(a) and Sub-section (4) of Section 139, we are satisfied that the assessee cannot claim that it is not open to the assessee to contend that there was no default in furnishing the return of its income as required by Sub-section (1) to Section 139 or by notice given under subsection (2) to Section 139. This question has been decided in R.C. No. 71 of 1968, Poorna Biscuit Factory v. Commissioner of", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-29", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "No. 71 of 1968, Poorna Biscuit Factory v. Commissioner of Income-tax (Unreported.) dated February 19, 1971, by a Division Bench of this court of which one of us (myself) was a party. Therein it was observed thus :", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "2b0591e9e0cb-30", "Titles": "T. Venkata Krishnaiah And Co. vs Commissioner Of Income-Tax on 10 September, 1971", "text": "\" The mere fact that the law gives him a further chance to file a return under Section 139(4) does not absolve him from his liability to be penalised under Section 271(1)(a) for the defaults he has already committed. The penalty is for failure without reasonable cause to file the return or for filing it beyond the time allowed under Section 139(1) or 139(2) of the Act. The penal interest is, however, levied as compensation to the Government for the interest that it would have earned had the return been filed in time and the assessment made on the basis of that return,\"  \n16. For all the reasons stated, our answer to question No. 4 is in the affirmative and in favour of the Government.  \n17. The assessee shall pay the costs of this reference. Advocate's fee, Rs. 300.", "source": "https://indiankanoon.org/doc/516144/"}
+{"id": "428b4576e996-0", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "JUDGMENT K. Ramaswamy, J.  \n 1. The Revenue sought reference under section 256(1) of the Income-tax Act, 1961 (43 of 1961), for short, \"the Act\", of six questions of law as follows :  \n \"(1) Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 17,056 spent by the assessee for hosting dinners to foreign delegation members in order to entertain them in an appropriate and befitting manner is not disallowable under section 37(2B) of the Income-tax Act, 1961, though it may be for purposes of business ?  \n (2) Whether, on the facts and in the circumstances of the case the amount of Rs. 2,668 spent by Delhi branch of the assessee for providing lunch and dinners to customers is not to be treated as entertainment expenditure and disallowed under section 37(2B) of the Income-tax Act 1961 ?  \n (3) Whether, on the facts and in the circumstances of the case, a sum of Rs. 1,79,155 debited under the head \"Business promotion expenses\" was not rightly disallowable as expenditure in the nature of entertainment expenditure and also partly as expenditure for maintenance of a guest house, for the stay of foreign guests (and not meant as holiday home for low-paid employees of assessee), under section 37(2B) and under section 37(4) of the Income-tax Act ?  \n (4) Whether, on the facts and in the circumstances of this case, the expenditure of RS. 893 paid to various clubs by the assessee for the purpose of entertaining foreign guests is not to be disallowed under section 37(2B) of the Act ?", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-1", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(5) Whether, on the facts and in the circumstances of the case, the amount of Rs. 22,722 debited by the assessee under the head \"Entertainment expenditure\" spent by it for providing coffee, tea and snacks to customers is not to be treated as expenditure in the nature of entertainment expenditure and disallowed under section 37(2B) of the Act ?  \n (6) Whether, on the facts and in the circumstances of the case, the amount of Rs. 1,49,965 spent on agmark charges, Rs. 2,14,860 spent on export licences fee and inspection charges, Rs. 1,09,587 paid as premium for export credit guarantee insurance, RS. 11,746 paid as subscription to export promotion council and trade associations, and Rs. 1,732 spent on translation charges are to be treated as items of expenditure eligible for weighted deduction either under sub-clause (ii) or sub-clause (vi) or, sub-clause(vii) of section 35B(l) (b) and the assessee held to be eligible for weighted deduction on these amounts particularly on account of the fact that the services were performed by the payees in India and not outside India ?\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-2", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "2. The material facts, relating thereto, are as follows : The assessee, Navabharat Enterprises (Private) Limited, for short \"the Company\", is having its head office at Hyderabad and branches at Guntur, New Delhi, Bombay, Calcutta and Cochin, and submitted its return for the assessment year 1973-74, ending the accounting year with June 30, 1972, of an income of Rs. 53,04,333 from ready-business and Rs. 8,060 from forward business. The Income-tax Officer found that a sum of Rs. 17,056 was incurred on account of \"special dinners arranged for trade delegations from U.S.S.R. and G.D.R.\" and disallowed it on the ground that it represented entertainment expenditure, disallowable under section 37(2B) of the Act. On appeal by the company, the Appellate Assistant Commissioner held that the expenditure did not partake of the character of business expenditure, so he confirmed the disallowance. On second appeal, the Appellate Tribunal held that trade delegations had come to India from G.D.R. and U.S.S.R., that the company had close business relationship with those countries and that with a view to promote the business interests of the company, it had incurred the expenditure only to entertain the delegates in an \"appropriate and befitting manner\". Therefore, it is business expenditure allowable under section 37(1) of the Act.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-3", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "3. The Income-tax Officer found that a sum of Rs. 2,668 incurred by the Delhi branch was in connection with arranging of lunch and dinner to \"trade customers\" which represented entertainment expenditure. Therefore, he disallowed the entire sum and the disallowance was confirmed on appeal by the Appellate Assistant Commissioner. On second appeal, the Appellate Tribunal found that there was nothing on record to show that the expenditure was \"extravagant or lavish\". It was incurred only for providing normal lunch and dinner to various \"trade constituents\". So, it allowed the entire claim of Rs. 2,668.  \n 4. In respect of the Guntur branch office, the company claimed a sum of Rs. 72,887 towards mess expenditure and Rs. 50,691 mess expenditure at the Madras guest house, totalling Rs. 1,23,578. The Income-tax Officer disallowed the entire claim. On appeal before the Appellate Assistant Commissioner, it was contended that the accommodation maintained is not in the nature of guest house but it is only a transit accommodation for the purpose of accommodating the employees and business associates while, at the above two places (Madras and Guntur) for the purpose of the appellant's business. Therefore, it cannot be said that it is maintained as a matter of hospitality and it should be taken as one maintained wholly and exclusively for the purpose of business and it is not covered by section 37(4). In support thereof, reliance was placed on a decision of the Income-tax Appellate Tribunal, Ahmedabad Bench, in Navasari v. A. D. P. P. Billimoria (ITA No. 48 (Ahd) /75-76 dated 30-1-1976). While acceding to this contention, the Appellate Assistant Commissioner held thus :", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-4", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "\"In this view of the matter, the appellant's contention that the expenditure on guest house has got to be allowed, has to be accepted. But, at the same time, in view of the fact that the entire expenditure cannot be treated as fully representing the elementary amenities, even though they are foreign visitors and in the absence of full details, I feel it would be fair to disallow 1/8th of the expenditure as representing entertainment.....\" (vide paragraphs 8.6 and 8.7 of the AAC's order in annexure-B in the material papers).  \n 5. On second appeal by the company, the Tribunal proceeded on the footing that the Appellate Assistant Commissioner was of the view that most of the expenditure was incurred wholly and exclusively for the purpose of business and as such it would not be covered under section 37(4) and held thus :  \n \"We find that the Appellate Assistant Commissioner in this case has clearly given a finding that no part of the expenditure could be considered as lavish or extravagant and the assessees had to incur such expenditure only for the provision of boarding and lodging for the business constituents In the background of this finding given by the Appellate Assistant Commissioner, we are of the view that no part of the expenditure claimed by the assessee should be held as disallowable. In any case, there is no evidence brought on record to show that any part of the expenditure incurred by the assessee-company was for the purpose of providing entertainment to the clients of the company.\"  \n 6. Thus, it held that the Appellate Assistant Commissioner was not justified in disallowing even a part of the claim made by the assessee in that regard. On that basis, the Tribunal allowed the entire amount claimed by the company (vide paragraphs 8 and 8.1 of the order of the Appellate Tribunal, annexure-C).", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-5", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "7. From the statement of the case, it would appear that the Tribunal proceeded on the footing that the Appellate Assistant Commissioner recorded a categorical finding that the expenditure was not lavish or extravagant, which is not correct as a fact. Without making any independent investigation into the point on the basis of the material on record, he recorded the above-quoted finding. The Appellate Assistant Commissioner categorically found that there is no definite evidence in that regard. Since the statement of the case is to stem from the finding recorded by the Appellate Tribunal in its order, it was so stated. Though normally we have to look to the statement of the case, since the Appellate Tribunal appears to have committed an obvious mistake apparent from the record, we have referred to the Appellate Assistant Commissioner's order (annexure-B) and the Tribunal's order (annexure-C), which are part of the record, only with a view to straighten the record and to bring out the correct position on findings.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-6", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "8. The Income-tax Officer disallowed a sum of Rs. 2,16,215 out of Rs. 2,21,515 from \"business promotion expenses\" on the ground that they are purelv expenses on entertainment and hence they are not allowable. On appeal by the company, the Appellate Assistant Commissioner gave relief of Rs. 1,79,155. The Revenue carried the matter in appeal. The Appellate Tribunal found that the same issue was considered by the Tribunal for the assessment year 1972-73 and, for the reasons mentioned therein, it upheld the order of the Appellate Assistant Commissioner that the expenditure incurred on foreign customers for their food, lodging and other expenses should be allowed. As regards the guest house expenses also, it was held that the guest house was maintained only as a place of lodging mainly for the foreign customers and as such it cannot be held that there was any element of entertainment in the expenditure incurred for the purpose of maintaining such guest house.  \n 9. The Income-tax Officer disallowed the claim of the company for a sum of Rs. 893 being the expenditure incurred on payment made to clubs for entertainment of foreign guests. The Appellate Assistant Commissioner accorded disallowance. On further appeal by the Revenue, the Appellate Tribunal held that the expenditure was incurred only on account of subscriptions to various clubs and it was necessary for the purpose of entertaining foreign guests. So, the expenditure was allowed under section 37(1) of the Act.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-7", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "10. The Income-tax Officer disallowed a sum of Rs. 22,722 being the expenditure incurred on account of provision of coffee, tea and snacks to customers as it was considered as entertainment expenditure disallowable under section 37(2B) of the Act. On appeal, the Appellate Assistant Commissioner allowed the entire claim and, on further appeal by the Revenue, the Appellate Tribunal upheld the decision of the Appellate Assistant Commissioner.  \n 11. The company claimed before the Appellate Assistant Commissioner the following items of expenditure under section 35B of the Act as being \"export markets development allowance\";  \n RS. P.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-8", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(1) Agmark charges                             1,40,265.01\n(2) Export licence fee and inspection charges  2,14.860.25\n(3) Export credit guarantee insurance          1,09,587.08\n(4) Salaries of chief buyers for exports         96,670.00\n(5) Subscription to export promotion councils    11,746.00\n    and trade associations\n(6) Translation charges                           1,737.32\n(7) Travelling conveyance and stay expenses of   54,193.93\n    foreign delegates", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-9", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "12. The Appellate Assistant Commissioner held that items Nos. 1, 2, 3, 5 and 6 are allowable under sub-clauses (ii), (vi) and (vii) of sub-section (1)(d) of section 35B. As regards items Nos. 4 and 7, it was held that, since the expenditure was not incurred wholly and exclusively for the purpose of export business, it was restricted to 50% of the expenditure and allowed accordingly. On further appeal, at the instance of the Revenue, the Appellate Tribunal confirmed those findings. On those facts, the above questions of law have been referred to this court for advice.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-10", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "13. Sri Suryanarayana Murthy, learned standing counsel for the Revenue, has contended that though the company has business connections with U.S.S.R. and G.D.R. and the trade delegates from those countries have visited India in connection with the purchase of tobacco, the expenditure incurred on them by the company is \"in the nature of entertainment expenditure\". Therefore, by operation of sub-sections (2) and (2B) of section 37 of the Act, the entire amount pertaining to questions Nos. (1),(2), (3) and (5) cannot be allowed as business expenditure under section 37(1) of the Act but is to be circumscribed within the slab prescribed in sub-section (2) of section 37. In support thereof, he placed strong reliance on CIT v. Veeriah Reddiar [FB]. He also further contends that though a Division Bench of this court in. Addl. CIT v. Maddi Venkataratnam & Co. Ltd. [1979] 119 ITR 514, held that the entire expenditure is to be disallowed, it defeats the very object of sub-sections (2), (2A) and (2B) of section 37 and, therefore, the entire amount cannot be allowed. The Appellate Tribunal found that the hosting of lunch or dinner to the foreign delegates was arranged in an appropriate and befitting manner. This finding is \"delightfully vague\". The terms \"appropriate and befitting\" jettisons legal setting drawn in section 37(2), (2A) and (2B) affording carte blanche to an assessee to expend any expenditure to woo a client, customer, constituent, at great cost to the exchequer defeating the object of sub-section (2) of section 37 of the Act. Alternatively, it is contended that even if that finding is to be", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-11", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "37 of the Act. Alternatively, it is contended that even if that finding is to be accepted, it is a matter for remittance to the Tribunal for verification, with reference to the evidence on record, whether the expenditure was incurred extravagantly or lavishly in arranging lunch or dinner to foreign delegates and slash it to a frugal one, as was done between the parties in Nava Bharat Enterprises (P.) Ltd. v. CIT [1983] 143 ITR 804 by this court for the previous assessment year.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-12", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "14. Sri Parvatha Rao, learned counsel for the company, has refuted these contentions. He contends that the company has close business relations with the USSR and the GDR; when the delegates from those countries visited India, it is elementary that the company should provide consistent with the dignity of the foreign delegates, lunch or dinner; and, therefore, it is a bare necessity in connection with the business. Unless it is shown that it is extravagant or lavish, as stated by the Appellate Tribunal, the finding is to be accepted and it is in consonance with the law laid down in Maddi Venkataratnam's case . Therefore, they are to be answered in favour of the company. It is further contended that, whether the expenditure expended by the company to arrange lunch or dinner for foreign delegates is extravagant or lavish is a question of fact and it cannot be gone into in a reference under section 256(1) of the Act.  \n 15. Questions Nos. (1), (2), (3) and (5) can be disposed of together. The point that arises for consideration is whether the expenditure incurred by the company is business expenditure laid out or expended wholly and exclusively for the purpose of the business of the company deductible under section 37(1) of the Act, or in the nature of entertainment expenditure, coming within sub-section (2) thereof, and allowable in the manner laid down thereunder on the basis of the slab system. With a view to understand the scope and to appreciate the same, it is necessary to wade through section 37 operative during the assessment year 1973-74. Section 37 reads thus :", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-13", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "\"(1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head 'Profits and gains of business or profession'.  \n (2) Notwithstanding anything contained in sub-section (1), no expenditure in the nature of entertainment expenditure shall be allowed in the case of a company, which exceeds the aggregate amount computed as hereunder : -  \n   (i) on the first Rs. 10,00,000 of the            at the rate of 1% or\nprofits and gains of the business (computed      Rs. 5,000, whichever is\nbefore making any allowance under section 33     higher;\nor section 33A or in respect of entertainment\nexpenditure)\n(ii) on the next Rs. 40,00,000 of the           at the rate of 1/2%;\nprofits and gains of the business (computed in\nthe manner aforesaid)\n(iii) on the next Rs. 1,20,00,000 of the        at the rate of 1/4%;\nprofits and gains of the business (computed in\nthe manner aforesaid)\n(iv) on the balance of the profits and           Nil.\ngains of the business (computed in the manner\naforesaid)", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-14", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), no allowance shall be made in respect of so much of the expenditure in the nature of entertainment expenditure incurred by any assessee during any previous year which expires after the 30th day of September, 1967, as is in excess of the aggregate amount computed as hereunder : -  \n   (i) on the first Rs. 10,00,000 of the profit    at the rate of 1/2% or\nand gains of the business or profession          Rs. 5,000, whichever is\n(computed before making any allowance            higher;\nunder section 33 or section 33A or in respect\nof entertaintnent expenditure)\n(ii) on the next Rs. 40,00,000 of the            at the rate of 1/4%;\nprofits and gains of the business or profession\n(computed in the manner aforesaid)\n(iii) on the next Rs. 1,20,00,000 of the          at the rate of 1/8%;\nprofits and gains of the business or profession\n(computed in the manner aforesaid)\n(iv) on the balance of the profits and             Nil :\ngains of the business or profession (computed\nin the manner aforesaid)  \n \n\nProvided that where the previous year of any assessee falls partly before and partly after the 30th day of September, 1967, the allowance in respect of such expenditure incurred during the previous year shall not exceed -  \n   \n\n (a) in the case of a company -", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-15", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(a) in the case of a company -  \n   \n\n (i) in respect of such expenditure incurred before the 1st day of October. 1967, the sum which bears to the aggregate amount computed at the rate or rates specified in sub-section (2), the same proportion as the number of days comprised in the period commencing on the first day of such previous year and ending with the 30th day of September, 1967, bears to the total number of days in the previous year;  \n \n\n (ii) in respect of such expenditure incurred after the 30th day of September, 1967, the sum which bears to the aggregate amount computed at the rate or rates specified in this sub-section; the same proportion as the number of days comprised in the period commencing on the 1st day of October, 1967, and ending with the last day of the previous year bears to the total number of days in the previous year;   \n \n\n (b) in any other case -  \n   \n\n (i) in respect of such expenditure incurred before the 1st day of October, 1967, the amount admissible under sub-section (1);  \n \n\n (ii) in respect of such expenditure incurred after the 30th day of September, 1967, the sum which bears to the aggregate amount computed at the rate or rates specified in this sub-section, the same proportion as the number of days comprised in the period commencing on the 1st day of October, 1967, and ending with the last day of the previous year bears to the total number of days in the previous year.    \n \n\nExplanation. - For the purposes of this sub-section and sub-section (2B), 'entertainment expenditure' includes -", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-16", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(i) the amount of any allowance in the nature of entertainment allowance paid by the assessee to any employee or other person after the 29th day of February, 1968;  \n \n\n (ii) the amount of any expenditure in the nature of entertainment expenditure (not being expenditure incurred out of an allowance of the nature referred to in clause (i)) incurred after the 29th day of February, 1968, for the purposes of the business or profession of the assessee by any employee or other person.   \n \n\n (2B) Notwithstanding anything contained in this section, no allowance shall be made in respect of expenditure in the nature of entertainment expenditure incurred within India by any assessee after the 28th day of February, 1970.\"    \n \n\n (Other sub-sections are not necessary. Hence omitted.)", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-17", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "16. The question at issue is whether the amount laid out or expended by the company on the foreign delegates in arranging dinner or lunch at various branches is \"in the nature of entertainment expenditure\" within the meaning of sub-section (2) of section 37. If the finding is positive by operation of the non obstante clause in sub-section (2), it is to be allowed as per its slab system and takes out from section 37(1). To understand its scope and sweep, it is now well-settled that recourse to the legislative history of sub-sections (1), (2), (2A) and (2B) can be sought so that it could dispel the seeming doubt from judicial dicta and the necessity the Legislature felt to undertake the amendments to section 37 by introducing sub-sections (2), (2A) and (2B) and the march of law thereby made. In CIT v. Shahzada Nand & Sons , their Lordships of the Supreme Court have traced the legislative history to section 34 of the Indian Income-tax Act, 1922, to find the legislative intent. So it is an authority for the proposition that considerations stemming from legislative history are relevant material for the court to get at the legislative intent in using the compendious phrase \"in the nature of entertainment expenditure\" in sub-sections (2), (2A) and (2B) of section 37.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-18", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "17. Chapter IV of the Act deals with the computation of total income under different heads of income. Part A deals with salaries; Part B relates to interest on securities; Part C deals with income from house property; Part D deals with \"profits and gains of business or profession ' which is material for the purpose of this case. Section 28 provides for income which shall be chargeable to income-tax under the head \"Profits and gains of business or profession\". Section 29 prescribes that the taxable income is to be computed in accordance with the provisions contained in sections 30 to 43A of the Act of which section 37 is relevant. As seen, section 37(1), as the marginal note indicates, is the general provision prescribing that any expenditure not being expenditure of the nature described in sections 30 to 36 and not being in the nature of \"capital expenditure\" or \"personal expenses\" of the assessee laid out or expended wholly and exclusively for the purpose of the business or profession shall be allowed in computing the income chargeable under the head \"Profits and gains of business or profession\". But, however, this generality of sub-section (1), is circumscribed by employing the non obstante clause in sub-sections (2), (2A) and (2B), where it specified that \"no expenditure in the nature of entertainment expenditure\" shall be allowed in the case of a company which exceeds the aggregate amount computed in the manner prescribed in clauses (i) to (iv). Explanation 2 was made to remove the doubts in operating sub-sections (2) and (2A). Therefore, the question is : What is the meaning of the compendious expression \" in the nature of entertainment expenditure\", couched in sub-sections (2), (2A) and 2(B) of section 37. Preceding the Act, under section 10(2)(xv) of the Indian Income-tax", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-19", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "the Act, under section 10(2)(xv) of the Indian Income-tax Act, 1922, in computing the income chargeable under the head \"Profits or gains of any business or vocation carried on\", necessary allowance was being given in respect of any non-capital expenditure incurred solely for the purposes of earning such profits or gains. The Legislature enlarged its scope by the amendment brought to section 10(2)(xv) by the Amendment Act, 1939, introducing a proviso. Thereby, any expenditure, not being in the nature of \"capital expenditure or personal expenses\" of the assessee laid out or expended wholly and exclusively for the purposes of such business, profession or vocation, was to be allowed. All amounts expended by the assessee for the entertainment of his business constituents, clients or customers were being deducted under this head on the ground that such hospitality or entertainment was extended wholly for the purpose of business promotion or profession or vocation of the assessee. When the Legislature found that this facility is being abused, intended to quench the thirst of the assessee in unduly expending or laying out entertainment expenditure, to further their business prospects and the exchequer to defray it, by gradual and deliberate legislative amendments restricted and curbed their claim for allowance. The initial step was section 6 of the Finance Act of 1961 which came into effect from April 1, 1962, by which the scope of the proviso to section 10(2) (xv) of the 1922 Act was curtailed by imposing a ceiling limit on all business expenditure in the nature of entertainment expenditure which could be allowed to companies. The maximum of such deductions was prescribed on a slab basis depending upon the profits and gains of the business of such company in the relevant accounting year. When the Act was brought on the statute book replacing the predecessor 1922 Act, the same provision was retained intact in sub-section", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-20", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "the statute book replacing the predecessor 1922 Act, the same provision was retained intact in sub-section (2) of section 37 of the Act.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-21", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "18. But when the avoidance was persisted with by assessees other than companies, Parliament further amended through section 4 of the Taxation Laws (Amendment) Act, 1967, introducing sub-section (2A) placing restrictions or ceiling limit on allowance of \"entertainment expenditure\"; allowance on other categories of assessees other than companies. It was further amplified by the Explanation to sub-sections (2) and (2A) introduced by the Finance Act of 1968 expanding the scope of the restriction imposed by sub-section (2A) so as to take in any expenditure incurred by an assessee in expending entertainment allowance to its employees or other persons from February 29, 1968, and also the amount of any expenditure in the nature of entertainment expenditure incurred by any employee or other person for the purpose of the business or profession of the assessee other than, out of an entertainment allowance paid to him by the assessee. Then, by the Finance Act, 1970, Parliament further introduced sub-section (2B) in section 37 removing the last vestige. While introducing the Finance Bill, the Finance Minister stated on the floor of the House thus :  \n \"Those who enjoy the hospitality of their business friends should now no longer find their sense of gratitude diminished by the thought that a part of the hospitality is really paid for by the exchequer.\" (vide [1970] 75 ITR (St.) 25, 26).", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-22", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "19. Section 37(2B) has been already extracted and needs no repetition. Section 37(2B) was omitted by the Finance Act, 1976, with effect from April 1, 1977, and it was again reintroduced by further amendment with effect from April 1, 1979, through the Taxation Laws (Amendment) Act, 1978. The later amendments are not relevant for the purpose of this case. Hence, the need to extract them is obviated.  \n 20. Maxwell on \"The Interpretation of Statutes\", 12th edition, at page 137, in Chapter 6, under the caption \"Construction to prevent evasion or abuse\", stated thus :  \n \"'.. the office of the judge is, to make such construction as will suppress the mischief, and advance the remedy, and to suppress all evasions for the continuance of the mischief.' To carry out effectually the object of a statute, it must be so construed as to defeat all attempts to do, or avoid doing, in an indirect or circuitous manner that which it has prohibited or enjoined : quando aliquid prohibetur, prohibetur et omne per quod devenitur ad illud.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-23", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "This manner of construction has two aspects. One is that the courts mindful of the mischief rule, will not be astute to narrow the language of a statute so as to allow persons within its purview to escape its net. The other is that the statute may be applied to the substance rather than the mere form of transactions, thus defeating any shifts and contrivances which parties may have devised in the hope of thereby falling outside the Act. When the courts find an attempt at concealment, they will, in the words of Wilmot C.J., 'brush away the cobweb varnish, and shew the transactions in their true light' (Collins v. Blantern [1767] 2 Wils KB 347 at 852)\".   \n 21. It was further stated at page 141 in the context of Taxing Act on the \"substance rule\" thus :  \n \"The language used is not to be either stretched, in favour of the Crown or narrowed in favour or the taxpayer. So where the court has to consider a provision expressly designed to prevent tax evasion which uses unnecessarily wide language to achieve its purpose, that language will be given effect to even though the section is thereby made to apply to cases which it was probably never intended to catch.\"  \n 22. In Craies on Statute Law, seventh edition, under Chapter 5, \"Construction where the meaning is plain\", it was stated at page 65 thus :  \n \"Where the language of an Act is clear and explicit, we must give effect to it, whatever may be the consequences, for in that case the words of the statute speak the intention of the Legislature.\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-24", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "23. In Shahzada Nand's case , while construing the provision of section 34 of the predecessor Income-tax Act, 1922, their Lordships of the Supreme Court, speaking through Subba Rao J. (as he then was), at para. 8 stated that where the words of the section are clear but its scope is sought to be curtailed by construction, the approach suggested by Lord Coke in In re Heydon's case [1584] 3 Co. Rep. 7a, was applied thus (p. 400 of 60 ITR) :  \n \"To arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope and object of the whole Act; to consider, according to Lord Coke : (1) What was the law before the Act was passed; (2) What was the mischief or defect for which the law had not provided; (3) What remedy Parliament has appointed; and (4) The reason of the remedy.\"  \n 24. The scope of the limitation provided under section 34(1A) of the Amendment Act fell for consideration before the Supreme Court. In that context, the rule of statutory construction of Mischief Rule was applied to a taxing statute.  \n 25. In Poppatlal Shah v,. State of Madras, , Mukherjea J. (as he then was) held at page 276, para. (7), thus :  \n \"It is a settled rule of construction that to ascertain the legislative intent, all the constituent parts of a statute are to be taken together and each word, phrase or sentence is to be considered in the light of the general purpose and object of the Act itself.\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-25", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "26. In that case, the question was whether the title in the goods has passed under the Madras Sales Tax Act at the time when the transaction was entered into within the State of Madras or when the title in the goods passed to the buyer who is outside the State, on its receipt for assessment to sales tax of the sales effected outside the State. In that context, the preamble, the purpose and the operation of the Act were considered.  \n 27. In CST v. Parson Tools & Plants, , Sarkaria J. has held that (AIR headnote) :  \n \"Where the Legislature clearly declares its intent in the scheme and language of a statute, it is the duty of the court to give full effect to the same without scanning its wisdom or policy, and without engrafting, adding or implying anything which is not congenial to or consistent with such expressed intent of the law-giver; more so if the statute is a taxing statute.\"  \n 28. The facts in that case were that under the U.P. Sales Tax Act, the limitation has been prescribed for filing a revision before the authorities constituted thereunder. The Full Bench of the Allahabad High Court in CST v. Parson Tools & Plants [1971] 27 STC 73 (All) held that sections 5 and 14 of the Limitation Act would apply to the revisions filed thereunder. While holding that the Limitation Act does not apply, the above law was laid down.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-26", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "29. Thus it is settled law that in order to ascertain the intention of the Legislature, the court has to gather from all admissible evidence including legislative history and the language in which the statute is couched, the purpose of the statute, its aim, scope, object and setting of the Act, giving effect to the context of every word, phrase or sentence employed therein by harmonious construction so as, as far as possible, to make a consistent enactment of the whole statute. In that process, the court has to keep in the forefront, what was the state of law before the Act was passed what was the mischief or defect which the law had not prevented, what remedy the Legislature has provided and the reason for the remedy. The construction would be to suppress the mischief and advance the remedy and to suppress all evasions for the continuance of the mischief which the statute intends to prevent. The statute must be applied to the substance rather than to the mere form of the transaction, thereby defeating any mischief of contraventions which the parties may have devised to wriggle out of the Act, if necessary to brush away the cobwebs and consider the transactions in their true light.  \n 30. In the light of the above law, the question is, as stated earlier, whether the expenditure incurred on dinner or lunch provided to the foreign trade delegates by the company is in the nature of entertainment expenditure within the meaning of sub-section (2) or sub-section (2B) of section 37.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-27", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "31. In this regard, there is a cleavage in judicial thought on the scope of \"entertainment expenditure\" one torch-bearer being CIT v. Patel Brothers & Co. Ltd. , followed by this court in Maddi Venkataratnam's case [1979] 119 ITR 514, the connecting link being Divan C.J., being a party to both the judgments; and the contra is CIT v. Veeriah Reddiar [FB], speaking through Balakrishna Eradi J. (as he then was), followed in CIT v. Khem Chand Bahadur Chand [FB]. At the cost of repetition, it may be necessary to recapitulate that section 37(1) gives right to an assessee to an allowance of business expenditure laid out or expended wholly or exclusively for the purposes of the business and profession (the expenditure not being in the nature of capital expenditure or personal expenses of the assessee) in computing the income chargeable to tax under the head \"Profits and gains of business or profession\". But its width and sweep are sought to be curtailed by sub-sections (2), (2A), (2B) and (4) of section 37, by employing the non obstante lause stating that \"no expenditure in the nature of entertainment expenditure shall be allowed exceeding the aggregate amount computed on the basis of the slab system provided thereunder as in the case of a company and individual assessees under sub-sections (2) and (2A) respectively and putting a total prohibition at the relevant assessment year under sub-section (2B) after February 28, 1970, and under sub-section(4), from the same period, allowance of expenditure incurred on the maintenance of a guest house or a guest house maintained as a holiday home for employees. The scope of the non obstante clause was considered by the Supreme Court in South Indian Corporation (P)", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-28", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "of the non obstante clause was considered by the Supreme Court in South Indian Corporation (P) Ltd. v. Secretary, Board of Revenue, . Subba Rao J. (as he then was), speaking for the Constitution Bench, held at page 215, paragraph 19 (of AIR), thus :", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-29", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "\"... Article 278 opens out with a non obstante clause. The phrasc 'notwithstanding anything in the Constitution ' is equivalent to saying that in spite of the other articles of the Constitution, or that the other articles shall not be an impediment to the operation of article 278. While article 372 is subject to article 278, article 278 operates in its own sphere in spite of article 372. The result is that article 278 overrides article 372; that is to say, notwithstanding the fact that a pre-Constitution taxation law continues in force under article 372, the Union and the State Governments can enter into an agreement in terms of article 278 in respect of Part B State depriving the State law of its efficacy.\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-30", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "32. The contention raised in that case was that article 277 of the Constitution would save only the levy of tax that was being lawfully levied by a State immediately before the commencement of the Constitution and since the Travancore and Cochin General Sales Tax Act came into force after the Constitution, the levy made thereunder does not satisfy the conditions laid down in article 277. So, the tax under the Act was not saved. While considering the scope of and upholding that contention, it was held that article 277 excludes the operation of article 372 or an agreement in terms of article 278 overrides article 372. A Division Bench of this court in Parasuramaiah v. Lakshmamma, , was also called upon to consider the effect of the non obstante clause in section 10(3)(c) of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act (15 of 1960). The contention therein was that by virtue of the non obstante clause in section 10(3)(c), it must be confined to find whether the land lord owns a residential or non-residential building of his own in the city, town or village concerned and nothing more. While meeting that contention, Gopal Rao Ekbote J. (as he then was), speaking for the Bench, held thus (p. 223) :", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-31", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "\"It must be understood that a non obstante clause is usually used in 'a provision to indicate that that provision should prevail despite anything to the contrary in the provision mentioned in such non obstante clause. In case there is any inconsistency or departure between the non obstante clause and another provision, one of the objects of such a clause is to indicate that it is the non obstante clause which would prevail over the other clause. It does not, however, necessarily mean that there must be repugnancy between the two provisions in all such cases.\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-32", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "33. It was held that the purpose of the non obstante clause was that the entire clause (a) would not apply to a case falling within the ambit of clause (c). Any other meaning would amount to ignoring the express non obstante clause appearing in clause (c). In sub-section (1) of section 37, any expenditure in the nature of capital expenditure or personal expenses of the assessee or expenditure in the nature described in sections 30 to 36 are not allowable in computing the income chargeable under the head \"Profits and gains of business or profession\". But the other business expenditure laid out or expended wholly and exclusively for the purpose of the business or profession shall be allowable. But the width of its net again is cut down by the non obstante clause in other provisions-the expenditure in the nature of entertainment expenditure shall not be allowed except at the rates on the basis of the slab prescribed thereunder. Therefore, despite the operation of sub-section (1) of section 37, sub-sections (2), (2A), (2B) and (4) have independent operation and an assessee is not entitled to deduction of the whole entertainment expenditure if it falls under the latter sub-section. The term \"in the nature of entertainment expenditure\" was not defined under the Act. The question therefore, is, what is the meaning of the general phrase \"in the nature of entertainment expenditure\". A reading of this compendious clause appears to be couched in wide language spreading its net widely to engulf in its ambit all the \"entertainment expenditure\" stricto sensu or otherwise so as to bring within its net all the expenditure laid out or expended as entertainment expenditure. The meaning of this phrase was considered in Veeriah Reddiar's case [FB]. Balakrishna Eradi J. (as he then was) has considered it with reference to the standard dictionaries and held at page 617 thus :", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-33", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "\"A reference to the leading dictionaries would show that the word entertainment 'has several different shades of meaning such as, a diversion or amusement : something affording a diversion or amusement esp. a performance : hospitable provision for guests : maintenance in service : reception of and provision for guests : hospitality at table : that which entertains : a performance or show intended to give pleasure : hospitality given or received : the consideration of an idea : reception admission, etc., etc. The exact content of the word has, therefore, to be gathered from the context and setting in which it has been used.\"  \n 34. It was held that in interpreting the expression \"entertainment expenditure\" occurring in sub-sections (2A) and (2B) of section 37 of the Act, the word \"entertainment\" should be taken to mean \"hospitality of any kind extended by the assessee directly in connection with his business or profession.\" In that case, the question was whether the expenditure for supplying cigarettes, coffee or meals to customers and constituents of the assessee would fall within the sweep of sub-sections (2A) and (2B) of section 37. The Full Bench has held against the assessee and in favour of the Revenue.  \n 35. In Khem Chand Bahadur Chand's case [FB], Sandhawalia Chief Justice, at page 347, held thus :", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-34", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "\"In construing the aforesaid provisions (section 37(1), (2), (2A)), what first meets the eye and deserves highlighting is the designed and considered use of the phraseology by Parliament in sub-sections (2) and (2A) aforesaid. The phrase deliberately employed is - 'in the nature of entertainment expenditure'. It is not merely 'entertainment expenditure ' or 'business entertainment simpliciter '. It is a sound canon of construction that the Legislature does not waste its words and every word employed in a statute has to be given a meaning. Undoubtedly, therefore, whilst using the larger and compendious expression 'in the nature of entertainment expenditure', Parliament had an obvious purpose behind it. This expression is much wider in its connotation, inasmuch as it would take within its ambit not merely what may stricto sensu be regarded as entertainment expenditure proper but also all other expenditure of allied nature partaking of some, if not all, of the characteristics of entertainment expenditure. The phrase has indeed a wide amplitude and its use leaves little doubt that the intention of the Legislature in employing it was to cast the net sufficiently wide so as to bring within its field all types of hospitality. Even on behalf of the respondents, it could not be denied that any lavish hospitality expended for business purposes would amount to 'entertainment expenditure'... What, however, calls for pointed notice is the fact that both sub-sections (2) and (2A) of section 37 begin with a non obstante clause, namely, 'Notwithstanding anything contained in sub-section (1) thereof'. Plainly, therefore, it would mean that whatever the amount of business entertainment expenses may be, they are subject to the stringent rule and limits provided in sub-sections (2) and (2A) for companies and other assessees, respectively. Therefore, reading sub-sections (1), (2) and (2A)", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-35", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "respectively. Therefore, reading sub-sections (1), (2) and (2A) together - and doing so is a wholesome rule of construction - the larger scheme appears to be that the law recognises the incidence of business entertainment expenses but does not allow any sky-high deductions thereof and curbs them within the slab limits provided in clauses (i), (ii), (iii) and (iv) of sub-sections (2) and (2A) of section 37 of the Act. To put it in other words, the statute is alive to the fact that business entertainment expenses may sometimes have to be incurred at inordinately high levels. That by itself would not give the businessmen carte blanche to incur any amount of entertainment expenses and claim a total deduction thereof. The Legislature has followed the golden mean by allowing a reasonable rein and also put a plausible leash thereon in the shape of maximum slabs therefor in sub-sections (2) and (2A). To construe the provision otherwise and to hold that hospitality which is not lavish may be expended without any financial limits would in effect be frustrating the very purpose of the Legislature in enacting sub-sections (2) and (2A) and defeating the larger legislative intent of curbing excessive business entertainment, at the cost of the public exchequer. Beyond the prescribed limits, business entertainment is left to the discretion and the personal cost of businessmen themselves, and is not to be defrayed by public revenue.\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-36", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "36. However, at page 355, a note of caution was administered by the Full Bench thus :  \n \"...... an overly doctrinaire approach must be avoided. We are inclined to the view that all hospitality extended wholly and exclusively for the purposes of the business is within the net of the phrase 'in the nature of entertainment expenditure'. However, it is elementary that, in the first instance, such an expense must be a hospitality expense and that which, in ordinary parlance, cannot be even termed hospitality cannot by any stretch of imagination be either deemed to be entertainment or in the nature of entertainment. To reiterate, for an expense to come within the ambit of being in the nature of entertainment, it must first partake of all the appellations of being hospitable. If it does not even satisfy the broad concept of being hospitable stricto sensu, then it cannot be elongated into either entertainment expenditure or even in the nature of entertainment expenditure.\"  \n 37. We find compatibility to respectfully make common journey. In that case, the assessee claimed deduction of kitchen expenses expended towards cigarettes, pan, tea, etc., treating them as expenditure in the nature of entertainment expenditure. Ultimately, the Tribunal took the view that they are not in the nature of entertainment expenses and accepting the stand of the assessee, deleted the amount of Rs. 4,500 under this head. The Full Bench answered the question against the assessee. In the application of the principle, we express our regrets to part our ways. Equally too of Veeriah Reddiar's case [FB].", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-37", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "38. As against this view, in Patel Brothers' case , a Division Bench of the Gujarat High Court was called upon to consider the question whether the supply of food, drinks or any amusement to a client, constituent or customer was in the nature of entertainment expenditure in law. The facts therein were that the assessee was a limited company. It provides meals to its workers as well as workers and customers of its associate firm carrying on business, viz., Patel Brothers Oil Mills. Farmers come to the factory to offer goods such as cotton, groundnut, rice and pulses to the assessee. It was customary and out of commercial expediency for the company to provide meals to its farmer customers. Therefore, the company claimed allowance of kitchen expenses for the relevant assessment years from chargeability to tax. The Income-tax Officer disallowed the expenditure. On appeal, the Appellate Assistant Commissioner held that it is not an entertainment expenditure covered by section 37(2) as the expenditure was to provide meals which is a bare necessity having regard to the nature of the business and, therefore, it is not an entertainment or amusement. On second appeal, the Tribunal confirmed it. On reference, the learned judges considered the word \"entertainment\". They did not consider the scope of the phrase \"in the nature of entertainment expenditure\". After considering the connotation and meaning of the word \"entertainment\" with reference to leading dictionaries, they laid down four propositions thus (p. 441 of 106 ITR) :  \n \"(a) If the provision of food, drinks or any amusement to a client, constituent or customer is on a lavish or extravagant scale, or is of wasteful nature, it is entertainment per se.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-38", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(b) If the provision of food or drinks to a client, constituent or customer is in the nature of bare necessity, or by way of ordinary courtesy, or as an express or implied term of contract or employment spelled out from longstanding practice or custom of trade or business, it will not amount to entertainment.  \n (c) If the provision of food or drinks to a client, customer or constituent is in a liberal and friendly way, it may amount, to entertainment having regard to the place, item and cost of such provision.  \n (d) The provision of amusement to a client, customer or constituent by way of hospitality or otherwise will always be entertainment.\"   \n 39. It was held that, having regard to the nature and magnitude of the business of the assessee, it would be necessary for the assessee to make arrangements for providing meals to its up country constituents who visit it. Accordingly, the point was held in favour of the assessee. The Punjab and Haryana High Court in Khem Chand Bahadur. Chand's case [FB] dissented from this view and stated several reasons for their inability to agree with the ratio laid down in Patel Brothers' case . It held that the Achillies' heel of Patel Brothers case missed the purpose, the import and the significance of the deliberate use by Parliament of the compendious phrase \"in the nature of entertainment expenditure\" and other reasons. In Veeriah Reddiar's case , the Full Bench of the Kerala High court also disagreed with the ratio in Patel Brothers' case .", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-39", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "40. In Maddi Venkataratnam's case , the assessee is a private limited company. The assessee maintained two guest houses intended for foreign buyers. It claimed entertainment expenses at the guest houses arranged as lodging to the customers coming from foreign countries in connection with the export business of tobacco. The assessee claimed before the Income-tax Officer that the expenses of providing lodging facillties to the foreign customers were in the nature of entertainment expenses in connection with the business of purchasing tobacco Therefore, it was an expenditure necessary for the business and did not constitute entertainment. The Income-tax Officer disallowed part of it On appeal, the Appellate Assistant Commissioner allowed the appeal. On further appeal by the Revenue, the Tribunal confirmed the order of the Appellate Assistant Commissioner. Thus, the reference by the Revenue. The Division Bench did not make any independent consideration except following the ratio in Patel Brothers' case . In Associated Newspapers Group Ltd. v. Fleming (Inspector of Taxes) [1973] AC 628 (HL), the question was whether the expenses laid out for the provision of hospitality by a newspaper publisher to informants and contributors is deductible in computing the profits under section 15 of the Finance Act, 1965, to the newspapers published in the United Kingdom. The word \"anything\" in section 15(9) was pressed into service to claim deduction. It was disallowed and, on appeal, the House of Lords confirmed it. While considering the same, at page 643, Lord Morris of Borthy-Gest has held thus :  \n \"My Lords, the questions that are raised must find their solution in a fair and reasonable interpretation of the words by which the Legislature has expressed its intention. In particular, must the wording in sub-section (9) be considered.\"  \n 41. At page 644 it was held :", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-40", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "41. At page 644 it was held :  \n \"The word 'anything ' in sub-section (9) meant business entertainment so that sub-section (9) related to the deduction of expenses incurred in the provision by any person of business entertainment which it is his trade to provide. I cannot agree. There is no trade or business of giving free hospitality. I see no reason why the word 'anything' should not be given its ordinary and natural meaning.\"  \n 42. Lord Simon of Glaisdale held at page 646 thus :  \n \"But a mere reading of section 15 of the Act, 1965, against the background of the preceding law, can leave no doubt that it was Parliament's conception that expenditure on business entertainment charged as a deduction against gross trading income was being fiscally abused, or that Parliament in section 15 was seeking to provide a remedy for what it conceived as such abuse.  \n Nor can there be any doubt about the method which the draftsman chose to adopt in order to provide the remedy. Experience must have taught him that if a fiscal abuse is too precisely remedied, taxpayers with expert advice will find a means of evading the fiscal control. To counter this, the draftsman may spread his net very wide at first, in order to make sure that nothing gets by which should not; and he will then re-examine to ensure that nothing has been caught in the net contrary to fiscal equity, and readjust accordingly. That seems to have been the draftsman's method with section 15.\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-41", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "43. This case is an authority for the proposition that entertainment expenditure is to be allowed only to an assessee whose business is to provide entertainment. The word \"anything\" is to be construed in that context. Though entertainment expenditure is necessary for getting news items, it is not to be allowed. The same appears to be the method adopted by Parliament in using appropriate language in section 37(1), (2), (2A) and (2B).  \n 44. In De Vigier v. IRC [1964] I WLR 1073 (HL), Lord Reid, while considering the transaction of loan and repayment of loan, and the meaning of \"loan\" under section 408 of the Income-tax Act, 1952, held at page 1077 thus :  \n \"I realise that if legislation is to be effective to forestall attempts at evasion, it must often be drafted in terms so wide that it can apply to a variety of quite innocent transactions.\"  \n 45. Lord Pearce at page 1079 held thus :  \n \"One, therefore, approaches this case with an inclination to limit, if one can properly do so, the application of section 408 to the cases which it was primarily intended to catch, and to exclude cases like the present where its application creates unfairness. But how can one do that without drawing some technical and artificial line which would defeat the whole intention of the section ?  \n If one excludes the operation of the section simply because this was a nebulous and casual transaction or because the trustees had no power to borrow, then every person wishing to drive through the section whether to secure the forbidden benefit or not, may do so by making his transaction nebulous and casual or by lending to a settlement which had no power to borrow. In my opinion, the section was not intended to have so limited an application.\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-42", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "46. The wife of the assessee lent loan from trust monies to purchase shares. On the facts, it was held that it was loan and repayment of the loan and the profits realised are chargeable to tax. This case is an authority for the proposition that it is the substance and not the form of the transaction that governs the case. Entertainment involves hospitality of any kind which an assessee extends to a customer, client or a constituent for furtherence of his business or profession. It must be wholly and exclusively necessary for the purpose of his business or profession. The primary motive behind laying out or expending entertainment expenditure is commercial or professional expediency. The phrase \"in the nature of entertainment expenditure\" encompasses in its ambit entertainment expenditure proper as well as expenditure akin to it partaking of some, if not all, of the characteristics of entertainment expenditure. Even lavish or frugal hospitality is none the less a hospitality. So any entertainment expenditure would be in the nature of entertainment expenditure, but may not strictly business expenditure. Equally every hospitality does not necessarily constitute per se entertainment expenditure. It would appear to us that the Legislature treated entertainment expenditure as part of business expenditure claimable for allowance under section 37(1) from chargeability to tax. The businessman abused the facility given thereunder. Amendments by gradual process were made in sub-sections (2), (2A) and (2B) of section 37 taking out \"entertainment expenditure\" from the purview of section 37(1) and transplanted it in later sub-sections by appropriate phraseology; widened its sweep employing \"in the nature of entertainment expenditure\" with a non obstante clause giving exclusive operation thereof, that notwithstanding the operation of sub-section (1) of section 37, the latter would operate. Entertainment expenditure, whether would come stricto sensu or of its allied nature, partaking of some, if not all, of the characteristics of entertainment expenditure to be operated", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-43", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "nature, partaking of some, if not all, of the characteristics of entertainment expenditure to be operated within the ambit of sub-sections (2), (2A) or (2B). This view gains support from the latest amendment introduced in 1978 to sub-section (2B) of section 37, treating advertisement in any souvenir, brochure, tract, pamphlet or the like published by a political party as a separate item. To get at the substance of the transaction doctrinaire angulation is to be eschewed, and it is to be pragmatically broached from work-a-day basis. It may be illustrated on the basis of some hypothetical questions :", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-44", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(1) Take a case where a company calls for a general body meeting of its shareholders or board of directors. While transacting its business, it hosts a lunch to all its shareholders or board of directors. The question is whether the expenditure incurred in connection therewith is wholly and exclusively necessary for the purpose of the business of the company. When the board of directors or shareholders met to transact the business of the company and the lunch was hosted, necessarily the expenditure incurred in connection therewith was wholly and exclusively for the purpose of the business of the company. The primary motive is the transaction of business. Though there is an element of hospitality in hosting a lunch, it cannot be said that the company is extending hospitality for itself for pleasure. Therefore, it comes squarely within the ambit of business expenditure under section 37(1).  \n (2) Take a case where an advocate or an attorney has been engaged by a managing director or chief executive of a business house and requests time for consultation in his pending cases. Counsel or attorney extends an invitation to the client to discuss the problem over a lunch or dinner and the same is arranged in a hotel. After having the lunch or dinner, the problem was discussed and the matter was settled. The question is whether the expenditure incurred by the advocate or attorney or company is wholly and exclusively for the purpose of the profession or business ? Nobody except the host and guest attended. The primary object of arranging the lunch or dinner is to discuss and finalise the problem and incidentally lunch or dinner, as an act of hospitality, has been provided. An element of hospitality, undoubtedly, is involved in it. But the primary purpose is wholly professional or business and the expenditure is exclusively incurred in connection therewith. The consideration of hospitality is secondary. The entertainment expenditure stemmed from professional or business expediency and hospitality is integrally connected. It would thereby appear to be wholly coming under section 37(1) of the Act.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-45", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(3) Take another case where a senior counsel of the Supreme Court is engaged on behalf of a company to argue a case in the High Court of Andhra Pradesh at Hyderabad. Counsel has been provided with lodging as an implied term of the contract. Though it is not necessary for the company to provide lunch and dinner to counsel, to make counsel comfortable, as an incident thereof, hospitality has been extended. Therefore, providing boarding to counsel, though it involves the element of hospitality, is incidentally connected with the business purpose which is wholly and exclusively extended in connection with the business of the company. So, it is business expenditure under section 37(1) of the Act.  \n (4) Take the case that, during the course of the transaction of the business during the business hours, a company like the case on hand, as an act of business courtesy or civility, supplies coffee, tea, snacks, etc., to the clientele or customers that visited the company for the purpose of business. Though there is an element of hospitality involved in it, the primary motivating factor is business courtesy or civility. Therefore the amount expended on that account would come as an incident of business expenditure. The concept of entertainment or pleasure is absent. It attracts section 37(1) of the Act.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-46", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(5) Take yet another case where an old client of a counsel or attorney visits the office of his former counsel or attorney but, by that time, there is no relationship of client and counsel. As a courtesy, counsel or attorney invites the old client and extends hospitality by entertaining him over a dinner or lunch and met the expenditure in that regard Though, there is an element of hospitality involved in this case also it is not wholly and exclusively for the purpose of profession. The primary motive or wish is to extend hospitality and the relationship is that of a host and a guest. Though it is in the nature of entertainment expenditure, counsel is not entitled to claim deduction. It would be personal expenditure excluded by section 37(1) itself. The reason is that there must be independent and deliberate business or professional purpose to host a dinner or a lunch. An element of private hospitality pervades the case.  \n (6) Take another case where the managing director or chief executive of a company is involved in a case, not necessarily connected with the company. But, out of consideration for the meritorious or faithful service rendered by him, the company may agree to bear the expenditure of a counsel and the company hosts lunch and dinner to counsel, at the expense of the company. The question is whether the expenditure incurred by the company can be claimed and is allowable ? Though there is an element of hospitality involved, it is not wholly and exclusively for the purpose of the business of the company. Therefore, it would neither fall under sub-section (1) - business expenditure - nor under sub-section (2) nor (2B) of section 37 and is to be disallowed.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-47", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(7) Take the case of a trade delegation, like the present case on hand from USSR and GDR who visited India and the assessee entertains them extending hospitality and arranges residential accommodation, lunch and dinner during their stay in India. The question is whether it is wholly and exclusively necessary for the purpose of the business. The motivating factor may be for immediate benefit to the trade. But, there is no relationship as customers. It is only a prospective order to be placed by the trade delegates with the assessee-company. Though hosting a dinner or lunch and arranging residential accommodation may be due to commercial expediency and indirectly facilitates trade prospects, yet it does not attract in stricto sensu business expenditure but it is certainly entertainment expenditure. Under those circumstances, it is in the nature of entertainment though it is for the purpose of trade, attracting section 37(2) or (2B) of the Act.  \n (8) Take the case where a race club arranges a meeting of its stewards and office-bearers of the club to transact its business on a day when races are to be conducted. Without inviting any third parties, if the expenditure is incurred in connection with the lunch while transacting business, the expenditure is in connection therewith and it is wholly and exclusively for the purpose of the business. It is a business expenditure. Take, for instance a case where only a few important dignitaries that visited the races are also invited to join them over dinner. Though there is an element of hospitality to a few guests and part of their expenditure is expended, yet the element of hospitality is subordinate and small in degree as host and guest. So, it cannot be said that the expenditure is in the nature of entertainment expenditure. The predominant purpose is business transaction and entertaining guests is incidental.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-48", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(9) Take, for instance, a case where without any meeting of the stewards or the office-bearers, they invited a number of invitees to visit the races and hosted a dinner for them along with stewards and office bearers. The object of the invitation is to promote races and the motivating factor for the stewards or office-bearers appears to be to lure a large gathering to attend the races and the expenditure, though not wholly necessary for business, would come within the net of sub-sections (2A) and (2B) of section 37 and not under section 37(1) of the Act.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-49", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "47. The above discussion leads us to conclude that the Legislature administered a caveat to an assessee thus : \"Look here, assessee, you are free to lay out or expend entertainment expenditure as an incident of your business expenditure. But you must be astute as a frugal businessman that the 'entertainment expenditure' is wholly and exclusively necessary absolutely for the purpose of the business and that it is a reasonable one. You are also free to be lavish or extravagant, having commercial expediency in view in expending entertainment expenditure, though of necessity, for your direct and immediate benefit to the trade indirectly facilitating the carrying of the business and you may feel that it is expended wholly and exclusively for the purpose of the trade. Yet it being within the wide net of 'in the nature of entertainment expenditure', the non obstante clause in sub-sections (2), (2A) and (2B), i.e., notwithstanding that the expenditure is business expenditure, at once catches it and despite the applicability of section 37(1), it would be operated within the parameters of sub-sections (2), (2A) and (2B) and it would be slashed down as per the slab rates prescribed either under sub-section (2) or (2A) depending on your gains or profits during the accounting year. So beware that all entertainment expenditure laid out or expended would not be allowed You are forewarned that the exchequer would not defray it. Oh you the Income-tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal eschew adoption of lexicographic consideration and doctrinaire approach but be pragmatic to adopt work-a-day rule, lift the veil encircling the transaction in question, find the primary motive behind laying out or expending entertainment expenditure and put a question to yourself whether it is wholly and exclusively necessary for the purpose of the business or profession and then arrive at the substance of the transaction.\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-50", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "48. Therefore, the tax authority or the Appellate Assistant Commissioner or the Tribunal has to narrowly scrutinise the accounts in each case, itemwise, whether the expenditure expended or laid out by a company or an assessee is wholly and exclusively for the purpose of the business or profession and it is business or professional expenditure or whether it is in the nature of entertainment expenditure. The authorities while scrutinising the expenditure very narrowly ask the question whether it was laid out or expended for the purpose of the assessee's trade or profession and then ask the second question, was it laid out or expended not wholly or exclusively for the assessee's trade or profession. They should further ask the question whether it is a reasonable expenditure. If the angulation is made in that perspective and the answers are elicited, it would not only subserve the purpose of sub-section (1) of section 37 and, in an appropriate case, relief granted but also brings within the net of sub-sections (2), (2A) or (2B) of section 37 preventing ostentation,, needless wasteful, extravagant or lavish expenditure and put a nail on evasion's coffin. Even if it comes under sections 37(1), 37(2) and(2A), it has still to be investigated whether it is reasonable expenditure. The reason is obvious By a fastidious or lavish person, the act of hospitality with luxurious dishes and costly hot drinks may be regarded as an ordinary lunch or dinner, but, to a common man, it would be a lavish meal or staggering wasteful expenditure. Therefore, care must be taken to maintain the record of expenditure by the assessee and the authorities are to scrutinise the record very narrowly, whether the act of hospitality is an ordinary and frugal one and give allowance accordingly.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-51", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "49. At this juncture, the contention of Sri Moorthy, learned standing counsel for the Revenue, merits acceptance. The finding of the Tribunal is that the company hosted dinners to foreign delegates in order to entertain them in \"an appropriate and befitting manner\". The phrase \"appropriate and befitting manner\" is an elusive and ambiguous one. No attempt has been made by the Tribunal to find whether it is reasonable. As stated earlier, to a fastidious host, arranging varied dishes with costly items and costly hot drinks is an ordinary act of hospitality, but to a common man it is wasteful expenditure. Therefore, what is appropriate and befitting is always a big question mark affording carte blanche to an assessee to expend lavishly, exhibiting ostentation, with the belief that the public exchequer would defray the wasteful expenditure. If this consideration is allowed to prevail, sub-sections (2), (2A) and (2B) of section 37 would be rendered otiose and ineffectual, defeating the legislative animation. Therefore, the fact finding authorities have to carefully scrutinise the record with circumspection and give the necessary allowance as per law.  \n 50. With regard to question No. (4), it is conceded by the Revenue that it was covered by a decision of this court that the amount of Rs. 893 made for subscriptions to the club for entertainment of the foreign business delegation is allowable. Accordingly, it is answered in favour of the assessee.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-52", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "51. With regard to question No. (6), the contention of Sri Moorthy is that no part of the expenditure is allowable, as it is not covered by section 35B(1) (b) (ii), (vi) or (vii) of the Act. He argues that the claim was not laid before the Income-tax Officer; for the first time, it was made before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner is unjustified in coming to the conclusion that the expenditure claimed qualifies for weighted deduction under the above provisions. The resistance of Sri Parvatha Rao is that obtaining agmark from the Indian Standards Institution is necessary for export, which was accepted by the Appellate Assistant Commissioner. It is not disputed that it was required for the purpose of export. The expenditure was necessary for export credit guarantee insurance, inspection charges, salaries of chief buyers for export, etc. As such, items Nos. (1), (2), (3), (5) and (6) were allowed by the Appellate Assistant Commissioner under sub-clauses (ii), (vi) and (vii) of sub-section (1)(b) of section 35B and 50% was allowed as regards items Nos. (4) and (7). The Appellate Tribunal confirmed it and it is a finding of fact and does not warrant an adverse finding. Learned counsel also placed reliance on Union Carbide India Ltd. v. CIT .  \n 52. To appreciate the respective contentions, sub-clauses (ii), (vi) and (vii) of sub-section (1) (b) of section 35B need extraction. Section 35B reads as follows :  \n \"Export markets development allowance - (1)(a).....  \n (b) The expenditure referred to in clause (a) is that incurred wholly and exclusively on - ........", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-53", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "(ii) obtaining information regarding markets outside India and for such goods, services or facilities;......  \n (vi) furnishing to a person outside India samples or technical information for the promotion of the sale of such goods, services or facilities;  \n (vii) travelling outside India for the promotion of the sale outside India of such goods, services or facilities, including travelling outward from, and return to, India;..\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-54", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "53. A reading of the above provisions would adumbrate that, where a domestic company or a person other than a company who is a resident of India has incurred after February 29, 1968, whether directly or in association with any other person any expenditure wholly or exclusively on obtaining information regarding markets outside India for such goods services or facilities, the assessee is entitled to claim \"weighted deduction\". Similarly, if it is required for furnishing to a person outside India samples of technical information for the promotion and sale of such goods, services or facilities or travelling expenses in connection therewith to and from India, weighted deduction is allowable. The question at issue is whether the company is entitled to weighted deduction in respect of the five items mentioned in question No. (6). Rs. 1,40,965-01 was expended for obtaining agmark from the Indian Standards Institution. We did not find any averment either in the order of the Appellate Assistant Commissioner or the Tribunal or the statement of the case that the agmark is wholly and exclusively necessary for the purpose of submitting technical information to the foreign buyers for the promotion of the sale of goods (tobacco) of the company. It is also not the case that the certification by the Indian Standards Institution as an agmark is a condition precedent to export of tobacco or a term of the contract. The decision in Union Carbide's case is of little assistance to the company. Therein, the facts were that obtaining a certificate from the export agency is necessary. Therefore, inspection has got to be made by the certifying officer regarding the quality of the goods. It was contended that it was technical information on the quality of the products for export. Therefore, weighted deduction has to be granted. But in this case as stated earlier, it is not the case of the company nor any material has been placed nor a finding was recorded either by the Appellate Assistant Commissioner or the Tribunal in that regard.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-55", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "nor a finding was recorded either by the Appellate Assistant Commissioner or the Tribunal in that regard. Equally, with regard to the alleged export licence fees and inspection charges, no material has been placed on record and nothing of it has been brought to our notice from record. Equally, with regard to items Nos. (5) and (6), viz., subscription to export promotion councils and trade associations and translation charges, no material has been placed that they are of any technical information required to be furnished by the company to foreign buyers for promotion of the sale of the goods of the company. Therefore, none of the items would be eligible for weighted deduction as sub-clauses (ii), (vi) and (vii) of sub-section (1)(b) of section 35B are not attracted. Considered from this perspective, the Tribunals below erred in law in allowing the above weighted deduction from the chargeable income.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-56", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "54. Finding,, it difficult to sustain the claims, Sri Parvatha Rao made valiant efforts to persuade us to give an opportunity to the company to lead further evidence before the Appellate Tribunal. We are afraid, we cannot accede to this contention. It is now settled law that the Tribunals cannot take evidence afresh. It cannot take in evidence subsequently gathered after the decision by the Appellate Assistant Commissioner. It has to look into the evidence on record placed by the assessee before the Income-tax Officer. Whatever evidence is available on record, it alone has to be looked into and the company has to satisfy from the record with regard to the claims in respect of questions Nos. (1) to (3).  \n 55. Thus considered, we decline to answer questions Nos. (1) to (3) and direct the Appellate Tribunal to examine the evidence on record afresh, whether the entertainment expenditure on foreign delegates is lavish or extravagant in the light of the law above laid down and to find out what would be the reasonable expenditure and accord allowance according to law. We answer question No. (4) in favour of the assessee and against the Revenue. We answer question No. (5) in favour of the assessee and against the Revenue. We answer guestion No. (6) against the assessee and in favour of the Revenue except to the extent of allowing weighted deduction in respect of the sum of Rs. 1,09,587.  \n 56. The reference is accordingly answered.  \n Anjaneyulu, J.  \n 57. I agree with the answers proposed by my learned brother to the six questions referred. I would, however, like to make a few observations.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-57", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "58. As regards the sum of Rs. 893 which is the subject-matter of consideration in question No. (4), learned standing counsel for the Revenue fairly conceded that it is allowable as business expenditure, as the sum in question represented subscription paid to the clubs for membership and not for entertainment. The amount paid, therefore, qualifies for deduction as business expenditure under section 37(1).  \n 59. There can be no doubt that the sum of Rs. 22,722 claimed by way of entertainment expenditure, which is the subject-matter of consideration in question No. (5), should be allowed as the facts would indicate that this expenditure was incurred for providing coffee, tea and snacks to customers visiting the business premises of the assessee. The expenditure is clearly allowable as business expenditure under section 37(1) of the Act in terms of the decision of this court in Addl. CIT v. Maddi Venkataratnam and Co. Ltd. [1979] 119 ITR 514.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-58", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "60. Questions Nos. (1), (2) and (3) go together. The sum of Rs. 17,056 specified in question No. (1) is claimed to have been spent on entertaining a foreign delegation. The sum of Rs. 2,668 referred to in question No. (2) is claimed to have been spent on providing lunch and dinner to customers. Finally, the sum of Rs. 1,79,154 in question No. (3) is described as \"business promotion expenses\". The last mentioned sum of Rs. 1,79,154 was part of the total claim of expenditure of Rs. 2,16,215 out of which the Appellate Assistant Commissioner disallowed Rs. 37,061. The balance amount of Rs. 1,79,154 was found to be expenditure incurred in the provision of food and other beverages to foreign buyers. At one stage learned standing counsel for the Revenue sought to urge that the sum of Rs. 1,79,154 included expenditure incurred for the maintenance of guesthouse also and that such expenditure is wholly disallowable. It was, however, found that the expenditure on account of maintenance of guesthouse amounting to Rs. 14,999 was debited in the books of the head office at Guntur and was disallowed wholly by the Income-tax Officer. Learned standing counsel did not dispute, after noticing the disallowance, that the entire expenditure of Rs. 1,79,154 referred to in question No. (3) was incurred on food and beverages for the use of foreign buyers.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-59", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "61. The basic question that falls for consideration is whether the three items of expenditure referred to above would qualify for deduction in terms of the tests laid down by the Gujarat High Court in ClT v. Patel Brothers & Co. Ltd. which tests were referred to and followed by a Division Bench of this court in Addl. CIT v. Maddi Venkataratnam and Co. Ltd. [1979] 119 ITR 514, 517. The approved tests are :  \n \"(i) If the provision of food, drinks or any amusement to a client constituent or customer is on a lavish and extravagant scale, or is of wasteful nature, it is entertainment per se.  \n (ii) If the provision of food or drinks to a client, constituent or customer is in the nature of bare necessity, or by way of ordinary courtesy, or as an express or implied term of the contract of employment spelled out from long-standing practice or custom of trade or business, it will not amount to entertainment.  \n (iii) If the provision of food or drinks to a client, customer or constituent is in a liberal and friendly way, it may amount to entertainment having regard to the place, item and cost of such provision.  \n (iv) The provision of amusement to a client, customer or constituent by way of hospitality or otherwise will always be entertainment.\"", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-60", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "62. The aforesaid decisions were within the knowledge of the assessee as well as the Tribunal, when the appeals were heard and disposed of on January 30, 1979. Yet, no effort was made by the assessee to furnish the full details of the expenditure and establish its case before the Tribunal that, in the light of the aforesaid tests enunciated, the expenditure qualifies for deduction as business expenditure and could not be treated as expenditure in the nature of entertainment expenditure; nor did the Tribunal make any endeavour to examine the details of the expenditure and record any specific finding whether the expenditure fulfilled the tests laid down by this court. The argument of the assessee regarding the nature of expenditure as well as the conclusions of the Tribunal in regard to the same proceeded on vague and uncertain considerations. In view of the decision of this court in Maddi Venkataratnam's case [1979] 119 ITR 514, following the tests laid down in Patel Brothers' case , the Tribunal should have specifically addressed itself to the question whether the expenditure incurred partook of the nature of entertainment expenditure or not. If, on scrutiny, it is found that the expenditure was incurred in providing accommodation and meals in posh hotels for foreign trade representatives, it cannot be termed as \"business promotion expenses\". It partakes of the nature of entertainment expenditure. (See the decision in Mysodet (Pvt.) ltd. v. CIT ). There is hardly any material or information in the order of the Tribunal and the authorities below regarding the nature of expenditure incurred. The Tribunal did not refer to the approved tests and record a finding that the expenditure claimed by the assessee qualified for allowance interms of the approved tests. It must, therefore, be said that there is total non-application of mind by the Tribunal to the question before it. The situation is precisely the same as it was in the assessee's own case for an earlier assessment year which was considered", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-61", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "the same as it was in the assessee's own case for an earlier assessment year which was considered by this court in Nava Bharat Enterprises (P.) Ltd. v. CIT [1983] 143 ITR 804.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-62", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "63. Having regard to the above facts and circumstances, it is not possible for this court to answer the first three questions referred by the Tribunal, as relevant details of the expenditure are wanting and the Tribunal has failed to scrutinise the expenditure and record a categorical finding on the admissibility or otherwise of the expenditure based on the approved tests referred to above. Inasmuch as relevant legal principles are laid down, the Tribunal will be entitled while passing an order conformably to this judgment under section 260(1) of the Act, to go into the question and determine the allowability of the whole or any part of the expenditure. The Tribunal shall be entitled to proceed on the basis of the material on record without taking any additional evidence, but the parties may be allowed necessary opportunity to explain the matters to the Tribunal. I, therefore, agree with my learned brother that we should decline to answer questions Nos. (1), (2) and (3) and direct the Tribunal to re-examine the matter bearing in mind the scope of rehearing under section 260 of the Act, as set out by the Supreme Court in CIT v. Indian Molasses Co. P. Ltd. [1970] 78 ITR 474 and Raghunath Prasad Poddar v. CIT [1973] 90 ITR 140.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-63", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "64. As regards question No. (6) concerning the eligibility for weighted deduction under section 35B(l)(b) of the Act, learned standing counsel conceded, at the time of hearing, that the assessee is entitled to claim weighted deduction in respect of expenditure of Rs. 1,09,587 pursuant to the decision of this court in the assessee's own case in RC No. 108 of 1982 dated November 5, 1986 (CIT v. Navabharat Enterprises (P.) Ltd. (No. 1) [1988] 170 ITR 326). In view of the above representation made by learned standing counsel, the assessee's claim for weighted deduction in respect of the expenditure of Rs. 1,09,587 is in order and is rightly allowed.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-64", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "65. As regards the expenditure of Rs. 1,49,965 on \"Agmark charges\" (paid to the Indian Standards Institution for certifying quality) and the sum of Rs. 2,14,860 incurred by way of export licence fee and inspection charges, it must be pointed out that there are absolutely no details in respect of these items of expenditure to support the assessee's claim for weighted deduction. No materials are placed before this court regarding the nexus between the expenditure incurred and the export promotion or development for purposes of section 35B. The Tribunal's order does not contain any useful discussion on this matter. All that the Tribunal did was to refer to the order of the Appellate Assistant Commissioner and to record the abrupt conclusion that weighted deduction is allowable. It is not possible to appreciate the reasoning adopted by the Tribunal. The claim for weighted deduction was indeed large and an endeavour should have been made by the Tribunal to ascertain the nature of the expenditure and examine if the expenditure was for the purposes of export promotion. For instance, fee is payable to the ISI for certification not only for the purpose of goods exported, but also for goods sold in the local market. The mere fact that some amount was paid to the ISI does not necessarily lead to the conclusion that the expenditure was incurred on export promotion. Similarly, the record does not contain the analysis of expenditure of Rs. 2,14,860 to show what part represented export licence fee and what part represented the inspection charges. There is also no guidance anywhere in the record to show for what purpose inspection charges were paid and to whom.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-65", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "66. The Tribunal did not consider all these aspects. It must be borne in mind that the weighted deduction in respect of these items was not claimed initially by the assessee during the course of the assessment enquiry. The claim was made at the fag end of the assessment enquiry and after the draft assessment order was approved by the Inspecting Assistant Commissioner. Justifiably, the Income-tax Officer had no opportunity to scrutinise this expenditure. The claim for weighted deduction in respect of these items was reiterated by the assessee before the first appellate authority. Although the items of expenditure were not subjected to scrutiny by the Income-tax Officer, the Appellate Assistant Commissioner thought it expedient to consider the matter. If the first appellate authority thought it fit to consider the claim, it was imperative that the matter was referred back to the Income-tax Officer for proper scrutiny. Without doing that the Appellate Assistant Commissioner recorded some ague, uncertain and laconic findings and came to the abrupt conclusion that weighted deduction is allowable. The Tribunal - did precious little when the Revenue came up in appeal; it merely referred to the observations of the Appellate Assistant Commissioner and held that the expenditure qualified for weighted deduction.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-66", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "67. Learned counsel, for the assessee, Sri Parvatha Rao, vehemently argued that it is not open to this court to interfere with the findings of fact recorded by the Tribunal, unless for the purpose of reference to this court a specific question is sought for by the applicant, the Revenue in this case. According to learned counsel, if a specific question is not sought for reference challenging the finding of fact, then this court is helpless in setting right an erroneous finding of fact recorded by the Tribunal. Learned counsel urged that in holding that the expenditure fell within the terms of sub-clauses (ii), (vi) and (iii), the Tribunal must be held to have looked into the nature of the expenditure and satisfied itself that the expenditure was incurred for export promotion. Learned counsel, therefore, urged that this court shall not look into the matter further. It is not possible to accept the submission of learned counsel. It is quite clear from the order of the Tribunal that the nature of the expenditure and the purpose for which the expenditure was incurred were not gone into. Without knowing the nature of expenditure, it was inconceivable how the Tribunal has come to the conclusion that the expenditure was incurred for export development. A finding of fact can be regarded as such if the Tribunal refers to the relevant facts and after discussion, records a finding one way or the other. Where, however, the Tribunal totally misdirects itself by omitting to consider the facts, it cannot be said that there is any finding of fact recorded by the Tribunal. Having looked into the order of the Tribunal, it is impossible to escape the conclusion that the claim for weighted deduction in respect of these two items was allowed without any application of mind. The Tribunal was obviously in error in allowing the weighted deduction in respect of these two items. It must be he] d that the assessee is not entitled to claim weighted deduction in respect of the sums of Rs. 1,49,965 and Rs.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-67", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "claim weighted deduction in respect of the sums of Rs. 1,49,965 and Rs. 2,14,860.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "428b4576e996-68", "Titles": "Commissioner Of Income-Tax vs Navabharat Enterprises (P.) Ltd. on 23 January, 1987", "text": "68. As regards the remaining sums of Rs. 11,746 and Rs. 1,732 referred to in question No. (6), I do not wish to add anything further to what has already been stated by my learned brother.", "source": "https://indiankanoon.org/doc/743169/"}
+{"id": "049e3c4ea2d9-0", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "JUDGMENT V.V.S. Rao, J. \n\nPART - I INTRODUCTION:\n1. Almost a century old Registration Act, 1908, which came into force on 01.01.1909, after about fifteen amendments, has now thrown up sea-saw situation played by human ingenuity. These cases have thrown up a couple of interesting questions of law having far reaching consequences. Whether a person can nullify the sale by executing and registering a cancellation deed? Whether a registering officer, like District Registrar and/or Sub Registrar appointed by the State Government, is bound to refuse registration when a cancellation deed is presented? When cancellation deed is registered how the grievance, if any, is to be redressed in law? These and other incidental questions are required to be answered by this Full Bench.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-1", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "BACKGROUND FACTS:", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-2", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "2. At the outset, brief reference may be made to the pleadings, in these petitions. W.P. No. 23005 of 2004 is filed by the petitioner seeking a writ of Mandamus declaring the action of the third respondent (hereafter called, Sub Registrar) in registering the deed of cancellation, dated 20.08.2003, bearing document No. 2854 of 2003 executed by respondents 4 and 5 as void, illegal, contrary to statutory provisions, administrative instructions and circulars. It is the case of the petitioner that her husband purchased Flat No. 302 in II Floor of Ashwood Villa under a registered sale deed, dated 12.01.1994, together with undivided share in the land admeasuring 100 square yards. The same was executed by respondents 5 and 6. The petitioner took possession of the flat and allegedly invested considerable amounts on improvements. It appears there is a dispute between the builder on one side and respondents 4 and 5 on the other side, who are seeking redressal before various authorities. The petitioner also alleges that all the owners of the apartments in the Ashwood Villa formed into an association, spent money for construction of compound wall, landscaping, provision for drain water pipes and for lighting of the stilt. It is stated that the builder contravened the sanction plan and on apprehension, the petitioner and others approached various forums for regularization of constructions. The builder with the connivance of respondents 4 and 5 (owners of the land), made constructions in deviation of the sanctioned plan. They also filed writ petition being W.P. No. 8971 of 1999 for regularization. The same was disposed of by this Court directing the Commissioner, Municipal Corporation of Hyderabad, who by proceedings, dated 26.03.2004, regularized constructions. When the enquiry was pending before the Commissioner, Municipal Corporation of Hyderabad, respondents 4", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-3", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "constructions. When the enquiry was pending before the Commissioner, Municipal Corporation of Hyderabad, respondents 4 and 5 produced copies of cancellation deed cancelling the registered sale deed executed in favour of the petitioner. The execution and registration of cancellation deed at the Office of the Sub Registrar is a fraud committed by respondents 3, 4 and 5 in active collusion with the officials. The cancellation deed was executed on the ground that the petitioner did not pay the sale consideration and therefore, the sale could not be completed. By the said cancellation deed, the sale deed executed in favour of the petitioner on 12.01.1994 was cancelled, which is illegal and contrary to the provisions of Registration Act and Transfer of Property Act, 1882 (TP Act).", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-4", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "3. Respondents 4 and 5 filed common counter affidavit. It is to the following effect. The dispute raised in the writ petition pertains to contractual obligation between the petitioner and respondents 4 and 5. The same is a matter to be decided by the competent civil Court. Writ jurisdiction in public law remedy cannot be invoked for resolution of private law dispute. The writ petition, is therefore, not maintainable. The Registration Act does not confer any power on registering officer to make an enquiry into infringement of rights resulting from cancellation of sale deed or any other deed. The Rules framed under the Registration Act specifically prohibit any enquiry by the registering officer into validity of the document on the ground that the executing party had no right to execute such document. The dispute relating to cancellation of sale deeds, gift deeds etc., are in the realm of private law and requires to be adjudicated only in common law proceedings, such as a suit under the Specific Relief Act, 1963.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-5", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "4. In W.P. No. 25661 of 2005, the petitioner seeks a writ of Certiorari quashing the registered document bearing No. 6119 of 2005, dated 24.10.2005, (cancellation of sale deed) and for a consequential direction to the respondents, namely, the Sub-Registrar, Deputy Registrar and one Nawab Mohammed Haji Khan, to declare the petitioner as the owner of the land covered by registered sale deed, dated 16.09.2005, bearing document No. 4995 of 2005. It is the case of the petitioner that third respondent, who is the owner of land admeasuring Acs. 107.00 in survey Nos. 181/1 to 181/6 and 182 of Nagaram village, executed agreements of sale-cum-General Power of Attorney documents in favour of one Syed Waheed Ahmed and that he purchased the land admeasuring Acs. 20.38 guntas in survey Nos. 181/3 of Nagaram village under registered sale deed, dated 16.09.2005, executed by General Power of Attorney holder. The petitioner received a notice from the Sub-Registrar to the effect that the third respondent cancelled the said document by executing the deed of cancellation. On verification, he found that the Sub-Registrar made an endorsement on the impugned cancellation deed to the effect that though unilateral cancellation is not valid in the eye of law, the document is registered under the provisions of the Registration Act and that the aggrieved can seek redressal in civil Court to get it annulled. The cancellation deed is one without authority of law and arbitration.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-6", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "5. The third respondent filed counter affidavit opposing the writ petition. It is stated that Syed Waheed Ahmed was very well known to the third respondent, who is a nanogenarian. The former was well aware of the family properties of the third respondent. The property in survey Nos. 181/1 to 181/6 and 182 belongs to two sons of the third respondent, namely, Akber Ali Khan and Farooq Ali Khan, who are Non Resident Indians. One Ghulam Rasool Faruqi and others filed suits being O.S. No. 463 of 2002 and O.S. No. 73 of 2004 in respect of the said land making a false claim. As he was not able to look after the Court cases, the third respondent gave General Power of Attorney to Syed Waheed Ahmed to enable him to defend the cases. It is alleged that documents executed by him are only deeds of special power of attorney, the third respondent, executed documents. But, taking advantage of the same, subsequently, Syed Waheed Ahmed, registered agreement of sale-cum-General Power of Attorney containing a clause empowering to sell the lands in Nagaram village. Having come to know this, the third respondent registered revocation of the agreement of sale-cum-General Power of Attorney and cancelled the sale deeds executed by Syed Waheed Ahmed including the one in favour of the writ petitioner. As the document cancelling the sale deed is compulsorily registrable, so as to save innocent public from being cheated, the third respondent executed cancellation deed, which is valid and in accordance with law. Syed Waheed Ahmed was never authorised to sell the property and he was only given Power of Attorney to represent and defend the Court cases. Therefore, the sale deed obtained by the petitioner is vitiated by mischief and fraud for unlawful enrichment. Therefore, a declaration to bring to the notice of the public about the fraud, and extinguish and limit the rights", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-7", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "declaration to bring to the notice of the public about the fraud, and extinguish and limit the rights of the purchaser therein was very much required. The action of the Sub-Registrar, therefore, does not suffer from any illegality or impropriety.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-8", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "6. The case of the registering officer is as follows. The Sub-Registrar filed a common counter in most of the writ petitions. It is stated that the Office of the Sub-Registrar is accepting and registering documents of \"cancellation deeds\" keeping in view the decision of this Court in Writ Appeal No. 972 of 2004, dated 11.10.2004, to the effect that the Registrar cannot look into validity of the document before registering the same. A reference is also made to circular Memo No. G1/4838/04, dated 17.12.2004, issued by the Commissioner and Inspector General of Registration and Stamps (the IG, for brevity) directing the registering officers to add a footnote to the effect that the cancellation deed is registered under the provisions of the Registration Act and that such unilateral cancellation is not valid unless the deed, which is cancelled, is annulled by the competent Court. It is also stated that in terms of the Judgment of the Division Bench, the IG has taken all necessary steps for intimation to the buyers about the registration of the document to enable them to seek immediate redressal in the matter.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-9", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "7. In W.P. Nos. 879, 880, 881, 882, 979, 980 and 981 of 2006, all the petitioners purchased various extents of lands out of Acs. 41.34 guntas in survey Nos. 262 to 271, 272, 272/1, 273 and 274 situated Puppalguda village of Rajendranagar Mandal in Ranga Reddy District, from respondents 3 to 6. Sale deeds were executed by duly constituted General Power of Attorney holders of respondents 3 to 6. They allege that when one K. Nagi Reddy and others, including respondents 3 to 6, tried to interfere with the possession and enjoyment of the petitioners, they filed suit being O.S. No. 803 of 2000 on the file of the Court of the I Additional Senior Civil Judge, Ranga Reddy District and obtained orders of status quo. The respondents 3 to 6 also filed a writ petition being W.P. No. 15275 of 2005 seeking cancellation of the sale deeds executed in favour of the petitioners and while the same is pending, the Joint Sub-Registrar I, Ranga Reddy District, issued notice to all the petitioners separately informing that a cancellation deed cancelling the earlier sale deed is registered, and the petitioners were asked to seek redressal in a competent Court of law. Therefore, they filed the writ petition seeking a writ of Mandamus to declare the registration of deed of cancellation as illegal and without jurisdiction and for a consequential order to set aside the cancellation deed.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-10", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "8. Respondents 3 to 6 filed a detailed counter affidavit along with applications for vacating stay. They allege that they are owners of land admeasuring Acs. 51.29 situated in Puppalaguda village, that they appointed M/s. P. Dilip Kumar & Syed Nazir as Power of Attorneys to manage the property, that in respect of various extents of lands in survey Nos. 263 to 270 and 273, that as GPA holders were acting in a manner detrimental to the interest of the respondents, they cancelled the General Power of Attorney vide registered cancellation deed, dated 17.05.1997, and that in spite of such cancellation, the General Power of Attorney holders sold substantial extents of lands to various persons, including the petitioners and therefore, they cancelled sale deeds on 06.01.2006, which was communicated to the petitioners. They also allege that petitioners and other purchasers obtained signatures of Mohd. Jamaluddin and Karimuddin, respondents 3 and 4, on ledger papers and created fabricated documents. The allegation that the respondents received sale consideration is denied. The writ petition is also opposed on the ground that the dispute in private law cannot be redressed in a public law remedy under Article 226 of Constitution of India. In all other writ petitions, the facts and allegations are on the same lines.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-11", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "REFERENCE TO FULL BENCH:", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-12", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "9. At this stage, the genesis of the reference to the Full Bench maybe noticed. In WP. No. 14007 of 2004, the action of the Joint Sub-Registrar, Karim nagar, in accepting the deed of cancellation cancelling gift deed, dated 02.08.2004, was questioned. A learned single Judge of this Court placing reliance on the Judgment delivered by one of us (Justice V.V.S. Rao) in Property Association of Baptist Churches v. Sub Registrar, Jangoan dismissed the writ petition observing that a party aggrieved by a registered document of conveyance has to file a suit seeking proper declaration. The Judgment of the learned single Judge was assailed in W.A. No. 1486 of 2004, dated 11.10.2004. The Division Bench considered the question whether registering authority is duty bound to make any enquiry before registering the deed of cancellation. The Division Bench, by order dated 11.10.2004, affirmed the order of the learned single Judge and dismissed the writ appeal. It was observed that the Registration Act does not enable the registering authority to conduct enquiry before registering the cancellation deed, and therefore, the dispute lies essentially in the realm of private law, which requires to be adjudicated only in common law proceedings by seeking appropriate declaration under Specific Relief Act. Thereafter, writ petitions, being W.P. Nos. 23005 and 23088 of 2004 came up before another learned single Judge, in which, cancellation deeds were challenged. The learned Judge having felt that various points were not brought to the notice of the Division Bench when it decided Writ Appeal No. 972 of 2004 (following Writ Appeal No. 1486 of 2004) thought it fit that the question needs to be examined by another Division Bench or, if necessary, by Full Bench. After that, the cases were listed before the Division Bench, which referred the entire matter", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-13", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Full Bench. After that, the cases were listed before the Division Bench, which referred the entire matter to this Full Bench.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-14", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "PART - II SUBMISSIONS FOR PETITIONERS:\n10. M/s. M.R.K. Chowdary and K. Ramakrishna Reddy, learned senior counsel, N. Subba Reddy, V. Venkata Ramana, J. Prabhakar and H. Venugopal, learned Counsel for petitioners, made elaborate submissions. The submissions can be conveniently divided into two parts. The first part of the submission is regarding the power/jurisdiction of the registering officers to accept and register the document styled as cancellation deed cancelling the registered sale deeds. The second part is regarding the maintainability of a writ petition, which is a public law remedy.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-15", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "11. The first part of the submissions may be summed up as follows. Except in respect of certain documents, like gift deed, the law does not enable the seller of immovable property to cancel a deed of sale/conveyance, under which, the vendor passed on the right, title and interest in the property to the purchaser/buyer of the immovable property (hereafter called, the vendee). There can be no cancellation deed extinguishing the right of the vendee at the instance of the vendor, because when once a proper conveyance deed is executed, the vendor is divested of the title and the vendee is vested with the title. The vendor cannot therefore logically, legally and validly extinguish the right and title, which do not inhere in him/her. The registering officers being public authorities have to act within the ambit of registration law and if a document does not fall under any of the categories in Sections 17 and 18 of the Registration Act, the registering officer is bound to refuse to admit the document for registration. A deed of cancellation (of sale deed) is one such species of the document, which ought to have been refused by the registering officer for registration. If the cancellation deed is considered to be a registrable document and the registering officer is permitted to register the cancellation deed, the same would be contrary to public policy.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-16", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "12. After insertion of Section 32A by the Registration and Other Related Laws (Amendment), 2001 (Act No. 48 of 2001), whenever a document relating to transfer of ownership is presented for registration, the passport size photograph and finger print of the vendor and vendee shall have to be affixed to the document. It is the submission of the learned Counsel that even when a cancellation deed is presented, the provisions of Section 32A of Registration Act requires compliance. The registering officers have not followed this and, therefore, cancellation deeds impugned in the writ petitions cannot be allowed to stand. It is lastly contended that nonpayment of sale consideration, competence of the vendor and identity of the property conveyed, do not render a sale transaction invalid. If the vendor desires to avoid the sale transaction, the remedy is only to seek by filing a suit for cancellation of deed as contemplated under Section 31 of the Specific Relief Act, in which event, the Court adjudicating the case shall send a copy of its decree to the Registering Officer, who registered the document, whereupon the Registering Officer shall note on the copy of the instrument contained in his books the fact of its cancellation. The Registering Officer committed gross illegality in accepting and registering the cancellation deeds.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-17", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "13. The second part of the submission is in relation to the maintainability of the writ petitions to annul the cancellation deeds by issuing a writ in public law remedy. The learned Counsel for the petitioners would urge that when any public authority acted in derogation of public policy, petition for judicial review seeking declaration that such action by public authority is illegal would be maintainable and it is not necessary for the aggrieved party to invoke the common law remedy by filing a suit. In support of the two main submissions, learned Counsel placed reliance on Muppudathi v. Krishnaswami AIR 1960 Madras 1 (FB.), Komal Chand v. State , State of Kerala v. The Cochin Chemical Refineries Ltd. , Hiralal Agrawal v. Rampadarath Singh , Jogi Das v. Fakir Panda , Guman Singh v. State , Ravindra Pharmaceutical Private Limited v. State of Haryana , ONGC Limited v. Saw Pipes Limited , ABL International Limited v. Export Credit Guarantee Corporation of India and District Registrar and Collector v. Canara Bank .", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-18", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "SUBMISSIONS FOR RESPONDENTS:", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-19", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "14. Learned Counsel for the respondents, Sri Mahamood Ali (in W.P. Nos. 25661 of 2005 etc.,) Sri Y. Srinivasa Murthy (in W.P. No. 879 of 2006 etc.,), and Sri M.S. Ramachandra Rao (in W.P. No. 22298 of 2004 etc.,) vehemently opposed the writ petitions. At the very outset, all the counsel submit that the dispute between vendor and vendee or true owner and transferee regarding the validity of a sale transaction in respect of immovable property is not amenable to writ jurisdiction as it is a private law dispute. Secondly, they would urge that in all the matters the vendees obtained sale deeds from persons, who had no valid title or authority to execute sale deeds, and from person, who played fraud on the real owners and without proper compliance with the requirements of law. These issues require recording and appreciating evidence before arriving at conclusions on the questions of fact and, therefore, writ petition is not proper remedy to adjudicate and resolve the controversy. They nextly contend that the Registering Officers are bound to register any document, which is compulsorily registrable under Section 17 of the Registration Act or which is presented before the Registering Officer as a document optionally registrable. According to the learned counsel, Section 35 of the Registration Act contemplates only two situations when the Registering Officer can refuse a registration and the scope of Section 35 cannot be enlarged by the Court, which would amount to legislation. They urge that though under Rule 26 of the Registration Rules, the Registering Officers are entitled to examine the document, they have no judicial powers to decide the inter se rights of the parties to the document presented for registration or the rights of the parties who are likely to be affected by such registration. They would also urge that to decide whether cancellation of a document is valid, is essentially a function", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-20", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "They would also urge that to decide whether cancellation of a document is valid, is essentially a function of the judiciary and any dilution of the principle would impinge the doctrine of separation of powers inherent in constitutional scheme. Judicial functions are not conferred on the Registering Officers and by judicial interpretation such power cannot be conferred on the Registering Officers. It is lastly contended that when the legislature has employed plain language, consequence of enforcement of law notwithstanding the Court cannot assume any ambiguity so as to enlarge the scope by supplying casus omissus, which can only be remedied by legislation. In support of these submissions, learned Counsel placed reliance on Property Association of Baptist Churches (supra), Union of India v. S.B. Vohra , M. Varalakshmi v. K. Mahadeva Sastry (died) and Ors. 2004 (4) ALD 371 (D.B.), State of Rajasthan v. Basant Nahata and Kamepalli Sitaramaiah v. Nalluri Krishna Mohana Rao 2006 (1) L.S. 174.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-21", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "PART - III\n \n\n15. We will take up the first point for consideration as indicated in the Introduction Part. \n\nIn Re Point No. 1:\n Whether a person can nullify the sale by executing and registering a cancellation deed? Whether a registering officer, like District Registrar and/or Sub Registrar appointed by the State Government, is bound to refuse registration when a cancellation deed is presented? \n\n16. A sale of immovable property is a contract, which gives an individual civil right to the buyer, if such sale is in accordance with entrenched common law principles. The Indian Contract Act, 1872, Specific Relief Act and Transfer of Property Act, essentially deal with, among others - the contract of sale. The Indian Evidence Act, the Registration Act and the Stamp Act form the trinity of procedural and adjutant law in respect of sale whereas the three Acts referred to before form the trinity of substantive law of contract of sale. A brief foray into these; relevantforthe purpose - is the first step while considering the first point which arises in these cases.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-22", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "TRANSFER OF PROPERTY ACT : INVALID TRANSFERS:", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-23", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "17. Chapter II of TP Act contains two parts. Part-A deals with 'Transfer of property whether movable or immovable' (Sections 5 to 34). Part-B deals with 'Transfer of immovable property' (Sections 38 to 53A). A transfer as defined by Section 5 of TP Act is conveyance of property by one living person to one or more living persons or to him in present or in future. Section 6 of TP Act declares that property of any kind may be transferred except the transfer of property, which is prohibited by TP Act. Clauses (a) to (h) under Section 6 of TP Act, deal with some of prohibited transfers. Clause (h) lays down that \"no transfer can be made (i) insofar as it is opposed to the nature of the interest affected thereby, or (ii) for an unlawful object, or consideration within the meaning of Section 23 of the Indian Contract Act, 1872, or (ii) to a person legally disqualified to be transferee.\" Section 7 of TP Act enumerates that every person entitled to transferable property or authorized to dispose of transferred property, not his own, can transfer the property provided he is competent to do so. Section 8 of TP Act deals with 'operation of transfer'. It is to the effect that a transfer of property passes forthwith to the transferee of the interest, which the transferor is then capable of passing in the property and legal incidents thereof. When such transfer is completed as per Sections 10 and 11 of TP Act, any restriction contained in the transfer deed disentitling the transferee from operating or disposing of his interest in the property would be void and when the interest is created absolutely in the transferee with a condition that such transferee can enjoy subject to conditions, the transferee can ignore such conditions. As per Section 4 of TP Act, all the provisions relating to contract in the TP Act", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-24", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "As per Section 4 of TP Act, all the provisions relating to contract in the TP Act shall be taken as part of the Indian Contract Act and Section 54 (Paragraphs 2 and 3), Sections 59, 107 and 123 of TP Act shall be read as supplemental to the Registration Act. At this stage, it is necessary to extract Sections 4, 5, 6(h), 7 and 8 of TP Act as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-25", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "4. Enactments relating to contracts to be taken as part of Contract Act. - The chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872 (IX of 1872). \n\n(And Section 54, Paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, 1908 (XVI of 1908). \n\n5. \"Transfer of Property\" defined. - In the following sections \"transfer of property' means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, and one or more other living persons and \"to transfer property\" is to perform such act. \n\nIn this section \"living person\" includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals. \n\n6. (h) No transfer can be made (1) insofar as it is opposed to the nature of the interest affected thereby, or (2) for an unlawful object, or consideration within the meaning of Section 23 of the Indian Contract Act, 1872 (IX of 1872), or (3) to a person legally disqualified to be transferee. \n\n7. Persons competent to transfer. - Every person competent to contract and entitled to transferable property, or authorized to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances to the extent and in the manner allowed and prescribed by any law for the time being in force.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-26", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "8. Operation of transfer. - Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof. \n\nSuch incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth;\nAnd, where the property is machinery attached to the earth the movable parts thereof;\nAnd, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows and all other things provided for permanent use therewith;\nAnd, where the property is a debt or other actionable claim, the securities therefore (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer;\nAnd, where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-27", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "18. As noticed above, Chapter II contains Part B as well, which deals with transfer of immovable property specifically. A brief summary of the provisions of Part B of Chapter II (Sections 38 to 53) is necessary. A reading of Sections 38, 41, 42, 43, 48 and 53 would show that in all cases, a sale of immovable property does not always absolutely result in transfer of property forthwith to the transferee. There is any number of exceptions to the principle adumbrated under Section 8 of the TP Act, apart from the two important conditions of the transfer, namely; \"that the transferor is entitled to transfer or the transferor is authorized to dispose of the transferable property not his own\". When the transferor or a person authorized by such transferor does not have any authority either because there is no such entitlement to transfer or because there is no such authority to transfer, the remedies of the true owner entitled to transfer but who has not done so, could be many. Under Section 38 of TP Act, a person who is authorized to transfer property only under specific conditions, but transfers the property for consideration though such conditions do not exist, as between the transferee and transferor, it is always open to the transferee to assume existence of such conditions if he has acted in good faith after taking reasonable care to ascertain the existence of circumstances. Further if an ostensible owner transfers the property with the consent of the persons interested in the immovable property, the transfer is valid and is not voidable on the ground that the transferor (ostensible owner) was not authorized to make it. That is the purport of Section 41 of TP Act. Under Section 42 of TP Act, the transferor (seller) can always reserve power to revoke the transfer and in such a case if subsequent transfer takes place with or without revocation, the subsequent transferee can always assume that in exercise", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-28", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "subsequent transfer takes place with or without revocation, the subsequent transferee can always assume that in exercise of such revocation power the transferee revoked earlier transfer. Section 43 of TP Act contains the principle known as \"feeding the estoppel\", which means that if a person transfers the immovable property by a fraudulent and erroneous means, and such person subsequently acquires authority to transfer, the transferee is entitled for the transfer of the ownership, if the interest is acquired during the subsistence of the contract of transfer. Here again 'good faith' comes to the rescue of the transferee buying the property without there being a validly vested title in the transferor. Section 53 of TP Act speaks about fraudulent transfer. It reads as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-29", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "53. Fraudulent transfer. - (1) Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. \n\nNothing in this sub-section shall impair the rights of a transferee in good faith and for consideration. \n\nNothing in this sub-section shall affect any law for the time being in force relating to insolvency. \n\nA suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution of his decree) to avoid transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor shall be instituted on behalf of, or for the benefit of, all the creditors. \n\n(2) Every transfer of immovable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee. \n\nFor the purpose soft his sub-section no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made. \n\n19. Any transfer of immovable property made with intent to defeat or delay the creditors of the transferors and transfer made without consideration with intent to defraud a subsequent transferee are void and at the option of the subsequent transferee is voidable.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-30", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "20. Chapter III of the TP Act contains Sections 54 to 57. All these provisions deal with \"sale of immovable property\". Section 54 of TP Act defines sale as transfer of ownership in exchange for a price paid or promised, or part paid or part promised. If the value of the property is Rs. 100 and upwards, sale shall have to be effected only by a registered instrument. A contract of sale of immovable property is a contract that a sale shall take place on terms settled between the parties and does not in itself create any interest in or charge of such property. Section 55 of TP Act contains the rights and liabilities of buyer or seller, which govern the sale as well as contract of a sale. As Section 55 of TP Act comes into play only when the terms of the contract are absent between the seller and buyer. If the sale is registered without there being a contract of sale to precede it, the seller and buyer are bound by the provisions in Section 55 of TP Act. Hence, it is to be concluded that as and when the immovable property is sold under registered document, the seller and buyer agree that the seller had a valid title and the buyer was receiving the valid title under the sale. Here, it is necessary again to refer to Chapter II of TP Act to notice various situations of there being purported valid sale and situations where the law cannot presume the transfer of property.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-31", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "21. Unless and until, a person is competent to contract and entitled to transfer the property, a valid transfer of property cannot take place (Sections 5 and 7 of TP Act). As a necessary corollary, if the transfer of property is by a person without title or such transfer is opposed to nature of interest or for an unlawful object or consideration within the meaning of Section 23 of the Contract Act or transferee is legally disqualified to be transferee, title in the property does not pass to the transferee (Sections 6(h) and 8 of TP Act and Section 23 of the Contract Act). In the case of transfer by a seller having improper title in him, the situation would be different. Here again, there could be different circumstances. These are (i) a person having authority to transfer immovable property only under certain circumstances, when the transferee can assume that such circumstances existed at the time of transfer (Section 38 of TP Act); (ii) a transfer of property burdened with an obligation operating as an encumbrance on the land, is valid in so far as the transferee who was not put on a notice regarding such obligation even though the beneficiary of such burden of the property in law is entitled to the benefit of an obligation arising out of contract (Sections 39 and 40 of the TP Act); (iii) If the transfer is made by an ostensible owner (who on the face of it is inferred to be authoritative transferor of property) for consideration, the transfer shall not be voidable on that ground provided the transferee has taken reasonable care to ascertain that the transferor had power to make the transfer (Section 41 of the TP Act); (iv) In a transfer of property where the seller reserves the power to revoke the transfer, the subsequent purchaser can always proceed as if the transferor revoked earlier transfer (Section 42 of the TP Act); and (v) if a transfer takes place where", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-32", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "transfer (Section 42 of the TP Act); and (v) if a transfer takes place where the transferor had no title or imperfect title, the transferee is entitled to get all the interests which the transferor may acquire in the property subsequently provided transferee has acted in good faith for consideration without notice of the existence of the defect in the title (Section 43 of the TP Act). Apart from these situations, the transfer by a co-owner, joint owner or by a person having distinct interest in the transfer, is not rendered void and transferee in certain situations has a right to get the transfer validated. The Legislature has dealt with a variety of situations where, in a transfer, there could be passing of imperfect title. Therefore, Sections 10 and 11 of TP Act which render conditions of inalienability or conditions of non-transfer or conditions encumbering the transfer, cannot be read in isolation, they have to be read along with other provisions to which a reference is made hereinabove.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-33", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "22. What would happen when the transfer is made by a person without any valid title? What would be the situation when a sale takes place by reason of the fraud played by the transferor and transferee, which drastically affects the person with absolute title and ownership? In situations such as these, does the law contemplate only remedy of seeking declaration or cancellation of the fraudulent transfer deed or does it enable the true owner to execute a deed nullifying the fraudulent transfer deed? When Sections 7 and 8 of TP Act contemplate that only person competent to contract and entitled to transfer property can transfer, any other transfer (otherwise than as contemplated under Section 7 of the TP Act) must be treated as void. Likewise, if a transferee reserves power to himself to revoke the transfer, such transfer/sale is not rendered void (in view of Sections 10 and 11) but the transferor can even revoke the sale deed without going to any Court.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-34", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "INDIAN CONTRACT ACT : VOID TRANSFERS:", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-35", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "23. Before dealing further having regard to the Section 4 of the TP Act, which stipulates that the provisions of the TP Act relating to contract shall be taken as part of the Indian Contract Act, 1872, a reference need to be made to relevant provisions of the Contract Act. The Indian Contract Act is not a complete code dealing with law of contracts. Whenever the provisions of the Contract Act do not apply the, principles of English Law in turn would apply. See Bhavandas v. Girdharlal and Co. and Superintendence Co. of India v. Krishna Murgai . Be that as it is, sale of immovable property being contract, it is necessary to recapitulate the basic principles of contract. An agreement enforceable by law is a contract and agreement not enforceable by law is void, though an agreement enforceable at the option of one or more parties thereto becomes voidable. All agreements become contracts when there is a valid proposal and reciprocal acceptance of the proposal agreeing with the conditions subject to which one party makes the proposal and the other party accepts such proposal. A person who is of sound mind and who is not disqualified by any law is alone competent to contract. Sections 13, 14, 15, 16, 17, 18 and 19 of Contract Act define and explain the terms often used in the law of contract, namely, \"consent\", \"free consent\", \"coercion\", \"undue influence, \"fraud\" and \"misrepresentation\" respectively. Sections 20, 24 to 30 describe the agreements/contracts, which are void. These are : (a) where both parties to an agreement are under a mistake as to the matter of fact essential to the agreement; (b) if the consideration and object of a contract is unlawful Section 23 enumerates considerations and objects which are lawful or which are not lawful; (c) an agreement without consideration is", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-36", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "considerations and objects which are lawful or which are not lawful; (c) an agreement without consideration is void subject to certain exceptions contained in Section 25; (d) agreement in restraint of marriage of a person other than a minor; (e) an agreement restraining the other from exercising a lawful profession, trade or business; (f) an agreement which restrains other party from enforcing the rights by taking legal proceedings in the Courts/Tribunals and (g) agreements by way of wager and agreement the meaning of which is not certain or capable of being made certain. Chapter IV of the Contract Act deals with the contracts, which must be performed. This chapter contains provisions regarding the contracts to be performed, by whom to be performed, time and place for performance, performance of reciprocal promises and appropriation of payments and contracts which need not be performed. Section 65 of the Contract Act lays down that when a contract becomes void, any person who has received any advantage under such contract is bound to restore it to the person from whom it was received. These principles cannot be ignored while dealing with the transfer of property, which is void for any of the reasons noticed hereinabove.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-37", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "SPECIFIC RELIEF ACT : SUIT FOR CANCELLATION OF DEED:\n24. That a void or voidable instrument of transfer or instrument governing the relations between two or more persons, cannot be enforced, is recognized in common law. Under Section 17 of Specific Relief Act, a contract to sell any immovable property cannot be specifically enforced in favour of vendor, who knowing himself not to have any title to the property has contracted to sell the property. Similarly, when vendor enters into contract believing that he had a good title to the property but cannot at the time fixed by the parties give the purchaser the title free from reasonable doubt, the same cannot be enforced. Whether a person who suffers injury by reason of such void instrument has to necessarily seek cancellation of such instrument? Is it necessary that a person who suffers injury by reason of transfer of immovable property (contract), which is between two persons in respect of his own property and which is void on the face of it for the reason that the vendor of the said transaction has no authority to transfer the property to the vendee, to file a suit? Can he not execute and register a deed cancelling the offending sale deed? \n\n25. The above queries need consideration of two aspects. When a suit for cancellation of an instrument/deed or document is maintainable? When such a suit at the instance of original owner is not maintainable and what are the other remedies to such a person? Sections 31 and 34 of Specific Relief Act are relevant and read as under. \n\n31. When cancellation may be ordered:- (1) Any person against whom a written instrument is void or voidable, and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the Court may, in its discretion, so adjudge it and order it to be delivered up and cancelled.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-38", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(2) If the instrument has been registered under the Indian Registration Act, 1908, the Court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation. \n\n34. Discretion of Court as to declaration of status or right:- Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying, or interested to deny, his title to such character or right, and the Court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further relief:\nProvided that no Court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so. \n\nExplanation:- A trustee of property is a \"person interested to deny\" a title adverse to the title of some one who is not in existence, and whom, if in existence, he would be a trustee.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-39", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "26. It is a misconception that in every situation, a person who suffers injury by reason of a document can file a suit for cancellation of such written statement. Two conditions must exist before one invokes Section 31 of Specific Relief Act. These are : the written instrument is void or voidable against such person; and such person must have reasonable apprehension that such instrument if left outstanding may cause him serious injury. Insofar as Section 34 of the Specific Relief Act is concerned, it is no doubt true that a person entitled to any right as to any property can seek declaration that he is so entitled to such right. Here again, the person who claims the right to property can institute a declaration suit only when the defendant denies or interested to deny the title of the plaintiff. The difference between the two situations is glaring. In one case, cancellation of deed can be sought in a Court only by a person who executed document and who perceives that such document is void or voidable. In the other case, even if a person is not a party to the document, he can maintain a suit for declaration.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-40", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "27. In Kotrabassappaya v. Chenvirappaya 23 ILR 375 (Bombay) (D.B.), dealing with Section 39 of Specific Relief Act, 1877 (which is now Section 31 of the 1963 Act), a Division Bench of Bombay High Court interpreted the provision as enabling only the person who parted with the property under an instrument maintain an action for cancellation of the deed. It was held:\n Any person against whom a written instrument is void or voidable, who has reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, may sue to have it cancelled. The test is \"reasonable apprehension of serious injury\". Whether that exists or not, depends upon the circumstances of each case. It cannot be laid down, as a rule of law, that in no case can a man, who has parted with the property in respect of which avoid or voidable instrument exists, sue to have such instrument cancelled. \n\n28. In lyyappa v. Ramalakshmamma 13 ILR 549 (Madras) (D.B.), the Madras Division Bench laid down that a suit for cancellation of an instrument will be maintainable only by the person who executed the document. In that case, the suit was brought alleging that the defendant forged the sale deed in the name of the plaintiff as executant and alternatively if it was in fact executed by the plaintiff the execution had been obtained by fraud and no consideration had passed upon him. The Court held that if the plaintiff did not execute the document and it was forgery, the suit for cancellation is not maintainable and if the sale consideration was not paid, the action should be for payment of money and not for cancellation of the document. The relevant observations are as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-41", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Seeing that the suit is, for reasons already mentioned, not maintainable, we do not desire to express any opinion on these questions of fact. But assuming that the Judge's findings are right, we must observe that the suit ought to have been dismissed. The gist of the plaintiff's charge against the defendant was that she never had executed a sale deed in his favour, and that the document set up by him was a forgery. It was not competent to the plaintiff to combine with this charge as an alternative the wholly inconsistent charge that, if she did execute the document, no consideration was received by her, or that fraud was practiced upon her See Mahomed Buksh Khan v. Hosseini Bibi L.R., 15 I.A., 86. For this reason the second issue was, we think, as improper one, and it is further open to the objection that, assuming that the document was executed, but that the consideration did not pass, the relief prayed for in this suit could not have been granted. It is obvious that in case of default in payment of consideration the vendor's right is not to have the sale deed cancelled and delivered up, but to have the money paid to him by the purchaser.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-42", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "29. A Full Bench of Madras High Court in Muppudathi v. Krishnaswami AIR 1960 Madras 1 (F.B.) considered the scope of Sections 39 and 41 of Specific Relief Act, 1877 (which are now Sections 31 and 33 of 1963 Act). The principle entrenched in Section 39 was explained thus:\nThe principle is that such document though not necessary to be set aside may, if left outstanding, be a source of potential mischief. The jurisdiction under Section 39 is, therefore, a protective or a preventive one. It is not confined to a case of fraud, mistake, undue influence etc. and as it has been stated it was to prevent a document to remain as a menace and danger to the party against whom under different circumstances it might have operated. A party against whom a claim under a document might be made is not bound to wait till the document is used against him. If that were so he might be in a disadvantageous position if the impugned document is sought to be used after the evidence attending its execution has disappeared. Section 39 embodies the principle by which he is allowed to anticipate the danger and institute a suit to cancel the document and to deliver it up to him. The principle of the relief is the same as in quia timet actions. \n\n(emphasis supplied) It was further laid down as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-43", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied) It was further laid down as under. \n\nThe provisions of Section 39 make it clear that three conditions are requisite for the exercise of the jurisdiction to cancel an instrument : (1) the instrument is void or voidable againstthe plaintiff; (2) plaintiff may reasonably apprehend serious injury by the instrument being left outstanding; (3) in the circumstances of the case, the Court considers it proper to grant this relief of preventive justice. On the third aspect of the question the English and American authorities hold that where the document is void on its face the court would not exercise its jurisdiction while it would if it were not so apparent. In India it is a matter entirely for the discretion of the court. \n\nThe question that has to be considered depends on the first and second conditions set out above. As the principle is one of potential mischief, by the document remaining outstanding, it stands to reason the executant of the document should be either the plaintiff or a person who can in certain circumstances bind him. It is only then it could be said that the instrument is voidable by or void against him. The second aspect of the matter emphasizes that principle. For there can be no apprehension if a mere third party, asserting a hostile title creates a document. Thus relief under Section 39 would be granted only in respect of an instrument likely to affect the title of the plaintiff and not of an instrument executed by a stranger to that title. \n\n(emphasis supplied)", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-44", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied)\n \n\n30. The Full Bench of Madras High Court noticed that when the instrument/document is not executed by the plaintiff, the same does not create a cloud upon the title of the true owner nor does it create apprehension that it may be a source of danger. Accordingly, a suit for cancellation of instrument by a person who did not execute the document would not lie. However, there could be cases where instruments are executed or purported to be executed by a party or by any person who can bind him in certain circumstances. As pointed out by the Madras High Court, these are : a party executing the document or principal in respect of a document executed by his agent, or a minor in respect of document executed by his guardian de jure or de facto, the reversioner in respect of a document executed by the holder of the anterior limited estate, a real owner in respect of a document executed by a benamidar. In these cases, though the party may not have executed document, if those are allowed to stand, it may become a potential source of mischief and danger to the title and a suit would, therefore, be maintainable for cancellation of such document. When the document itself is not executed by the plaintiff, there is no necessity to have the document cancelled by a Court decree, for it has no effect on the title of true owner. \n\n31. In Debi Prasad v. Maika , a learned single Judge of Allahabad High Court placing reliance on Full Bench decision of Madras High Court in Muppudathi (22 supra), observed asunder.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-45", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "In all these cases there is no question of a document by a stranger to the title as in the present case and it can further be found that in all such cases a reasonable apprehension can be entertained that if such an instrument is left outstanding the same may cause the plaintiff serious injury. In the present case, it cannot be successfully maintained that a reasonable apprehension can be entertained by the plaintiffs that if the sale-deed is left outstanding it may cast a cloud upon their title or cause them serious injury because the cloud upon their title will not be removed merely by a decree for cancellation of the instrument. The cloud will continue to hang over the plaintiffs by the hostitle assertion of title by the executant of the sale-deed and those who claim a title to it. Therefore, the proper relief for the plaintiffs to seek in a case of this kind is a declaration of their own title or a declaration that the executant of the sale-deed in dispute has no title to the property. \n\n32. The law, therefore, may be taken as well settled that in all cases of void or voidable transactions, a suit for cancellation of a deed is not maintainable. In a case where immovable property is transferred by a person without authority to a third person, it is no answer to say that the true owner who has authority and entitlement to transfer can file a suit under Section 31 of the Specific Relief Act for the simple reason that such a suit is not maintainable. Further, in case of an instrument, which is void or voidable against executant, a suit would be maintainable for cancellation of such instrument and can be decreed only when it is adjudicated by the competent Court that such instrument is void or voidable and that if such instrument is left to exist, it would cause serious injury to the true owner.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-46", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "PUBLIC POLICY IS BREACHED OR NOT:\n33. The discussion thus far would show that even in the matter of transfer of immovable property, there could be two situations. One, where the owner himself executes a registered transfer deed, but later feels that such instrument is void or voidable for any of the reasons as per TP Act or Contract Act. The second situation is where the true owner never executed transfer deed but such transfer (transaction) materialized between two strangers one impersonating vendor and another as vendee, where there is a possibility to presume fraud in the transaction. Conveyance to deny creditors their due is another species of fraud. In at least fifty per cent of this batch of cases, there are allegations by alleged true owners that the registered sale deeds were brought into existence by playing fraud by persons who had no such authority and who are not entitled to transfer the immovable property. There are also cases where allegation of non-payment of sale consideration is made. Insofar as first category of cases is concerned, the second point for consideration would cover the same. The ensuing discussion is regarding second category of cases.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-47", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "34. The purchaser of immovable property can get the title that is passed on under the deed of conveyance by the vendor. If the title passed on is defective, the law gives the option to the purchaser to avoid such sale and sue for recovery of consideration and/or damages for breach and misrepresentation. In a situation there could also be a criminal charge against the spurious vendor for cheating under Indian Penal Code, 1860. Even in a case where he vendor has no title at all but the purchaser was made to believe that what is passed on is a valid title in the property demised under the instrument, the vendee has remedy in civil law as well as criminal law. This remedy, however, is not available to a purchaser who is negligent in not inspecting the title of the vendor and who does not insist upon such covenant or warranty. The principle of caveat emptor (let the purchaser beware), however, has no application if vendor has practised fraud to induce the purchaser to accept the offer of sale 'A Selection of Legal Maxims' : Herbert Broom; Tenth Edn., (1939), Sweet & Maxwell, pp. 528-529. In case of fraud, the vendor cannot maintain any action against the purchaser. The legal maxim 'ex dolo malo non oritur actio' applies and the vendor who knowingly committed an act declared by the law to be criminal cannot maintain action against the purchaser who refuses to take the title conveyed under the deed. The maxim 'dolus malus' vitiates all transactions effected by fraud ibid pp. 497; 540. Insofar as the buyer is concerned, as observed by Herbert Broom in his compilation of Legal Maxims (p. 540), he may abide by the contract induced by fraud and bring an action for deceit (i.e., cheating in Indian law), for the damages sustained by the fraud. The buyer may also rescind the contract returning the goods if", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-48", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "for the damages sustained by the fraud. The buyer may also rescind the contract returning the goods if already accepted and recover the price paid.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-49", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "35. What would be the remedy for the person who actually and factually holds a valid title to a property in respect of which a fraudulent transfer was effected by deceitful vendors and vendees or deceitful vendors and genuine vendees, who parted with consideration. The legal maxims 'nemo dat quod non habet' and 'nemo plus juris ad alium transferre potest quam ipse habet' postulate that where property is sold by a person who is not the owner and who does not sell under the authority or consent of the real owner, the buyer acquires no title to the property than the seller had. The Indian law recognizes this principle in various provisions of various statutes which in pith and substance deal with Contracts, Transfer of property and Specific relief (See Sections 17, 18, 19, 20, 23, 25 and 29 of the Contract Act; Sections 6(h), 7, 25, 38, 42 to 48, 52, 53 and 55 of TP Act and Sections 13, 15, 17, 21, 31 and 34 of the Specific Relief Act). Dealing with this aspect of the matter, one of us (Justice V.V.S. Rao) in A.K. Lakshmipathy (died) by LR v. R.S. Pannalal Hiralal Lahoti Charitable Trust , after making reference to Section 55 of TP Act and Section 13 of Specific Relief Act pointed out the following remedies for the transferees under fraudulent sale contracts or transfer vitiated by fraud.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-50", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(i) Where the seller transfers the property with imperfect title and subsequently acquires interest in the property, the buyer has a right to compel the vendor to make good the contract out of such interest; if necessary by compelling concurrence of other persons. Section 18 of the Specific Relief Act, 1877 except for minor variations is in pari materia with Section 13 of the New Act. The Courts have held that a defect of title is one which exposes the purchaser to adverse claims to the land and have pointed out (a) restrictive covenants, (b) encumbrances, (c) liable for the property to be satisfactorily acquired, (d) existence of partition decree allotting a portion to the co-sharer, (e) title being voidable at the option of third party and (f) the absence of concurrence of persons whose consent is necessary to validate the transfer as defects of title. \n\n(ii) The second situation deals with a case of mortgage. When the vendor sells mortgaged property professing the same to be unencumbered, the purchaser has a right to compel the vendor to redeem the mortgage, obtain valid discharge and also ask for conveyance from the mortgagee of the property. \n\n(iii) In a case where the specific performance of contract cannot be enforced and the suit is dismissed by the Court on a ground of want of title or imperfect title, the buyer has a right to the return of the deposit with interest thereon and shall also have a lien in the property to the extent of the deposit, interest and costs of the suit.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-51", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "36. The position of transferee under a fraudulent instrument of conveyance is different from the true owner of the title to the property in question. Section 31 of the Specific Relief Act provides one remedy, namely, cancellation of the instrument by showing to the Court that such instrument is void or voidable and that if such instrument is allowed to outstanding, it would cause serious injury. The injury referred to in Section 31 need not be with reference to the person i.e., the true owner of the title, but can as well encompass the property involved. Indeed, Sub-section (2) of Section 31 of the Specific Relief Act requires the Court trying a suit for cancellation of instrument to send a copy of the decree to the registering officer, who shall note on the copy of the instrument contained in the books of registration the fact of its cancellation. This would only show that the law is anxious to protect the title to the immovable property from all deceitful encumbrances. Should there be a fraudulent transfer or a transfer vitiated by misrepresentation and collusion between two unconcerned persons, does the law expects the true owner to file a suit only under Section 31 of the Specific Relief Act or to file a suit for declaration of his title again and again? That in all cases, the true owner of the immovable property cannot seek the remedy of cancellation under Section 31 is already discussed supra. If a person has enjoyed the property as a true owner for considerable length of time, merely because there is a fraudulent transfer of his property, by one incompetent person to another person, should we compel the true owner to file a suit for declaration of title again and again? Does it not render the registration of the transfer of title, which he had obtained much earlier, useless, unfruitful and meaningless? Whether the present dispensation of law is in such ineffective state containing vacuum or is it the duty of this Court to interpret the existing statute law taking into consideration the phenomenal changes in", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-52", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "is it the duty of this Court to interpret the existing statute law taking into consideration the phenomenal changes in the society and also fast changing values in the society to mould the existing policy in statute law so as to render fraudulent transfers ineffective without recourse to common law remedy?", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-53", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "37. No society can claim to adhere to stereotyped static norms, mores and code of conduct. No democratic Government can make a policy to last infinitely. The policy governing regulated social and economic human activity must continuously change. Without such continuous change, the reforms - social, political and economic; are meaningless. What is good in one age may become detestible in another age. One political philosophy replaces the other and an ever ending human endeavour to put thinking process influenced by socio-cultural fusion among human beings throws up different political philosophies in different ages. The curial exercise by the law Tribunals cannot remain inert or non-responsive to these changes. While laying down a judicial policy acceptable to all, the Court has to innovate new procedures of interpretation and invent new remedies to keep the scales of justice even. A myopic view of law and its influences may result in amelioration lasting for a short period. Long term solutions can be found only when the Courts act with vision with longer perspective. \n\n38. Justice K.K. Mathew in Murlidhar Agarwal v. State of U.P. , describes public policy as an unruly horse. His Lordship referred not only to public policy but also the policy of law. He observed that public policy must take into consideration the interest of all sections of the public ignoring the small section of the public who might be benefited by such an interpretation, which ignores the large sections of the public. His Lordship further held that public policy does not remain static in any given community. It may vary from generation to generation and may differ in the same generation, and public policy would be useless if it remains in fixed moulds for all time. It was also observed as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-54", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "The courts may have to strike a balance in express terms between community interests and sectional interests. So, here we are concerned with the general freedom of contract which everyone possesses as against the principle that this freedom shall not be used to subject a class, to the harassment of suits without valid or reasonable grounds.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-55", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Yet again it was observed:\nIf it is variable, if it depends on the welfare of the community at any given time, how are the courts to ascertain it? The judges are more to be trusted as interpreters of the law than as expounders of public policy. However, there is no alternative under our system but to vest this power with judges. The difficulty of discovering what public policy is at any given moment certainly does not absolve the judges from the duty of doing so. In conducting an enquiry, as already stated, judges are not hide bound by precedent. The judges must look beyond the narrow field of past precedents, though this still leaves open the question, in which direction he must cast his gaze. The judges are to base their decision on the opinions of men of world, as distinguished from opinions based on legal learning. In other words, the judges will have to look beyond the jurisprudence and that in so doing, they must consult nor their own personal standards or predilections but those of the dominant opinion at a given moment, or what has been termed customary morality. The judges must consider the social consequences of the rule propounded, especially in the light of the factual evidence available as to its probable results. Of course, it is not to be expected that men of the world are to be subpoenaed as expert witnesses in the trial of every action raising a question of public policy. It is not open to the judges to make a sort of referendum or hear evidence or conduct an inquiry as to the prevailing moral concept. Such an extended extra-judicial enquiry is wholly outside the tradition of courts where the tendency is to 'trust the judge to be a typical representative of his day and generation'. Our law-relies, on the implied insight of the judge on such matters. It is the judges themselves, assisted by the bar, who here represent the highest common factor of public sentiment and intelligence. \n\n(emphasis supplied)", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-56", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied)\n \n\n39. In ONGC Limited (9 supra), it was opined that the principles governing public policy must be capable of expansion or modification. Practices, which are considered perfectly normal at one time have today become obnoxious and oppressed to public conscious. It was further opined that if there is no rationale public policy, then the Court must in consonance with the public conscious, with public good and public interest, declare such practice to be opposed public policy and that the Courts have to bear in mind the principles contained in the preamble to the Constitution of India. When the precedents are lacking, the Court can always be guided by principles underlying the fundamental rights and directive principles enshrined in our Constitution of India. The Court, further, observed that the term 'public policy' is required to be interpreted in the context of the jurisdiction of the Court and giving a wider meaning to prevent patently illegal results. \n\n40. After giving our anxious consideration to these questions, we are of the opinion that the existing law is still effective to come to the rescue of the true owner of the immovable property to take steps rendering fraudulent transactions of transfer between two strangers to the property ineffective. Some more reasons for this conclusion are discussed in Part IV of this Judgment. \n\nPART - IV\n \n\n41. It is a misconception to assume that whenever there is an instrument evidencing transfer of immovable property, a person has to seek a decree for cancellation of such instrument. This remedy has its own limitations. It is also a misconception to assume that the owner of the property cannot seek cancellation of an instrument or sale deed, which in some way affects his own right, on the principle that the transfer of property divests the rightful owner of the property.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-57", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "42. The rule is nemo dat quod non habet; no one can give what he does not have. Thus, if a person has a right in the property and some one else transfers it without the consent of the owner, the right in that property still continues to subsist in the true owner and the transfer has no effect on such title. The person is still the owner of the property. Indeed, the very concept of title is excisability against the third parties. A property right is a right in rem and therefore, will not be destroyed even if right comes into hands of a third party under a fraudulent transfer. In common law, there is no exception to the rule nemo date in favour of all persons, who allegedly purchased in good faith for value. Even an innocent bona fide purchaser will be bound by the pre-existing common law property rights in the land. As we presently show the registration of a transfer deed, which is illegal, fraudulent, obtained by coercion and misrepresentation are no exceptions to these settled rules of right to property. This reiteration of common law principles leads to one thing i.e., the person who has a title to the property and the person who continues to enjoy such right can always take such steps available in law to remove the encumbrances on the property and to evict trespassers by resorting to remedies in civil law, criminal law and seeking redressal before appropriate administrative and statutory authorities.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-58", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "REGISTRATION LAW:", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-59", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "43. The Stamp Act, 1899 and the Registration Act, 1908 are not in pari materia legislations. The former is a fiscal enactment referable to the taxing powers of the State whereas the latter is a regulatory enactment in exercise of police powers of the State. Even while interpreting the provisions of the Registration Act, this distinction cannot be ignored. Registration Act is a pre Constitution enactment made by British Parliament and adopted by India by Adoptation Order, 1937. Any interpretation of any of its provision must also satisfy the constitutional provisions and in case of conflict, the provisions of Registration Act have to yield to Constitution of India. As seen from the statement of objects and reasons appended to the Registration bill, it consolidated seven enactments relating to registration of documents. Before 1908, registration system envisaged optional registration but in 18th century, it was felt that registration of certain documents of transactions should be made compulsory so as to avoid conflicts in relation to various transactions. The purpose was to assure people that if a document evidencing transaction or conveyance is registered, no one can claim any interest by creating a forged or sham document. In Hemanta Kumari v. Zemindari Co. AIR 1919 PC 79 at 81, and Tilakdhari Lal v. Khedan Lal AIR 1921 PC 112 at 116-117, the Judicial Committee observed that, the object of registering a document is to give notice to the world that a document has been executed to prevent fraud and forgery and to secure a reliable and complete account of all transactions effecting the title to the property. In the latter decision, it was also observed that so as to classify as a valid document, such document should be registered strictly complying with the provisions of the Registration Act. Therefore, the purpose of giving information to people who deal with the property as to nature and extent of rights which might be affected in relation to property, can be achieved by maintaining the", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-60", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "nature and extent of rights which might be affected in relation to property, can be achieved by maintaining the solemnity of transactions among the people and giving due importance to ethics.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-61", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "44. The Registration Act contains fifteen Parts or Chapters. Part I contains the definitions clause and Part II deals with \"Registration Establishment\" i.e., administration, management and organization of the registration department. Whether it is IG or Registrars and Registrars of the Districts and Sub Districts (for the purpose of Registration), all of them are appointed by the State Government. Part XI deals with duties and powers of the registering officers and the method of registration of the documents presented for registration. Part XII deals with the powers of the registering officers to refuse registration and the remedies there for. Part III contains the provisions dealing with the registerable documents and Parts IV to IX deal with procedure for method and manner of presenting the documents and registration as such. Part X describes the effects of registration and non-registration. \n\n45. As the submissions in support of the writ petitions revolve round the powers of the registering officers, it is necessary to deal with Part III (of registrable documents) and Parts XI and XII (of the duties and powers of the registering officers) in some detail. It may also be noted that Section 69 of the Registration Act confers the power of general superintendence on IG, over all the registration offices in the territories in the State, and also confers powers to make Rules consistent with the Registration Act. In exercise of such powers, the IG has made Rules known as A.P. Rules under the Registration Act (hereafter called, the Rules). \n\nINTERPRETATION OF SECTION 17 OF REGISTRATION ACT:\n46. Part III of the Registration Act contains Sections 17 to 22. Section 17 enumerates documents, which are compulsorily registerable and Section 18 deals with document of which registration is optional. Section 17(1) as amended by A.P. State Legislature from time to time reads as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-62", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "17. Documents of which registration is compulsory:- (1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely:\n(a) instruments of gift of immovable property;\n(b) other non-testamentary instruments which purport or operate to create, assign, limit or extinguish, whether in present or in future; any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;\n(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-63", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(d) leases of immovable property;\n(e) non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent of the value of one hundred rupees and upwards, to or in immovable property;\n(f) any decree or order or award or a copy thereof passed by a civil Court, on consent of the defendants or on circumstantial evidence but not on the basis of any instrument which is admissible in evidence under Section 35 of the Indian Stamp Act, 1899, such as registered title deed produced by the plaintiff where such decree or order or award purports or operate to create, declare, assign, limit, extinguish whether in present or in future any right, title or interest whether vested or contingent of the value of one hundred rupees and upwards to or in immovable property; and\n \n\n(g) agreement of sale of immovable property of the value of the one hundred rupees and upwards:\n Provided that the State Government may, by order published in the Official Gazette, exempt from the operation of this sub-section any leases executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rents reserved by which do not exceed fifty rupees. \n\n(1-A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of Section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001 and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said Section 53A.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-64", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied)\n \n\n47. Sub-section (2) of Section 17 of the Registration Act is by way of an exception to Section 17(1)(b) and (c) and therefore, the same need not be read here. Section 18 enumerates documents, which could be registered at the option of the parties. As per Section 18(f), other documents not required by Section 17 to be registered can also be registered at the option of the parties. For ready reference, Section 18 is extracted as under. \n\n18. Documents of which registration is optional:- Any of the following documents maybe registered under this Act, namely:\n(a) instruments (other than instruments of gift and wills) which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of a value less than one hundred rupees, to or in immovable property;\n(b) instruments acknowledging the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction, of any such right, title or interest;\n(c) xxxx (cc) instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of a value less than one hundred rupees to or in immovable property;\n(d) instruments (other than wills) which purport or operate to create, declare, assign, limit or extinguish any right, title or interest to or in immovable property;\n(e) wills; and\n \n\n(f) all other documents not required by Section 17 to be registered.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-65", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(f) all other documents not required by Section 17 to be registered. \n\n48. There is no dispute that a sale deed under which immovable property is transferred by one person to another person falls under Section 17(1)(b) of the Registration Act. As already noticed supra, under Section 54 of TP Act, transfer of ownership in immovable property (sale) can only be made by a registered instrument, and therefore, the interpretation of Section 17(1)(b) is important in the context. The contention of some of the learned Counsel for the petitioners is that the sale of immovable property under registered document being absolute, the vendor who is divested of title by reason of transfer to the vendee cannot again execute another deed nullifying the earlier one. Section 17(1)(b) deals with non-testamentary instruments other than instruments of gift. Any instrument which purport to create or operate to create, declare, assign, limit or extinguish any right, title or interest any immovable property of the value of Rs. 100/- and upwards requires compulsory registration or else under Section 49(c), such instruments, cannot be received as evidence of any transaction affecting such property. A careful reading of Section 17(1)(b) of Registration Act does not support the interpretation placed by the learned Counsel for the petitioners. We shall deal with this now. For this purpose, it is necessary to notice the meaning of the word 'purport' or the meaning of 'purport to create', 'declare' etc. \n\n \n\n49. The word 'purport' is not defined in the Registration Act or any other statute dealing with transfer of property. In Black's Law Dictionary Sixth Edn., West Publishing Company, 1990, the word 'purport' is defined as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-66", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Purport - Meaning, import, substantial meaning; substance; legal effect. The \"purport\" of an instrument means the substance of it as it appears on the face of the instrument, and is distinguished from \"tenor\", which means an exact copy. \nPurport - To convey, imply, or profess outwardly; to have the appearance of being, intending, claiming. \n\n50. In Words and Phrases (permanent edition) Words & Phrases (Permanent Edition) Vol. 35-A : West Publishing Company) the words 'purport', 'purported' and 'purported to convey' are explained as under. \n\nPURPORT The \"purport\" of a written instrument is usually its meaning; what it intends to show, what is apparent; what it shows on its face. \n\n\"Purport\" means the substance of an instrument, as it appears on the face of it to every eye that reads it, and \"tenor\" means an exact copy of it; and, where an instrument is stated according to its tenor, the purport of it must necessarily appear. \nPURPORTED Implication of word \"purported\" is that something is deficient or amiss; everything is not as it is intended to be. \n\nPURPORT TO CONVEY Where deed recited that it was held by grantor subject to any change grantor might make prior to death, and grantor did not actually deliver the deed, but his wife, the grantee, took it form his private papers after death and claimed title, the deed did not \"purport to convey\" the land within terms of statute governing adverse possession in favor of persons claiming under instruments \"purporting to convey\".", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-67", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "In LAW LEXICON The Law Lexicon by P. Ramanatha Aiyar, (reprint edn., 1993, p. 1053), the word 'purport' is defined as under. \n\nPurport. The word \"purport\", as used in speaking of the purport of an instrument, means the substance thereof as it appears on the face thereof to every eye that reads it. \n\nPurport imports what appears on the face of the instrument. It is usually intended to express the substance and effect as appears from the face of the instrument, in distinction from 'tenor', which means a copy or exactness. \n\nPurport means the design or tendency, the meaning or import when used in the expression, \"An instrument purports.\" \n\nAn instrument purports to be a particular instrument which it more or less resembles and this definition applies to a part, as well as the whole, of an instrument. \n\nThe purport of an instrument means the substance of it, as it appears on the face of it, in the eyes of all who read it. \n\nAn instrument purports to be that which, on the face of the instrument, it more or less accurately resembles. The definition of purporting is the same whether applicable to the whole or to a part of an instrument. There must be a resemblance more or less accurate.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-68", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "51. Section 73 of the Indian Evidence Act is to the effect that in order to ascertain whether the signature is that of a person by whom it purports to have been made, the same can be proved to the satisfaction of the Court by comparison of the signature with the one which is admitted or approved. The term 'purports' appearing in Section 73 of the Evidence Act fell for consideration before a Division Bench of Bombay High Court in Emperor v. Ganpat Balkrishna Rode 25 IC 649 (D.B.). The Court referred to an earlier Judgment of Calcutta High Court in Barindra Kumar Ghose v. Emperor 7 IC 359 : 11 Cr.L.J. 453 and held that the word 'purports' is used in the sense 'alleged'. The relevant plasitum in the Judgment is as follows. \n\n...And in the Calcutta judgment, the words \"by whom it purports to have been written or made\" have been construed to mean that the writing which is in dispute must itself in terms express or indicate that it was written by the person to whom the writing is attributed. One meaning of the word \"purports\" as given by Murray in his Dictionary, is \"alleged,\" and, therefore, it is reasonable to construe these words to mean \"by whom it is alleged to have been written or made.\" Or even if we take the word \"purports\" in the sense which is generally attributed to it, we may say that when an anonymous writing is produced and ascribed by the prosecution to a particular person, then the case for the prosecution must be taken to be that, having regard to the admitted documents, and the disputed writing, the prosecution alleged that the disputed document purports to have been written or made by the accused.... \n\n(emphasis supplied)", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-69", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied)\n \n\n52. Section 17(1)(b) of the Registration Act is so broadly worded that any non-testamentary instrument, which either creates or assigns right, title and interest or allegedly does so can be registered. Such a broad language was used by the legislature to see that any document of transfer of immovable property does not escape the compulsory registration. Therefore, in the considered opinion of this court, wherever a deed of transfer is registered under which a right, title and interest is assigned or transferred, the same need not always be conclusively taken to be a legal and valid transfer of title. Every sale deed must be treated as non-testamentary instrument, which purports to transfer. This interpretation is also supported by Section 18(a), which is to the effect that all instruments other than instruments of gifts and wills which purport to or create or assign right, title or interest in property of less than Rs. 100/- can be registered at the option of the parties. If Section 17(1)(b) is interpreted as dealing with all documents, which absolutely transfer the right, title and interest, the provisions of Sections 31 and 34 of the Specific Relief Act would be rendered otiose. Such an interpretation has to be avoided. Therefore, this Court must conclude that whenever sale deed is registered by one person in favour of the other person, the vendor can still has locus to question such sale deed under which the title is transferred or purportedly (allegedly) transferred. A document on the face of it, may appear to be sale deed evidencing transfer of property, but for reasons more than one; it may be a void document. \n\nDUTY AND POWER OF REGISTERING OFFICERS", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-70", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "DUTY AND POWER OF REGISTERING OFFICERS\n \n\n53. At this juncture, it is necessary to consider the powers of the registering officers in discharge of their duties under the Registration Act, to know whether it is mandatory for the registering officers to accept and admit every document presented in any form for registration or whether it is permissible for the registering officers to refuse registration and is it permissible to cancel the registration. Sections 19, 20, 21 and 22 of the Registration Act describe certain situations in which the registering officer can refuse registration. These are : when the document is in a language not understood by the officer, the documents with blanks, eraser, alteration etc., the documents without description of the property sufficient to identify the same and the documents which are presented for registration beyond four months from the date of execution. Under Section 32, when a document is presented by some person other than the person who executed the document, the registration can be refused and similarly under Section 35, the registering officer should be satisfied that the document presented for registration is in fact executed by the person, who appears before him and admits the execution. But, registration can be refused when the person by whom the document purported to be executed denies execution or the person, who purportedly executed is dead. Be it noted that by reason of the effect of Section 17 and 18, all documents whether compulsorily registrable or optionally offered for registration can be accepted for registration by the registering officer subject to the limitations contained in the provisions referred to hereinabove.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-71", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "54. When a document is presented for registration, it should contain the photographs and fingerprints affixed as per Section 32A (if it is a sale deed, the photographs and fingerprints of the buyer and seller must be affixed). After receiving the document, the registering officer has to verify/examine a document with reference to Sections 19 to 22, 32 and 35. The registering officer is also required to follow the Rules promulgated by IG under Section 69 of the Registration Act. Chapter VIII of the Rules deals with registration and examination of documents, whereas Chapter XII of the Rules deals with enquiry before registration and examination of executing parties. The Rules elaborately deal with all aspects of registration, including maintenance of registers, rectification of mistakes, fees payable for registration, maintenance and preservation of records, the method and manner of keeping the documents, and of late registration of documents through CARD Computer-Aided Administration of Registration Department. The Rules also contain as many as ten appendices dealing with different types of registers and entries to be made therein etc. \n\n \n\n55. Rule 26, to which a reference has been made by some of the learned counsel, gives the nature of examination to be made by the registering officer. The same reads as under. \n\nRule 26\n  \n\n(i) Every document shall, before acceptance for registration, be examined by the registering officer to ensure that all the requirements prescribed in the Act and in these rules have been complied with, for instance,-\n(a) that it has been presented in the proper office (Sections 28, 29 and 30);\n(b) that the person is entitled to present it (Sections 32 and 40);\n(c) that if it is a non-testamentary document and relates to immovable property, it contains a description of property sufficient to identify the same and fulfils the requirements of Rules 18 to 20.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-72", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(d) that if it is written in a language not commonly used in the District and not understood by the registering officer it is accompanied by a true translation into a language commonly used in the District and also by true copy (Section 19);\n(e) that if it contains a map or plan, it is accompanied by true copies of such map or plan as required by Section 21(4);\n(f) that if it contains no unattested interlineations, blanks, erasures or alterations, which in his opinion require to be attested as required by Section 20(1);\n(g) that if the document is one other than a will it has been presented to within the time prescribed by Sections 23 to 26;\n(h) that it bears the date of its execution and does not bear a date anterior to the date of purchase of stamp papers and the document is written on a date subsequent to the date of representation;\n(i) that if the date is written in any document other than a will presented for registration after the death of the testator according to both the British and the Indian calendars, these dates tally; and\n \n\n(j) that if the present ant is not personally known to the registering officer, he is accompanied by such identifying witnesses with whose testimony the registering officer may be satisfied. \n\n(ii) If there are any informalities in presentation of a nature which can be remedied, for instance, non-compliance of the requirements mentioned in Clauses (a) to (f), (h), (i) and (j) of Sub-rule (i) or this rule, the registering officer shall give the party such information as may be necessary and return the fees and the document with a view to the document being presented again in due form. The action of the registering officer shall be confined to advice and he shall not himself alter the document in any way.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-73", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "56. The attention of this Court is also invited to Rule 58, which while laying down that it is not duty of the registering officer to enquire into the validity of the document, nevertheless casts a duty on the registering officer to consider objections raised by anybody for the registration of the document. Rule 58 reads as follows. \n\n58. It forms no part of a registering officer's duty to enquire into the validity of a document brought to him for registration or to attend to any written or verbal protest against the registration of a document based on the ground that the executing party had no right to execute the document; but he is bound to consider objections raised on any of the grounds stated below:\n(a) that the parties appearing or about to appear before him are not the persons they profess to be;\n(b) that the document is forged;\n(c) that the person appearing as a representative, assign or agent, has no right to appear in that capacity;\n(d) that the existing party is not really dead as alleged by the party applying for registration; or\n \n\n57. Though Rule 58 prohibits the registering officers from enquiring into validity of the document, Rule 26 read with Rule 58 reveals that it is always permissible for the registering officer to examine the document presented for registration as to whether the person who presented the document is entitled to present, whether such person is known to the officer or has been properly identified by the identifying witnesses, and also examine the document with reference to the various provisions referred to hereinabove. If any objection is raised, the registering officer has to consider whether the parties appearing before him are not the parties they profess to be, whether the document is forged and whether the document is presented without proper authority by representative, and whether the executing party is dead or not. In case, the registering officer is not satisfied, he can refuse registration.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-74", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "58. Part XII of the Registration Act deals with refusal to register and Chapter XXIV of the Rules (Rules 161 to 164) deal with \"refusal register\". Under Section 71 of the Registration Act, the registering officer has to record his reasons for such refusal in book No. 2 and endorse the words \"registration refused\" on the document and when asked for, to furnish the reasons to the person executing or claiming the document. The reasons for refusal could be many and many more as seen from Chapter XXIV of the Rules. When the registration is refused, the person aggrieved has to prefer an appeal to the Registrar (Section 72) and if the appeal is also rejected, the remedy to an aggrieved person is to file a suit under Section 77 of the Registration Act for a decree directing the document to be registered by the registering officer. \n\n59. When a document is presented for registration; whether such document is compulsorily registerable or not; the registering officer is bound to examine the document, conduct enquiry and satisfy himself as to the identity of the property, the identity of the person executing the document and as to the compliance with Stamp Act and other provisions of the Registration Act. Unless such an exercise is done, the registering officer cannot certify that the document is registered and only after such certification, the registration becomes valid. Sections 60 and 61 of the Registration Act deal with such situation. These provisions read as under. \n\n60. Certificate of registration:- (1) After such of the provisions of Sections 34, 35, 58 and 59 as apply to any document presented fro registration have been complied with, the registering office shall endorse thereon a certificate containing the word 'registered', together with the number and page of the book in which the document has been copied.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-75", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(2) Such certificate shall be signed, sealed and dated by the registering officer, and shall then be admissible for the purpose of proving that the document has been duly registered in manner provided by this Act, and that the facts mentioned in the endorsements referred to in Section 59 have occurred as therein mentioned. \n\n61. Endorsements and certificate to be copied and document returned:- (1) The endorsement and certificate referred to and mentioned in Section 59 and 60 shall thereupon be copied into the margin of the Register-book, and the copy of the map or plan (if any) mentioned in Section 21 shall be filed in Book No. 1:\nProvided that the copying of the items referred to be may be done using electronic devices like scanner. \n\n(2) The registration of the document shall thereupon be deemed complete, and the document shall then be returned to the person who presented the same for registration, or to such other person (if any) as he has nominated in writing in that behalf on the receipt mentioned in Section 52. \n\n60. The above provisions would show that unless and until there is compliance with the provisions of the Registration Act and also with the provisions of Sections 34, 35, 58 and 59 of the Registration Act, there cannot be any presumption about the regularity of the proceedings before the Sub-Registrar as contemplated under Sub-section (2) of Section 60. When once an endorsement is made as stipulated in Section 60 of the Registration Act, under Sub-section (2) of Section 61, registration shall be deemed complete and the document so registered shall have to be returned to the person, who presented for the registration.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-76", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "61. The Courts in India have taken the view that the non-compliance with the provisions of Sections 60 and 61 of the Registration Act is fatal defect and the same cannot be cured by Section 87 of the Registration Act, which declares that anything done in good faith, shall not be deemed invalid See Sharnappa v. Pathru Saheb AIR 1963 Mysore 335. A contra view has also been taken by Madras High Court in Padmapan Singh v. III Joint Sub-Registrar AIR 1967 Madras 432, wherein it was held that the endorsement of the word 'registered' on the document is a ministerial act and the omission to do it being a procedural defect, the omission would not invalidate registration. Here, a reference may also be made to Section 23A of the Registration Act, which deals with Re-registration of the document. The same reads as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-77", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "23-A. Re-registration of certain documents:- notwithstanding anything to the contrary contained in this Act, if in any case a document requiring registration has been accepted for registration by a Registrar or Sub-Registrar from a person not duly empowered to present the same, and has been registered, any person claiming under such document may, within four months from his first becoming aware that the registration of such document is invalid, present such document or cause the same to be presented, in accordance with the provisions of Part VI for re-registration in the office of the Registrar of the district in which the document was originally registered; and upon the Registrar being satisfied that the document was so accepted for registration from a person not duly empowered to present same, he shall proceed to the re-registration of the document as if it had not been previously registered, and as if such presentation for re-registration was a presentation for registration made within the time allowed therefor under Part IV, and all the provisions of this Act, as to registration of documents, shall apply to such re-registration; and such document, if duly re-registered in accordance with the provisions of this section, shall be deemed to have been duly registered for all purposes from the date of its original registration:\nProvided that, within three months from the twelfth day of September, 1917, any person claiming under a document to which this section applies may present the same or cause the same to be presented for re-registration in accordance with this section, whatever may have been the time when he first became aware that the registration of the document was invalid.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-78", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "62. When a document is registered at the instance of a person not duly empowered to present the same, any person claiming under the document, may within four months from the date of knowledge that such document is invalid, may present such document in accordance with the provisions of Part VI (Sections 32 to 35) of the Registration Act. In such event, registering officer after following the same procedure contemplated under the Act, can re-register the document as if it has not been registered previously. Thus, it is not possible to accept the submission of the learned Counsel for petitioners that the registering officer ought to have rejected the documents submitted for cancellation of the sale deeds. \n\nSUPPLYING CASUS OMISSUS:\n63. This Court has referred to relevant provisions of the Registration Act, which would reveal that under specific conditions only the registering officer can reject registration and if a document registered earlier is invalid, the registering officer can even re-register the document at the instance of the person who is entitled to execute and register the document. Further, as rightly pointed out by the learned Counsel for the respondents, the registering officer can refuse registration only on grounds contemplated under law. When the legislature or subordinate legislature contemplates the circumstances and situations under which the registering officer can refuse registration, the Court cannot enlarge the scope by supplying casus omissus. \n\n64. That, when there is a casus omissus in the statute, the Court while construing law, cannot supply omission by introducing new things is settled position in law. In Illachidevi v. Jain Society, Protection of Orphans India , while reiterating that the Court cannot supply casus omissus and that the Court cannot read anything into the statutory provision, which is plain and unambiguous, the Supreme Court laid down as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-79", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "It is equally well settled that when the Legislature has employed a plain and unambiguous language, the Court is not concerned with the consequences arising therefrom. Recourse to interpretation of statues may be restored only when the meaning of the statute is obscure. The Court is not concerned with the reason as to why the Legislature thought it fit to lay emphasis one category of suitors than the others. A statute must be read in its entirety for the purpose of finding out the purport and object thereof. The Court, in the event of its coming to the conclusion that a literal meaning is possible to be rendered, would not embark upon the exercise of judicial interpretation thereof and nothing is to be added or taken from a statute unless it is held that the same would lead to an absurdity or manifest injustice.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-80", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "65. In Sri Ram Saha v. State of West Bengal (para 19), the appellant who was the owner of the garden land desired to plant hybrid saplings after removing worm affected and non-fruit bearing old trees in his land. When he was doing so, the land reforms officer prevented him from felling the trees. He challenged the same before the High Court of Calcutta. The Division Bench relied on Section 4B of West Bengal Land Reforms Act, 1955, which required Collector's permission for felling the trees by owners of non-forest private plantations and held that the appellant was entitled to cut one out of ten trees in two years. Before the Supreme Court, the appellant contended that in the absence of any provisions in the Act or in any other legislation, he cannot be prevented from felling trees in his garden land. It was also urged that the Court cannot supply casus omissus when there was no such prohibition for felling the trees from non-forest private land. The Apex Court referred to the decisions in Commissioner of Sales Tax v. Parson Tools and Plants and Sankar Ram and Co. v. Kasi Naicker and held that when the language of the statute is plain and unambiguous, casus omissus cannot be supplied. It was observed as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-81", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "It is well-settled principle of interpretation that a statute is to be interpreted on its plain reading; in the absence of any doubt or difficulty arising out of such reading of a statute defeating or frustrating the object and purpose of an enactment, it must be read and understood by its plain reading. However, in case of any difficulty or doubt arising in interpreting a provision of an enactment, Courts will interpret such a provision keeping in mind the objects sought to be achieved and the purpose intended to be served by such a provision so as to advance the cause for which the enactment is brought into force. If two interpretations are possible, the one which promotes or favours the object of the Act and purpose it serves, is to be preferred. At any rate, in the guise of purposive interpretation, the Courts cannot re-write a statute. A purposive interpretation may permit a reading of the provision consistent with the purpose and object of the Act but the Courts cannot legislate and enact the provision either creating or taking away substantial rights by stretching or straining a piece of legislation. \n\n(emphasis supplied)", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-82", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied)\n \n\n66. Therefore, when the provisions of the Registration Act and Registration Rules elaborately deal with the circumstances and situations when the registering officer has to accept and register the documents, and/or as to when registering officer has to reject the documents for registration, it is not possible to hold as a general rule that whenever a cancellation deed is submitted, the registering officer is bound to reject the acceptance and registration of the same. Such interpretation would render Section 126 of TP Act (which enables the donor of a gift to cancel/revoke the same) ineffective. Secondly, there could be unimaginable number of circumstances when the executant himself on his own volition comes before the registering officer and desires to cancel the earlier document. As already pointed out supra, under Section 23A of the Registration Act, the registering officer can reregister a document totally ignoring the earlier registration. Furthermore, under Schedule 1A to the Indian Stamp Act as amended by the Stamp (A.P. Amendment) Act, 1922, cancellation deed is one of the legal documents recognized in law and a transaction for transfer of immovable property, is no exception. \n\nEFFECT OF FRAUD ON PUBLIC AUTHORITIES", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-83", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "EFFECT OF FRAUD ON PUBLIC AUTHORITIES\n \n\n67. The question may also have to be examined from the point of view of administrative law. Needless to point out that administrative law, which also governs the exercise of power of judicial review by this Court is intended to see that all the public authorities, who are vested with powers discharge their duties and functions in accordance with rule of law, in a manner which is not illegal, irrational or improper. In post constitutional era, all the power exercised in the democratic governance flows from super statute i.e., the Constitution of India. There is no gainsaying that all power is a trust and the trust should be discharged legally, fairly, impartially and with accountability. There is always presumption - though rebuttable; in law that all public functions are discharged for public good in accordance with law. If a public authority is induced to discharge the trust (exercise power) in a manner which is fraudulent, whether such public authority can recall/revoke earlier fraudulent order? Insofar as the judicial authorities and Courts are concerned, it is now settled law that every Court in judicial hierarchy has inherent power to revoke an earlier order obtained by fraud.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-84", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "68. In Fraud is a conduct which induces another person or authority to take a definite determinative stand in response to such person's conduct by words or letter. In his treatise on the 'Law of Fraud and Mistake', Kerr describes the elements of fraud as consisting in one man's endeavour by deception to alter another man's general rights; or in one man's endeavouring by circumvention to alter general rights of another or in one man's endeavouring by deception to alter another man's particular rights. Fraud and dispensation of justice by any authority - be it judicial or executive; do not go together. One species of fraud is misrepresentation. When the man misrepresents about some animate thing or inanimate thing which is quite opposite to the reality, he would be committing fraud by misrepresentation. The effect of fraud on the person or the benefit derived by such person is a cipher. \"Fraud unravels everything and no Court can allow a person to keep an advantage obtained by fraud nor Judgment of a Court or an order of a public authority can be allowed to stand if the same is obtained by fraud\". That was so held in a well known Judgment viz., Lazarus Estates, Limited v. Beasley (1956) 1 All E.R. 341. This is accepted in Indian Law as well. \n\n69. In Shrisht Dhawan v. Shaw Brothers , the Supreme Court held as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-85", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Fraud and collusion vitiate even the most solemn proceedings in any Civilized system of jurisprudence. It is a concept descriptive of human conduct. Michael Levi likens a fraudster to Milton's sorcerer, Comus, who exulted in his ability to, 'wing me into the easy-hearted man and trap him into shares'. It has been defined as an act of trickery or deceit. In Webster's Third New International Dictionary fraud in equity has been defined as an act or omission to act or concealment by which one person obtains an advantage against conscience over another or which equity or public policy forbids as being prejudicial to another. In Black's Legal Dictionary, fraud is defined as an intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or surrender a legal right; a false representation of a matter of fact whether by words or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury. In Concise Oxford Dictionary, it has been defined as criminal deception, use of false representation to gain unjust advantage; dishonest artifice or trick.... From dictionary meaning or even otherwise fraud arises out of deliberate active role of representator about a fact which he knows to be untrue yet he succeeds in misleading the representee by making him believe it to be true. The representation to become fraudulent must be of fact with knowledge that it is false. \n\n(emphasis supplied)", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-86", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied)\n \n\n70. In S.P. Chengalvaraya Naidu v. Jagannath , quoting Lord Edward Coke (that 'fraud avoids all judicial acts, ecclesiastical or temporal',) Supreme Court of India emphasised that the Judgment or decree obtained by fraud on the Court is nullity and non est in the eye of law. It was also held that a decree/Judgment vitiated by fraud must be ignored treating it as nullity by every Court whether superior or inferior as \"finality of litigation is not available when fraud is alleged\". The following passage from the said Judgment is relevant here. \n\n...The principle of \"finality of litigation\" cannot be passed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The Courts of law are meant for imparting justice between the parties. One who comes to the Court, must come with clean hands. We are constrained to say that more often than not. Process of the Court is being abused. Property-grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the Court-process a convenient lever to retain the illegal gains indefinitely. We have no hesitation to say that a person whose case is based on falsehood, has no right to approach the Court. He can be summarily thrown out at any stage of the litigation.... A fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage.... \n\n(emphasis supplied)", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-87", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied)\n \n\n71. The principle is thus well settled that all the Courts and judicial forums in India have inherent power to recall or revoke the order passed earlier when it is shown that such order came to be passed by reason of fraud played on the Court. What is the effect of fraud in public administration when power is exercised by either administrative/executive authorities or statutory authorities? This was precisely the question considered by the Supreme Court in Indian Bank v. Satyam Fibres India Private Limited (paras 20 and 23). While observing that the judiciary in India possesses inherent power under Section 151 of Code of Civil Procedure, 1908 (CPC), to recall its Judgment or order obtained by fraud on the Court, the apex Court ruled as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-88", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "This plea could not have been legally ignored by the Commission which needs to be reminded that the authorities, be they constitutional, statutory or administrative, (and particularly those who have to decide a lis) possess the power to recall their judgments or orders if they are obtained by fraud as fraud and justice never dwell together (Fraus et jus nunquam cohabitant). It has been repeatedly said that fraud and deceit defend or excuse no man (Fraus et dolus nemini patrocinari debent).... Since fraud affects the solemnity, regularity and orderliness of the proceedings of the court and also amounts to an abuse of the process of court, the courts have been held to have inherent power to set aside an order obtained by fraud practised upon that court. Similarly, where the court is misled by a party or the court itself commits a mistake which prejudices a party, the court has the inherent power to recall its order. See : Benoy Krishna Mukerjee v. Mohanlal Goenka AIR 1950 Cal. 287; Gajanand Sha v. Dayanand Thakur AIR 1943 Pat. 127 : ILR 21 Pat. 838; Krishnakumar v. Jawand Singh AIR 1947 Nag. 236 : ILR 1947 Nag. 190; Devendra Nath Sarkar v. Ram Rachpal Singh ILR (1926) 1 Luck 341 : AIR 1926 Oudh 315; Saiyed Mohd. Raza v. Ram Saroop ILR (1929) 4 Luck 562 : AIR 1929 Oudh 385 (F.B.); Bankey Behari Lal v. Abdul Rahman ILR (1932) 7 Luck 350 : AIR 1932 Oudh 63; Lekshmi Amma Chacki Amma v. Mammen Mammen 1955 Ker L.T.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-89", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Amma Chacki Amma v. Mammen Mammen 1955 Ker L.T. 459. The court has also the inherent power to set aside a sale brought about by fraud practised upon the court Ishwar Mahton v. Sitaram Kumat AIR 1954 Pat. 450 or to set aside the order recording compromise obtained by fraud. Bindeshwari Pd. Chaudhary v. Debendra Pd. Singh ; Tara Bai v. V.S. Krishnaswamy Rao .", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-90", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied)\n \n\n72. It is thus law of the land that even administrative authorities have inherent powers to recall or revoke their own orders if such order was obtained by playing fraud on such public authority. As a necessary corollary if some thing is done by public authority at the behest of a person who played fraud, the same public authority can nullify that was done as vitiated by fraud. As observed by the Supreme Court in Indian Bank (45 supra), inherent powers spring not from legislation but from the nature and conservation of the authorities, to enable them to maintain their dignity, secure obedience to process and ensure transparency. This Court is able to place its hands on two decisions of the Supreme Court, in which the administrative authorities rectified their earlier orders on the ground of fraud and the same received approval by the Supreme Court. These are District Collector and Chairman, Vizianagaram v. M. Tripurasundari Devi and Union of India v. M. Bhaskaran 1995 Supp. (4) SCC 100. \n\n73. In District Collector and Chairman, Vizianagaram , persons who are not qualified were appointed as clerks in the District Administration ignoring the claims of those who were qualified. The Supreme Court held that appointment of an unqualified person amounts to fraud and therefore, such appointments can be withdrawn. The relevant observations are as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-91", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "It must further be realized by all concerned that when an advertisement mentions a particular qualification and an appointment is made in disregard to the same, it is not a matter only between the appointing authority and the appointee concerned. The aggrieved are all those who had similar or even better qualifications than the appointee or appointees but who had not applied for the post because they did not possess the qualifications mentioned in the advertisement. It amounts to a fraud on public to appoint persons with inferior qualifications in such circumstances unless it is clearly stated that the qualifications are relaxable. No Court should be a party to the perpetuation of the fraudulent practice. \n(emphasis supplied)\n \n\n74. In M. Bhaskaran (57 supra), the respondents obtained employment in railway service by producing bogus and forged service cards as casual labour. Their appointments were subsequently cancelled, which was set aside by Central Administrative Tribunal, Ernakulam. Before the Supreme Court, however, removal of the railway employees was sustained on the ground that when appointment is obtained by fraud, it was open for the employer to terminate the employee. The law laid down by the Supreme Court is as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-92", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Therefore, it is too late in the day for the respondents to submit that production of such bogus or forged service cards had not played its role in getting employed in railway service. It was clearly a case of fraud on the appellant-employer. If once such fraud is detected, the appointment orders themselves which were found to be tainted and vitiated by fraud and acts of cheating on the part of employees, were liable to be recalled and were at least voidable at the option of the employer concerned. This is precisely what had happened in the present case. Once the respondents were proceeded against in departmental enquiries and were called upon to have their say and thereafter have been removed from service. Such orders or removal would amount to recalling of fraudulently obtained erroneous appointment orders which were avoided by the employer-appellant after following the due procedure of law and complying with the principles of natural justice. Therefore, even independently of Rule 3(1)(i) and (iii) of the rules, such fraudulently obtained appointment orders could be legitimately treated as voidable at the option of the employer and could be recalled by the employer and in such cases merely because the respondent-employees have continued in service for a number of years on the basis of such fraudulently obtained employment orders cannot create any equity in their favour or any estoppel against the employer. \n\n(emphasis supplied)", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-93", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied)\n \n\n75. It is therefore axiomatic that in India, the judicial, quasi judicial and administrative authorities have inherent powers to recall their orders or proceedings at a latter point of time if it is shown that such order was obtained by playing fraud and misrepresentation. The question of applicability of law of limitation to exercise such inherent power by the administrative authorities does not arise because fraud unravels every thing rendering a fraudulent order void and non-existent. To our mind, this principle in a different manner is also adumbrated in Section 21 of General Clauses Act, 1897 (Central Act No. X of 1897). Under the said provision, an authority who has power to issue, inter alia orders has also power to rescind such order. Further, the Rule 117 of Registration Rules permits the registration of cancellation deed in the same class of register book as that in which original document which it cancels has been registered. It is clearly not possible to accept the submission that registering officer has no power to accept and register a cancellation deed cancelling the earlier sale deed. Such an interpretation would not sub-serve public interest and if the registering officer is not given such power, it would further harm public interest and public policy. Nobody can deny that in a civilized society regulated by rule of law, the person with valid title must have the liberty to enjoy his property and such liberty cannot be deprived of without proper procedure under law.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-94", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "76. In the considered opinion of this Court if a person sells away the property belonging to other, it would certainly be fraud on the statute. It would be adding insult to injury, if such person is asked to go to civil Court and get the subsequent sale deed cancelled or seek a declaration. Be it also noted that under common law, as discussed supra, the title of a person remains intact even if a stranger conveys that title to another stranger, which is ineffective. In the context of describing 'overriding interest' (interests, rights and powers not entered in the register), in Halsbury's Laws of England (Fourth Edition by Lord Mackay, volume 26 (reissue), the following is elucidated:\nPara 786. Entry of existence of overriding interests. Where the existence of any overriding interest is proved to his satisfaction or admitted, the registrar may, subject to prescribed exceptions, enter notice of the interest or of a claim to it on the register. This is a general provision which authorizes entry of notice of, among other things, the burden of an easement, right or privilege (being an overriding interest) acquired in equity by prescription if it be of such an estate and nature as is capable of taking effect at law.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-95", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Any person desiring an entry to be made must make a written application giving particulars of the entry required. If the applicant is the proprietor of the land, or the liability, right or interest has been created by the proprietor, and if in either case there is no caution, restriction or inhibition on the register, an entry of the existence of the liability, right or interest may be made accordingly. In other cases evidence satisfactory to the registrar must be produced of the existence of the liability, right or interest. The proprietor of the land, if not the applicant, must have notice of the application; and the matter must be proceeded with as the registrar directs Any entry of the existence of the liability right or interest, if made, must be agains the title in the charges register; and sucl entry must be made so far as practicable and convenient by reference to the instrument creating the right or by setting out an extract from it. \n\nNo claim to an easement, right or privilege not created by an instrument may be noted against the title to the servient land if the proprietor of that land (after 14 days' notice or such longer period as the registrar deems advisable) shows sufficient cause to the contrary. \n\n77. The person, who has ex facie right whether such right is registered or not can always approach the registering authority, with a request to cancel a sale deed, which was registered earlier by such registering authority by showing that subsequent registration was obtained by fraud by a person who is not entitled to transfer the property or that such transfer was registered by playing fraud on the owner or on the stranger. In the present statutory dispensation, namely Transfer of Property Act, Contract Act, Specific Relief Act and Registration Act, the Court does not see any prohibition operating on the exercise of inherent power by the registering authority to cancel the sale deed earlier registered, which is likely to cause prejudice to the true owner as well as to the entire public at large.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-96", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "78. This Court accordingly holds on point No. 1 against the petitioners. \n\nPART - V <span class=\"hidden_text\" id=\"span_1\">In Re Point No. 2</span> Whether a writ petition is maintainable for invalidation of a cancellation deed or for cancellation of an instrument which purports to nullify a sale deed?", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-97", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "79. There are mainly three types of cases before this Court. In the first group of cases being W.P. Nos. 22257, 22298, 23005 and 23008 of 2004, respondents 4 and 5 executed and registered cancellation deeds on the ground that the sale deeds executed by vendors in August, 1994, could not be finalized as sale consideration was not received by the vendors, that physical possession of the property was not delivered to the vendee and that the property was not mutated in the name of the vendee. It is also alleged that the earlier sale deed is sham and nominal. Be that as it is, though the cancellation deeds were executed on 20.08.2003, the writ petitions were filed after a period of one year in November, 2004. In the second group of cases, the sale deeds were cancelled by the vendors alleging that the owners executed general power of attorney in favour of two persons, that subsequently they cancelled the GPA in 1997 and that in spite of cancellation those persons executed sale deeds in the year 2000 without any authority or entitlement to transfer the property. These are Writ Petition Nos. 879 to 882 and 979 to 981 of 2006. In the third category of cases, being W.P. Nos. 25661 to 25666 of 2005, the contesting respondents alleged that the person who executed sale deeds claiming to be GPA holder played fraud and misrepresented, that he has such authority or power to execute sale deeds and that the executant obtained GPA by playing fraud on the real owner.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-98", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "80. Assuming that the petitioners filed suits before the civil Court for the relief, as is prayed herein before this Court, having regard to the pleadings, the civil Court has to necessarily frame the issues, which would be somewhat like this, namely, (i) whether the sale deeds executed by the vendors in favour of the petitioners are valid and binding on the owners of the property; (ii) whether the GPA executed by the owner in favour of the persons, who executed sale deeds enables such GPA holder to convey or transfer the immovable property; (iii) whether the person who obtained GPA from the real owner has not played fraud and misrepresentation on the real owner; (iv) whether the sale deed executed is void or voidable as vitiated by fraud and misrepresentation; and (v) whether the cancellation deed is liable to be cancelled. There could be other incidental or related issues but mainly these will be issues in case the petitioners go to civil Court. This Court cannot resolve these issues in writ petitions. Each one of the issues requires evidence - both oral and documentary. Such evidence must be relevant and must relate to existence or non-existence of every disputed fact in issue. Mere pleadings either by way of plaint or written statement or for that matter, an affidavit would not be sufficient to decide the issue either way. In such a situation, an assumption that a vendor cannot cancel the sale deed or the registering authority cannot accept and register the cancellation deed would be legally incorrect.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-99", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "81. Conceptually, Law broadly consists of private law and public law. All statutes and majority of common law principles regulating inter se human relations are often referred to as private law. The principles of law or statute law governing relations between the individual and public authorities (the State, the Government, quasi-Government, statutory and administrative authorities and bodies), is often referred to as public law. In Common Law jurisdictions in one form or the other, the Courts have developed the principles of public law containing normative standards though not always entrenched. These principles have been evolved to ensure that every public body acts within law in a manner, which is not arbitrary and unreasonable. The power of judicial review, therefore, is the process by which statutory Courts - generally constitutional Courts; review functions and activities of public authorities in the field of public law. What are the authorities and what are the functions of such authorities amenable to the power of judicial review is always a question of great significance, with which the Courts perennially grope with. There could be public authorities with wide variety of private law functions as there could be private persons discharging public functions. In the former case, they cannot be dragged to public law Courts and in the latter case they cannot escape scrutiny by public law Courts. \n\n82. It is misnomer to assume that all statutory authorities like registering authority, always discharge public law functions. Some of the functions like registration of documents/instruments may be in exercise of statutory power but such functions may or may not strictly concern with public law. For instance, a registration of gift deed executed by donor in favour of donee is only pursuant to statutory power but the same does not involve any public law function. Similar is the case in the event of registration of a sale deed, mortgage deed or licence deed, compromise deed and/or cancellation of any of these deeds.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-100", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "83. Judicial review has its own limitations and all decisions of public bodies are not amenable to this public law power. Nor is it permissible for a reviewing Court to deal with matters which lack adjudicative disposition by reason of prerogative nature of the power exercised by the public authority or exclusive entrustment of powers to a specialized body of the State. As the legislative and executive wings are prohibited from usurping the judicial functions of the State, the judiciary is not expected to discharge legislative and executive functions. The exposition of the principles of judicial review by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service (1985) AC 374 has attained the classical status of law of judicial review. While grouping the grounds of judicial review into three broad points, namely, illegality, irrationality and impropriety, the noble Lord observed. \n\n For a decision to be susceptible to judicial review the decision-maker must be empowered by public law (and not merely, as in arbitration, by agreement between private parties) to make decisions that, if validly made, will lead to administrative action or abstention from action by an authority endowed by law with executive powers, which have one or other of the consequences mentioned in the preceding paragraph. The ultimate source of the decision-making power is nearly always nowadays a statute or subordinate legislation made under the statute; but in the absence of any statute regulating the subject matter of the decision the source of the decision-making power may still be the common law itself, i.e., that part of the common law that is given by lawyers the label of 'the prerogative'. \n\n84. In a recent Judgment in State of U.P. v. Johri Mal , the Supreme Court of India reiterated the scope and limitations of judicial review in the following terms.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-101", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "The scope and extent of power of the judicial review of the High Court contained in Article 226 of the Constitution of India would vary from case to case, the nature of the order, the relevant statute as also the other relevant factors including the nature of power exercised by the public authorities, namely, whether the power is statutory, quasi-judicial or administrative. The power of judicial review is not intended to assume a supervisory role or don the robes of the omnipresent. The power is not intended either to review governance under the rule of law nor do the courts step into the areas exclusively reserved by the suprema lex to the other organs of the State. Decisions and actions which do not have adjudicative disposition may not strictly fall for consideration before a judicial review court. The limited scope of judicial review, succinctly put, is:\n(i) Courts, while exercising the power of judicial review, do not sit in appeal over the decisions of administrative bodies. \n\n(ii) A petition for a judicial review would lie only on certain well-defined grounds. \n\n(iii) An order passed by an administrative authority exercising discretion vested in it, cannot be interfered in judicial review unless it is shown that exercise of discretion itself is perverse or illegal. \n\n(iv) A mere wrong decision without anything more is not enough to attract the power of judicial review; the supervisory jurisdiction conferred on a court is limited to seeking that the Tribunal functions within the limits of its authority and that its decisions do not occasion miscarriage of justice. \n\n(v) The courts cannot be called upon to undertake the government duties and functions. The court shall not ordinarily interfere with a policy decision of the State. Social and economic belief of a judge should not be invoked as a substitute for the judgment of the legislative bodies.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-102", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "85. Apart from the limitations pointed out by the Supreme Court, the power of judicial review is not available when there is an effective alternative remedy to the aggrieved person. When granting redressal involves adjudication of disputed questions of facts, which require adducing of evidence by the parties, then also ordinarily an application for a judicial review is not accepted. See Whirlpool Corporation v. Registrar of Trade Marks . There is justification for the principle. Clive Lewis in 'Judicial Remedies in Public Law' (first edition 1992, Sweet & Maxwell, pp. 229 and 230), explained the rationale for the principle as under. \n\n The rationale for the exhaustion of remedies principle is relevant to the scope of that principle. A two-fold justification has been put forward. First, that where Parliament has provided for a statutory appeals procedure, it is not for the courts to usurp the functions of the appellate body. The principle applies equally to bodies not created by statute which have their own appellate system. Secondly, the public interest dictates that judicial review should be exercised speedily, and to that end it is necessary to limit the number of case in which judicial review is used. To these reasons can be added the additional expertise that the appellate bodies possess. In tax cases, for example, the appellate body, the General or Special Commissioners, have wide experience of the complex and detailed tax legislation. In employment cases, for example, the system of Industrial and Employment Appeal Tribunals may be better equipped to deal with industrial issues than the High Court.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-103", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "86. Whether the vendors file suits for cancellation of the instrument under Section 31 or for declaration of title under Section 34 or whether vendees file suits for cancellation of the cancellation deed, there are bound to be allegations of fraud, misrepresentation and illegality by both the parties. An elaborate procedure is available under Code of Civil Procedure, 1908 (CPC), Evidence Act, Specific Relief Act and Transfer of Property Act, which has to be followed by a civil Court. Certain issues cannot be adjudicated by resorting to summary procedure. In a writ petition, this Court decides the issues based on the affidavit evidence. Whenever affidavit evidence is not sufficient and further probe is required in the sense that persons who swear affidavits need to be cross-examined and confronted with documentary evidence, a writ petition is not a proper remedy. In a sale transaction, it is essentially a contract between two persons and if one person after conclusion of the contract goes back and makes attempt or purports to make an attempt to deny the benefit of the contract of the other party, the remedy is only in the civil Court.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-104", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "87. Registration Act would show that the registering authorities are creations of statutes and they are conferred powers under the statute to enable them to discharge statutory duties. A registering authority has a role of a catalyst in the sense of legitimizing certain transactions by registering as per law. By the action or inaction of registering authority, there is no involvement of the State or the Government as such, except to the extent of charging registration fee for the service of registration as well as keeping the registers. Therefore, any instrument between the two persons, is governed by private law principles and registration thereof does not play any pervading role in rendering the transaction legal or otherwise. For instance, if a contract is prohibited by reason of its being against public policy, the registration of the document evidencing such contract does not render it valid. Similarly, if two joint owners of immovable property decide to exchange properties and do so without going to registering authority, no law prohibits such exchange. However, if either of them wants to produce such deed as evidence, by reason of Section 49(c) of Registration Act, the same cannot be received as evidence of transaction between them. The registration in certain circumstances is notice of a transaction relating to immovable property to a limited extent. Therefore, Registration Act and registering authorities acting thereunder mainly deal and regulate transactions in the realm of private law. For this reason also, the writ petition cannot be entertained.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-105", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "88. At this stage, cases decided by this Court may be noticed. In these, a view has been taken that when once a document is registered by registering authority, the same can be nullified only by the civil Court and that at the time of registration, the registering authority has no power to make enquiry as to the competence or otherwise of the person presenting the document for registration. In Property Association of Baptist Churches (1 supra), one of us (Justice V.V.S. Rao) was dealing with a case wherein the action of the registering authority was challenged in registering the documents in respect of specified land. The case was founded on an allegation that the land was being alienated by encroachers clandestinely though they have no title to the property. The writ petition was opposed inter alia on the ground that registering authority has no jurisdiction to refuse registration of the documents. This Court referred to Part XI and Section 77 of the Registration Act as well as Rule 58 of the Registration Rules and dismissed the writ petition observing as under. \n\n A reading of the above provisions would show that the power of the registering officer is limited to enquire into the validity of the document brought to him for registration or to enquiry into any written or verbal protest against the registration of a document based on the ground that the executing party has no right to execute the document. The limited power of the registering officer to enquire into objections that the executing party had no right to execute document get extinguished the moment the document is registered. No such power inheres in the registering officer or the District Registrar to cancel the sale deed, unless another document for cancellation is presented with proper stamp duty and registration charges. A party aggrieved by a registered document on conveyance has to file civil suit seeking appropriate declaration under Section 34 of the Specific Relief Act, read with Article 59 of the Schedule under the Limitation Act, 1963. The writ petition is not a proper remedy.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-106", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "89. Following the decision in Property Association of Baptist Churches (1 supra), another learned single Judge in Karimnagar Education Society, Karimnagar v. The District Registrar, Registration and Stamps, Karimnagar, an unreported Judgment in W.P. No. 14007 of 2004, dated 18.08.2004, dismissed the writ petition observing as under:\nThis Court in Property Association of Baptist Churches (1 supra) categorically held that the limited power of the registering officer to enquire into the objections that the executing party had no right to execute document get extinguished the moment the document is registered. No power inheres in the registering officer or the District Registrar to cancel the deeds, unless another document is presented with proper stamp duty and registration purpose. A party aggrieved by a registered document on conveyance has to file a civil suit seeking proper declaration under Section 34 of the Specific Relief Act. \n\nIn the present case, earlier Gift Deed, which was registered in favour of the petitioner was cancelled through Cancellation Deed and presented for registration and the same was registered. The moment it is registered, the remedy of the petitioner, if any, is to approach the civil court seeking proper declaration. \n\n90. In K. Gopal Reddy v. Secretary and Ors. , Another learned single Judge allowed the writ petition restraining the vendors from alienating and conveying the immovable property in favour of others. The learned Judge observed as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-107", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "If the cancellation of sale deed is by a private individual, it hardly needs any emphasis that the necessary forum to adjudicate upon it is a Civil Court. However, where such action is resorted to by a State or its agency, the exercise partakes an administrative character. An administrative or state agency is not accorded the same latitude as a private individual in its functioning. Its acts and omissions are required to be in accordance with law, reasonable and not arbitrary.... It hardly needs any emphasis that wherever a transaction of sale, mortgage or other transfer takes place in accordance with law, it can be annulled only with the participation of parties to such transaction. If one of the parties does not co-operate for such annulment or cancellation, the only course open to the party intending such cancellation is to have recourse to an action under Section 39 of the Specific Relief Act. If unilateral cancellation of sale deeds or other instruments is permitted, there is every danger of a party to a transaction becoming an ultimate Judge in his own cause. In such cases, the sales or other transactions brought about in accordance with law, loose their significance and have to depend for their efficacy or enforceability on the mercy of the person who transferred the rights under the documents.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-108", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied) 91 Reading the above observations made by the learned Judge, this Court is not able to countenance the submission of the learned Counsel for the petitioners that the said Judgment is an authority in support of the contention that a cancellation cannot be registered. Indeed as held by learned Judge, if a cancellation deed is executed and registered by private individual, the remedy is only civil Court and a writ petition would not lie. Another aspect of the above decision is that if there is participation by all the parties to the document, there can be a cancellation deed and according to learned Judge, unilateral cancellation cannot be permitted. Be that as it is, the decisions in Karimnagar Education Society (supra) and K. Gopal Reddy (61 supra) were the subject matter of writ appeals. Writ Appeal No. 1486 of 2004 was filed against Karimnagar Education Society (supra) and Writ Appeal No. 972 of 2004 was filed against K. Gopal Reddy (61 supra). The Division Bench, by order dated 11.10.2004, dismissed the Writ Appeal No. 1486 of 2004 laying down as under:", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-109", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "The short question that falls for consideration is whether the registering authority is duty bound to make any enquiry as such before registering the deeds of cancellation. The learned Counsel for the appellant very fairly stated before us that there is no provision, which enables or obligates the registering authority to make any such enquiry before registering the cancellation deed. In such view of the matter, in our considered opinion, the public law remedy invoked by the appellant herein is ill suited to resolve the controversy between the appellant and the third respondent. The dispute essentially is between the appellant and the third respondent. The third respondent having executed the gift deed appears to have cancelled the document and according to the appellant, without any reason or justification. That dispute lies essentially in the realm of private law, which is required to be adjudicated only in a common law proceeding.... It is not as if the appellant is left without any remedy. He is always entitled to seek proper declaration under Section 34 of the Specific Relief Act as has been rightly observed by the learned single Judge. We accordingly find no merit in the appeal and the same shall accordingly stand dismissed.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-110", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "92. The writ appeal filed against K. Gopal Reddy (61 supra) was allowed by order, dated 11.10.2004, following Writ Appeal No. 1486 of 2004. However, when two writ petitions being W.P. Nos. 23005 and 23008 of 2004 were listed before the learned single Judge, who decided K. Gopal Reddy (61 supra), the matters were referred to Larger Bench observing that so as to protect the interests of both the parties whenever a deed of cancellation is presented, there should be compliance with Section 32A of the Registration Act which mandates compulsory affixing of photographs of the buyer and seller, if the document is a sale deed. \n\n93. After considering the background of these cases, we hold that the decision of the Division Bench in Writ Appeal No. 1486 of 2004, dated 11.10.2004, is correct exposition of law having regard to various provisions of Registration Act and TP Act, which have been analysed while considering point No. 1. We, therefore, hold that whenever a person is aggrieved by a cancellation deed, the remedy is to seek appropriate relief in the civil Court and writ petition is not proper remedy. There are other reasons as well, as discussed below.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-111", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "94. As seen from the counter affidavits filed by the contesting respondent, extremely serious questions regarding right and entitlement to immovable property have been raised. With the affidavit evidence, which by no means can be treated as elaborate, if this Court decides such serious questions, it would certainly prejudice the rights of the respondents and they would be deprived of the remedy before hierarchy of civil Courts. In the considered opinion of this Court, the jurisdiction under Article 226 of Constitution of India cannot be exercised if the order passed by this Court cannot be carried out without prejudicing the rights of the others. As observed by the Supreme Court in A.R. Antulay v. R.S. Nayak , \"it has been said long time ago that \"Actus Curiae Neminem Gravabit\", the act of the Court shall prejudice no man and that this maxim is founded upon justice and good sense and affords a safe and certain guide for the administration of the law\". Be it noted that even according to the petitioners, the sale deed obtained by them is valid till it is cancelled by the civil Court. Therefore, even if the cancellation deed is allowed to remain, no prejudice would be caused to the petitioners. It is also pointed out to us by the learned Government Pleader that as per the instructions issued by the IG under Section 69 of the Registration Act, the registering authority is issuing a notice to the earlier purchasers and also endorsing on the cancellation deed that such cancellation deed does not alter the rights. \n\n95. That disputed questions of fact cannot be gone into in a writ petition is axiomatic. A copious reference to case law is not necessary. As pointed out earlier, among many; it is one of the limitations on the exercise of power of judicial review. A reference may be made to two decisions of the Supreme Court in this context. In State of Bihar v. Jain Plastics and Chemicals Limited , the law was summarized as under.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-112", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "It is to be reiterated that writ petition under Article 226 is not the proper proceeding for adjudicating such disputes. Under the law, it was open to the respondent to approach the Court of competent jurisdiction for appropriate relief for breach of contract. It is settled law that when an alternative and equally efficacious remedy is open to the litigant, he should be required to pursue that remedy and not invoke the writ jurisdiction of the High Court. Equally, the existence of alternative remedy does not affect the jurisdiction of the Court to issue writ, but ordinarily that would be a good ground in refusing to exercise the discretion under Article 226....It is true that many matters could be decided after referring to the contentions raised in the affidavits and counter-affidavits, but that would hardly be ground for exercise of extraordinary jurisdiction under Article 226 of the Constitution in case of alleged breach of contract. Whether the alleged non-supply of road permits by the appellants would justify breach of contract by the respondent would depend upon facts and evidence and is not required to be decided or dealt with in a writ petition. Such seriously disputed questions or rival claims of the parties with regard to breach of contract are to be investigated and determined on the basis of evidence which may be led by the parties in an properly instituted civil suit rather than by a Court exercising prerogative of issuing writs.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-113", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "96. In Orissa Agro Industries Corporation Limited v. Bharati Industries , after referring to State Bank of India v. State Bank of India Canteen Employees Union , Chairman, Grid Corporation of Orissa v. Sukamani Das and National Highways Authority of India v. Ganga Enterprises , while reminding that where the dispute involves questions of fact, the matter ought not to be entertained under Article 226 of Constitution of India, the apex Court observed as under:\n Where a complicated question of fact is involved and the matter requires thorough proof on factual aspects, the High Court should not entertain the writ petition. Whether or not the High Court should exercise jurisdiction under Article 226 of the Constitution would largely depend upon the nature of dispute and if the dispute cannot be resolved without going into the factual controversy, the High Court should not entertain the writ petition. As noted above, the writ petition was primarily founded on allegation of breach of contract. Question whether the action of the opposite party in the writ petition amounted to breach of contractual obligation ultimately depends on facts and would require material evidence to be scrutinized and in such a case writ jurisdiction should not be exercised. \n(emphasis supplied) PART - VI CONCLUSION:", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-114", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(emphasis supplied) PART - VI CONCLUSION:\n97. As already referred to in these cases, there are serious disputed questions of fact regarding the allegations of fraud and misrepresentation played by the vendors as well as vendees against each other. There are also questions raised regarding the competence and entitlement of a person executing the document. In some cases (W.P. Nos. 22298, 23005 and 23088 of 2004), the sale deeds were cancelled some time in August, 2003, but the writ petitions are filed with considerable delay. In some cases, there are complaints of cancellation of deeds/instruments after lapse of ten years after execution of the original deed. In the opinion of this Court, these are the matters which are to be decided based on evidence and the affidavit evidence available on record is hardly sufficient to decide the issues in such a manner to meet the ends of justice. Indeed, in some of the matters (W.P. Nos. 879, 880, 881, 882, 979, 980 and 981 of 2006), suits are already filed for injunction and the orders of status quo are in force. Therefore, this Court is of considered opinion that the parties should be relegated to the civil Court to file suit either under Section 31 or under Section 34 of Specific Relief Act. Point No. 2 is answered accordingly.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-115", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "98. In the result, for the above reasons, all the writ petitions are dismissed subject to observations made hereinabove. Be it noted, as and when any suits are filed, the civil Court has to decide the issues regarding disputed questions of facts without in any manner influenced by the observations made in this Judgment. There shall be no order as to costs. \n\nBilal Nazki, J. \n\n1. This batch of writ petitions raise same question of law and fact. Facts in different writ petitions have been noted in the opinion of my brother Mr. Justice V.V.S. Rao and I will not be dealing with the facts in detail.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-116", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "2. The question is, whether a person who sells his property and executes a sale deed and gets it registered in terms of the Registration Act, 1908 (hereinafter referred to as 'the Registration Act'), could unilaterally cancel such sale deed and whether Sub-Registrar was bound to register such a deed. In Writ Petition No. 14007 of 2004, the registration of cancellation of gift deed by Sub-Registrar, Karimnagar was challenged. A learned Single Judge of this Court, relying on an earlier judgment of Single Judge in Property Association of Baptist Churches v. Sub-Registrar, Jangoan , dismissed the writ petition holding that a party aggrieved by registration of a document, had to file a suit. This judgment was challenged in Writ Appeal No. 1486 of 2004. The Division Bench considered the question whether registration of a cancellation deed could be effected by the registering authority. The Division Bench however, by its order dated 11.10.2004, affirmed the order of the learned Single Judge and dismissed the appeal. In that judgment, it was observed that the Registration Act does not enable the registering authority to make an enquiry before registering a cancellation deed. Therefore dispute, if any, between the parties, was a dispute essentially in terms of private law which could only be agitated in common law proceedings by seeking a declaration under the Specific Relief Act. Thereafter, Writ Petition Nos. 23005 and 23088 of 2004 came up before another Judge. In these writ petitions also, registration of cancellation deeds was challenged. The learned Single Judge felt that various legal questions were not brought to the notice of the Division Bench when it decided Writ Appeal No. 972 of 2004 and referred the matters to another Division Bench. The Division Bench referred the matters to the Full Bench. This is the background in which these matters have come up before us.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-117", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "3. The learned Single Judge in Writ Petition Nos. 23005 and 23088 of 2004, was of the opinion that the law laid down by this Court in Writ Appeal No. 1486 of 2004 was sought to be applied to sale deeds whereas registration of cancellation of gift deed was the subject matter in Writ Appeal No. 1486 of 2004. The learned Single Judge in his reference order, observed-\n In this regard, it needs to be noticed that a gift deed, on the one hand, and a sale deed, on the other, stand on different footing. Under Section 126 of the Transfer of Property Act, it is competent for a Donor, to suspend or revoke a gift deed, executed by him, whereas similar facility is not available, in case of a sale deed. Gift is a transfer, without any monetary consideration, whereas under a sale transaction, mutual rights and obligations exist, as between a Vendor and Vendee. Section 31 of the Specific Relief Act prescribes the manner, in which a document can be cancelled. What is required to be done through the decree of a Court, cannot be permitted to be undertaken by a party by himself. \n\nAnd finally observed-\n This Court is of the view that, if sale deeds, under which valuable properties are conveyed, are permitted to be cancelled unilaterally, it would not only result in several complications, unnecessary litigations, and hardship to the affected parties, but also bring about situations, having far-reaching implications and unrest in the Society. These aspects do not appear to have been brought to the notice of the Division Bench, which disposed of W.A. No. 972 of 2004. It is felt that the matter needs to be examined either by another Division Bench, or, if necessary, by a Full Bench.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-118", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "4. When the matter came up before the Division Bench, the Division Bench, by a very short order, referred the matter to the Full Bench as it thought that the questions raised were of public importance and the earlier Division Bench had not discussed all the issues which were involved. \n\n5. My brother Mr. Justice V.V.S. Rao has written a detailed opinion and has come to a conclusion that writ petitions deserve to be dismissed. With due respects to my brother, I venture to draft an opinion which is not in conformity with the views of my brother.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-119", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "6. M/s. M.R.K. Chowdary and K. Ramakrishna Reddy, senior Advocates and N. Subba Reddy, V. Venkata Ramana, J. Prabhakar and H. Venugopal, learned counsel, have appeared for petitioners. The main thrust of their contentions is on the fact that the Registration Act has been enacted with a view to provide information to people, who may deal with property, as to the nature and extent of the rights, which, persons may have, affecting that property. They further contend that there would have been no need for having an Act like the Registration Act if it was not felt necessary that people should know and people should be able to find out whether any particular property with which they may be concerned, had been subjected to any liability or legal obligation. Therefore, the scheme of the Registration Act provides that one should give importance and solemnity to certain classes of documents by directing that they shall be compulsorily registrable and the general purpose of the Act appears to be to put on record somewhere the particulars of ownership of property where people can examine those particulars if they are interested in such properties. It also appears from the scheme of the Registration Act that the Act reduces the chances of fraud. It is further contended by the learned Counsel for the petitioners that sale is governed by the provisions of Transfer of Property Act, 1882 (hereinafter referred to as 'the TP Act') and 'sale' is defined under Section 54 of the TP Act as, \"\"Sale\" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. \"It further lays down that in case of such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, can only be made by a reqistered instrument, and Section 17 of the Registration Act makes a sale deed compulsorily", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-120", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "reqistered instrument, and Section 17 of the Registration Act makes a sale deed compulsorily registerable. Therefore, it is contended on behalf of petitioners that it is not the registration of the document which is sought to be cancelled by preparing cancellation deeds and getting them registered, in effect, what is sought to be done is cancellation of the sale itself, which is not permissible. Sale, by its definition in the TP Act, is a transfer of ownership in exchange of consideration, which means that there cannot be a unilateral sale. A person must be owner of the property and he should sell it to another person in exchange for a price paid or promised or part-paid or part-promised. There is no concept of a unilateral sale. Sale is always bilateral. It is true there can be many owners and many purchasers but sale is incomplete unless the document is registered, which is a requirement under Section 54 of the TP Act and also under Section 17 of the Registration Act. It is well settled that transfer of ownership means a transfer by a person of his rights and interests in the property in full and permanently. A transfer of a part only of such interests or for a particular period reserving the rest for the transferor himself is not a transfer of ownership. It has also been held by Courts that where a transfer is made for a price paid or promised and the deed is registered, a sale is duly effected and the propriety interest in the property passes. In this connection, reference can be made to (1) Sahadeo Singh v. Kuber Nath Lal , and (2) Kalyan v. Mt. Desrani AIR 1927 All. 361. This Court in Kutcherlakota Vijayalakshmi v. Radimeti Rajaratnamba , even went to the extent of saying that purchaser gets title as soon as the sale deed is registered even if the consideration is not paid and it further held that the remedy for", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-121", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "the sale deed is registered even if the consideration is not paid and it further held that the remedy for the vendor was to claim consideration.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-122", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "7. The learned Counsel for petitioners would further contend that if Section 17 of the Registration Act and Section 54 of the TP Act are read together, then the effect of registration of sale deed would be that the rights of the vendor get extinguished in the property for which he executes a sale deed and if the rights of a person are extinguished and he has no rights whatsoever left in the property, there arises no question of his executing a fresh deed cancelling the sale deed. Sale is not a unilateral act, but is a bilateral act. As a result of this bilateral act, the rights of the vendors in the property get extinguished and get transferred wholly to the vendee. Vendor is left with no rights vis-a-vis the property. Therefore, if any deed styled as 'cancellation of sale deed' is executed or registered, it would amount to fraud because, by such a deed, neither rights are extinguished nor created but has the potential of creating a mischief. The deed of cancellation of sale deed which is duly registered by the Sub-Registrar, does not confer in law any rights to the erstwhile vendors. These documents are only executed for the purpose of creating a mischief and blackmailing the vendees. It was submitted that these documents, after registration, are presented to banking authorities and are given publicity so that the bankers and the prospective purchasers entertain doubts about the title of the land and the vendees-the bona fide purchasers, find difficulty in raising finances, using the property or transfer the property.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-123", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "8. The argument of the other side is that the registration officer is bound to register any document, which is presented before him. He is not supposed to conduct an enquiry whether the document confers any right on the person who presents the documents for registration or who execute such a document. It is further contended that if the petitioners are aggrieved of registration of any document, the remedy available to them is to go to a civil Court and get a declaration. \n\n9. In the light of these submissions, this Court will have to see whether the registration authorities are duty bound to register such sham documents. Let us now see the provisions of the Registration Act. Section 17 of the Registration Act make certain documents compulsorily registrable. Section 18 of this Act mentions the documents, of which, registration is optional. Section 32 mentions the persons who can present the documents for registration. It lays down-\n32. Persons to present documents for registration:- Except in the cases mentioned in Sections 31, 88 and 89, every document to be registered under this Act, whether such registration be compulsory or optional, shall be presented at the proper registration office:\n(a) by some person executing or claiming under the same, or, in the case of a copy of a decree or order, claiming under the decree or order, or\n \n\n(b) by the representative or assign of such person, or\n \n\n(c) by the agent of such person, representative or assign, duly authorized by power-of-attorney executed and authenticated in manner hereinafter mentioned. \n\nSection 49 lays down-\n49. Effect of non-registration of documents required to be registered:- No document required by Section 17 [or by any provision of the Transfer of Property Act, 1882], to be registered shall,-\n(a) affect any immovable property comprised therein, or\n \n\n(b) confer any power to adopt, or", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-124", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(b) confer any power to adopt, or\n \n\n(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered. \n\n10. After having a glance over these provisions of the Registration Act, a glance at certain sections of the TP Act is also necessary. Section 54 has already been reproduced hereinabove. Section 4 of the TP Act lays down-\n4. Enactments relating to contracts to be taken as part of Contract Act - The Chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872 (IX of 1872). \n\n[And Section 54, Paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, 1908 (XVI of 1908)] 'Transfer of property' has been defined under Section 5 as under-\n In the following sections \"transfer of property\" means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, and one or more other living persons and \"to transfer property\" is to perform such act. \n\nSection 8 of this Act lays down-\n8. Operation of transfer - Unless; a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-125", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth;\nand, where the property is machinery attached to the earth, the movable parts thereof;\nand, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent use therewith;\nand, where the property is a debt or other actionable claim, the securities therefor (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer;\nand, where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect. \n\nSection 53 of TP Act lays down-\n53. Fraudulent transfer:\n(1) Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration. Nothing in this sub-section shall affect any law for the time being in force relating to insolvency. A suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of, all the creditors.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-126", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "(2) Every transfer of immovable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee. For the purposes of this subsection, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made. \n\n11. The purpose of noting down these provisions of TP Act and the Registration Act is to come to a conclusion as to whether a vendor retains any interest in the property which he sold and of which a sale deed was executed and registered. The answer is emphatic 'no'. Therefore, in my view, when a person transfers all his rights, his rights in the property get extinguished and if he tries to get back the property, it has to be done by challenging the sale deed which he has executed and which is registered by the Sub-Registrar.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-127", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "12. Section 23 of the Indian Contract Act, 1872 (hereinafter referred to as 'the Contract Act') is applicable to the present controversy. It lays down that an agreement is void if it deviates from the provisions of any law. It further lays down that consideration or object of an agreement is lawful unless it is forbidden by any law or is fraudulent or involves or implies injury to the person or property of another, or the Court regards it as immoral or opposed to public policy. Therefore, such a document, in my view, is a fraudulent document within the meaning of Section 23 of the Contract Act and as such, cannot be registered. It is even against public policy. 'Public policy' was defined by Supreme Court in Murli dhar Agarwal v. State of Uttar Pradesh . In para 28, the Supreme Court discussed public policy vis-a-vis policy of law. Para 28 is reproduced hereunder-\n 28. The expression 'public policy' has an entirely different meaning from 'policy of the law' and one much more extensive. Nevertheless, the term 'public policy' is used by the House of Lords itself apparently as synonymous with the policy of the law or the policy of a statute see Hollinshead v. Hazleton 1916 AC 428. Yet it is clearly so used without intent to repudiate or disregard the distinction so clearly drawn in Egerton v. Brownlow, (1853) 4 HLC 1 at p. 105. It seems clear that the conception of public policy is not only now quite distinct from that of the policy of law but has in fact always been so except is some exceptional instances of confusion which have had no substantial effect on the general course of authority. See W.S.M. Knight, \"Public Policy in English Law\", 38, Law Quarterly Rev., 207, at pp. 217-218.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-128", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "13. In para 30 of the judgment, it defined 'public policy' on the basis of the definition of Win field as a principle of judicial legislation or interpretation founded on the current needs of the community. Para 30 is reproduced hereunder-", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-129", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "30. \"Public policy\" has been defined by Winfield as \"a principle of judicial legislation or interpretation founded on the current needs of the community\". (See Percy H. Winfield, \"Public Policy in English Common Law\", 42 Harvard Law Rev. 76). Now, this would show that the interests of the whole public must be taken into account; but it leads in practice to the paradox that in many cases what seems to be in contemplation is the interest of one section only of the public, and a small section at that. The explanation of the paradox is that the courts must certainly weigh the interests of the whole community as well as the interests of a considerable section of it, such as tenants, for instance, as a class as in this case. If the decision is in their favour, it means no more than that there is nothing in their conduct which is prejudicial to the nation as a whole. Nor is the benefit of the whole community always a more tacit consideration. The courts may have to strike a balance in express terms between community interests and sectional interests. So here we are concerned with the general freedom of contract which everyone possesses as against the principle that this freedom shall not be used to subject a class, to the harassment of suits without valid or reasonable grounds. Though there is considerable support in judicial dicta for the view that courts cannot create new heads of public policy, see Gherulal Parakh v. Mahadeodas Maiya 1959 Supp (2) SCR 406 at p. 440 : , there is also no lack of judicial authority for the view that the categories of heads of the public policy are not closed and that there remains a broad field within which courts can apply a variable notion of policy as a principle of judicial legislation or interpretation founded on the current needs of the community. See Dennis Lloyd, \"Public Policy\", (1953), pp. 112-113.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-130", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "In para 31, the Supreme Court held that public policy does not remain static in any given community. It may vary from generation to generation and even in the same generation. Public policy would be almost useless if it were to remain in fixed moulds for all time.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-131", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "14. One of the arguments advanced by the respondents in this case, which has found favour with my brother Mr. Justice V.V.S. Rao, is that the remedy available to the petitioners is to go to a civil Court under the provisions of Specific Relief Act. The same argument can be used against the respondents in this case, who, if aggrieved of registration of a sale deed which they had executed, themselves should have gone to the civil Court for such a remedy. I do not agree with my learned brother that the writs are not maintainable, as the remedy to the petitioners is at common law by going to a civil Court. The effect of registration of a cancellation deed is against public policy and it will create a chaos if such deeds are allowed to be registered. The purpose of registration of a document is not only to see that the rights of the vendor are extinguished and rights of the vendee are created, but the purpose is much more than that. It has been consistently held by the Courts that the purpose of registration is to inform and give notice to the world at large that such a document has been executed. Registration of a document is a notice to all the subsequent purchasers or encumbrances of the same property. The doctrine of constructive notice can be extended to others besides subsequent purchasers or encumbrances, as has been held in Tatyarao Venkatrao Vase v. Puttappa Kotrappa 12 Bom. L.R. 940. Therefore, the effect of registration of a sale deed is not effecting the rights of the present petitioners alone, but that registration is a notice to everybody in the world that the property belongs to the petitioners and if such a right is violated by subsequent registration of a cancellation deed by the Sub-Registrar, it cannot be said that writ petitions are not maintainable.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-132", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "15. If the present practice of cancelling the duly registered sale deeds as prevalent in the State of Andhra Pradesh is approved, then, the whole public policy with regard to registration of documents would get vitiated. Registered sale deeds executed duly, have some sanctity and people at large rely on them to test the title of a particular person to a particular property. If a person executes a sale deed and registers it today and then on the second day gets it cancelled, it will be simply a chaos.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-133", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "16. The object and purpose of registering the immovable property has been discussed herein above. But we think it appropriate to end this discussion on importance and need of registration of documents relating to immovable property, by referring to a judgment of Supreme Court in State of Himachal Pradesh v. Shivalik Agro Poly Products . In paragraphs 5 and 6 of the judgment, the Supreme Court recorded with approval, the legal position in the United States as is described in Corpus Juris Secundum, Vol. 76, page 525. It also took note of the position in the United Kingdom as is described in Halsbury's Laws of England, Vol. 26, Paras 701 and 705. Paragraphs 5 and 6 of the judgment are reproduced as under-\n5. By the very nature of things recognition of rights or title over immovable property and transactions therein give rise to manifold problems. Movable property, depending upon its size or dimension, can be kept in absolute control in possession of its owner and a third party may not be in a position even to know where the same has been kept. But this is not so for an immovable property which lies in the open, attached to the earth at a particular place and the owner may be residing at a faraway place. The owner may give the property on lease or licence to someone else who may get physical possession thereof and enjoy the usufruct thereof. In order to get over this difficulty, a system of registration of title to immovable property has been evolved which is followed in many countries. In the United States the legal position has been described as under in Corpus Juris Secundum, Vol. 76, p. 525:", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-134", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Systems looking toward the registration of titles to land, as distinguished from the practice under Recording Acts generally of recording or registering the evidence of such title, are in effect by virtue of statute in several of the United States, and the courts are bound by such provisions rather than by any doctrine of the common law which is in contravention thereof. These systems are quite generally known as 'Torrens systems' and the statutes providing therefore as 'Torrens Acts' from the name of the author of the Australian Act of 1857, the underlying principle of which they follow. These systems are limited in their application to titles to lane.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-135", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "The predominant object of such legislation is the establishment of a method whereby the title to a particular tract or parcel of real estate will always be ascertainable by reference to a register of conclusive veracity, maintained by the designated public official. In other words, the purpose of these laws is to simplify the transfer of real estate, and to render titles thereto safe and indefeasible through the registration of such titles, the bringing together in one place of all of the facts relative to the title to each particular tract which is registered, and the use of certificates which shall conclusively show at all times the state of such title and the person in whom it is vested. The Torrens system serves a broader purpose than merely to notify the record owner of instruments affecting the title; it is notice to all the world of the condition of the title. \n\n6. The position in the United Kingdom has been described in Halsbury's Laws of England, Vol. 26, paras 701 and 705 as under:\n701. Legislation referable to centrally maintained register - The legislation relating to registration of the title is directed to the manner in which the law and practice of conveyancing are to be adapted to the use of a centrally maintained register of title to land. As the use of the register has been extended, so the successive statutes mark the historical development of a system of conveyancing, commonly known as registered conveyancing, which approached maturity as part of the real property legislation of 1925. \n\nThe result of that legislation, as respects registered land, is to produce on first registration a State-insured record of entitlement to legal estates in land, open to public inspection, which is to be kept up to date in respect of subsequent transactions in accordance with the conveyancing technique for which the legislation provides.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-136", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "Indirect reference to the earlier legislation is found at the commencement of the Land Registration Act, 1925 in the provision that requires the Chief Land Registrar to continue to keep a register of title to freehold and leasehold land. \n\n705. The Land Registry Act, 1862 - The Land Registry Act, 1862 marked the first attempt to introduce registration of title as distinct from registration of deeds by memorial. Registration was on a voluntary basis and subject to conditions, which included conditions (1) that a marketable title should be shown; (2) that the boundaries of the land should be officially determined and defined as against adjoining owners; and (3) that partial interests should be disclosed and registered. The Act continues to apply to estates registered under it as if the Land Registration Act, 1925 had not been passed, until such time as those estates are registered pursuant to the Act of 1925. The intention that the registration of such estates is to be transferred to the modern register is confirmed by power given to the Lord Chancellor to provide by order that all titles registered under the Land Registry Act, 1862 should be registered under the Land Registration Act, 1925 without cost to the parties interested. \n\n17. To the same effect, reference can also be made to the Supreme Court judgments in Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd. and also in State of Rajasthan v. Basant Nahata .", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-137", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "18. Lastly, it was contended by the respondents that under no provision of law the Sub-Registrar is required to register a document after an enquiry as to the ownership of the property with respect to which a document is sought to be registered. It may be true that there is no such provision in the Registration Act, but if strictly interpreted, then the Registration Act would not empower the registering authority to register any document unless it falls within Section 17 or 18 of the Registration Act. Section 17 mentions those documents which are compulsorily registrable and Section 18 mentions those documents, of which, the registration is optional, but, the whole scheme of the Registration Act shows that it is incumbent upon the Registrar not to register documents that are unlawful. Obviously if a person has no right in the property and his interests in the property had extinguished, if he tries to execute any document for the same property, the document would be illegal. If 'A' executes a document with 'B' that he would kill 'C' on payment of a consideration and if such a document is presented before the Sub-Registrar, is the Sub-Registrar duty bound to register such a document? If 'A' executes a sale deed conveying the title of 'Charminar' or High Court for consideration, is the Sub-Registrar bound to register such a document? Besides, in the present case, the documents themselves show that the property had already been conveyed by a registered document, therefore, no enquiry was needed to be conducted. It is only on mere reading of the document that Sub-Registrar would come to a conclusion that the document, which was sought to be registered, was an illegal document and as such could not be registered. Therefore, the argument of the learned Counsel for respondents that the Sub-Registrar has no authority to make enquiries with regard to the title of the parties who executes the documents, would have to be accepted with exceptions. That may be true, but if the document", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-138", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "the documents, would have to be accepted with exceptions. That may be true, but if the document itself shows that the party who executes the document has no title over the property, the Sub-Registrar is not bound to register such a document. The scheme of the Registration Act shows that documents which create interest or extinguish interest are either compulsorily registrable or are to be registered at the option of the executor. Besides this, what is sought to be revoked by this cancellation deed, is the earlier registered sale deed. One of the documents we are taking as an example is the cancellation deed filed in Writ Petition No. 22257 of 2004, which reads as under-", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-139", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "CANCELLATION OF SALE DEED This Cancellation of Sale Deed is made and executed on this the 20th day of August, 2003 at Hyderabad - A.P., by::\n1. DR. P.S.N. MURTHI, S/o. Sri P.V. Venkat Rao, aged about 68 years, Both R/o. 8-2-322, Road No. 7, Banjara Hills, Hyderabad-34.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-140", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "2. SMT. P. NAGESWARAMMA, W/o. Dr. P.S.N. Murthi, aged about 64 years;\nHereinafter called the \"First party/party of the first part\". \n\nAND SRI CH. SURENDRA REDDY, S/o. Sri Ch. Veera Reddy, aged about 42 years, R/o. Plot No. 385, Road No. 22, Jubilee Hills, Hyderabad - A.P. \n\nHereinafter called the \"Second party/ party of the Second part\". \n\nWHEREAS the party of the first part herein has executed a Registered Sale Deed in favour of the party of the Second part in respect of undivided share of the property bearing M.C.H. 8-2-322, admeasuring 100 Sq. yards, out of total land measuring 800 Sq. yards, situated at Road No. 7, Banjara Hills, Hyderabad - A.P., under a Regd. Sale Deed, Regd. As Document No. 3600 of 1994, Book-I, Volume : 1612, pages : 291 to 304, dated : 30th August, 1994, Regd. at the office of the Sub-Registrar, Khairatabad, Hyderabad-A.P. \n\nAND WHEREAS due to some unavoidable circumstances not specific to mention hereunder the Sale Deed mentioned above executed by the Party of the First part in favour of the party of the Second part; could not be finalized forthe reasons mentioned hereunder:\ni. That the sale consideration was not received by the first party from the second party though the same was written as received in the principal Sale Deed.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-141", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "ii. That it is hereby further declared that the physical possession of the Schedule property still vests with the first party and the same was never delivered to the Party of the Second part;\niii. That the property was not mutated in the name of the second party/Vendee and the Municipal taxes still stand in the name of the First Party/Vendors. \n\nNOW THIS DEED OF CANCELLATION WITNESSET HAS UNDER:\n1. THAT with the execution of this deed all the rights, titles, and interests vesting with the party of the Second part shall stand REVOKED & TERMINATED and cancelled, and they shall have no claim of any kind and whatsoever nature on the schedule mentioned property. \n\n2. THAT the parties of the first part now with the execution of these presents shall become the absolute owner of the schedule mentioned property and shall be entitled to enjoy, hold, use & possess the schedule mentioned property in any manner they likes. \n\nSCHEDULE OF THE PROPERTY All that the undivided share of the property bearing M.C.H. 8-2-322 admeasuring 100 Sq. yards, out of total land measuring 800 Sq. yards, situated at Road No. 7, Banjara Hills, Hyderabad - A.P., and bounded as under::\nNORTH :: Road No. 3. \n\nSOUTH :: Neighbours Property. \n\nEAST :: Road NO. 7. \n\nWEST :: Neighbours Property. \n\nIN WITNESS WHEREOF the party of the part herein have signed on this Deed of Cancellation of Sale deed with their own free will and consent on the day, month and year above mentioned in the presence of the following witnesses. \n\nWITNESSES::\n  1. xxxxxxxxx       1. xxxxxx\n2. xxxxxxxxx       2. xxxxxx\n \n\nFIRST PARTY", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-142", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "FIRST PARTY\n \n\n19. In this document, it has been stated that all rights, titles and interests vesting with the party of the Second part shall stand revoked and terminated. Party of the Second part is not a party to the deed itself, whereas in the preamble of the deed it is stated that the document is executed between Dr. P.S.N. Murthi and Smt. P. Nageswaramma as the first party and Sri Ch. Surendra Reddy as the second party. The second party had not even executed this document and had not signed the document and registration of this document amounts to nullifying of earlier document registered by the Sub-Registrar and the Sub-Registrar does not have any power whatsoever over a document, which is already registered by him. In this connection, we are fortified in our view by a Division Bench judgment of Punjab and Haryana High Court in Ravindra Pharmaceutical Pvt. Ltd. v. State of Haryana . Since this is a small judgment, we are reproducing the whole judgment-\nOrder (Annexure P-6) issued by Sub-Registrar, Pehowa, on August 10, 1992, is challenged by the petitioner in this writ petition, as having been issued without any authority of law. The petitioner had taken a loan from the bank-respondent No. 4. Subsequently the bank asked the petitioner to furnish additional security that a document was prepared and submitted to the Sub-Registrar, Pehowa, for registration. It was duly registered. Subsequently this notice (Annexure P-6) was issued, calling upon the petitioner to pay deficiency of Rs. 29,000/- on the aforesaid deed.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-143", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "2. On notice of motion having been issued, written statement was filed on behalf of the official respondents, inter alia, asserting that the said deed was a mortgage-deed and required more stamp duty, for which notice was issued. Maintainability of the writ petition was also disputed. \n\n3. We have heard counsel for the parties and we are of the opinion that after a documentis registered, the Sub-Registrar ceases to have jurisdiction over the matter. It is only before registering the document that for the reasons to be recorded, the Sub-Registrar could refuse to register it under Section 71 of the Registration Act. Such an order could be appealed before the Registrar under Section 72 of the Act.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-144", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "4. Apart from that, after registration of the document, the Sub-Registrar could not re-open the matter. It is entirely different as to whether the document was deficiently stamped and could be used as an evidence in a court or not. The Additional Advocate General, Haryana, referred to the provisions of Sections. 31 to 35 of Indian Stamp Act to support his contention that the Collector could determine about the exact amount of stamp duty payable on a document. In our view, no help could be sought from provisions of Sections 31, 33 and 25 of the Indian Stamp Act, as the Collector has not so far taken any action under these provisions. We may observe that such an action can only be taken by the Collector if his opinion is sought by any person by producing a document as to how much stamp-duty is payable on such a document. We take it that in the facts of the present case, after registration of the document the same is with the petitioner and he has not approached the Collector for his opinion under Section 31 of the Indian Stamp Act. No provision of law has been cited before us to cho the Sub-Registrar with power to issue notice for recovery of stamp-duty, if any, after registration of the document. While allowing the writ petition, we quash the notice Annexure P-6.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-145", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "20. To the same effect, there is another judgment of Supreme Court in Komal Chand v. The State of Madhya Pradesh AIR 1996 M.P. 20. In this case, after registration of a document, the registering authority had ordered an enquiry regarding the value of the property covered by the deed. But the Supreme Court found that after registration of a document, the registering authority would become functus officio and held, \"After the registration of the 'Takseemnama' on 31st October 1956, the registering authority had no power to hold an enquiry regarding the value of the property covered by the deed and call upon the executant to pay the deficit stamp duty\". The Supreme Court was considering this case in the light of the various provisions of Registration Act and also various provisions of the Stamp Act and it held-\n Neither in the Registration Act nor in the Stamp Act is there any provision giving to the registering officer any power to examine whether an instrument already registered was or was not duly stamped and to impound it. As soon as the Registering Officer registers a document presented to him for registration, the function in the performance of which the document was produced before him is over and thereafter, becomes functus officio having no power under Section 33 to impound the instrument. \n\nThe Supreme Court, while coming to this conclusion, relied on an earlier judgment in Government of Uttar Pradesh v. Mohammad Amir Ahmad Khan . That was a case where the question arose whether the Collector had any power to impound an instrument sent to him for adjudication under Section 31 of the Stamp Act. The Supreme Court held that under that Section, the Collector had no such power, as under Section 31 of the Stamp Act, the Collector could only give his opinion as regards the duty, with which, in his judgment, the instrument was chargeable and once that duty was performed by the Collector, he would become functus officio.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-146", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "21. By registering so-called 'Cancellation of Sale Deeds', what the Sub-Registrars are doing, in effect, is that they are cancelling the registrations made earlier and once a registration is made, the Sub-Registrar has no power under the Registration Act to cancel such a registration, as he became a functus officio. \n\n22. I am also in agreement with the judgment of a learned Single Judge of this Court in Badugu Venkata Durga Rao v. Surneni Lakshmi that a person who has executed a sale deed and got it registered cannot subsequently execute a document unilaterally cancelling the earlier sale deed. \n\n23. For the reasons stated hereinabove, all the writ petitions are allowed. \n\nG. Chandraiah, J.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-147", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "G. Chandraiah, J. \n\n1. I am in complete agreement with the detailed judgment prepared by my learned brother Justice V.V.S. Rao. However, I would like to reiterate that there is no specific prohibition under the Registration Act, 1908 (for short 'the Act') to register a deed of cancellation. The registering officer can refuse registration in the situations arising under Sections 19 to 22, 32 and 35 and the relevant rules are Rules 26, 58 and 117. But in all other cases where the conditions under the Act i.e., Sections 17 and 18 of the Act are fulfilled, the registering officer is bound to register the document and it is not in dispute that the cancellation deed fulfills the conditions for the purpose of registration. However, the Act does not permit the registering officer to enquire into the title of the party presenting the document for registration and the situations mentioned in the above said provisions under which the registration can be refused are for different purpose and only under those contingencies he can refuse. This Court cannot enlarge the scope of these provisions under the guise of interpretation of statute. Further when there is no prohibition under the Act the registering officer has to register the documents presented for registration in accordance with law and this Court by judicial interpretation cannot impose the same into the statute. It is well settled that what has not been provided for in a statute cannot be supplied by Courts and to do so will amount to legislating which is not the function of the Courts.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-148", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "2. The main grievance of the petitioners is that by permitting the registration of cancellation deeds, the vendors of immovable property are misusing the provisions and allowing it would amount to abuse of process of law. This contention cannot be countenanced for the reason that admittedly there is no prohibition under the statute and if there is misuse, it is for the legislators to make necessary amendments and this Court under Article 226 of the Constitution of India cannot step into the shoes of the legislators. At this juncture it is necessary to look into the judgment of the Constitutional Bench of the Apex Court in Padma Sundara Rao v. State of T.N. . The facts in the said case reveal that a notification under Section 4(1) of the Land Acquisition Act, 1894 was issued and a declaration under Section 6(1) of the said Act was made and published in Official Gazettee within the period of three years prescribed under the proviso thereto, which was subsequently substituted by Act 68 of 1984. The notification has been quashed by the High Court. The question that arose for consideration before the Apex Court was whether after quashing of the notification under Section 6 of the said Act, fresh period of limitation was available to the State Government to issue another notification under Section 6. It was contended on behalf of the appellant therein that the declaration under Section 6 has to be issued within the specified time and merely because the court has quashed the declaration concerned, an extended time period is not to be provided. In other words, the controversy was whether the court can extend the period of limitation prescribed by the statute on the ground that the earlier notification was quashed by the Court. The Apex Court answered the issue in the negative and made the following observations with regard to interpretation of statutes:", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-149", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "12. The rival pleas regarding rewriting of statute and casus omissus need careful consideration. It is well settled principle in law that the court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the legislature itself. The question is not what may be supposed and has been intended but what has been said....", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-150", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "13. In D.R. Venkatchalam v. Dy. Transport Commr (1977) 2 SCC 283 it was observed that courts must avoid the danger of a priori determination of the meaning of a provision based on their own preconceived notions of ideological structure or scheme into which the provision to be interpreted is somewhat fitted. They are not entitled to usurp legislative function under the disguise of interpretation. \n\n14. While interpreting a provision the court only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary. (See Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd. .). \n\n(Emphasis added)\n \n\n3. Coming to the present case, as stated above, there is no prohibition under the Act for the vendor to get the cancellation deed registered. Therefore, this Court cannot read the same in the statute. However, the aggrieved party can always approach competent civil court. The learned Government Pleader submitted that even if the cancellation deed is registered, as per the instructions given by I.G. under Section 69 of the Act, the registering officer is issuing notice to the earlier purchaser and also endorsing on the cancellation deed that such cancellation deed does not alter the rights. Further some of the parties filed suits and obtained status quo orders. \n\n4. It is also to be seen that there are many disputed questions of fact, which this Court cannot delve under Article 226 of the Constitution of India. Further it is not as though the petitioners are without any remedy, they have alternative remedy before the competent civil court, which will be in a position to adjudicate based on the evidence both oral and documentary available on record and, therefore, when an alternative and efficacious remedy is available, writ jurisdiction cannot be invoked.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "049e3c4ea2d9-151", "Titles": "Yanala Malleshwari And Ors. vs Ananthula Sayamma And Ors. on 24 October, 2006", "text": "5. For the foregoing reasons, the writ petitions deserve to be dismissed as opined by the learned brother Justice V.V.S. Rao. \n\nJUDGMENT OF THE COURT BY MAJORITY The writ petitions are dismissed with no costs. \n\nSince substantial questions of public importance are raised, leave to file appeal to Supreme Court, is granted.", "source": "https://indiankanoon.org/doc/803172/"}
+{"id": "32a51fd0b970-0", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "JUDGMENT Seshachalapati, J. \n 1. This is an appeal against the judgment and decree of the learned 1st Additional Subordinate Judge, Vijayawada, in O. S. No. 86 of 1949. The suit was brought by one Sree Raja Kakarlapudi Venkata Sudarsana Sundara Narasayamma Garu, for a declaration that the sale of 9,100 B-Class shares of the Andhra Cement Company Ltd., Vijayawada (3rd defendant) by the Andhra Bank Ltd., Vijayawada (1st defendant) to the Jaipur Sugar Company Ltd., Rayagaddah (2nd defendant), is contrary to law, void and did not affect her right to redeem the pledge effected by her husband in favour of the 1st defendant-Bank and for an injunction restraining the 3rd defendant from recognising and registering the shares in the name of the 2nd defendant.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-1", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "The case of the plaintiff is that to secure the due payment of certain advances made by the 1st defendant-Bank to her husband amounting to Rs. 45,000 he pledged 9,100 B-Class shares bearing Nos. 143762 to 152S61 of the 3rd defendant Company, that her husband died on 20-4-1948 at Madras and that she was his widow and nearest heir, that in spite of her intimation that she was making arrangements to pay the amounts due_to the 1st defendant Bank and redeem the pledge, the 1st defendant-Bank without notice to her sold the 9100 B-Class shares to the 2nd defendant-company, and that the sale is illegal and void and would not affect her right to redeem the pledge. She, therefore, prayed for a de deration that her right to redeem the pledge remained unaffected and for an injunction restraining the 3rd defendant company from recognising and registering the shares.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-2", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "2. The 1st defendant-Bank contended in its written statement; first, that inasmuch as on her own admissions the late R. K. N. G. Raju died leaving a will appointing her as an executrix, she was not entitled to 61e a suit without obtaining a probate or producing a succession Certificate; secondly, that her husband, the late R. K, N. G. Raju, hypothecated the shares in question on 22-9-19-17 along with blank transfers duly signed by him and that in that instrument power had specifically been given to the Bank to sell and dispose of the shares either by public auction or private treaty as the Bank might deem fit without reference to him, and thirdly, that the Bank did demand the repayment of the loans and sold them only when there was no repayment and that even if notice of sab is required, the letters written by the Bank constituted sufficient notice. \n\nIt was lastly contended that the suit for a mere declaration with regard to the sale of shares was misconceived and not maintainable in law. The 2nd defendant-company while adopting the main contentions of the 1st defendant pleaded that it is a bona fide purchase for value and that the plaintiff had no cause of action against it. The 3rd defendant Company filed a written statement pleading that it had done nothing to prejudice the interests of the parties concerned, that it was not a necessary party to the suit, that the plaintiff was not entitled to any injunction in the manner prayed for, and that it is in no way concerned with the disputes alleged in the plaint. \n\n 3. On those pleadings, the learned Subordinate Judge framed the following issues :\n1. What are the terms of pledge? \n\n2. Whether the sale of shares by the 1st defendant to the 2nd defendant is true, valid and binding on the plaintiff?", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-3", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "3. Whether the plaintiff is entitled to the declaration prayed for? \n\n4. Whether the plaintiff cannot file this suit without obtaining probate? \n\n5. Whether the suit is not maintainable as it is for mere declaration? \n\n6. To what relief is the plaintiff entitled? \n 4. On issues, 1, 2 and 3, the learned Subordinate Judge, after a review of the evidence held that the only objection of the plaintiff that there was no notice under Section 176 of the Indian Contract Act was not tenable, as in the circumstances of this case it should be held that the pledger waived the right to receive the notice of sale, and that such a waiver was legal and valid. He also held that the sale by the 1st defendant in favour of the 2nd defendant was at the prevailing market rate and that there was no evidence of any dishonesty or fraud on the part of the 1st defendant. On those findings, the learned Subordinate Judge held that the impugned sale of shares by the 1st defendant to the 2nd defendant was binding on the plaintiff. \n\n 5. On issue 4, the learned Subordinate Judge held that inasmuch as on the admissions of the plaintiff herself, her husband the late R. K. N. G. Raju left a will appointing her as an executrix in the absence of a probate or at least the production at the will, it could not be said that the plaintiff had established her prima facie right to maintain th suit as the heir of her husband. \n\n 6. As regards the form of the suit, the learned Subordinate Judge held that a suit for declaration with an ancillary relief for injunction was maintainable in the circumstances of this case. But in view of his findings on issues 1, 2, 3 and 4, the learned Judge dismissed the suit.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-4", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "7. The plaintiff, filed the present appeal in the High Court of Madras, which eventually was transferred to this Court. During the pendency of the appeal, the appellant died and the present four appellants have been brought on record as her legal representatives. \n\n 8. In this appeal, it has been contended by Mr. Ramachandra Raju, the learned counsel for the ap* pellants that (i) there is no default in the matter of payment of the debt since neither in the instrument of pledge (Ex. B-1), nor in the subsequent letters of demand written by the 1st defendant-Bank was any specific date for the repayment mentioned; (ii) that in any event the sale is invalid, because there was no notice as required by Section 176 of the Indian Contract Act; (iii) that on tile facts of this case there was no waiver of such a notice by the plaintiff either expressly or by conduct amounting to such waiver; and (iv) that the waiver relied on by the learned Subordinafe Judge is only referable to certain expressions in the contract of pledge (Ex. B-1) which, even on the assumption that they amount to waiver are inoperative in law as they would amount to terms which cannot be legally incorporated in the contract, being manifestly opposed to the mandatory terms of Section 176.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-5", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "9. On the other hand, it has been contended by the learned counsel for the 1st defendant-Bank that (i) on a proper construction of Ex. B-1 coupled with the execution of blank transfers, the transaction would amount to mortgage of shares and that the legal estate in the shares stood transferred to the 1st defendant-Bank, with the result that when on demand the debt was not discharged, it could foreclose and sell the shares and convey a valid title to the purchaser; (ii) that even on the assumption that Ex. B-1 constitutes a pledge of the shares, the letters written by the Bank (Exs. B-5, 6 and 8) are sufficient notice; (iii) that assuming they do not constitute sufficient notice, the transaction of sale cannot be held to be invalid because in Ex. B-1 there is an express and unambiguous waiver of the right to receive such a notice. \n\nIt is also argued that on the footing that the sale in favour of the 2nd defendant is invalid and inoperative, the proper remedy for the plaintiff is to sue for redemption of the shares by tendering the money or for damages on the foot of conversion. Lastly, it is argued that the plaintiff, having been appointed, on her own admissions as an executrix under the will of her husband she cannot file the present suit without obtaining a probate and without any reference to the will whatever.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-6", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "10. For appreciating the contentions raised and debated before us, it would be necessary to state in brief outline the main facts of this case. The husband of the plaintiff was one R. K. N. G. Raju. He held 9100 B-class shares in the Andhra Cement Company bearing share Nos. 143762 to 152861, stated to have been purchased by him at Rs. 12/-per share. He had an over-draft account with the 1st defendant, Andhra Bank Ltd., both in his personal capacity and as partner of Raja Industrial and Chemical Agencies. On those two accounts the 1st defendant-Bank made several advances to him, on various dates in 1947 totalling upto a sum of Rs. 45,000. In order to secure the due payment of the amounts, R. K. N. G. Raju executed an instrument of security on 22-9-1947.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-7", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "Along with the said instrument, 9100 B-class shares were delivered to the 1st defendant Bank together with blank share transfer forms duly signed by R. K. N. G. Raju. During his life time certain payments were made to the Bank. R. K. N. G. Raju died at Madras on 20-4-1948. On 25-11-1948, the counsel for the plaintiff wrote to the 1st defendant-bank a communication (Ex. B-2) stating that R. K. N. G. Raju diet! at Madras on 20-4-1948, leaving a will appointing his wife as the executrix, and that he was instructed to take steps to secure adequate iegal representation tp the estate of the deceased. In that connection the counsel requested the 1st defendant-Bank to furnish the particulars of the account of the late R. K. N. G. Raju with the 1st defendant-bank, and also the amount due to the Bank in respect of over-draft transactions covered by tide pledge of 9100 B-class shares in the Andhra Cement Company.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-8", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "la reply to that communication from the counsel, the 1st defendant-Bank wrote a letter (Ex. B-3) dated 8-12-1948 that all necessary particulars were furnished to the 1st plaintiff and advised the counsel to obtain the information from her. By a letter of even date (Ex. B-4) the Bank wrote to the plaintiff, the widow of R. K. N. G. Raju, that with respect to the over-draft accounts by her husband and the pledge of 9100 B-Class shares in the Andlira Cement Company, a sum of Rs. 37,216-8-0 was due. The Bank requested that arrangements might be made for the payment of the debts and taking the delivery of the said shares. \n\n 11. On 17-12-1948, the Bank wrote a letter (Ex. B-5) to the plaintiff giving particulars of the advances made to her husband and the amounts due and requesting her as the legal heir of the late R. K. N. G. Raju to take immediate steps to repay the outstanding amounts due to the Bank. This letter was addressed to the plaintiff C/o the Andhra Cement Company Ltd. This letter obviously did not reach the plaintiff as it was returned unserved. Thereupon the Bank wrote another letter (Ex. B-61 dated 5-1-1949 to her address at Rajahrnundry, giving the particulars of the loans and the balance due and requiring her to take immediate steps for repayment. It is not in dispute that this letter was Received by the plaintiff.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-9", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "12. On 7-1-1949, the counsel of the plaintiff from Madras wrote to the Bank asking for the particulars asked for hy him on the assumption that the widow of the deceased would have already authorised the Bank to disclose the information. Accordingly the 1st defendant-Bank wrote to the counsel a letter (Ex. B-8) dated 9-2-1949. There was no reply by the plaintiff to the 1st defendant-Bank's letter dated 5-1-1949. \n\n 13. The 1st defendant-Bank thereupon would seem to have made enquiries with Somayajulu and Co., Slock and Share Brokers, Madras as to the market price of the B-class shares of the Andhra Cement Company. By a letter dated 10-2-1949, the firm advised the 1st-defendant-Bank that it would be possible to sell the Andhra Cement Company Ltd.'s B-class shares round-about Rs. 6-4-0 per share,", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-10", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "14. On 25-3-1949, the 1st defendant-Bank sold the 9198, B-class shares of the Andhra Cement Company Ltd., at Rs. 6-5-0 per share to the 2nd defendant the Jaipur Sugar Company Ltd., and had also forwarded to them 5 transfer deeds signed by R. K. N. G. Raju for their signatures. On the same day the 1st defendant-Bank wrote a letter (Ex. B-12) to the plaintiff informing her that since no arrangements had been made by her for the adjustment of the loans, the Bank decided to realise the amounts due by the sale of the securities pledged and accordingly sold them at Rs. 6-5-0 per share. On 30-3-1949, a telegram (Ex. B-13) was sent by the plaintiff to the 1st defendant-Bank to the effect that the sale of 9100 B-class shares was illegal and that the Bank was liable in damages. \n\n 15. On 5-4-1949, the counsel for the plaintiff sent a registered notice (Ex. B-14) to the 1st defendant-Bank with a copy to the Andhra Cement Company Ltd., (3rd defendant) stating that he confirmed the telegram sent by the plaintiff on 30-4-1949, and that the sale of the shares was without notice to his client and, therefore, invalid and not binding on her. \n\n 16. The present action was then instituted by the plaintiff on or about 20-4-1949 for the reliefs already mentioned.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-11", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "17. Before dealing with the main case of the appellants, we consider it convenient to deal at the outset with a contention advanced by Mr. Somasundaram, that Ex. B-1 is not an instrument of pledge, hut a mortgage. The relevant portion of the instrument (Ex. B-1) may he extracted :\n \"That failing payment on demand to you by us of the amount of such advances you shall be entitled, but not hound to sell or otherwise dispose of all or any of the said moveahle properties, marketable securities and goods by public auction or private contract in such manner and upon such term and subject to such conditions as you may think fit without any reference to us or obtaining our consent and the proceeds of sale or disposal shall be applied first in payment of all costs, charges and expenses of and incidental to such sale or disposal and the enforcement of the pledge and charge in your favour hereby created.\" \n 18. Under the Indian Law, unlike in England a share is not a mere chose in action. Section 137 of the Transfer of Property Act clearly states that Chapter VIII of the Act dealing with transfer of actionable claims will not apply to stocks, shares or debentures, or to instruments which are for the time being by law or custom, negotiable. Or to any mercantile documents of title of goods. Section 2 (7) of the Sale of Goods Act defines goods as meaning 'every kind of moveable property other than shares etc.' With respect, therefore, to this class of moveable property there can be a mortgage or a pledge. This distinction between the two is clearly brought out in the following passage in Halsbury's Laws of England, Hailsham Edn. (2nd Edn.) para 300 page 226 of Vol XXIII.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-12", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "\"A mortgage of personal chattels is essentially different from a pledge or pawn under which money is advanced upon the security of chattels delivered into the possession of the lender, such delivery of possession being on essential element of the transaction. A mortgage conveys the whole legal interest in the chattels; a pledge or pawn conveys only a special properly, leaving the general property in the pledger or pawnor; the pledgee or pawnee never has the absolute ownership of the goods, but has a special property in them coupled with a power of selling and transferring them to a purchaser on default of payment at the stipulated time, if any, or at a reasonable time after demand and non-payment if no time for payment is agreed upon.\" \n 19. The essential distinction, therefore, between a pledge and a mortgage is that unlike a pledgee a mortgagee acquires general property in the thing mortgaged subject to the right of redemption of the mortgagor. In other words, the legal estate in the goods mortgaged passes on to the mortgagee. But a pledgee has only the special property in the goods pledged, namely, the right of retainer of the goods as security, and in case of default he must either bring a suit against the pawnor or sell the goods after giving a reasonable notice.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-13", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "20. Whether a particular transaction is a mortgage of moveable property or a pledge can only be determined by reference to the intention of the parties, and other surrounding circumstances. (Vide Arjun Prasad v. Central Bank of India, (S) ). It is argued by Mr. Somasundaram that the execution along with Ex. B-1 of blank transfers indicates that it is a mortgage. We are unable to agree that that circumstance alone, without more will mean that the transaction is one of mortgage. A pledge of shares can also be accompanied by blank transfers as in the case of Official Assignee, Bombay v. Madholal Sindhu, AIR 1917 Bom 217. In Elaya Nayar v. Krishna Pattar, AIR 1943 Mad 74, it was held that a share in a company could be the subject matter of a pledge which can be enforced, but unless the pledgee at the time of deposit secures a deed of transfer which he can use in case of necessity or obtains one from his debtor at a later stage, he must have recourse to the court when he wishes to enforce his security. \n\nIn other words, obtaining of blank transfers is a convenient mode of exercising the right of sale when the pledgee in law is entitled to do. In any view, it seems to us that this question as to the nature of the transaction cannot be considered at this stage, because the parties throughout treated the transaction as one of pledge. In Ex. B-8 the plaintiff's counsel referred to the transaction as a pledge. In some of the letters written by the Bank the expression 'pledge' is used. The plaint proceeds upon the footing that the shares were pledged. The expression 'pledge' has a definite legal significance and there is no warrant for the assumption that the 1st defendant-Bank used the expression 'pledge' by inadvertence.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-14", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "In the written statement filed by the 1st defendant the plea that the transaction amounts to a mortgage, and not a pledge is not clearly set out. The 1st issue framed at the trial is, 'What are the terms of the pledge'? The main ease as put forward by the parties in the trial court was as to whether there was notice as required under Section 176 of the Indian Contract Act, or whether on the facts of this case there was a waiver by the pledger of the right to receive notice. There was no oral evidence adduced by either side as to the suit transaction. In those circumstances, we are of opinion that the transaction must be treated as one of pledge alone. \n\n 21. The term 'pledge' is defined in Section 172 of the Indian Contract Act as 'the bailment of goods as security for payment of a debt or performance of a promise'. The bailor is called the pawnor, and the bailee is called the pawnee. \n\n 22. Section 176 of the Act deals with the right of the pawnee or the pledgee in the case of default by the pledger. The Section is in these terms :\n\"If the pawnor makes default in payment of the debt, or performance, at the stipulated time of the promise, in respect of which the goods were pledged, the pawnee may bring a suit against the pawnor upon the debt or promise, and retain the goods pledged as a collateral security, or he may sell the thing pledged, on giving the pawnor rea^ sonable notice of the sale.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-15", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor.\" \n 23. On a plain reading of the section it seems to us that before exercising the power of sale the pawnee should give to the pledger reasonable notion of the sale. The contention of the Advocate for the respondent, however, is that in Ex. B-1 the pawnor had waived the right to receive such a notice and this found favour with the trial court. The learned counsel for the appellants has assailed the correctness of that finding 011 various grounds,\n \n\n 24. It is first contended that in the ease the waiver is not founded on an assent or affirmance of the sale by the pledger subsequent to the contract of pledge, but is referable only to the recitals of Ex. B-1, and that those recitals are not clear and unambiguous that notice has been waived. In support of that contention reliance was placed upon the decision of Wallis J., in Venkatesa Perumal Chetty v. S. Parthasarthy Iyengar, 18 Ind Cas 986 (Mad), where it was held that a party to a contract who relies upon a clause as affording him protection from liability cannot succeed unless the clause he relies on is clearly and unambiguously repressed. We do not think the expression in Ex. B-1 to the effect that the sale could be held by the pledgee without reference to the pledger is ambiguous or uncertain. It seems to vis that the expression 'without reference to us' is wide enough to include notice.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-16", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "25. But the more important argument of Mr. liamachandra Raju is that even assuming thai the expression constitutes waiver of notice, such a waiver is not permissible as it would be inconsistent with the mandatory terms of Section 176. It is argued that wherever the legislature thought that a particular term could be the subject of a contract it had said so by incorporating words such as : 'subject to the contract' or 'in the absence of a contract to the contrary'. In Section 176 there are no such qualifications. Therefore, any contract to the terms of Section 176 would be a contract contrary inconsistent with the provisions of tbe Act within the meaning of Section 1 of the Contract Act.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-17", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "26. There is considerable judicial authority in support of the above contention. In Co-operative Hindustan Bank Ltd. v. Surendra Nath Dey, AIR 1932 Cal 524 at p. 532, a Bench of the Calcutta High Court has held that Section 176 of the Contract Act unlike some other sections, such as, 163, 171, 172 does not contain a saving clause in respect of special contracts contrary to its express terms, and that inasmuch as Section 177 gives to the pawnor a right to redeem even after the stipulated time for payment but before the sale, in order that that provision should not be made nugatory, the proper interpretation to put on Section 176 is to hold notwithstanding any contract to the contrary notice has to be given. In AIR 1947 Bom 217 at p. 228, a Bench of the Bombay High Court consisting of Stone C. J. and Chagla J., took substantially the same view. The learned Chief Justice observed as follows :\n \"In my judgment, a notice must be given in all cases of pledge, even when the instrument of pledge itself contains an unconditional power of sale. This opinion is held by the three distinguished editors (Sir Frederick Pollock, Sir Dinshah Mulla and Sir Maurice Gwyer) of Mulla's Indian Contract Act, Edn. 7 (see p. 519). It follows that even if It is possible to regard the contract of 23rd, 24th October, 1941, as a sale by the Bank as pledgee of Mr. Nissim that sale is invalid as being in breach of Section 176. unless it could be shown that before this insolvency Mr. Nissim effectively waived the giving of notice so as to bind the Official Assignee.\"", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-18", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "27. This case was carried in appeal to the Federal Court. Their Lordships held by a majority that in view of the assent for sale of shares by the pledger and the acquiescence thereof by the Official Assignee the sale was good and the further questions argued heforc them as to whether the pledgor could enter into a contract contrary to the provisions of Section 176 or whether a want of notice is a mere irregularity not affecting the title of the bona fide purchaser for value did not arise for consideration.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-19", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "28. In Bharat Bank Ltd. v. Sheoji Prasad, AIR 1953 Pat 28S, a Bench of the Patna High Court has held that Section 176 is mandatory and the required notice has to be given for the right to exercise redemption, and under Section 176 it: would be rendered illusory if such notice is not given. \n\n 29. In Hulas Kunwar v. Allahabad Bank Ltd., , a Bench of the Calcutta High Court has held following the decision in AIR 1932 Cal 524 at p. 532, that the obligation of the pawnee to give a reasonable notice of sale under Section 176 is mandatory and supersedes any contract to the contrary. In that case as in the case of AIR 1932 Cal 524 at pp. 525-532, the contract of pledge authorised the pawnor. It was held in both the decisions that such a clause could not relieve the pawnee from the mandatory obligation to give notice. \n\n 30. When in an enactment, in some sections the expression 'subject to the contract' or 'in the absence of the contract to the contrary' are used end in. others not, it is a well settled principle of construction that the provisions of the latter class of sections are not subject to contracts to the contrary.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-20", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "31. In Mohammed Slier Khan v. Swami Dayal, 1LR 44 All 185 : (AIR 1922 PC 17), while dealing with Section 60 of the Transfer of Property Act, their Lordships of the Judicial Committee observed as follows :\n \"The section is unqualified in its terms, and contains no saving provisions, as other sections do, in favour of contracts to the contrary. Their Lordships, therefore, see no sufficient reason for withholding from the words of the section their full force and effect. In this view the mortgagor's right to redeem must be affirmed, and as both suits are not before the Board there will he no difficulty in passing one decree in both so framed as to give due effect to this right.\" To the same effect is the observation of Srinivasan Ayyangar J., in Seeti Kutti v. Kunhi Pathumma, 1LR 40 Mad 1040 at p. 1062 : (AIR 1919 Mad 672 at p. 984) :\n \"The Indian Legislature in Section 60 of the Transfer of Property Act, as has been pointed out, has omitted the words 'in the absence of a contract to the contrary' with a view to prevent the mortgagor from contracting himself out of his right of redemption at the time of the mortgage.''  \n \n\n 32. Following the decision arising under Section 176 of the Indian Contract Act and the principle of construction enunciated in the two aforesaid decisions, it seems to us that the contention of Mr. Ramachandra Raju that at the time of enter-ing into a contract of pledge the pawnor cannot agree to waive notice as it would be inconsistent with the provisions of Section 176, should prevail.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-21", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "33. Mr. Somasundaram very strenuously contended before us that the right to receive notice 35 conceived in the interests of the pawnor and when a statute gives a party certain advantage or right it is always open to him to waive it- In support of the contention he cited a large number of authorities. \n\n 34. In Wilson v. McIntosh, 1894 AC 129, the facts were that the respondent. Mclntosh lodged an application in the office of the Registrar General to bring under the Real Property Act (26 Victoria No. 9) certain lands in New South Wales. Under Section 23 of that Act every caveat shall bo deemed to have lapsed unless the caveator took the proceedings in any court of competent jurisdiction to establish his title to the estate and gave notice of that to the Registrar General and also obtained an injunction from the Supreme Court, In the case referred to above the respondent filed a case and obtained an order against the appellant to state her case both of which proceeded upon the fooling that the caveat was still in existence. \n\nIt was held that the respondent having waived her right to claim that the caveat should be regarded as having 3apsed and obtained .1 case stated by the applicant he cannot in equity plead the bar under Section 23. The decision rested on the assumption that an applicant may waive the objection of pleading lapse under Section 23 of the Real Property Act.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-22", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "35. In Toronto Corporation v. Russell. 1908 AC 493, the facts were that in the city ot Toronto a land was advertised for sale under Ontorio Assessment Act of 1897 for arrears of taxes and after an adjournment was bought by the appellant. But before the sale the appellants published their intention to purchase in case the amount fixed was less than the arrears of tax, but omitted to give the respondent a notice in writing under Section 184 to that effect. It was held by the Privy Council that the notice under that Section could be waived and that as a matter of fact, it was waived. \n\n 36. In Selwyn v. Garfit, (1888) 38 Ch D 273, the question of waiver did nut really fall to be considered as the only man, the mortgagor, who could have waived notice had already parted with his equity of redemption as has been made clear in the judgment of Bowcn L. J. \n\n 37. In Griffiths v. Earl of Dudley, (1882) 9 QBD 357, the question was us to whether a workman could agree not to claim compensation for personal injuries under the Employer's Liability Act of 1880. It was held that the widow of the workman was bound by the conditions of employment assented to by her husband and the agreement not to claim damages for personal injuries was on the facts of that case not opposed to public policy.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-23", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "38. A reference was also made to the decision of the Privy Council in Vellayan Chettiar v. Government of the Province of Madras, ILR 1948 Mad 214 : (AIR 1947 PC 197), where Lord Simonds speaking for the Privy Council held that there is no inconsistency between the proposition that the provisions of Section 80 are mandatory and must be enforced by the court, and that they may be waived by the authority for whose benefit they are provided. This decision is not directly in point, for, the question of contracting out of the mandatory terms of the section did not arise in that ease. \n\n 39. In Raja Chetty v. Jagannathadas, , a Bench of the Madras High Court held that notwithstanding the provisions of the Madras Building Lease and Rent Control Act of 1946, a landlord could contract to waive his right to evict the tenant. It was pointed out by the learned Chief Justice that no public policy, was involved in that case and a landlord could well abridge his right.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-24", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "40. The rule as to waiver is stated in Maxwell on Interpretation of Statutes p. 388 (10th Edn.) in these words:\n \"Every one has a right to waive and to agree to waive the advantage of law or rule made solely for the benefit and protection of the individual in his private capacity, which may be dispensed with without infringing any public right or public policy.\" \n 41. Mr. Ramachandra Raju has contended that the terms of Section 176 are conceived in general public interest and referable to public policy. It is argued by him that in the stress of need a pledger might assent to terms so manifestly deleterious to his interest and it is to prevent such people being exploited and that some notice being given before the pledgee exercises the right of sale that advisedly in Section 176 no provision is made to contract contrary to its terms. In this contention strong reliance was placed on the observation of Farwell J. in Soho Square Syndicate Ltd. v. E. Pollard and Co. Ltd., 1940-1 Ch 638 at p. C43, to the following effect :\n \"If if be right to say that a mortgagee, by merely getting the consent of the mortgagor, can avoid the ..... necessity of applying to the Court. a large part of the protection which this Act was intended to provide would virtually disappear. People in the position of such persons as I have mentioned might easily be persuaded to give a consent without really knowing what exactly was involved in such consent, and an opportunity of expressing their reasons for their inability to pay, whatever they may he, and of stating their difficulties, which is now afforded to them by the necessity of an application to the court would be entirely removed. Moreover, difficult questions might also arise whether the consent had in fact been obtained, or whether it was a consent which was binding, and similar questions.''", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-25", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "42. The point that arose for decision in that case was whether a mortgagor could under the provisions of the Courts (Emergency Powers) Act, 1939 assent to the appointment of a Receiver without the leave of the Court. The learned Judge held that he could not so assent as the provision for the leave of the court being obtained for the appointment of a Receiver was conceived in the interests of the people who had gone to war and was referable to public policy. \n\n 43. In Bowmaker, Ltd. v. Tabor, 1941-2 KB 1. Goddard L. J., has taken the same view with reference to some of the other provisions of the Courts (Emergency Powers) Act and had approved the principle of the decision of Farwell J., in the case earlier referred to. \n\n 44. It is not necessary for us to consider in this case the question further, in view of the direct decisions of the Indian High Courts, with which, we arc in agreement interpreting Section 176 of the Contract Act, and holding that its terms are mandatory and that, even if there is a term in the contract of pledgo to waive notice, still the pledgee is not relieved of his obligation to give notice before the sale. \n\n 45. We, therefore, do not accede to the contention very strenuously pressed on us by Mr. Somasundaram that in this case the objection as to want of notice is without substance by reason ot the waiver of such a notice by the pledger in Ex. B-1.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-26", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "46. But we are of opinion that the suit must fail for a different reason. In the plaint the plaintiff claims to be the widow and the heir of the late R.K.N.G. Raju and entitled to his estate including the shares in the suit. It is not in dispute that R.K.N.G, Raju died at Madras on 20-4-1948 leaving a will. The counsel of the plaintiff wrote to the 1st defendant-Bank a letter on 25th November, 1948 marked as Ex. B-2 in these terms : \n \"To The Agent, Andhra Bank Ltd., Bezwada. \n Sir, Reference : Sri R. K. N. G. Raju Garu. \n\nThe above gentleman died at Madras on 20th April 1948, leaving a will appointing his wife as executrix. In the said will he makes a reference to the current account dealings he had with you. From a perusal of his Bank Pass Book we have the following particulars, folio No. 683/3, account 822. \n\nI am now instructed to take steps to secure adequate legal representation to the estate of the above-named deceased. The balance of his account with you has to be disclosed to Court. I shall he highly obliged if you can furnish to me at the earliest opportunity the balance now standing to the credit of the abovenarned deceased together with accrued interest, if any.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-27", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "I further understand that he has pledged with you 9100-B, ordinary fully paid up shares which he held in the Andhra Cement Company Limited, Rezwada on 22nd September, 1947 to secure overdraft account. Kindly furnish me the particulars as to the rate of interest and the amount now outstanding to you in respect of the over-draft transactions.\" \n 47. From this letter it is clear that the plaintiff was appointed the executrix and that she was taking steps to get the estate duly represented, which in the circumstances, could only mean taking out probate. On those facts the 1st question that emerges is whether the suit could be filed without obtaining the probate. \n\n 48. It is common ground between the parties that if the will had been executed at Madras, it is necessary to obtain the probate before filing the suit. Section 213 of the Indian Succession Act inter alia provides as follows :\nSection 213 (1) :\n \"No right as executor or legatee can be established in any court of Justice, unless a court of competent jurisdiction in British India has granted probate of the will under which the right is claimed, or has granted letters of administration with the will or with a copy of an authenticated copy of the will annexed.\" \n 49. On behalf of the appellants it is contended that Section 213 of the Succession Act has no application to this case for two reasons : (1) that there is no proof that the will of the late R. K. N. G. Raju was executed at Madras; and (ii) that even on the footing that it was so executed, the present suit Is not filed for establishing any right as an executrix or legatee and has been instituted by the plaintiff in ber capacity as the heir of late R. K. N. G. Raju. We will now take up the first question.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-28", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "50. In Ex. B-2 there is no mention as to the place where the will was executed, though the suggestion that steps were being taken to get the estate duly represented may be suggestive of the will having been executed at Madras. On behalf of the defendant interrogatories were served on the plaintiff on 5-1-1950, under O. 12 R. 2, C. P. C. in these terms :\n\"The Andhra Bank Ltd., and others. \n\nDefendants. \n\nNotice to admit documents under O. XII, R. 3 C. P. C. \n To Sri Metlapati Koteswara Rao Pantulu Gam, B.A.B.L., Advocate for plaintiff, Vijayawada. \n\nTake notice that you are hereby required to reply to the following matters within two days of the receipt of this notice :\n(1) Do you admit the execution of the will-nama by the plaintiff's husband in Madras? \n\n(2) Do you admit the registered notice, dated 25th November, 1948, caused by the plaintiff to be issued by Sri P. Satyanarayana Raju Garu, Advocate, Madras, to the first defendant-Bank after giving instructions? \n\nThe said notice has been filed in the court.\"  \n These interrogatories were not answered,\n \n\n 51. On 14-12-1950, a notice was served on the counsel appearing for the plaintiff in these terms :\n\"O. S. No. 86 of 1949. Between :\nSri Rajah Kakarlapudi Venkata Sudarsana Sundara Narasayamma Garu..... Plaintiff. \n\nAnd The Andhra Bank Ltd., and Others. \n\nDefendants.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-29", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "And The Andhra Bank Ltd., and Others. \n\nDefendants. \n\nNOTICE TO PRODUCE DOCUMENTS To Sri Metlapalli Koteswara Rao Pantulu Garu, B,A., B.L., Vijayawada. \n\nTake notice that you are required to produce on 16th December 1950 the hearing date, the will-nama alleged to have been executed by late Sri R.K.N.G. Raju Garu and referred to in the ietter Written On 25th November, 1948 by the plaintiff's advocate at Madras, to the 1st defendant-Bank. Batta of Re. 1/- is sent herewith. \n\nSd./-\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \n K. Nagabhushana Rao Advocate for 1st Defendant. \n14-12-1950.  \nReceived copy and batta of Re. 1/-, Sd./- \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \n M. Koteswararao, Advocate,\" \u00a0\u00a0 \n 52. The will was not produced. Even during the course of the arguments before us the counsel for the appellants could not give information as to where exactly the will was executed. In the circumstances, of this case, therefore, we are of opinion that this vital information was withheld because, if given it would be detrimental to the interests of the appellant. We would be justified in drawing inferences' adverse to the plaintiff. We are, therefore, of the view that the will should have been executed at Madras in which case Section 213 of the Succession Act would he a bar for the institution of this suit.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-30", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "53. The second argument is that the suit is filed by the plaintiff not for establishing any right as executor or legatee under the will, but as the heir of her husband. In support of his contention, the learned counsel of the appellants laid strong reliance on a decision of the Full Bench of the Madras High Court in Ganshamdoss Narayandass v. Gulab Bi Bai, ILR 50 Mad 927 : (AIR 1927 Mad 1054) (FB), and Western India Insurance Co. Ltd. v. Asima Sirkar, AIR 1942 Cal 412. The point referred to the Full Bench of the Madras High Court was this :\n \"Can a defendant resisting a claim made by the plaintiff as heir-at-law rely in defence on a will executed in his favour at Madras in respect of property situate in Madras when the will is not probated and no letters of administration with the will annexed have been granted.\" \n It was held that a defendant resisting a claim made by the plaintiff as heir-at-law cannot rely in defence on a will which required to be probated, but which has not been, and Section 187 of the Indian Succession Act XXXIX of 1925 is a bar to every one claiming under such a will, whether a plaintiff or defendant. But what is relied upon by the learned counsel are certain observations of Phillips Offg. C. J. to the following effect :", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-31", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "\"The plaintiff is suing as heir-at-law but he was resisted by the defendants who claim under a will of which no probate has been taken. It is argued that it is a sufficient answer to the plaintiff's case to allege and prove the existence ot a will; for in that case the plaintiff, who would be the heir in case of intestacy, would no longer have any right. This rather ignores one point which, I think is important namely, that the plaintiff being the heir under intestacy, which must be presumed until a will is proved, is entitled to succeed to the property, unless it can be shown that his title has been displaced. If the defendant merely proves that a will is in existence and does not prove the terms of that will, that is not necessarily inconsistent with the plaintiff's title. In the first place, the will may not be a valid will, and, in the second place, the plaintiff may be a legatee under the will. The mere existence therefore, ot a will does not necessarily displace the plaintiff's title. It is necessary for the defendant to go further and to prove that some one other than the plaintiff has title under the will. This he cannot do by virtue of the provisions of Section 187.\" \n Anantakrtshna Ayyar J., observed as follows :", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-32", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "Anantakrtshna Ayyar J., observed as follows :\n \"Thus where a plaintiff makes out a prima facie title in himself to the property in dispute, the defendant has to show a better title either in him-self or in some third person. If what is stated above be the correct principle of pleading applicable to such cases, it follows that when the plaintiff in the present case shows a prima facie title in himself to the property in dispute -- as the admitted heir-at-law of the last owner -- the defendant has 'to show a better title' either in himself or in some third person xx xx The general law would seem to he that the defendant's plea of jus tertii cannot be entertained when he does not state in whom the right resides. The defendant must trace the title to a third party Other than the plaintiff. A mere suggestion that there may he a third party with better title is nothing.\" \n 54. To the same effect is the decision in AIR J942 Cal 412. We are unable to appreciate the bearing of these decisions on the facts of the present case. This is not a case where the defendant is setting up the rights under the will, or setting up jus tertii for the purposes of non-suiting the plaintiff who has shown a prima facie title as the heir-at-law of the deceased. The real question in this case is whether the plaintiff who on statements made on her behalf is the executrix appointed under the will of her husband can maintain the present action as an heir as if on intestacy.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-33", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "55. That the plaintiff was appointed as an executrix under the will of her husuand is beyond all doubt. That being so, under Section 211 of the Succession Act, the entire property of the testator vests in the executor or executrix, as the case may be, from the time when the will takes effect. Section 211 (1) of the Act is in these terms :\n \"The executor or administrator, as the case may be, of a deceased person is his legal representative for all purposes, and all the property of the deceased person vests in him as such.\" \n Even before the obtaining of the probate on the death of the testator, the property vests in the executrix 'as such'. It is not Section 213 which deals with the vesting of the property of the deceased persons, but Section 211. The vesting of the property of the deceased persons in the executor as such does not arise from the probate. The executor derives his title from the will. Immediately upon the testator's death his property vests in the executor, for, the law knows no interval between the testator's death and the. vesting of the property (vide Whitehead v. Taylor, 1839-10 Ad and El 210 and Raja Rama v. Fakuruddin Sahib, 38 Mad LJ 210: (AIR 1930 Mad 218)). Therefore, even without obtaining the probate of the will, the executor becomes the representative of the estate of the deceased. All that the grant of the probate does is not to give him title; but only to make his title certain (Vide Hewson v. Shelley, 1914-2 Ch. 13 at p. 38).", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-34", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "56. Even in cases where the will has been executed outside the limits of the presidency towns the position is the same. In Ramiah v. Venkata Subbamma, AIR 1926 Mad 434, a Full Bench of the Madras High Court held that in the case of a Hindu will executed in the mofussil to which the Hindu Wills Act does not apply, the estate vests in the executor, who accepts office, from the date of the testator's death, This decision is later affirmed by the Privy Council in Venkata Subamma v. Ramayya, AIR 1932 PC 92. It seems to us, therefore, that on the date of the testator's death the property of the late R.K.N.G, Raju vested in the plaintiff as an executrix. \n\n 57. In Parlhasarathy Aiyar v. Subbaraya Gramany, AIR 1924 Mad 07 at p. 70, it was observed by Schwabe C. J., that\n  \"It is not right, as has been suggested in some cases, to treat a will of which probate has not been ranted as non-existent and the property    passing y intestacy.\" \n \n\nThis will of course depend upon the fact whether the plaintiff has accepted the office as an executrix. The learned counsel for the appellant has placed strong reliance on certain observations in the judgment of the Madras Higb Court in Parthasarathy Appa Rao v. Venkatadri Appa Rao, 43 Mad LJ 486 at p. 515 : (AIR 1922 Mad 457 at pp. 469-470). But that case obviously has no application, because on the facts of that case it was found that the executor died without accepting the office or showing any indication that he took upon himself the duties of executor.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-35", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "Whether the executor has accepted the office or not will ^depend upon the facts of each case. In this case the plaintiff has not given evidence and no oral evidence was at all tendered by her. We can only, therefore, deduce the fact of her acceptance from the record available. In Ex. B-2, the counsel of the plaintiff stated that his client was appointed as an executrix under the will of her husband and that he was instructed to take adequate legal steps to have the estate duly represented. We are of opinion that this letter written obviously on behalf of the plaintiff is enough to constitute acknowledgment or the acceptance of the plaintiff of her office as an executrix.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-36", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "58. The following passage in Williams on the Law of Executors and Administrators (13th Edn. 44 para 60) is directly in point:\n \"Where a man who was named as one ot several executors, in answer to an inquiry who were the executors, wrote a letter saying that he and others were executors, this was held to afford sufficient evidence that he had acted as executor. The insertion of an advertisement calling on persons to send in their accounts, and to pay money due to the testator's estate, to A and B. 'his executors in trust', was held to make them compellable to take probate, and to subject them personally to the costs occasioned by their resistance (the estate being small, and left for two years and a half without a representative).\" \n 59. The above passage is founded on two cases : Vickers v. Bell, (1863) 4 De G. J and Sm. 274 and Long and Feaver v. Symes and Hannam, (1832) 3 Hag Ecc 771 : 162 ER 1339. The facts of the 1st case are as follows : The defendant's solicitor wrote to the plaintiff's Solicitor in answer to a query on behalf of a creditor as to who had proved the will. The defendants' Solicitor replied that the executors of the will are his widow and daughter and Robert Smith, thus acknowledging himself to be an executor. Turner L. J. held that that letter was enough to indicate that there was an acceptance of the office of the executor.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-37", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "60. In the second case ; (1832) 3 Hag Ecc 771 : 162 ER 1339, certain persons, Symes and Hennam published an advertisement in the paper that all persons who have any claim on the estate of late John Feaver were requested to send their respective accounts due without delay to Symes or Hannam, his executors in trust. It was held that the conduct of those two persons amounted to an absolute acceptance of the executorship. \n\n 61. In Jnanandra Nath v. Jitendra Nath, AIR 1928 Cal 275, a Bench of the Calcutta High Court has held that :\n \"The office of executor being a private office of trust named by the testator and not by the law, one named executor may refuse the office or renounce. It is, however, too late to refuse or renounce when one has once elected to act as executor, and he may determine such election by acts which amount to an administration,\" \nOne of the acts which amounts to administration so that the executor cannot afterwards refuse is something done by him with relation to the estate of the testator which shows an intention in him to enter upon the office of the executor. \n\n 62. In view of these authorities, we are of opinion that the plaintiff had accepted the office of the executrix, and it is not open now to the appellants' counsel to contend that she did not accept the office, that the will is of no avail whatever and that she is entitled to file and sustain the action as an heir of her husband as if on intestacy. \n\n 63. We, therefore, hold that the present suit filed by the plaintiff as the heir of her husband is incompetent and should fail.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-38", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "64. It is contended by Mr. Somasundaram that the suit in any event for a declaration and injunction in terms prayed for is incompetent. It is argued that a pledgor who impugns the sale by the pledgee of the pledged goods must either seek to redeem or sue for damages on the foot of conversion. This contention finds support in the decision of the Privy Council in Neckram Dobay v. Bank of Bengal, ILR 19 Cal 322. In that case the facts were that the plaintiff Dobay deposited with the Bank of Bengal certain Government promissory notes for the purpose of securing loans. \n\nA part of those securities were sold lawfully by the Bank, upon the borrower failing to comply with the terms of the agreement, As to the rest, the pledgor redeemed a part, but was led to believe that the Government papers that were actually delivered back to him were on the securities which remained unsold in the Bank's possession. But it was found as a fact that the Bank had taken over considerable portion of those securities and sold them to itself, crediting the borrower, however, with the price of the sale.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-39", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "On those facts, the contention advanced before the Judicial Committee was that the sale by the pledgee-bank to itself was illegal and, therefore, the plaintiff was entitled to a declaration that what purported to have been the sale to the Bank itself, was no sale at all and that the plaintiff was entitled to redeem according to the terms of his pledge. The Privy Council, however, held that :\n \"It would be inequitable to allow the Bank, after this transaction, to treat the securities, which it had sold to itself, and then had in its hands, as still subject to the pledge. In their Lordships' opinion, the Bank should be held to he no longer a pledgee of these notes, and to have converted them to its own use, and to be liable in damages for the value of them, including the interest thereon.\" \n 65. In S. L. Ramaswamy v. M. S. A. P. L. Palaniappa, AIR 1930 Mad 364, a Bench of the Madras High Court has held that in case of an improper sale of the pledged goods by the pawnee the remedy of the pledgor is to get damages for the improper sale. \n\n 66. In Cooverji v. Mawji, AIR 1937 Bom 26, Wadia J., held that the sale of pledged goods without proper notice does not render the sale void but by analogy to Section 69 (3) of Transfer of Property Act, the remedy of the pawnor for an improper sale of the mortgaged property is damages for conversion to the pawnor, and the correct measure of damages is the loss which the pawnor has actually sustained, taking into account the pawnee's interest in the goods at the time of the conversion.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-40", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "67. In a Bench of the Patna High Court held that if the sale of the pawned article is wrongful, the pawnor has got the remedy to sue the pawnee for having converted his goods to his own use. \n\n 68. In AIR 1947 Bom 217 Chagla J., after a review of English authorities held as follows :\n(i) \"that althoughthe pledgee may sell the goods unauthorisedly or unlawfully, the contract of pledge is not put an end to and the pledgor does not become entitled to the possession of the goods pledged without tendering the amount due on the pledge; or, in other words, without seeking to redeem the pledge, and;\n(ii) that without a proper tender of the amount due on the pledge, the only right of the pledger in respect of an unlawful or unauthorised sale is in tort for damages actually sustained by him.\" We are in accord with the view of Chagla J., that in case of an unauthorised sale by a Pledgee the relief that the pledgor can seek is to file a suit for redemption by depositing the money, treating the sale as if it had never taken place, or where the suit for redemption is not filed, to ask for damages on the foot of conversion. The present suit is neither the one nor the other. It is a suit merely for a declaration with an ancillary relief for an injunction restraining the 3rd defendant from registering the shares in the name of the 2nd defendant. We are of the opinion that the suit as framed is not sustainable.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-41", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "69. The learned Subordinate Judge has taken the view that a suit for declaration and injunction in terms prayed for was not incompetent. But it: seems to us that in view of the fact of the admitted existence of the will the plaintiff who has filed the action as the heir of her deceased husband has not the legal character or right to the property as such, so as to justify her to seek the present reliefs within the scope of Section 42 of the Indian Specific Relief Act, (Vide the decision of the Privy Council in Sheoparsan Singha v. Ramnandan Prasad Singh, ILR 43 Cal 694; AIR 1916 PC 78). On this ground also, it seems to us that the suit should fail. \n\n 70. Mr. Kuppuswamy, the learned counsel for the 2nd defendant has urged that the 2nd defendant is a bona fide purchaser for value and that no relief could be claimed, in any event, against the 2nd defendant. He contends that the shares accompanied by blank transfers were sold for proper value and when once a Bank who was in the nature of a mercantile agent sells the shares without anything to put the purchaser on notice as to any infirmity of title, the registered holder of the shares is estopped from questioning the title of the purchaser.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "32a51fd0b970-42", "Titles": "Sri Raja Kakarlapudi Venkata ... vs Andhra Bank Ltd., Vijayawada And ... on 17 October, 1959", "text": "He placed strong reliance on the decisions in Colonial Bank v. Cady and Williams, (1890) 15 AC 267, Fazal v. Mangaldas, ILR 46 Bom 489: (AIR 1922 Bom 303) and Abdul Vahed Abdul Karim v. Hasan Ali Alibhai, AIR 1926 Bom 338. The view of Kanga J., in ILR 46 Bom 489: (AIR 1922 Bom 303) was, however, dissented from by a Bench of the Bombay High Court in ILR 50 Bom 229: (AIR 192G Bom 338), where it was held that a registered owner of shares does not by handing over the share certificates and blank transfers signed by him to another person, make a representation to the world that such person is entitled to deal with the shares and, therefore, there is no question of any estoppel against the registered owner of the shares. But in the view we have taken that the suit filed by the plaintiff must fail, it is not necessary to pursue the question further. \n\n 71. For these reasons, we hold that the appeal should fail and it is accordingly dismissed with costs, one set.", "source": "https://indiankanoon.org/doc/641816/"}
+{"id": "b0b5f7363af5-0", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "JUDGMENT Y.V. Anjaneyulu, J.   \n 1. All these writ petitions raise a common question of law for consideration of this Court. It will be convenient to dispose them of together.   \n 2. The Constitution (Forty-sixth Amendment) Act, 1982 inserted through section 4, clause (29-A) in Article 366 relating to definitions of certain expressions occurring in the Constitution of India. The said clause (29-A) may be reproduced below for the purpose of convenient reference :   \n \"(29-a) 'tax on the sale or purchase of goods' includes -   \n (a) a tax on the transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;   \n (b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;   \n (c) a tax on the delivery of goods on hire-purchase or any system of payment by instalments;   \n (d) a tax on the transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;   \n (e) a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-1", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "(f) a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made;\".     \n The above clause came into force on 2nd February, 1983. The Seventh Schedule to the Constitution consists of Lists I, II and III setting out the subject-matter of laws which the Parliament and the Legislature of the States have the power to make. List II is the State List and it contains the matters upon which the State has the exclusive power to make laws. Entry 54 of List II conferred power on the States to levy taxes on the sale or purchase of goods. Pursuant to the power conferred by entry 54, the State Government enacted the Andhra Pradesh General Sales Tax Act (hereinafter referred to as \"the Act\") to levy tax on the sale or purchase of goods in the State of Andhra Pradesh. On the Forty-sixth Amendment to the Constitution inserting clause (29-A) in article 366, consequential amendments were made to the Act. By the Andhra Pradesh General Sales Tax (Amendment) Act No. 18 of 1985, explanation IV was added in section 2(n) of the Act which defines the expression \"sale\". Explanation IV, which was inserted by Act 18 of 1985, was brought into force retrospectively from 2nd February, 1983 and it is extracted below :", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-2", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "\"Explanation IV. - A transfer of right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration shall be deemed to be a sale.\"   \n By the same Act 18 of 1985, the definition of the expression \"dealer\" occurring in section 2(e) of the Act was also amended with effect from 13th September, 1985. By the said amendment, the expression \"dealer\" is defined to include \"any person, who may transfer the right to the use of any goods for any purpose whatsoever (whether or not for a specified period) in the course of business to any other person\". Section 5-E of the Act was also inserted by the same Act 18 of 1985 with effect from 1st July, 1985. It is relevant to refer to the same :   \n \"Section 5-E. Tax on the amount realised in respect of any right to use goods. - Every dealer who transfers the right to use any goods for any purpose, whatsoever, whether or not for a specified period, to any lessee or licensee for cash, deferred payment or other valuable consideration, in the course of his business shall, on the total amount realised or realisable by him by way of payment in cash or otherwise on such transfer or transfers of the right to use such goods from the lessee or licensee, pay a tax at the rate of five paise in every rupee of the aggregate of such amount realised or realisable by him during the year :   \n Provided that no such tax shall be levied if the total turnover of the dealer including such aggregate is less than Rs. 1,00,000.\"    \n We may, for the sake of convenient reference, sum-up the legislative changes :   \n------------------------------------------------------------------------\nS. No.                 Particulars                        Date of coming\n                                                          into force\n------------------------------------------------------------------------", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-3", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "S. No.                 Particulars                        Date of coming\n                                                          into force\n------------------------------------------------------------------------\n  1.      Clause (29-A) of article 366.                        2-2-83\n  2.      Explanation IV to section 2(n) through\n          Act 18 of 1985.                                      2-2-83\n  3.      Clause (iii-b) inserted by Act 18 of 1985 in\n          section 2(e) defining the expression \"dealer\".      13-9-85\n  4.      Section 5-E levying tax on the amount realised\n          in respect of right to use goods inserted by\n          Act 18 of 1985.                                      1-7-85\n------------------------------------------------------------------------", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-4", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "3. In view of the power conferred on the State Governments to levy tax on the transfer of the right to use any goods for any purpose and following the amendments made to the Andhra Pradesh General Sales Tax Act referred to above, the sales tax authorities felt that banks which provide safety-lockers for the use of customers are liable to pay tax on the charges realised. In that view, notices were issued to various banks by the Commissioner of Commercial Taxes to show cause why sales tax should not be levied at 5 per cent on the charges realised by hiring lockers which, in law, amounted to transfer of the right to use goods by the customers. In some cases notices related to the years commencing from 1983-84 and in some other cases the notices pertained only to the year 1984-85 and 1985-86, etc. The notices issued by the Commissioner pointed out that the banks failed to submit appropriate returns and consequently an estimate of hire charges was made in the notices for the purpose of levy of tax. After receipt of the aforesaid notices the banks filed writ petitions in this Court questioning the validity of the proposal of the sales tax department to levy tax on the charges realised by hiring lockers to customers.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-5", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "4. Before we proceed to deal with the matters we may refer only to one more fact. In exercise of the powers conferred by section 9(1) of the Act, in G.O. Ms. No. 1091, Revenue, dated 10th June, 1957, the Governor of Andhra Pradesh directed exemption from all taxes payable under the Act to the banks in the State of Andhra Pradesh, except when they act as buying or selling agents of a dealer as specified in the explanation to clause (e) of section 2 or in section 11 of the Act. This notification continued to be in force until it was rescinded by G.O. Ms. No. 794 dated 19th August, 1987. By the aforesaid notification dated 19th August, 1987, the Governor of Andhra Pradesh rescinded the notification issued in G.O. Ms. No. 1091, Revenue, dated 10th June, 1957 and published in the Andhra Pradesh Gazette on 15th June, 1957. The date of publication of G.O. Ms. No. 794 dated 19th August, 1987 in the Gazette is not furnished to this Court.   \n 5. Sri Ananta Babu led the arguments on behalf of the State Bank of India in W.P. No. 10983 of 1987. Learned counsel for the other petitioners M/s. K. Srinivasa Murthy, B. K. Seshu, L. P. R. Vittal, G. V. Seetharama Rao, V. R. Reddy, A. Ramalingeswararao and D. Hanumantharao adopted the arguments of Sri Ananta Babu, although some of them made a few submissions supplementing the arguments of Sri Ananta Babu.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-6", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "6. We may first clear the ground proceeding on the assumption that there is conferment of power to levy tax on charges realised from customers by the banks for providing safety-lockers. It is urged that even if there is conferment of power, the power cannot be exercised so long as the Notification G.O. Ms. No. 1091, Revenue, dated 10th June, 1957 issued under section 9(1) of the Act was in force. We have already referred to the aforesaid notification in para 4 supra under which exemption was granted from all taxes payable to the banks in the State of Andhra Pradesh. This notification continued to be in force till it was rescinded by G.O. Ms. No. 794 dated 19th August, 1987. We find considerable force in the contention of the learned counsel for the petitioners that in any case, no tax can be levied till the date of publication of G.O. Ms. No. 794 dated 19th August, 1987 rescinding the earlier notification dated 10th June, 1957. The notices issued by the department to the bankers proceeded to state that tax is leviable from the year 1983-84, obviously for the reason that the Forty-sixth Amendment to the Constitution inserting clause (29-A) in article 366 of the Constitution of India, came into force on 2nd February, 1983. We must, however, point out that the insertion of clause (29-A) in article 366 of the Constitution did not automatically confer power on the State Government to levy tax. Consequential steps have to be taken by effecting necessary amendments to the Sales Tax Act at the State level. Those amendments were made by Act 18 of 1985 whereunder explanation IV was added to section 2(n) of the Act containing the definition of the expression \"sale\". Clause (iii-b) was also", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-7", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "of the Act containing the definition of the expression \"sale\". Clause (iii-b) was also inserted by the same Act amending the definition of the expression \"dealer\" in section 2(e). That provision came into force only on 13th September, 1985. The charging section empowering the levy of tax at 5 paise, which was also inserted by Act 18 of 1985, vide section 5-E of the Act, came into force on 1st July, 1985. If regard be had to these consequential amendments it is clear that until the definition of the expression \"dealer\" is amended by the Act 18 of 1985 which came into force on 13th September, 1985, it is not open to the authorities to levy tax, because the liability to pay the tax under the Act arises only if a person is a dealer and not otherwise. Thus till 13th September, 1985 there could be no levy of tax. We may also point out that the charging section 5-E itself came into force on 1st July, 1985 and there could be no levy of tax prior to section 5-E coming into force. Even after the necessary amendment came into force and there is full conferment of power to levy tax, the notification dated 10th June, 1957 issued under section 9(1) of the Act directing exemption from all taxes payable under the Act to the banks in the State of Andhra Pradesh, continued to be in force. The notification would, therefore, have the effect of exempting the tax which might otherwise be leviable with effect from 13th September, 1985. Obviously it escaped the notice of the Government to withdraw the notification dated 10th June, 1957 issued under section 9(1) of the Act and that was done through G.O. Ms. No. 794 dated 19th August,", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-8", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "and that was done through G.O. Ms. No. 794 dated 19th August, 1987. Thus, the ground is cleared for the State Government to exercise power to levy tax only from the date of publication of G.O. Ms. No. 794 dated 19th August, 1987, although some notices required the payment for the year 1983-84 and yet some other notices required payment for the years 1984-85 and 1985-86. On this short ground alone the notices issued by the authorities deserve to the quashed and a declaration given that the petitioners herein are not liable to pay tax till the date of publi-cation of G.O. Ms. No. 794 dated 19th August, 1987. We may state that the learned Government Pleader realising the above position did not seriously contend before this Court that the provisions in the Act relied upon conferred power upon the authorities to levy tax prior to the date of publication of G.O. Ms. No. 794 dated 19th August, 1987. We accordingly declare the law and quash the impugned notices in all the cases.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-9", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "7. Learned counsel for all the petitioners made a request that the larger issue whether the petitioners-banks are liable to pay tax at all may be considered as extensive arguments were advanced and the sales tax authorities are bound to initiate action once again for levy of tax subsequent to the period of publication of G.O. Ms. No. 794. It is pointed out that the question would have to be reagitated once again by filing writ petitions and if the larger issue is settled one way or the other multiplicity of proceedings will be avoided. Having heard the arguments in some detail we feel that it is desirable to decide the larger issue concerning the liability of the banks to pay sales tax on the charges realised by the banks for hiring safe deposit lockers.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-10", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "8. The main thrust of the argument of Sri Ananta Babu who led the arguments is that the impugned provision does not authorise the levy of tax on banks for hiring safe deposit lockers to constituents. Attention is invited to the relevant provision. Clause (29-A) of article 366 of the Constitution specifies that tax on the sale or purchase of goods include a tax on the transfer of the right to use any goods for any purpose, whether or not for a specified period, for cash, deferred payment or other valuable consideration. The amendments effected to the definition of the expression \"sale\" in section 2(n) of the Act and also of the expression \"dealer\" in section 2(e) of the Act were in line with clause (29-A) of article 366 of the Constitution. The charging section 5-E provided that every dealer who transfers right to use any goods for any purpose whatsoever, whether or not for a specified period, to any lessee or licensee for cash, deferred payment or other valuable consideration in the course of his business shall, on the total amount realised or realisable by him by way of payment in cash or otherwise on such transfer or transfers of the right to use such goods from the lessee or licensee, pay a tax at the rate of five paise in every rupee. No liability is attached if the total turnover of the dealer is less than rupees one lakh. The question for consideration is whether in the transaction of the banks hiring safe deposit lockers to constituents, there is any transfer of the right to use any goods.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-11", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "9. A copy of the agreement for hiring of the locker executed between the State Bank of India and the constituents is obtained by us. We are informed that more or less identical agreements are entered into by all the banks with their constituents for hiring of lockers. Learned Government Pleader also stated that we may proceed on the basis of the covenants in the agreement filed by the State Bank of India and it is not necessary to examine the agreement in each case. The constituent to whom the locker is provided is called the hirer and the agreement is described as \"the agreement for hiring of locker\". The period for which the locker is hired is specified in the agreement. Where the lockers are taken in the joint names of constitutents the agreement provides for the manner of access and the rights of each one of the joint hirers. Clause 3 of the agreement is in the following terms :   \n \"The hirer shall have no right of property in the locker but only an exclusive right of user thereof and access thereto during the period of this agreement and in accordance therewith. The hirer shall not assign or sublet the locker or any party of it, nor permit to be used to any purpose other than for the deposit of documents, jewellery or other valuables nor shall the hirer use the locker for the deposit of any property of an explosive or destructive nature.\"", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-12", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "There are provisions relating to the payment of the hire and the bank's lien on all the moneys to sell the property by the safe deposit department of the bank if the rental is not paid. The agreement can be terminated by giving seven days' time by either side. If no such termination is made, the bank will consider the renewal in favour of the hirer for a further period. Clause 9 of the agreement provides that all repairs required to be done to the locker or keys shall be done exclusively by workmen appointed by the bank. Clause 11 provides that for reasons of grave or urgent necessity the bank reserves the right of closing the safe deposit department for such period as it may consider necessary. The bank also reserves the right of making charges in the working hours. Clause 12 cautions the hirers to keep the keys of the lockers in a place of safety and not to divulge the number of their lockers and their passwords and not to deliver their keys for the purpose of operating on the lockers or otherwise to any person other than their duly authorised agent. Clause 13 provides that the relation between the bank and the hirer is that of licensor and licensee and not that of a banker and customer.   \n 10. Omitting the routine covenants in the agreement the important condition specified in clause 3 of the agreement would indicate that the hirer has no right of property in the locker. He, however, has an exclusive right of user thereof and access thereto during the period of agreement. The hirer has no right to assign or sublet the locker; nor permit it to be used to any purpose other than the deposit of documents, jewellery or other valuables. The hirer is forbidden from using the locker for the deposit of any property of an explosive or destructive character.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-13", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "11. We may now consider the arguments advanced by the learned counsel for the petitioners. It is contended that the safe deposit locker in a bank cannot be considered as \"goods\" within the meaning of section 2(h) of the Act. It is pointed out that the expression \"goods\" means all kinds of moveable property subject to the exceptions specified therein and also includes all growing crops, grass and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale. Learned counsel invited attention to explanation IV to section 2(n) defining \"sale\" which refers to a transfer of right to use any goods. Our attention is also invited to clause (iii-b) in section 2(e) defining \"dealer\" as any person who may transfer the right to the use of any goods and then reference is invited to section 5-E of the Act which provides that every dealer who transfers the right to use any goods for any purpose shall pay a tax specified therein. It is thus pointed out that the exigibility to tax would depend upon the question whether there is any transfer of the right to use goods by the bankers. It is contended that if safe deposit lockers are not \"goods\", then, no liability to tax arises. As the expression \"goods\" refers only to moveable property, then, safe deposit lockers are excluded from that expression, because the lockers are imbedded in the earth in the strong rooms of the banks. It is submitted that safe deposit lockers are permanently fixed in the strong rooms and they do not answer the description of moveable property. According to the General Clauses Act, immoveable property shall include land, benefits arising out of the land, and things attached to the earth. The Transfer of Property Act defines the phrase \"attached to earth\", but gives no definition of immoveable property beyond excluding standing timber, growing crops. The phrase \"attached to the", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-14", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "definition of immoveable property beyond excluding standing timber, growing crops. The phrase \"attached to the earth\" is defined in the Transfer of Property Act as imbedded in the earth, as in the case of walls or buildings or attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. The definition of immoveable property in the General Clauses Act is held to apply even to the Transfer of Property Act. It is all the more applicable to the Sales Tax Act which levies tax on transactions relating to goods constituting moveable property. There is considerable force in the contention of the learned counsel for the petitioners that lockers imbedded in the earth cannot be regarded as moveable property and cannot, therefore, answer the description of \"goods\" for the purpose of the Sales Tax Act. Learned Government Pleader was on his feet quickly to contradict the petitioners that in some banks the lockers are not imbedded in the earth. That is a matter for verification. It is for the banks to establish the relevant fact. All that we can declare is that if the safe deposit lockers are imbedded in the earth in the strong rooms of the banks, they do not constitute \"goods\" for the purpose of levy of tax on the charges realised for transferring the right to use the lockers. If in any given cause the lockers are kept mobile in the bank then they answer the description of the goods and further considerations regarding the levy of tax may arise.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-15", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "12. It is next contended that the hire charged by the banks for hiring of lockers is not exclusively for the use of the lockers. It is a composite charge to cover a variety of services associated with the lockers. It is submitted that the safe deposit lockers are located in strong rooms constructed at considerable cost by the banks. Walls of high thicknesses rendering them fire-proof are constructed. Steel doors of larger thicknesses in gauge are provided and special locking devices are arranged in the strong rooms. It is stated that some of the leading banks make their strong rooms an impregnable fortress by providing emergency alarm, etc., in the event of prowlers gaining access into the strong room. It is further stated that heavy security by employing security staff round the clock was provided. All these precautions were taken to ensure that the properties deposited in the safe deposit lockers located in the strong rooms are safe and inaccessible. Learned counsel contended that in fixing the hire charges the banks would take into consideration all the above services which are associated with the operation of the lockers. Learned counsel, therefore, urged that unless classification is made of the hire charged it is not possible to identify the sum charged for the transfer of right to use the lockers alone. As it is impossible to make any such classification no tax can be levied, contended the learned counsel for the petitioners.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-16", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "13. We see considerable force in the submissions of the learned counsel for the petitioners. Let us ask the question as to why people go to banks for depositing their valuables in lockers. Is it because they do not have the facility of a locker at their residence ? It is common knowledge that every steel almirah is fitted with a safe deposit locker of high thickness and gauge. The class of customers who go to banks for depositing their valuables in lockers do certainly have steel almirahs in their houses or even otherwise can afford to purchase one such almirah with safe deposit locker. But then why do these persons prefer to go to a bank and deposit their valuables in the lockers located there without keeping the articles in their houses under constant watch by them ? The answer is obvious. It is because the safe deposit lockers hired by banks are located in impregnable strong rooms and prowlers cannot gain access into these strong rooms of the banks. The wide feeling is that valuables deposited in bank lockers are safer than at home because of the high security arrangements at the bank and the provision of strong rooms. It cannot, therefore, be gainsaid that persons pay the hire charges for the lockers not only for the right to use the lockers but also for a host of other services referred to above closely associated with the maintenance of lockers by the banks. In that sense the hire charges collected by the banks from the constituents represent a consolidated charge levied by the bank for a variety of services and facilities provided, of which the use of the locker forms a small part. The hire charge is inseparable into various services and because of the impossible nature of relating to any particular amount as hire charge solely for the use of the locker, the proposal to levy tax on such hire should fail. Any endeavour to levy tax on the aggregate hire charges levied by the bank would amount to levying tax not only on the right to use locker but", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-17", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "levied by the bank would amount to levying tax not only on the right to use locker but also on the charges collected by the bank for the provision of strong rooms, providing round the clock watch and ward and employing necessary staff to have a close supervision in the operation of strong rooms. The inseparable character of the hire charged by the banks frustrates any attempt to separate the small sum which is the charge for the right to use the locker, which only can be subject to tax under the Act. We have, therefore, no hesitation in holding that, in the facts and circumstances above stated, the banks cannot be called upon to pay sales tax on the hire received for the use by the constituents of the lockers which forms a fractional and inseparable part of the composite charge for a variety of services.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-18", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "14. Sri Ananta Babu raised a further plea that the levy of tax is contemplated only in respect of goods which are either delivered or capable of being delivered to the persons who seek exclusive use of the goods. Referring to the agreement between the bankers and the persons taking the lockers on hire, learned counsel submitted that it must be regarded as a contract in the nature of bailment falling under Chapter IX of the Indian Contract Act. Section 148 of the Contract Act defines a \"bailment\" is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivered them. Learned counsel points out that the contract in these cases cannot be considered under any other head. It is submitted that delivery to the bailee may be made by doing anything which has the effect of putting the goods in the possession of the intended bailee or of any person authorised to hold them on his behalf. Learned counsel submits that in the first place no delivery of lockers is involved when a bank hires a safe deposit locker to a constituent. The bank keeps the custody of the locker and the constituent is merely a licensee having access to go into the strong room and operate the locker. Learned counsel also pointed out that the hirer does not even have the facility to open the locker on his own, because the locker cannot be opened unless the master key available with the bank is also simultaneously operated. Learned counsel, therefore, submitted that the bank does nothing having the effect of putting the lockers in the possession of the bailee. On the other hand, the conditions in the contract unmistakably indicate that the exclusive possession and custody of the locker are kept with the bank itself always and not even liberty is given to the hirer to open the locker whenever he likes. The lockers can be operated only during the prescribed hours and a hirer cannot operate the", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-19", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "The lockers can be operated only during the prescribed hours and a hirer cannot operate the locker with his own key, unless the master key remaining with the banks is also simultaneously used. On these facts, the learned counsel contended that there is neither delivery of the lockers nor has anything been done by the bank having the effect of putting the lockers on the possession of the bailee. The facts indicate the contrary. Learned counsel invited our attention to Chitty on Contracts, 24th Edition, Volume II, to the observations at page 2236 concerning \"Hire at common law\". It is observed that in the bailment termed \"hire\" the bailee receives both possession of the chattel and the right to use it, in return for a price or remuneration to be paid to the bailor. The bailee is under an obligation to return the chattel to the owner at the expiration of the fixed period of the hiring and to pay the cost of returning it. While the bailment continues to subsist, the bailee is entitled to possessory remedies and can prevent anyone, including the owner, for interfering with the chattel against his will. Adverting to these observations, Sri Ananta Babu claims that the arrangement for providing lockers cannot but be regarded as a bailment under law and once that is accepted, none of the conditions associated with the contract of bailment is satisfied in the present case. In our opinion, the learned counsel is well fortified in his submissions. We are not told by the learned Government Pleader that the contract of hire between the bankers and the constituents can be regarded legally as anything other than the contract of bailment. Indeed the nature of the transaction undoubtedly puts the contract as one of bailment. That being so, delivery is essential which is lacking in the present case. Clause (29-A) of article 366 of the Constitution of India and the consequential amendments made to the Sales Tax Act refer in our opinion only", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-20", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "of the Constitution of India and the consequential amendments made to the Sales Tax Act refer in our opinion only to cases where there is a transfer of the right to use goods delivered to the person concerned. It does not take in its sweep transactions which merely licence a person to use goods without securing possession. Take for instance a case where a person takes on hire a cab from a rental agency. The agency delivers the car to the person for his use during a specified period and the person concerned returns the vehicle after user and pays to the agency the charge for such user. That clearly is a transaction caught by clause (29-A) in article 366 of the Constitution. Or, take for instance the case of a person who took on hire articles from a furniture makes for his use for a specified period. He carries the furniture home, used it for a particular period and returns it to the furniture maker after user and pays appropriate charges. That again is an instance falling under clause (29-A) of article 366 of the Constitution and the consequential amendments in the Act. It is not necessary to multiply instances of this type as there are plenty. In making the aforesaid amendments, in our opinion, the law envisaged the levy of tax in respect of sums paid for securing the right to use the goods, of which possession or delivery has been taken by him. It does not apply to cases where the person concerned is merely a licensee without possession of the goods.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "b0b5f7363af5-21", "Titles": "State Bank Of India And Ors. vs State Of Andhra Pradesh on 9 March, 1988", "text": "15. Our attention has been invited to a decision of the Calcutta High Court in Bank of India v. Commercial Tax Officer, Calcutta [1987] 67 STC 199 wherein the same question was considered by a learned single Judge of the Calcutta High Court. The learned Judge held that tax is not leviable in respect of lockers hired by banks to customers. Although we tread the ground through a route slightly different from what the learned Judge did we reached the same destination; we are in respectful agreement with the view expressed by the learned single Judge.   \n 16. For all the aforesaid reasons, we hold that no power is conferred on the sales tax authorities to levy sales tax in respect of hire charges collected by banks for providing safe deposit lockers under section 5-E of the Act. If, however, a contrary view is possible, we still hold that the petitioners cannot be called upon to pay tax till the date of publication of G.O. Ms. No. 794 dated 19th August, 1987, as the notification issued under section 9 of the Act withdrawing the exemption from the levy of tax had taken effect only from that date.   \n 17. In the result, all the writ petitions are allowed, but in the circumstances, without costs. Advocate's fee Rs. 200 in each.   \n 18. Writ petitions allowed.", "source": "https://indiankanoon.org/doc/1788622/"}
+{"id": "64ed99d40797-0", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "JUDGMENT Syed Shah Mohammed Quadri J.", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-1", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "1. In these four writ petitions, the constitutional validity of section 115J of the Income-tax Act, 1961, is questioned. As the question raised in these writ petitions is common, they were heard together and are being disposed of by a common judgment. For appreciating the contentions raised in these writ petitions, we would refer to the facts in Writ Petition No. 8060 of 1992.", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-2", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "2. The first petitioner in this writ petition is a public limited company which is registered under the Companies Act, 1956. The second petitioner is one of the equity shareholders of the first petitioner-company. It is stated that under the provisions of the Companies Act, the petitioner is required to prepare the balance-sheet and the profit and loss account in accordance with Schedule VI to the said Act. For the financial year 1989-90, i.e., April 1, 1989, to March 31, 1990, the petitioner disclosed Rs. 65,52,925 as the net profit. The petitioner filed income-tax returns for the said year claiming that under section 32(2) of the Act, the company has unabsorbed depreciation allowance of Rs. 11,99,745 which the petitioner was entitled to carry forward; the petitioner had also investment allowance computed in accordance with the provisions of section 32A of the Act at Rs. 49,59,734 which remained unabsorbed. After necessary adjustment of the other allowances and expenses, the income for that year was determined at Rs. 61,59,479. But after setting off the brought forward depreciation and investment allowance for the assessment year, the income of the petitioner for the assessment year 1990-91 became nil. The petitioner says that section 115J was inserted by the Finance Act, 1987; and a new concept of book profit was introduced; and the provisions of section 80VVA were deleted. By virtue of the operation of the newly inserted provision 115J, the books profits liable to tax were determined at Rs. 29,25,878 and tax of Rs. 14,62,939 computed at 50 per cent. and surcharge of Rs. 1,17,035 at eight per cent. of the income-tax, totalling to Rs. 15,79,974 were paid along with returns of", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-3", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "income-tax, totalling to Rs. 15,79,974 were paid along with returns of income for the year 1990-91. It is added that for the assessment year 1991-92, the petitioner had the profit of Rs. 1,10,64,691. After making necessary adjustments as per the Act and the rules framed thereunder, the taxable income was arrived at Rs. 18,63,394 on which tax together with surcharge was paid at Rs. 8,57,160. The petitioner-company deducted the income determined for the assessment year 1991-92 under the provisions of section 115J and claimed to set off the notional income on which it has suffered tax for the year 1990-91. That was not allowed by the Income-tax Officer. The petitioner, therefore, challenges the constitutional validity of section 115J saying, it is unconstitutional and violative of articles 14 and 19(1)(g) of the Constitution of India.", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-4", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "3. In the counter-affidavit filed by the Revenue, it is stated that the minimum tax on companies was dealt with by section 80VVA which was inserted in 1983 but from the year 1988-89 that provision was deleted and section 115J was inserted. Sample studies carried out by the Central Board of Direct Taxes revealed that while the provisions of section 80VVA have had the effect of subjecting the companies to minimum tax which they would not have otherwise paid, there were still companies which had no income-tax liability despite substantial profits. This was due to the fact that the companies were availing of depreciation in full under the Income-tax Act, and thus the phenomena of prosperous zero-tax companies continued. There were about 650 such companies during the relevant assessment year 1984-85. About 28 per cent. of the companies (139 companies) accounting for a net profit of Rs. 274 crores showed no tax liability. So after conducting a careful study, by the Finance Act, 1987, section 80VVA was deleted and section 115J was introduced by way of an independent Chapter XII-B in the Income-tax Act and it came into force from the assessment year 1988-89. It is only when the total income of a company under the provisions of the Income-tax Act, in respect of any accounting year, of any company, is less than 30 per cent. of its book profits for purposes of charging income-tax, that 30 per cent. of the book profit is treated as income. Subject to some adjustments, the book profits became the basis of taxation or assessability of income-tax. The figures given by the petitioner company in its return for the assessment year 1991-92 are not disputed. But it is stated that there is no rationality in claiming deduction of the income assessed under section 115J for the assessment year 1990-91 and there is no substance in the", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-5", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "section 115J for the assessment year 1990-91 and there is no substance in the contention that there would be double taxation. It is not correct that section 115J creates any hostile discrimination as alleged. Parliament in its wisdom chose the corporate sector for taxing under section 115J of the Act and the same is not open to challenge on the ground of discrimination. The Government policy of taxation strikes a balance between promotion of investment in development and levy and recovery of taxes for the purposes of developmental activities and keeping in view these factors amongst others, the Government formulated the taxation policy. For these reasons, it prayed that the writ petitions be dismissed.", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-6", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "4. Sri Ravi, learned counsel for the petitioners, who led the batch, concentrated on the question of carry forward of unabsorbed losses and unadjusted allowances under sub-section (2) of section 115J when notional income becomes the subject-matter of assessment under sub-section (1) of section 115J of the Act. In other words, his submission is that where the notional income of a company is taxed, having regard to the provisions of section 115J(1), the unabsorbed loss and unadjusted allowances. etc., of an amount equal to the extend income should be allowed to be carried forward, otherwise it would result in double taxation. He has elaborated his argument with reference to the example given in the Board's Circular No. 495, dated September 22, 1987 (see [1987] 168 ITR (St.) 87); if unabsorbed losses or unadjusted allowances, equal in quantum to the income which is subject to tax under section 115J(1). are not allowed to be carried forward to the next year, then submits the learned counsel, the provisions of section 115J(1) would be liable to be struck down on the ground of violation of article 14 as well as on the ground of double taxation so to save them from the vice of unconstitutionality it is necessary to interpret sub-section (2) of section 115J in such a manner as to make the carry forward of the unabsorbed losses and unadjusted allowances, equal in amount to the income calculated under section 115J(1), permissible.", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-7", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "5. Sri Muralikrishna, learned counsel appearing for the petitioner in Writ Petition No. 2221 of 1993, while adopting the arguments of Sri Ravi, adds that once the taxable income of the company is determined under sub-section (1) of section 115J that should form the basis for the purpose of determining the unabsorbed depreciation, business losses and other allowances to be carried forward and set-off against the income for the subsequent year, in other words, he submits that on determining the taxable income under section 115J(1) the corresponding amount of the scientific research expenditure that could be absorbed against that income, should be allowed to be carried forward to the next assessment year under sub-section (2) of section 115J; if any other interpretation is given to section 115J(2), then section 115J(1) would be rendered unconstitutional.", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-8", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "6. Sri S.R. Ashok, learned standing counsel appearing for the Revenue, has contended that under the garb of interpreting sub-section (2) of section 115J, the assessee cannot nullify the purpose of the legislation and the scheme introduced under section 115J(1) of the Act. His contention is if sub-section (2) of section 115J is interpreted in the manner suggested by learned counsel for the petitioners, it would lead to anomalous consequences as the amounts that could be carried forward under sub-section (2) of section 115J would fall either under unabsorbed investment allowance or unabsorbed depreciation or unabsorbed loss or benefit under section 80J and each of them had its own restriction both with regard to time-limit as also with regard to computation. Had Parliament intended to provide such a relief under sub-section (2) of section 115J, it should have said so in that provision and it is not open for the petitioners to read in sub-section (2) something which has not been provided by Parliament. He submits that the example given in Board's Circular No. 495, dated September 22, 1987 (see [1987] 168 ITR (St.) 87), is the correct interpretation of sub-section (2) of section 115J. He has also contended that section 115J(1) is not open to challenge on any of the grounds urged by the petitioners. \n7. We shall first deal with the contention of learned counsel for the petitioners in regard to carry forward of unabsorbed losses or unadjusted allowances, etc., under sub-section (2) of section 115J. \n8. It will be useful to read here section 115J which runs as under :", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-9", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "8. It will be useful to read here section 115J which runs as under : \n\"115J. Special provisions relating to certain companies. - (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee being a company (other than a company engaged in the business of generation of distribution of electricity), the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day April, 1988, but before the 1st day of April, 1991 (hereafter in this section referred to as the relevant previous year), is less than thirty per cent. of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent. of such book profit. \n(1A) Every assessee, being a company, shall, for the purpose of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956). \nExplanation. - For the purposes of this section, 'book profit' means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (1A), as increased by - \n(a) the amount of income-tax paid or payable, and the provision therefor; or", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-10", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "(b) the amounts carried to any reserves (other than the reserves specified in section 80HHD or sub-section (1) of section 33AC), by whatever name called; or \n \n\n(c) the amount or amounts set aside to provisions made for meeting liabilities other than ascertained liabilities; or \n \n\n(d) the amount by way of provision for losses of subsidiary companies; or \n \n\n(e) the amount or amounts of dividends paid proposed; or \n \n\n(f) the amount or amounts of expenditure relatable to any income to which any of the provisions of Chapter III applies; or \n \n\n(g) the amount withdrawn from the reserve account under section 80HHD, where it has been utilised for any purpose other than those referred to in sub-section (4) of that section; or", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-11", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "(h) the amount credited to the reserve account under section 80HHD, to the extent that amount has not been utilised within the period specified in sub-section (4) of that section; or (ha) the amount deemed to be the profits under sub-section (3) of section 33AC; \nif any amount referred to in clauses (a) to (f) is debited or, as the case may be, the amount referred to in clauses (g) and (h) is not credited to the profit and loss account, and as reduced by, - \n(i) the amount withdrawn from reserves (other than the reserves specified in section 80HHD) or provisions, if any such amount is credited to the profit and loss account : \nProvided that, where this section is application to an assessee in any previous year (including the relevant previous year), the amount withdrawn from reserves created or provisions made in a previous year relevant to the assessment year commencing on or after the 1st day of April, 1988, shall not be reduced from the book profit unless the book profit of such year has been increased by those reserves or provisions (out of which the said amount withdrawn) under this Explanation; or \n \n\n(ii) the amount of income to which any of the provisions of Chapter III applies, if any such amount is credited to the profit and loss account; or", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-12", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "(iii) the amounts (as arrived at after increasing the net profit by the amounts referred to in clauses (a) to (f) and reducing the net profit by the amounts referred to in clauses (i) and (ii) attributable to the business, the profits from which are eligible for deduction under section 80HHC or section 80HHD; so, however, that such amounts are computed in the manner specified in sub-section (3) or sub-section (3A) of section 80HHC or sub-section (3) of section 80HHD, as the case may be; or", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-13", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "(iv) the amount of the loss or the amount of depreciation which would be required to be set-off against the profit of the relevant previous year as if the provisions of clause (b) of the first provision (1) of section 205 of the Companies Act, 1956 (1 of 1956), are applicable. \n(2) Nothing contained in sub-section (1) shall affect determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year to years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A or sub-section (3) of section 80J.\"", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-14", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "9. By the Finance Act, 1987, Chapter XIIB containing a lone section, viz., section 115J, extracted above, was inserted with effect from April 1, 1988. It replaced section 80VVA and remained in force for three years, viz., 1988-89, 1989-90 and 1990-91. Section 80VVA had placed certain restrictions on allowances of various incentives allowable under the Act. But the unabsorbed part of the allowances was allowed to be carried forward to the subsequent year; however, that does not cover depreciation allowances or settings off business losses. The object of insertion of section 115J is to ensure levy of minimum tax on what are known as \"prosperous zero-tax companies\". Such companies were showing huge profits in the profit and loss account and were also declaring dividends to the shareholders but on account of various incentives and increase in depreciation rates, among others, were showing very less or \"Nil\" taxable total income. Under the scheme of the above section which is a self-contained provision, certain companies whose total income as computed under the provisions of the Income-tax Act, in respect of the previous year relevant to the assessment year after April 1, 1988, is less than 30 per cent. of their book profits the total income of such companies chargeable to income-tax for the relevant previous year, is treated as an amount equal to 30 per cent. of such book profits and is taxed accordingly. It also provides for certain adjustments by way of adding amounts and granting deductions for computing the chargeable income under section 115J(1).", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-15", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "10. Sub-section (2), with which we are concerned, says that the provisions of sub-section (1) shall not affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under : (a) sub-section (2) of section 32; or (b) sub-section (3) of section 32A; or (c) clause (ii) of sub-section (1) of section 72; or (d) section 73; or (e) section 74; or (f) sub-section (3) of section 74A; or (g) sub-section (3) of section 80J. \n11. Sub-section (2) is only a saving provision. It provides that determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions, enumerated above, will have to be made unaffected by the provisions in sub-section (1) of section 115J. \n12. It is argued that having regard to sub-section (1), determination of the amounts to be carried forward of losses, etc., referred to above, three propositions are possible, viz. : \n(i) Once the income is determined under sub-section (1) in an assessment year, from that year unabsorbed losses and unadjusted allowances, etc., mentioned above, cannot be carried forward any more because by operation of sub-section (1) of section 115J, a new scheme has come into effect which puts an end to the carrying forward of losses, etc.;", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-16", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "(ii) On the determination of the taxable income, under the relevant provisions of the Act, whatever amounts remain to be carried forward as per regular computation, either by way of unabsorbed losses or unadjusted allowances, etc. the same be carried forward to the next year ignoring the fact that a notional income is made taxable under sub-section (1); \n(iii) The taxable income arrived at under sub-section (1) of section 115J should be deemed as available for purposes of setting of unabsorbed losses or unadjusted allowances, etc., in that assessment year but postponed to the next year without allowing the actual adjustment.", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-17", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "13. In our considered view sub-section (2) gives statutory recognition to the proposition (ii) and gives no scope to entertain propositions (i) and (iii). We would examine these propositions and the merits of the Board's Circular No. 495, dated September 22, 1987 (see [1987] 168 ITR (St.) 87), interpreting sub-section (2) of section 115J. The circular recites that it is an accepted canon of taxation to levy tax on the basis of ability to pay; however, as a result of various tax concessions and incentives, some companies which are marking huge profits and also declaring substantial dividends, have been managing their affairs in such a way as to avoid payment of income-tax and accordingly as a measure of equity section 115J has been introduced by the Finance Act, 1987. Under the new provision, in the case of a company whose total income, as computed under the provisions of the Income-tax Act is less than 30 per cent. of the book profit, computed under the section, the total income chargeable to tax will be 30 per cent. of the book profit as computed. The book profit will be the net profit as shown in the profit and loss account prepared in accordance with the provisions of the Sixth Schedule to the Companies Act, 1956, after certain adjustments. This provision involves two processes. First, the assessing authority has to determine the income of the company under the provisions of the Income-tax Act and, secondly, the book profit has to be worked out in accordance with the Explanation below section 115J(1A), then it will have to be seen whether the total income determined under the first process is less than 30 per cent. of the book profit; if so, sub-section (1) would be invoked and the total income of such company chargeable to income-tax for the relevant previous year shall be equal to 30 per cent. of", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-18", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "chargeable to income-tax for the relevant previous year shall be equal to 30 per cent. of such book profit.", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-19", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "14. Sub-section (2) of section 115J provides that the application of this process shall not affect the carry forward of unabsorbed depreciation, unabsorbed investment allowance, business losses, deficiency under sub-section (3) of section 80J to the extent not set-off, as computed under the Income-tax Act. It is illustrated in the said Board's circular as under (see [1987] 168 ITR (St.) 111) : \n ----------------------------------------------------------------------Book profits for the purposes of Profit under the Income-tax\nCompanies Act, 1956    Act\n----------------------------------------------------------------------\n  (1)      (2)\n----------------------------------------------------------------------\n      Year 1984\n    (Rs.)       (Rs.)\nLoss excluding     Loss excluding\n  depreciation  3,00,000  depreciation   80,000\n Depreciation  1,00,000   Depreciation   4,00,000\n      Year 1985 \nProfit before      Profit before\n depreciation   5,00,000  depreciation  5,00,000\nLess : Depreciation     Less : Depreciation 4,00,000\n  as per books  2,00,000\n    --------      --------\n    3,00,000      1,00,000\nLess : Deduction under    Less : Business loss\n  section 205(2)for      for 1984  80,000\n  the year 1984  1,00,000\n    --------      --------\n    2,00,000       20,000\nC.F. Business loss     Less : Unabsorbed\n 1984   3,00,000    depreciation 20,000\n    --------      --------\n           Nil\n        C.F. unabsorbed\n        depreciation 1985 3,80,000", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-20", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "depreciation 1985 3,80,000\n      Year 1986\nNet loss as per books   Business loss (-) 10,00,000\nbefore depreciation (-) 10,00,000\nDepreciation   2,00,000 Add : Depreciation\n        as per I.T.\n        Rules (-) 4,00,000\nBusiness loss to be\ncarried forward (-) 10,00,000\nUnabsorbed\ndepreciation\nto be carried\nforward   (-) 2,00,000\n      Year 1987\nNet Profit    10,00,000 Profit before\n        depreciation   10,00,000\nBook depreciation   2,00,000 Less : Depreciation  \n       as per I.T.Rules 8,00,000\n           2,00,000\n       Less : Carried\n       forward business loss\n       for 1986 to the\n       extent adjusted 2,00,000\n           ---------\n       Assessed income  Nil\n          ---------\n           (Rs.)\n    Application of section 115J    \nProfit before depreciation     10,00,000", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-21", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "Less : Book depreciation      2,00,000\n           ---------\n           8,00,000\n Less : Deduction under section 205(2)    2,00,000\n           ---------\n           6,00,000\nOut of the amount whichever is less :\n  1984 : Business loss     3,00,000\n  1986 : Business loss     10,00,000\n           ---------\n  Total loss        13,00,000\n1986 : Depreciation       2,00,000\nAssessable income 30 per cent. of Rs. 6 lakhs, i.e.,\nRs. 1.8. lakhs\nAmount to be carried forward as per sub-section (2)\nof section 115J\n  1984 : Unabsorbed depreciation    3,80,000\n\n  1986 : Business loss     8,00,000 \n\n  Unabsorbed depreciation     4,00,000", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-22", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "15. The contents of the above circular read with the example given thereunder, extracted above, would make it evident that there is no scope for the Revenue to contend that in view of the provision of sub-section (1), the unabsorbed depreciation allowance, unadjusted loss or deficiency, etc., as the case may be, can no longer be carried forward to the subsequent year to years. The second proposition represents the stand of the Revenue, while the assessee presses into service the third proposition. In the light of the example given in the circular of the Board, we shall consider these aspects. At the end of the year 1985, it is noted, the company was having carried forward unabsorbed depreciation of Rs. 3,80,000. In the year 1986, the company was having net loss of Rs. 10,00,000, depreciation of Rs. 2,00,000 and unabsorbed depreciation of Rs. 2,00,000 to be carried forward; further business loss to be carried forward in a sum of Rs. 10,00,000, thus it was having business loss of Rs. 10,00,000 and total depreciation of Rs. 4,00,000. But in the year 1987, the company had net profit of Rs. 10,00,000 and book depreciation of Rs. 2,00,000; the depreciation as per the Income-tax Rules was Rs. 8,00,000. After deducting depreciation under the Income-tax Rules, the income was reduced to Rs. 2,00,000. Against this income of Rs. 2,00,000, out of the unadjusted loss of 1986 amounting to Rs. 10,00,000, a sum of Rs. 2,00,000 would get adjusted leaving the assessable income as nil. Now under the Companies Act, from out", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-23", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "would get adjusted leaving the assessable income as nil. Now under the Companies Act, from out of the profits of Rs. 10,00,000, the book depreciation of Rs. 2,00,000 was deducted reducing the income to Rs. 8,00,000; under section 205(2) of the Companies Act, a sum of Rs. 2,00,000 was deducted leaving the income of Rs. 6,00,000, after adjusting under the Explanation, 30 per cent. of Rs. 6,00,000, i.e., 1.8 lakhs would be taxable under sub-section (1) of section 115J.", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-24", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "16. Proposition (ii) which in accordance with sub-section (2) of section 115J would entitle the company to carry forward unabsorbed depreciation of Rs. 3,80,000 unadjusted depreciation of Rs. 4,00,000 and business loss of Rs. 8,00,000. So far as the first two items are concerned, there is no controversy. Regarding the unabsorbed business loss of Rs. 8,00,000, what to contained is that out of carried forward business losses of Rs. 10,00,000, only Rs. 2,00,000 of business loss was adjusted as the amount of income was reduced to nil; however, as the Revenue is assessing the company to income-tax on Rs. 1.8 lakhs, the income arrived at under section 115J(1), whereas, in fact, income as per income-tax calculations is nil; the unadjusted depreciation and/or business loss which is available for adjustment but could not be adjusted against the said taxable income, that is, so much of the loss as can be adjusted against Rs. 1.80 lakhs should be allowed to be carried forward to the next year. We find it difficult to accede to the contention of learned counsel for the petitioners for reasons more than one. Firstly, for the purpose of arriving at the total taxable income under the provisions of the Income-tax Act, out of the carried forward loss, a sum of Rs. 2 lakhs was already adjusted and that resulted in the nil income and business loss, unabsorbed of Rs. 8,00,000 which is allowed to be carried forward, as such the claim to carry forward Rs. 1,80,000, equal to taxable income under sub-section (1) is misconceived. Secondly, because sub-section (2) of section 115J of the Act is saving provision and does not confer any", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-25", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "(2) of section 115J of the Act is saving provision and does not confer any further right, the amount of income arrived at for the purpose of exigibility of income-tax under sub-section (1) of section 115J, cannot be taken note of, while considering the question of carrying forward of unadjusted loss. Thirdly, the very object of the provision of section 115J is to tax such companies which are making huge profits and also declaring substantial dividends, but are managing their affairs in such a way as to avoid payment of income-tax, as a result of various tax concessions and incentives and for that purpose the taxable income is determine under sub-section (1) of section 115J, if any loss equal to the income thus determined is allowed to be adjusted, then that would frustrate and nullify the very object of enacting the provision. In our view, from a plain reading of sub-section (2) of section 115J, it is very clear that the quantum of unabsorbed losses, unadjusted depreciation, etc., for the purpose of carrying forward as to be under the provisions of the Act, irrespective of the quantum of income determined under the provisions of sub-section (1) of section 115J. We, therefore, find no illegality in the example of calculations given in the Board Circular No. 495, dated September 22, 1987 (see [1987] 168 ITR (St.) 87).", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-26", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "17. This takes us to the second contention which was somewhat faintly contended and that is, if operation of sub-section (2) of section 115J, as given in the Board's circular is accepted, the provision of sub-section (1) of section 115J would be rendered unconstitutional, as it will be discriminatory and violative of articles 14 and 19(1)(g) of the Constitution of India. The discrimination alleged is that the provision is applicable only to companies but not to other units of taxation. This contention in our view is without any substance. In Jain Brothers v. Union of India , the Supreme Court observed that it was well-settled that in fiscal enactments the Legislature had a larger discretion in the matter of classification so long as there is no departure from the rule that persons included in a class were not singled out for special treatment. In that case the classification of firms as the registered firm and the unregistered firm and taxing them differently, was questioned as arbitrary and violative of article 14. It was held that it was open to the Legislature to say that once a registered firm committee a default attracting penalty, it should be deemed or considered to be an unregistered firm for the purpose of imposition of penalty and no question of discrimination under article 14 could arise in such a situation. It was also observed that there was nothing to prevent the Legislature from giving the benefit of a reduced rate to a registered firm for the purpose of tax but withholding the same when it committed a default and became liable to imposition of penalty. \n18. On the question of applicability of article 14 to fiscal legislation, in ITO v. N. Takin Roy Rymbai , the Supreme Court has laid down as under :", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-27", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "\"In taxation laws the State has, in view of the intrinsic complexity of fiscal adjustments of diverse elements, a considerably wide discretion in the matter of classification for taxation purposes. Legislature has ample freedom to select and classify persons, districts, goods, properties, incomes and objects which it would be tax and which it would not tax. So long as the classification made within this wide and flexible range by a taxing statue does not transgress the doctrine of equality it is not vulnerable to attack on the ground of discrimination merely because it taxes of exempts from taxation, some incomes or objects and not others. Nor is the mere fact that a tax falls more heavily on some in the same category, by itself a ground to render the law invalid.\" \n19. The same principle is reiterated in R.K. Garg v. Union of India [1982] 133 ITR (SC) and Kerala Hotel and Restaurant Association v. State of Kerala . \n20. Before concluding the discussion on this aspect, we may usefully refer to the judgment of the Division Bench of the Delhi High Court in National Thermal Power Corpn. Ltd. v. Union of India , wherein the Division Bench has held that the provision of section 115J is not violative of article 14 or 19(1) of the Constitution. \n21. We are in respectful agreement with the view expressed by the learned judges. \n22. The next contention is that sub-section (1) of section 115J results in double taxation. We are unable to appreciate this contention. Firstly, because what is being taxed is income determined on the basis prescribed under the said impugned provision and there is no provision to re-tax the same income as such, as of fact there is no double taxation. And, secondly, because double taxation per se would not render an otherwise valid provision, invalid. (See Jain Brothers v. Union of India .", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "64ed99d40797-28", "Titles": "Suryalatha Spinning Mills Ltd. ... vs Union Of India And Anr. on 20 February, 1996", "text": "23. However, learned counsel submits that if the losses, etc., which are not set-off or adjusted against the income determined as taxable under section 115J(1) and are not allowed to be carried forward, it would result in double taxation. We do not think so. The right to carry forward, it would result in double taxation. We do not think so. The right to carry forward losses, unadjusted allowances, etc., is kept intact by sub-section (2) of section 115J; merely because the amount equal to the income determined as taxable under sub-section (1) is not treated as unabsorbed loss, etc., which under no provision of the Act can be so treated, it cannot be said that there is double taxation. \n24. For the aforementioned reasons, the writ petitions are without any substance and accordingly we dismiss them; having regard to the circumstances of the cases, we make no order as to costs.", "source": "https://indiankanoon.org/doc/737044/"}
+{"id": "058e532644cb-0", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "JUDGMENT Chinnappa Reddy, J.  \n 1. Nawab Salar Jung III, a nobleman of erstwhile Hyderabad State died on 2-3-1949 leaving behind him a vast estate but no issue. Not unnaturally several persons came forward claiming to be heirs of the late Nawab Sajjid Yar Jang and Turab Yar Jung first cousins of the late Nawab were two such claims. But a notification published in the Jarida dated 9-5-1949 the Nizam made the Salar Jung Estate Administration Regulation, 1358 F, and appointed a Committee known as the Salar Jung Estate Committee to administer the estate of late Nawab Salar Jung. The regulation provided that no person including heirs, if any, of the late Salar Jung shall be entitled to the possession of the estate of the deceased so long as it was under the administration of the Committee. It was further provided that the Committee should function until the Government dissolved it by notification. This Committee was continued by the Nawab Salar Jung Bahadur (Administration of Assets) Ordinance 1949 made by the Governor General of India on 12-11-1949. The Ordinance was replaced by the Nawab Salar Jung Bahadur (Administration of Assets) Act, 1950 ( a Central Act). The Nawab Salar Jung Committee was continued by this Act and it was provided that no suit or other legal proceeding for the enforcement of any right or remedy in respect of any asset shall be instituted in any Court by any person other than the Committee save with the previous consent of the Central Government.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-1", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "2. On 31-5-1949 the Nizam of Hyderabad appointed a Commission to enquire into the question of succession to the estate of the late Nawab and one of the questions referred to the Commission was whether the Jagir of the law Nawab escheated to Government. Another question was who were the heirs of late Salar Jung. The Commission was unable to proceed with the enquiry as some of the claimants filed a Writ Petition in the High Court challenging the jurisdiction of the Commission to enquiry into the question of succession. The writ petition was ultimately allowed by the High Court of Hyderabad by the judgment dated 23-9-1952. The High Court held that the Commission was not the proper forum for determining the question of succession to the estate of the Nawab. The High Court, however, directed that the management of the estate might remain with the Committee until the question of succession was settled by the Civil Court in an appropriate action. The question of succession was ultimately settled as a result of the compromise between the various claimants, including the Government. The compromise was embodied in the decree passed in O.S. 13/58 a suit filed by some of the claimants.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-2", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "3. We stated that Sajjid Yar Jung and Turab Yar Jung were two of the persons claiming to succeed to the estate of Nawab Salar Jung. According to the plaintiff (a business of Bombay), Sajjid Yar Jung, did not have the wherewithal to establish his claim to a share i the estate of Salar Jung. He, therefore, approached the plaintiff for financial help to enable him to pursue his establish his claim. The plaintiff agreed to do so. Sajjid Yar Jung agreed to return all amounts advanced by the plaintiff from time to time. In addition he also agreed to give the plaintiff a one anna share in the amount received from the estate of Salar Hung Sajjid Yar Jung executed an agreement to that effect on 27-6-1952. Pursuant to the agreement Sajjid Yar Jung and his agents were drawing large amounts from the plaintiff from time to time. The total of the amounts so drawn came to about Rs.75,000. Sajjid Yar Jung was enabled to pursue and establish his claim. He, however, passed away before the plaintiff could be paid his share of the amount received from the estate of Salar Jung. The plaintiff estimated the amount due to Sajjid Yar Jung from the estate of Salar Jung at about Rs. 60 lakhs. He claimed that he would be entitled to about Rs. 3 lakhs in addition to the return of the sums advanced by him. The plaintiff, therefore, filed a suit against the heirs of Nawab Sajjid Yar Jung for accounts and for administration of the estate of the late Nawab. He impleaded as parties to the suit the sons, daughters and widow of Nawab Sajjid Yar Jung as defendants 1 to 8. The receiver of the estate of Nawab Salar Jung Bahadur was impleaded as the 19th defendant.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-3", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "of Nawab Salar Jung Bahadur was impleaded as the 19th defendant.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-4", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "4. The heirs of the late Nawab who contested the suit denied that the plaintiff had advanced any amounts to the Late Nawab and generally denied all that was said in the plaint. They also pleaded that the suit was barred by limitation. They further pleaded that the agreement dated 27-6-1952 was unenforceable in law as it was \"in the nature of a chaperty deal\" which was 'opposed to public policy and forbidden by law.\"", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-5", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "5. The learned Chief Justice of the City Civil Court found that the agreement was true, that it was admissible in evidence, that amounts were advanced by the plaintiff to late Sajjid Yar Jung as claimed by the plaintiff ad that the suit was not barred by limitation. However, he found that the agreement was opposed to public policy as the object of the agreement was that the plaintiff should wield his influence with the Central and State Ministers to have Sajjid Yar Jung recognised as the heir of Salar Jung in return for his being given a one anna share in the amount to be received by the Sajjid Yar Jung from the estate of Salar Jung. On that ground learned Chief Judge held that the agreement could not be enforced. He also held that it was unconscionable. He further held that even the amounts actually received by the Sajjid Yar Jung could not be recovered by the plaintiff. The suit was dismissed with costs. The plaintiff has preferred this appeal.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-6", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "6. The appeal was filed against all the legal representatives of the Sajjid Yar Jung. During the pendency of the appeal, Askar Nawaz Jung, 1st defendant in the appeal, died. C.M.P. No. 1990/1972 was filed to bring on record the legal representatives of Askar Nawaz Jung as parties in the appeal. Twelve persons were mentioned in C.M.P. No. 1990/72 as the legal representative of Askar Nawab Jung. Respondent No. 8 was 'Dorothy Baker alias Zaibunnissa alias Nazim and Hamidunnisa alias Baby, both being minors were proposed to be represented by their mother Dorothy Baker alias Zaibunnissa Begum alias Munavari Jahan Begum, respondent No. 8. It was mentioned in the petition that respondents 8 to 12 were residing opposite Dr. Kirloskar's Nursing Home in Bashir Bagh, Hyderabad. C.M.P. 1992/1972 was filed to appoint the 8th respondent as guardian of respondents 11 and 12. On the ground that the notices sent to respondents 8, 11 and 12 were returned unserved for the reason that they had vacated the house and the advocate for the appellant had not filed fresh batta with correct address though informed abut it, matter was posted first before the Deputy Registrar and later before the Court for orders. On 30-1-1974 Gopal Rao Ekbote, C.J. and Chennakesav Reddy, J., passed the following order :", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-7", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "\"Even in regard to the 1st respondent C.M.P. 1990 and 1992 of 1972 were filed to bring on record the legal representatives and to appoint R-8 as guardian for minor respondents 11 and 12, all the respondents except respondents 11 12 were served with notices. The notices which were sent to R-8 for self and as guardian for minor respondents 11 and 12 were returned unserved with the endorsement 'house vacated'. Intimation of the fact was given to the counsel in the first week of December 1973 and he was asked to file a fresh batta with correct address and other costs. The order, however, was not complied with till today. The matter was placed before Deputy Registrar thrice. No one was present and nothing was done in that behalf. Even today no one appeared. We are therefore constrained to dismiss the appeal even as against the 1st respondent on the same ground. Although some of L.Rs. are served, but others are not served, particularly minors. Therefore, the appeal will abate against R. 1 as a whole.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-8", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "Post the appeal for final hearing next week.\" \nOn 10-6-1974 when the appeal came up for hearing before one of us and Krishna Rao, J., the learned counsel for the respondents raised a preliminary objection that the abatement of the appeal against the first respondent had, in law, resulted in an abatement of the entire appeal. At that stage, while going through the records, the learned counsel for the appellant claimed to have discovered that respondents 8, 11 and 12 in C.M.P. 1990/72 had in fact been served with notices and that the matter had been wrongly posed before the Court on 30-1-1974. At his request we adjourned the case to enable him to file applications to set aside the order dated 30-1-1974. Thereafter the appellant filed C.M.P. Nos. 4740 and 4824 of 1974 to condone the delay in seeking to set aside the orders dated 30-1-1974 passed in C.M.P. Nos. 1990/72 and 1992/72. Notice was ordered to the respondents. The appeal and the C.M.P. are now before us.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-9", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "7. We have looked into the original notices issued to respondents 8 to 12 in C.M.P. Nos. 1990 and 19921 of 1972. We find that some persons received the notices on 26-12-1972 on behalf of respondents 8, 11 and 12. Whoever was the person that received the notices it was certainly not the 8th respondent. The signature of the person who has signed on the notices bears no resemblance whatever to the signature of the 8th respondent. On the other hand, we find that notices appear to have been taken out once again to respondents 8, 11 and 12 and on 1-11-1973 the Process server made an endorsement on the notices to the effect that the respondents had vacated the house and gone to live elsewhere. It is clear that respondents 8, 11 and 12 were never served with notices. The order dated 30-1-74 cannot therefore be set aside on the ground of mistake of fact. The learned counsel for the appellant also argued that the Court was wrong in holding that the appeal had abated against respondent No. 1 as a whole. He argued that when notices had been served on nine out of the twelve legal representatives, the court acted without jurisdiction in declaring that the appeal had abated against the 1st respondent 'as a whole'. We will consider this question with preliminary objection raised by the learned counsel for the respondents that the appeal having abated against the first respondent it must be considered to have abated as a whole against all the respondents.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-10", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "8. In support of his preliminary objection Sri Jaleel Ahmed relied on a catena of decisions to which we shall make a brief reference in State of Punjab v. Nathu Ram, , land belonging to two brothers was acquired. The Arbitrator to whom the question of compensation was referred made an award against which the Government preferred an appeal. During the pendency of the appeal one of the brothers died. His legal representatives were not brought on record. So the appeal abated against him. The Supreme Court held that the appeal could not proceed against the other brother either. Reghubir Dayal J., observed that the Court would not proceed with an appeal (a) when the success of the appeal might lead to the court's coming to a decision which would be in conflict with the decision between the appellant and the deceased respondent and which would, therefore, lead to the court's passing contradictory decrees with respect to the same subject-matter; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who were still before the court; and (c) when the decree against the surviving respondents would be ineffective. \n\n 9. In Ramswarup v. Munshi, a pre-emption decree had been granted. The vendees preferred an appeal to the Supreme Court. Of the five appellants first and second appellants constituted one group and appellants 3, 4 and 5 constituted another group. While the appeal was pending the first appellant died, but his legal representatives were not brought on record. The sale in the case was not a sale of any individual item of property but one of the entire set of properties. The Supreme Court held that the decree was a joint one and as part of the decree had become final by reason of abatement, the entire appeal must be held to be abated.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-11", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "10. In Rameswar Prasad v. Shambehari Lal, , it was held that if in respect of one appellant the appeal had abated and the decree in favour of the respondents had become final to that extent, it would be against the scheme of the Code of Civil Procedure to hear the appeal if the decree of the lower court proceeded on a ground common to all the plaintiffs or defendants.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-12", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "11. In Raghunath v. Ganesh, , Shamdass and Jaigopal had purchased the property prescribed as Lot No. 8 under a single sale deed. Jaigopal died and his legal representatives were not brought on record. The appeal in the Supreme Court was concerned with several items of property, besides Lot No. 8 which were in the possession of other defendants. An argument was advanced that the failure to bring the legal representatives of Jaigopal on record resulted in the abatement of the entire appeal. The Supreme Court repelled the contention and said that the interests of the other defendants who were in possession of various other properties were independent and, therefore, the whole of the appeal could not abate because the heirs of certain deceased defendant which was in possession of one property had not been brought on record. But so far as lot No. 8 was concerned, it was held that since there was only a single sale deed the appeal abated and could not proceed against Shamdas also. This case is an instructive case since it shows how the death of a respondent may not allow further proceedings in an appeal against some respondents while it may allow further proceedings in an appeal against other respondents depending upon whether the interests of the other respondents were the same as the interest of the deceased respondent. \n 12. In Gupta v. Murali Prasad, , the three tests laid down by the Supreme Court in State of Punjab v. Nathu Ram, were reiterated and it was further pointed out that the tests were not cumulative and that even if one of them was satisfied the court would have to dismiss the appeal.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-13", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "13. In Md. Suleman v. Md. Ismail, the plaintiff instituted a suit against persons who were not the only heirs of a deceased person against whose estate of the plaintiff had a claim. The plaintiff had made diligent and bona fine enquiry and had instituted the suit in the genuine belief that the defendants were the only persons interested in the estate. It turned out that there were others also who were interested in the estate. The Supreme Court was of the view that the question whether a decree obtained by a creditor against the heirs of a deceased person was binding upon the entire estate or only upon those who were impleaded eo nomine as parties was part of the law of procedure which regulated all matters gong to the remedy. The Supreme Court held that in the absence of fraud or collusion and in the absence of other circumstances which would indicate that there had not been a fair or real trial or that the absent heir had a special defence was not and could not be tried in the earlier proceeding, the decree would bind the absent heirs also.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-14", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "14. The principles deducible from these decisions of the Supreme Court are that on the abatement of an appeal against one respondent the Court cannot proceed with the appeal against the other respondents (1) If the success of the appeal would lead to contradictory decisions with respect to the same subject-matter (2) if the appellant could not have brought the action against the remaining respondents only and (3) if the decree granted against the surviving respondents would be ineffective. The tests are not cumulative and the entire appeal will have to be dismissed even if one of them is satisfied. These principles are founded on the assumption that the appellant has allowed the appeal to abate against one of the respondents by his own default. But where the appellant after diligent and bona fide enquiry genuinely believes that some persons alone are the heirs of the deceased respondent and brings them on record, a decree passed against such persons would bind the entire estate of the deceased person, subject of course to the absence of fraud or collusion or other circumstances which would indicate that there had not been a fair or real trial, or that the absent heir had no special defences which were open to them. If these principles are applied it must be held that the failure of the appellant to bring on record respondents 8, 11 and 12 in C.M.P. No. 1990/72 resulted in the abatement of the appeal against Askar Nawab Jung the 1st respondent in the appeal, as was held in the order passed by the Gopal Rao Ekbote, C.J., and Chennakesav Reddy, J., on 30-1-1974. Applying the same principles it must be further held that abate of the appeal against Askar Nawab Jung, the 1st respondent, must also lead to the position that the appeal cannot be heard against the other respondents either. The interests of the other respondents in the appeal are the same as the interests of Askar Nawab Jung", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-15", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "interests of the other respondents in the appeal are the same as the interests of Askar Nawab Jung and any success in the appeal against the other respondents would lead to contradictory decisions. On the one hand, the agreement would be void against Askar Nawab Jung heirs while it would be valid against the other respondents. This is a situation which the appellant had brought upon himself. There was no diligence at all on his part. It is not a case where he was not aware who the heirs of Askar Nawab Jung were. He filed a petition to implead all the heirs of Askar Nawab Jung but defaulted in taking appropriate steps to bring all of them on record. Even after the order of Gopal Rao Ekbote, C.J., and Chennakesav Reddy, J., was passed on 30-1-1974 he did not take any steps to have the order reviewed on any of the grounds now mentioned. In the petitions filed by him he does not even state why he delayed in filing the petitions. We have, therefore, no option but to hold that in view of the abatement of the appeal against the 1st respondent, it is not permissible for us to proceed with the appeal against the other respondents.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-16", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "15. The learned counsel for the appellant argued that in an action for administration it was not necessary that all the heirs of the deceased should be impleaded as parties. He relied on the decision of the Privy Council Mohammedali v. Safia Bai, AIR 1940 PC 215. That was a case where a Mohammadan heir brought a suit against his co-heirs for administration. On the death of one of the defendants the legal representatives were not brought on record. It was held that the suit for administration did not come to an end. The Privy Council pointed out that the contention that the plaintiffs suit had abated as a whole involved an assumption that the plaintiff was claiming relief against the deceased and that the deceased's heirs were entitled to resist the grant of such relief. No step of that reasoning could be justified, according to their Lordships. The situation here is completely different. The action is not by an heir against his co-heirs. The action is by a creditor against the heirs representing the estate of the deceased. Relief was claimed by the plaintiff against all the defendants and each of the defendants had a right to resist the grant of relief to he plaintiff whether or not the others resisted the action. We do not think that the reasoning in Mohammedali v. Safia Bai, AIR 1940 PC 215 (Supra) can possibly apply to the facts of the present case.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-17", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "16. Assuming that our conclusion that the appeal has been determined by its abatement against the 1st respondent is not correct, we will proceed to consider the appeal on its merits. It was argued by the learned counsel that the learned Chief Judge of the City Civil Court had invented a new ground of public policy in deciding that the suit agreement was opposed to public policy. This he urged, was impermissible and he relied on the observations of the Supreme Court in Cherulal Prakh v. Mahadeo Das, . Subba Rao, J.,, (as he then was) after referring to a few earlier cases on the subject of public policy stated that the position thus :--", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-18", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "\"The doctrine of public policy may be summarized thus : Public policy or the policy of the law is an illusive concept. It has been described as \"untrustworthy guide\", \"variable equality\", 'uncertain one'. 'Unruly horse' etc., the primary duty of a Court of Law is to enforce a promise which the parties have made and to uphold the sanctity of contracts which form the basis of society but in certain cases, the court may relieve them of their duty on a rule founded on what is called the public policy, for want of better words. Lord Atkin describes that something done contrary to public policy is harmful thing but the doctrine is extended not only to harmful cases but also to harmful tendencies, this doctrine of public policy is only a breach of common law, and, just like any other breach of common law, it is governed by precedents the principles have been crystallized under different heads and though it is permissible for Courts to expound and apply them to different situations it should only be invoked in clear and incontestable cases of harm to the public; though the heads are not closed and though theoretically it may be permissible to evolve a new head under exceptional circumstances of a changing world, it is advisable in the interests of stability of society not to make any attempt to discover new heads in these days.\"", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-19", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "It will be noticed that the Supreme Court did not altogether ban the evolution of a new head of public policy. In fact, in a modern progressive society with fast changing social values and concepts it becomes more and more imperative to evolve new heads of public policy, whenever necessary, to meet the demands of new situations. Law cannot afford to remain static. It has, of necessity, to keep pace with the progress of society and judges are under an obligation to evolve new techniques or adapt old techniques to meet the new conditions and concepts. As was said by Dankwerta L.J., in Nagle v. Fielden, 1966 (2)QB 633 at p. 650:\n \"The law relating to public policy cannot remain immutable. It must change with the passage of time. The wind of change blows upto it.\" \nProfessor Winfield described public policy as \"a principle of judicial legislation or interpretation founded on the current needs of the community.\" Therefore, he thought that public policy was necessarily variable and that its very variability was its surest foundation. In an essay on 'Public Policy in English Common Law' (42 Harvard Law Review P. 76) he said :\n \"Public policy is necessarily variable. It may be variable not only from one century to another, not only from one generation to another, but even in the same generation. Further it may vary not merely with respect to the particular topics which may be included in it, but also with respect to the rules relating to any one particular topic................ This variability of the doctrine and not a missile to be flung at it. Public Policy would be almost useless without it.\" \n 17. The whole concept of limiting the heads of public policy is based on the concept of 'freedom of contract' which was considered so very fundamental in the days when laissez faire ruled the roost. This concept was succinctly stated by Jessel MR. In 1875 as follows:", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-20", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "\"You have this paramount public policy to consider, that you are not rightly to interfere with the freedom of contract.\" \nBut, Laissez faire had its day and its corner stone. 'Freedom of contract' has not ceased to have the idealistic attraction it had in the 19th Century. We are now more and more concerned with the social and economic interest of the community rather than individual interest. A.C. Guest in his introduction in Anson's Law of Contract (23rd Edition) says :\n \"Today the position is seen in a very different light. Freedom of contract is a reasonable social ideal only to the extent that equality of bargaining power between contracting parties can be assumed, and no injury is done to the economic interests of the community at large. In the more complicated social and industrial conditions of a collectivist society it has ceased to have much idealistic attraction. It is once realised that economic equality often does not exist in any real sense, and that individual interests have to be made to subserve those of the community. Hence there has been a fundamental change both in our social outlook and in the policy of the legislature towards contract, ad the law today interferes at numerous points with the freedom of the parties to make what contract they like.\" \n 18. With this fundamental change of outlook on the concept of Freedom of contract Jussel M.R's concept of limiting 'public policy' in the name of 'Freedom of Contract' must be considered to be on its way to becoming archaic. Further, in our view, in a developing democracy like ours dedicated to the establishment of a new social order, we cannot afford to shut the door firmly against new heads of public policy.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-21", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "19. It is true that public policy should not depend upon 'the idiosyncratic inferences of a few judicial minds'. (Lord Atkin in Fender v. St. John Mild May (1938) AC 1) and moral indignation must not be mistaken for public policy (Starke J., in Jenkins v. Smith, 1969 VR 267). These are trite sayings which need not deter morality indignant judicial minds from searching for new heads of public policy which satisfy the test of advancement of the highest public good and the prevention of clear and incontestable public hard. As far back as 1853 in Egerton v. Earl Brownlow, (1853) 4 HLC 1 at p. 151, Lord Chief Baron Pollock said :\n \"My Lords, it may be that Judges are no better able to discern what is for public good than other experienced and enlightened members of the community but that is no reason for their refusing to entertain question, and declining to decide upon it. Is it, or is not, a part of our common law that in a new and unprecedented case where the mere caprice of a testator is to be weighed against the public good, the public good should prevail? In my judgment it is.\"", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-22", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "Lord Chief Baron Pollock's speech was echoed by Viscount Haldane in Rodrigueaz v. Speyer Brothers, 1919 AC 59, Viscount Haldane expressed the view that in deciding upon questions of public policy Judges should be guided by the opinions of men of the world as distinguished from opinion based on legal learning. He also pointed out that what the law recognised as contrary to public policy turned out to vary greatly from time to time and that the dictum of Lord Halsbury in Janson v. Drieftein Consolidated Mines Ltd., 1902 AC 484, that courts cannot invent new heads of public policy should not be taken too laterally. Of course, as observed by professor Winfield in his essay.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-23", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "\"It is not to be expected that men of the world are to be supposed as expert witnesses in the trial of every action raising a question of public policy. It is the Judges themselves, assisted by the bar who here represented the highest common factor of public sentiment and intelligence.\" \nThus the twin touchstones of 'public policy' are advancement of the public good and prevention of public mischief and these questions have to be decided by Judges and not as men of legal learning but as 'experienced and enlightened members of the community' 'representing the highest common factor of public sentiment and intelligence.' Enunciation of public policy is the crystallizing of the opinions of Judges as men of the world.\" \n\n 20. Public policy has often enough been described as 'an unruly horse' and this description appears to have scared away judicial minds from lading the steed into new pastures. To quote professor Winfield again.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-24", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "\"That animal has proved to be a rather obtrusive not to say blundering steed in the law reports. It would have been more effective if we had not been so much of it. It has gone reverberating down the history of our law..................... some Judges appear to have thought it more like a tiger and have refused to mount it at all ............\" \nIn a short note in 59 Law Quarterly Review P. 298 Dr. F.A. Mann observed :\n \"public policy may be an unruly horse. But this does not mean that on the proper occasion a Judge must not take his courage in his hand and mount the steed.\" \n 21. Similarly, Lord Denning in Enderby Town Football Club v. F.A. Limited, (1970) 3 WLR 1021 said, \"I know that over three hundred years ago Hobart C.J. said, 'the public policy is an unruly horse.' It has often been repeated since. So unruly is the horse, it is said (per Burrough J., in Richardson v. Mellis, (1824) 2 Bing 229 at p. 252), that no Judge should try to mount it lest it run away with him. I disagree. When a good man in the saddle the unruly horse can be kept in control. It can jump over obstacles. It can leap the fences put up by fictions and come down on the side of justice, as we done in Nagle v. Fielden, (1966) 2 WLR 1027.\"", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-25", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "22. We have said so much amount 'public policy' at the risk of being thought presumptuous because it is our firm belief that it is as fascinating a weapon in the judicial armoury as 'ultra vires', 'natural justice', etc., and certainly capable of being put to far greater and effective use much in the hope that at some not too distant date the Supreme Court will 'unblinker the unruly horse.'", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-26", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "23. The learned Chief Justice said tat it was against the public policy to order into an agreement the object of which was to influence the Central and State Minister as. If this is a new head of public policy we are ready to sponsor it. But is by no means a new head of public policy. It comes under the head 'Agreement Tending to Injure the Public Service' mentioned at page 325 of Anson's Law of Contract, 23rd Edition. In Egerton v. Earl Brownlow, (1853) 4 HL Cas 1 (supra), Lord Chief Baron Pollock stated :\n \"the conclusions to which I have arrived, from the decided cases and the principles they involve, are, that all matter relating to the public welfare all acts of the legislature or the executive must be decided and determined upon their own merits only; and that is against the public interest (and therefore not lawful) for any one officiously, wantonly and capriciously........... to create any pecuniary interest or other bias of any sort in the decision of a matter of public nature and which involves the public welfare .............\" \n 24. In Montefoire v. Menday Motor Components Co. Ltd., (1913) 2 KB 241, the defendants entered into an agreement with the plaintiff in the following terms:\n \"In consideration of your finding me the necessary capital, I am prepared to pay you 10 percent on the amount intorudced either direct or indirect and also to allot you forty shares in the Menday Motor Components Company Ltd.\"", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-27", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "According to the plaintiff a member of the Imperial Air Fleet Committee be arranged with the Treasury to provide the defendant, a manufacturer of Components of aircraft with the sum of ( 2000. He claimed that he was, therefore, entitled to be paid ( 200 and to have allotted to him forty shares in the defendant Company. In the course of the trial the Judge thought it right to call attention to the question whether there was not a defence open to the defendants that the contract sued upon was void at being contrary to public policy. The Judge fund that plaintiff had talked to the defendant \"fairly of his acquaintance with high official of the Air Board\" and he defendant thought that the plaintiff had 'put in a good word for him'. Shearman J., expressed the view that it was well settled that if on the face of a contract it was apparent that it was unlawful, it was the duty of the Judge himself to take the objection, and that, too, whether the parties take or waive the objection. He then proceeded to say :\n \"A contract may be against public policy either from the nature of the acts to be performed or from the nature of the consideration. In y judgment it is contrary to public policy that a person should be hired for money or valuable consideration when he has access to persons of influence to use his position and interest to procure a benefit from the Government.\"  \nAfter referring to Normal v. Cole, (1800) 3 Esp. 253 and Statute 5 and 6 Edward 6, C. 16, Shearman J., further stated :", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-28", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "\"While I do not go to the length of holding that the defendants were bargaining with the plaintiff that they should receive an office under the Crown, I agree with the remarks of Coltman J., in the case of Hopkins v. Prescott, (1847) 4 CB 578 at p. 596 that where a person undertakes for money to use his influence with the Commissioners of Taxes to procure for another party the right to sell stamps & c., if the contract were not void by statute, it would be void at common law as contrary to public policy. It is well settled that in judging this question one has to look at the tendency of the acts contemplated by the contract to see whether they tend to be injurious to the public interest. In my judgment a contract of the kind has a most pernicious tendency. At a time when public money is being advanced to private firms for objects of national safety it would tend to corrupt the public service and to bring into existence a class of persons somewhat like those who in ancient times of corrupt politics were described as 'carriers', men who undertook for money to get titles and honours for those who agreed to pay them for their influence; see the remarks of Lord St. Leonards in Egerton v. Earl Brownlow, (1853) 4 HLC 1 at p. 234.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-29", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "It has been urged upon me in the course of the argument that a Judge must act with great caution in declaring a contract void as against public policy Burrough J., in Richardson v. Mellish, (1824) 2 Bing 229 at p. 252 said that public policy 'is a very unruly horse, and when once you get astride it you never know where it will carry you' and Lord Bramwell in Mogul Steamship Co., v. Mcgregor Gow & Co., (1892) AC 25 at p. 45, Lord Halsbury in Janson v Drieftein Consolidated Mines Ltd. (1902) AC 484 at p. 491 repeat the warning. But, applying the words of Pollock C.B. in Egerton v. Earlbrownlow (1853) 4 HLC 1 at p. 49, I think I am bound to look for the principles of former decisions, and not to shrink from applying them with firmness and caution to any new and extraordinary case that may arise.\" \nIn my judgment it is both in accordance with precedent and with public interest that I should declare this contract void as against public policy, with the result that both the action and the counter-claim are dismissed with costs.\"", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-30", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "25. In our view, an agreement, the object of which is to use the influence of a person with Ministers of the Government to obtain favourable decisions, is destructive of all sound and good administration. It discloses a tendency to corrupt or to influence public servants to decide and determine matters otherwise than upon their own merits, a tendency most injurious to the public interest. We do not have the slightest doubt that such an agreement is contrary to public policy. We also wish to emphasize that it is irrelevant that the persons proposed to be influenced are incorruptible and are persons 'whose ability honesty and patriotism are beyond all question' as in the case of Montefoire v. Menday Motor Components Co. Ltd., (1918) 2 KB 241 (supra). It is the very tendency of the agreement that makes it contrary to public policy. \n 26. The learned counsel for the appellant urged that this ground was not expressly raised in the written statement. As pointed out by Shearman, j., in Monterfoire v. Menday Motor Components Co. Ltd., (1918) 2 KB 241 it is the duty of the Judge to take the objection whether parties take or waive the objection if it comes to his notice that the agreement is contrary to public policy. The learned counsel then argued that the evidence in this case did not justify the finding of the learned Judge that the object of the agreement was to influence Ministers of the Government. \n 27. Ex. A-27 is the agreement executed by the late Nawab Sajjid Yar Jung. It is as follows:\n \"I Nawab Sahid Yar Jung Bahadur of Hyderabad Deccan wish that you should help me and my family in promoting our cause, i.e., in our being recognised as heirs to the late Nawab Salar Jung Bahadur's property.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-31", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "For the regard and love and affection that I held for you and for the time help that you have rendered me and will render me in future, I, by my free will and consent, promise to pay out of my proportionate share, a share of one anna in a rupee, within three months only after getting the possession of the property. \n The letter dated...........    is not in addition to this officer and on getting your full share that letter shall stand cancelled.  Executed this document in favour of Seth RatanChand Hira Chand of 26, Napean Sea Road, Bombay and sign in confirmation whereof this 27th day of June, 1952 at 1, B. Passa Road, New Delhi.\n\n \n\n        Sd. Sajid Yar Jung.\n\n \n\nWitnesses :\n\n \n\n1.   Sarfraz Hussain,\n\n \n\n2.   G.N. Hardas.\"", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-32", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "It is interesting to notice that the plaintiff was required to help the Nawab and his family \"in promoting our cause, i.e. in our being recognised as heirs of the late Nawab Salar Jung Bahadur's property.\" The use of expression 'promoting' is significant and it appears to us to contemplate much more than mere financing. We do not, however, wish to stress too much upon the use of this expression. The evidence of the plaintiff himself, as P.W. 10, gives more than a clue as to the true object of the agreement and what was expected of the plaintiff. He stated that he was an industrialist, a justice of the peace and the Chairman and Director of more than a dozen companies. He was approached by Sajjid Yar Jung and his brother for help them \"to represent their case before the Union Ministers.\" He stated 'the representation to be made was regarding the estate of late Salar Jung and Sajjid Yar Jung and his brother wanted recognition for themselves and his sisters as the heirs of Salar Jung.\" He further stated that it was requested that he should accompany them to the Union Ministers concerned for representing their case to the Union Government. It appears to be fairly clear from these statements that the help which Sajjid Yar Jung wanted from the plaintiff was to represent their case before the Union Ministers i.e. to bring to bear his influence with the Union Ministers. It is nobody's case that the plaintiff is an adept at advocacy. The plaintiff added \"they are made a request that I should advance monies to meet their expenses..............\" This statement indicates that the request for financial help was secondary to the request to represent their cause i.e. to use his influence. The plaintiff stated that he took Sajjid Yar Jung to the concerned Ministers on two or three occasions at New Delhi and that after they learnt that the case was being considered favorably by the Union Government they came down to Hyderabad.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-33", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "they learnt that the case was being considered favorably by the Union Government they came down to Hyderabad. Sajjid Yar Jung requested him to meet the then Chief Minister Sri B. Ramakrishna Rao. Accordingly he met him. He further stated that he arranged for Sajjid Yar Jung's meeting with the Union Ministers who were seized with the subject-matter of Salar Jung's estate. He himself met three Ministers in connection with the representation of Sajjid Yar Jung. They were late N.Gopalaswamy Iyyengar, Late Sardar Vallabhhai Patel and Late Lal Bahadur Sastry. He has met Lal Bahadur Sastry earlier at Hyderabad along with Sajjid Yar Jung at the time of Congress Sessions. His meeting with the Ministers according to him, created a very favourable impression. At the time when he took up the assignment on behalf of Sajjid Yar Jung he expected an early disposal of the matter by the Government of India. It would have been so disposed of but for the stay orders of the High Court. He pursued the matter with the authorities at Delhi and the Union Government entered into correspondence with the local Government on the representation of Sajjid Yar Jung. With a show of modesty he added \"I am not supposed to know which influence weighed with the Union Government or the local Government. I am only concerned with the result\". The evidence of the plaintiff can lead but to one conclusion namely, that Sajjid Yar Jung promised to give imprisonment a one-anna share in the amount to realised from the estate of Salar Jung in return for the influence which the plaintiff was to bear upon the Union and State Ministers. One of the attestors of the agreement, a friend and consultant of Sajjid Yar Jung, was examined as P.W. 11. He also stated, \"Sajjid Yar Jung wanted a representation of his case to be made to the", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-34", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "stated, \"Sajjid Yar Jung wanted a representation of his case to be made to the Government of India and to the then Hyderabad Government. Sajjid Yar Jung wanted me to find a financier who can help him financially and also represent his case to the concerned Government\". Later, he stated, \"the plaintiff met two or three Union Ministers along with Sajjid Yar Jung and represented the case of the Nawab. I was present at the meeting with Mr. Lal Bahadur Sastry, who was then a Minister.\" Again, he stated, \"the help rendered by the plaintiff was the financial help as also the representations he made to the persons concerned in the Union and the State Governments.\" The evidence of the plaintiff and P.W. 11 leave no doubt in our minds that the object of the agreement was to influence the Union and State Ministers and to advance and expend all amounts necessary in that connection. We agree with the finding of the learned Civil Judge on this question.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-35", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "28. The learned counsel argued that late Gopalaswamy Iyengar, late Sardar Vallabbhai Patel, late Lal Bahadur Sastry and late B.Ramakrishna Rao were incorruptible public servants and that there could be no question of influencing them. As already pointed out by us earlier, the question is not about the integrity of the persons proposed to be influenced but about the tendency of the agreement. \n 29. Even so, the learned counsel for the appellant argued that the plaintiff was entitled to a return of all the amounts advanced by him with interest. He relied upon the decisions in Hussain Baksh v. Rahmat Hussain, ILR (1889) 11 All 128 and Venkataswamy v. Nagi Reddy, AIR 1962 Andh Pra 457. Both were cases of champerty. Both were cases where the agreements wee held to the extortionate and unconscionable. In both cases the amounts actually advanced were directed to be refunded. The law is well settled in India that Champertous agreements are not as such opposed to public policy. They will not be enforced if they are extortionate and unconscionable in which the persons advancing the monies will be entitled to get a return of the same. In the present case, we are not concerned with a plain and simple champertous agreement. The object of the agreement was to influence Ministers and to incur necessary expenditure in connection therewith. There were no two independent agreements one for influencing the Ministers and the other for advancing monies. The agreement was one whole agreement and if it could not be enforced in part it could not be enforced as a whole. The whole of the agreement was tainted by the vice of being opposed to public policy.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-36", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "30. In passing the learned Chief Judge appeared to hold that the agreement was also unconscionable. The learned counsel for the appellant invited our attention to several cases where agreements to give 1/4th share. 3/32nd share, 3/16th share had been upheld by Courts. In the present case, what Sajjid Yar Jung agreed to give was only a 1/16th share. It could not, therefore, be said to be unconscionable. That, however, makes no difference in our final conclusion.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "058e532644cb-37", "Titles": "Ratanchand Hirachand vs Askar Nawaz Jung And Ors. on 18 March, 1975", "text": "31. In the result, we uphold the judgment and decree of the lower court and dismiss the appeal with costs. C.M.P. Nos. 4740, 4924/1974 are dismissed. \n\n32. Appeal dismissed.", "source": "https://indiankanoon.org/doc/1685776/"}
+{"id": "95f83f67a79f-0", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "JUDGMENT Y.V. Anjaneyulu, J.  \n 1. Two questions are referred to this court by the Income-tax Appellate Tribunal under s. 256(1) of the I.T. Act, 1961 : \n\"(1) Whether, on the facts and in the circumstances of the case, the entire land or any part of it could be treated appurtenant to the building for the purpose of applying the provisions of section 54 of the Income-tax Act, 1961 ? \n(2) Whether the department was justified in reading 'reasonableness' before the words 'land appurtenant thereto' in section 54 of the Income-tax Act and whether the Tribunal was right in repelling such an interpretation ?  \n2. The matter relates to the assessment year 1964-65. The assessee and her three sisters were the joint owners of house property consisting of a fairly large building and extensive land, each one owning 1/4th share. The building has a built-up area of 17,136 sq. ft. and the total extent of land including the land on which the building stands is 13,029 sq. yards. The building as well as the entire extent of land was acquired by the Government under the Land Acquisition Act for construction of the office of the Accountant-General. Compensation was initially awarded by the Land Acquisition Officer and it was enhanced by the Second Additional Chief Judge, City Civil Court, Hyderabad, pursuant to reference made under s. 18 of the Land Acquisition Act. The compensation finally awarded was : \n Rs. \n\n(a)  Compensation for land                       5,21,160\n(b)  Compensation for the building               1,71,360\n(c)  Solatium                                    1,03,878\n                                              -------------\n                                                 7,96,398\n                                              -------------", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-1", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "3. In the income-tax return field for the assessment year 1964-65, the assessee declared her share of capital gain arising on the transfer of the land and building by way of compulsory acquisition. The assessee claimed that she constructed a building for her residential purposes at a cost of Rs. 80,000 within a period of two years from the date of transfer of the abovesaid building together with land. Accordingly, the sum of Rs. 80,000 was claimed as deduction under s. 54 of the I.T. Act, 1961 (hereinafter referred to as \"the Act\"), from out of her share of capital gain. Omitting matters which are not the subject-matter of dispute in the present reference, it is enough to state that the ITO determined the assessee's 1/4th share of capital gain on the transfer of the land and building jointly owned by the assessee and her three sisters at Rs. 1,42,283 and set off against the same a sum of Rs. 75,000 which he estimated as the cost of building constructed by the assessee for her residential purposes under s. 54 of the Act. Doing so, he arrived at the capital gain for the purpose of assessment at Rs. 67,283 and included the same in the total income.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-2", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "4. Against the order of the ITO, the assessee filed an appeal before the AAC and questioned the correctness of the computation of the capital gain at Rs. 1,42,283. The dispute, inter alia, related to the original cost (market value) of the land and building as on January 1, 1954, and also the determination by the ITO of the cost of the building newly constructed for the assessee's residential purposes at only Rs. 75,000 against Rs. 80,000 claimed. The question regarding determination of the original cost (market value) as on January 1, 1954, is not relevant for the purpose of the present reference and it is not, therefore, necessary to refer to that matter. On the question of the estimated cost construction of the new residential house at Rs. 75,000, the AAC did not interfere with the estimate made by the ITO at Rs. 75,000. The AAC went further into the question whether the deduction of Rs. 75,000 representing the cost of construction of the new residential house could be set off against the entirety of capital gain arising on the sale of building as well as the land or should be limited to the extent of capital gain arising on the sale of the building and land \"reasonably appurtenant\" to the building. The provisions of s. 54(1) of the Act were construed by the AAC as permitting the set-off of the amount spents on the construction of a new building for residential purposes only against the capital gain arising on the transfer of the building and land, which is \"reasonably appurtenant\" to the building. The AAC was of the view that, if the land contiguous to a building is vast in extent, the entire extent of land could not be considered to be appurtenant to the building and only a reasonable portion of such land could be so considered under law. He, accordingly,", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-3", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "building and only a reasonable portion of such land could be so considered under law. He, accordingly, directed the ITO to redetermined the capital gain on the transfer of the building and the land reasonably appurtenant to the same and, if such capital gain should be less than Rs. 75,000, restrict the deduction under s. 54(1) of the Act only to the extent of the restricted sum. The AAC obviously held the view that the capital gain derived on the sale of land, which is not reasonably appurtenant to the building should be taxed in entirety and no part of the sum of Rs. 75,000 spent on the construction of the new residential house should be set off against such capital gain. As the ITO did not examine the question from the above points of view, he directed the ITO to re-work out the capital gain on the aforesaid basis.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-4", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "5. The assessee filed an appeal to the Income-tax Appellate Tribunal questioning the correctness of the above view of the AAC. It was urged before the Income-tax Appellate Tribunal that the AAC wrongly construed the provisions of s. 54(1) of the Act, inasmuch as the language of s. 54(1) did not provide for the classification of the land appurtenant to a building as \"reasonably appurtenant\" and otherwise. According to the assessee, the entire extent of land contiguous to the building should be considered as land appurtenant to the building for purposes of s. 54(1) of the Act and the sum of Rs. 75,000 spent on the construction of the new residential house should be set off against the entirety of the capital gain arising on the sale of the building as well as the land. The Income-tax Appellate Tribunal accepted the assessee's contention. The Tribunal was of the view that the AAC was in error in qualifying the word \"appurtenant\" occurring in s. 54(1) as \"reasonably appurtenant\". In that view of the matter, the Tribunal reversed the order of the AAC concerning this point. Thereupon, the Commissioner of Income-tax asked for and obtained the present reference from the Tribunal under s. 256(1) of the Act.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-5", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "6. Sri M. Suryanarayana Murthy, learned counsel for the Revenue, submitted that on a plain construction of the provisions contained in s. 54(1), it must be held that the expression \"being buildings or lands appurtenant thereto\" should necessarily refer only to that extent of land which is reasonably required for purposes of proper enjoyment of the house. According to the learned counsel, if a house stands on a vast extent of land, it would be improper to consider the entire extent of land as appurtenant to the building for purposes of s. 54. The learned counsel contends that the deduction under s. 54(1) is not permitted against capital gain arising on the sale of (entire) land as such, but only against the sale of the building and land appurtenant thereto. Thus, where a building together with land is sold, the learned counsel urges, it is necessary to enquire and determine the extent of land which is required for the purpose of proper enjoyment of the building as such and the appurtenant land can be restricted only to that reasonable extent and cannot be extended to the entire extent of land. Learned counsel draws attention to the Explanation to s. 5(1)(ivc) of the W.T. Act, 1957, which was inserted by the Finance Act of 1976 with effect from April 1, 1977. It would be appropriate to extract the Explanation referred to by the learned counsel : \n\"Explanation. - For the purposes of this clause, - .... \n(b) 'land appurtenant, in relation to any dwelling unit or units comprising a building, means, -", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-6", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "(i) in an area where there is any law in force providing for the minimum extent of land contiguous to the land occupied by any building to be kept as open space for the enjoyment of such building, the minimum extent of land contiguous to the land occupied by the building comprising such dwelling unit or units required to be kept as open space under such law; \n(ii) in any other area, an extent of land not exceeding one-third of the plinth area of the building comprising the dwelling unit or units at the ground level contiguous to the land occupied by such building.\"  \n7. Learned counsel states that the same considerations should prevail for determining the land appurtenant for purposes of s. 54 of the I.T. Act also. Learned counsel relied on certain decisions to which we shall presently refer, supporting his contention that the extent of the land appurtenant to a building has to be determined with reference to the facts of each case bearing essentially in mind the extent of land required for proper enjoyment of the building.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-7", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "8. Sri Parvatha Rao, learned counsel appearing for the assessee, reiterates the pleas taken by the assessee before the lower authorities. According to the learned counsel, there is absolutely no provocation for restricting the land appurtenant to building to any reasonable extent for purposes of s. 54 of the Act. According to the learned counsel, the language of s. 54 does not lend support to the Revenue's plea that any enquiry could be conducted for purposes of determining the extent of the land reasonably required for the purpose of proper enjoyment of the house and to treat such reasonable extent only as land appurtenant to the building. Learned counsel states that the Explanation to s. 5(1)(ivc) of the W.T. Act relied on by the Revenue cannot be applied for purposes of s. 54 of the I.T. Act. Learned counsel further contended that the extent of land in the present case is in any event, not so extensive as to call for any determination of the land reasonably appurtenant to the building, especially in view of the fact that the building was owned by four co-owners and the total extent of land of 13,029 sq. yards was necessary for the proper enjoyment of the building by all the four co-owners. It was pointed out that there was no material for the authorities below to show that the land contiguous to the building was used for any purpose other than the enjoyment of the house and consequently, no enquiry was called for.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-8", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "9. We may now notice the relevant provisions of the Act. Under s. 45 of the Act, any profits or gains arising from the transfer of a capital asset effected in the previous year shall be chargeable to income-tax under the head \"Capital gains\". The expression \"capital asset\" in defined in s. 2(14) of the Act as meaning property of any kind held by an assessee, whether or not connected with his business or profession. The definition excludes certain categories of capital assets which are not relevant for out purpose. Section 48 of the Act provides that the income chargeable under the head \"Capital gains\" shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset, the expenditure incurred wholly and exclusively in connection with such transfer and the cost of acquisition of the capital asset and the cost of any improvement thereto. Section 54 of the Act, which is relevant for out present purpose, deals with capital gain arising on the sale of property used for residence and it may be usefully extracted below :", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-9", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "\"54. Profit on sale of property used for residence. - Where a capital gain arises from the transfer of a capital asset to which the provisions of section 53 are not applicable, being buildings or lands appurtenant thereto the income of which is chargeable under the head 'Income from house property', which in the two years immediately preceding the date on which the transfer took place, was being used by the assessee or a parent of his mainly for the purposes of his own or the parent's own residence, and the assessee has within a period of one year before or after that date purchased, or has within a period of two years after that date constructed, a house property for the purposes of his own residence, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say, - \n(i) if the amount of the capital gain is greater than the cost of the new asset, the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-10", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "(ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain.\"", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-11", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "10. It is clear from the above provisions that if capital gain arises on the transfer of buildings or lands appurtenant thereto, the income of which is chargeable under the head \"Income from house property\", and within the specified period an assessee acquires a house property for the purpose of his own residence, then the capital gain shall be reduced by the cost of the new house property. This is the plain effect of the provisions of s. 54. The basic requirement is that the capital gain should arise from the transfer of buildings or lands, the income of which is chargeable under the head \"Income from house property\". If land alone is sold, the provisions of s. 54 will have no application, inasmuch as the income from the land is not chargeable under the head \"Income from house property\". In order to secure the benefit of s. 54, it is necessary that the building together with land is transferred and the income from such building and land is chargeable under the head \"Income from house property\" under s. 22 of the Act. Inasmuch as the cost of the new house property acquired by the assessee for the purposes of his own residence is liable to be set off against the capital gain arising on the transfer of the buildings or lands appurtenant thereto, the question arises whether the expression \"lands appurtenant thereto\" covers the entire extent of land transferred along with the building or only a portion of such land as may be considered appurtenant to the building. The Revenue contends that the expression \"land appurtenant thereto\" does not cover the entire extent of land that may be transferred along with the building, but is limited only to the extent of land which is required for the proper enjoyment of the house and may, therefore, be considered as appurtenant to the building. In other words, what the Revenue contends is that if, in a given case, a vast extent of land is", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-12", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "what the Revenue contends is that if, in a given case, a vast extent of land is also transferred along with the building, it is not permissible to consider the entire extent of land as appurtenant to the building. An enquiry should be conducted for the purpose of ascertaining the extent of land required for effectively and properly enjoying the building and the land appurtenant should be restricted only to that extent and the capital gain ascertained accordingly. The set-off of the cost of the new house property acquired by the assessee for the purpose of his own residence can be made against the capital gain so computed.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-13", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "11. The expression \"land appurtenant thereto\" occurring in s. 54 of the Act has not been defined. It must, therefore, be understood in its popular and non-technical sense. It is not possible to accept the Revenue's contention that clause (b) of the Explanation to s. 5(1)(ivc) of the W.T. Act, 1957, defining \"land appurtenant\" for the purpose of that clause should be considered equally applicable for the purpose of understanding that expression occurring in s. 54 of the I.T. Act. If the Legislature thought that the same technical meaning given in clause (b) of the Explanation to s. 5(1)(ivc) of the W.T. Act should be applied to that expression occurring in s. 54 of the I.T. Act, nothing would have prevented the Legislature from doing so. The above Explanation was introduced in the W.T. Act with effect from April 1, 1977, and I.T. Act has been amended any number of times between 1977 and 1984, and yet the Legislature did not think it fit to define the expression \"land appurtenant thereto\" occurring in s. 54 of the I.T. Act in terms identical to clause (b) of the Explanation to s. 5(1)(ivc) of the W.T. Act. It is interesting to find that the above Explanation in the W.T. Act is only for the purpose of s. 5(1)(ivc) because it is specifically stated so. That Explanation can have no application for any other purpose in the W. T. Act itself. It is, therefore, difficult to accept the Revenue's contention that the above technical meaning in clause (b) of the Explanation to s. 5(1)(ivc) of the W.T. Act should be extended to s 54 of the", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-14", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "of the W.T. Act should be extended to s 54 of the I.T. Act. It must also be remembered that we are dealing with the income-tax assessment year 1964-65 and the amendment in the W.T. Act came into force only on April 1, 1977. It is equally difficult to accept the assessee's contention that whatever be the extent of land transferred along with the house, should be considered appurtenant to the building. The fallacy in this contention will be apparent if we take into account the fact that the land contiguous to a building can be used for purposes other than the enjoyment of the building. Take for instance a case where a part of the land contiguous to the building is independently leased for a fire-wood depot. The land contiguous to the building may be so vast in its extent that a person can conveniently lay out the surplus extent of land into plots and sell those plots without causing detriment to the proper enjoyment of the building. Could it be said that, in these cases, the land leased for a firewood depot or sold by laying out into plots constituted land appurtenant to the building ? We do not think so. There is force in the contention of the learned standing counsel for the Revenue that the expression \"land appurtenant thereto\" occurring in s. 54 of the Act is a matter of enquiry depending upon the facts and circumstances of each case and the authorities must determine the extent of land that is considered to be appurtenant to the building based on some acceptable criteria to which we shall advert a little later.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-15", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "12. Our attention has not been drawn to any decided cases on this point under the I.T. Act or, for that matter, under the W.T. Act. We have already stated that the expression \"land appurtenant thereto\" occurring in s. 54 of the Act is used in a broad, popular and non-technical sense and it must be so understood. \n13. We may now examine some decisions bearing on this point arising under different enactments. In Palaniappa Chettiar v. Vairavan Chettiar [1960] 1 MLJ (Sh.N.) 29, a case arising under the Madras Buildings (Lease and Rent Control) Act, the Madras High Court held that the word \"appurtenant\" includes all structures of property abutting or adjacent to the main tenement or property, which are proper and necessary for its due enjoyment.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-16", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "14. In Trim v. Sturminster Rural District Council [1938] 2 KB 508; 2 All ER 168 (CA), which arose under the Housing Act, 1936, the meaning of the expression \"house\" turned out to be significant. Under s. 188 of the said Act, that expression was defined as including \"any yard, garden, outhouses, and appurtenances belonging thereto or usually enjoyed therewith\". The question arose whether a cottage and ten acres of adjoining grass land came within the expression of \"house\" for the above purpose. It was held that it was not the cottage together with the whole of the ten acres of land, but only the cottage with its outhouses, yards, curtilage and gardens, that constituted the \"house\" within the definition, inasmuch as the term \"appurtenances\" was there used in its well-established legal sense as including only such matters as outhouses, yards and gardens, and not land as meaning a corporeal hereditament. It was further held that the question as to exactly how much of the ten acres ought to be included in the appurtenances of the cottage and, therefore, in the \"house\" was one for the decision of the county court judge, his decision to be confined, however, to matters which, on the face of it, would be something considerably less than the whole of the ten acres.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-17", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "15. We may notice the judgment of the Madras High Court in Irani v. Chidambaran Chettiar, . The matter arose under the Madras Buildings (Lease and Rent Control) Act, 1946. The question in that case was whether the 1st defendant was a \"tenant in possession of building\" within the meaning of the Act. He would be a tenant of a building if what was leased to him was within the definition contained in the Act. The word \"building\" is defined in the Madras Act as meaning \"any building or hut or part of a building or hut let or to be let separately for residential or non-residential purposes and includes : (a) the garden, grounds and outhouses, if any, appurtenant to such building, hut or part of such building, or hut and let or to be let along with such building or hut, (b) any furniture supplied by the landlord for use in such building or hut or part of a building or hut\". After considering the legal and popular meaning of the expression \"appurtenant\", Satyanarayana Rao J. observed at page 655 of the report as under : \n\"The meaning of the word 'appurtenant' given in the Oxford Dictionary is : \n'Belonging as a property or legal right; constituting a property or right subsidiary to one which is more important; appertaining as if by right to; proper, suited or appropriate to; relating to, pertinent.\"", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-18", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "16. That is the primary meaning of the word 'appurtenant'. In Budhi Mal v. Bhati, AIR 1915 All 459, \"an appurtenance\" is defined as an appendage, an adjunct, or something belonging to another thing as principal and passing as an incident to it. In Trim v. Sturminster Rural District Council [1938] 2 KB 508; 2 All ER 168 (CA), the learned judge considered the meaning of the word 'appurtenance' at pages 515 and 516 (of [1938] 2 KB) and observed that the word 'appurtenance' had never been extended to include land, as meaning a corporeal hereditament, which does not fall within the curtilage of the yard of the house itself - that is, not within the parcel of the demise of the house. That may be so. In the definition contained in the Act, the grounds and outhouses, if any, appurtenant to such building are included in the definition. As pointed out in Thomas v. Owen [1888] 20 QBD 225 (CA) at pp. 231, 232, the word 'appurtenance' has also a secondary meaning as equivalent to 'usually occupied' and this was cited with approval in Woodfall on Landlord and Tenant. If from 1914 this entire ground was occupied for the purpose of continuing the superstructure along with the building belonging to the lessor and the whole of it is treated as one unit, the site may be treated as an appurtenance in the secondary sense of the word.\" \n17. In a separate but concurring judgment, Raghava Rao J. observed at pages 658 and 659 of the report as under :", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-19", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "\"In my opinion the word 'appurtenant' occurring in the definition of 'building' in the Act with which we are concerned is used in the broad, secondary and non-technical sense of 'relating to', 'usually enjoyed or occupied with' and 'adjoining' just noticed by me. The idea of the legislature seems to be that if grounds appurtenant to the building in this sense are let along with the building they should stand attracted to the operation of the Act. That the grounds should also be let along with the building would not be a matter of specific provision in the definition of the statute, if the primary or legal sense of the word 'appurtenant' were intended, as in that case anything appurtenant to another in that sense would pass with it under the demise whether specifically let or not along with it. It is settled law that where a word admits of senses more than one, that sense is to be adopted which best harmonises with the context and promotes in the fullest manner the policy and object of the legislature. The paramount object in construing statutes is to ascertain the legislative intent and the rule of strict construction is not violated by permitting the words to have their full meaning, or the more extensive of two meanings best effectuating the intention. They are indeed frequently taken in the widest sense, sometimes in a sense more wide than etymologically belongs or is popularly attached to them in order to carry out effectively the legislative intent, or to use Lord Coke's words 'to suppress the mischief and advance the remedy' (vide Maxwell on the Interpretation of Statutes, 9th edition, by Sir Gilbert Jackson, 280).\"", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-20", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "18. It is clear from the observations of Satyanarayana Rao J. and Raghava Rao J. above referred to that, if the expression is used in the Act in a primary sense, then the meaning attached to that primary sense must be given irrespective of other considerations. We have already stated that the expression \"land appurtenant thereto\" was defined in a primary sense for purposes of s. 5(1)(ivc) of the W.T. Act. It would follow that the expression occurring in s. 5 (1)(ivc) should be understood in that primary sense and it is not open to the courts to impose any other considerations. Where, however, the expressions used convey more than one sense-a primary and secondary sense-that sense is to be adopted which best harmonises with the context and promotes in the fullest manner the policy and object of the Legislature. In our opinion, the expression \"land appurtenant thereto\" has also a secondary meaning as equivalent to \"usually enjoyed or occupied with\". There is no indication that the Legislature used the above expression in s. 54 of the I.T. Act limiting its sense and meaning artificially to any particular extent. Considerations governing the limitations imposed upon the meaning of that expression under sister enactments like the W.T. Act and the Urban Ceiling and Regulation Act, 1976, cannot be imported into s. 54 of the I.T. Act. In our opinion, that expression is used in s. 54 of the I.T. Act in a wider sense. It is, therefore, imperative that the tax authorities will have to determine the extent of land appurtenant to a building transferred, taking into consideration a variety of circumstances that may be relevant for the purpose. It is not possible to lay down infallible tests to be applied for the determination of the extent of land appurtenant to a building, as the tests vary depending upon the facts and attendant circumstances of", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-21", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "land appurtenant to a building, as the tests vary depending upon the facts and attendant circumstances of each case. For instance : (1) If the building together with the land is treated as an indivisible unit and enjoyed as such by the persons occupying the building, it is an indication that the entire extent of land is appurtenant to the building; (2) If the building has extensive lands appurtenant thereto and even if the building and the land have been treated as one single unit and enjoyed as such by the occupiers, an enquiry could be made to find out whether any part of the land contiguous to the building can be put to independent user without causing any detriment to the effective and proper enjoyment of the building as such. Such an enquiry should be conducted not based on any artificial considerations but from the point of view of the persons occupying the building. The number of persons or different branches of families residing in the building, the requirements of the persons occupying the building consistent with their social standing, etc., are relevant for the purpose. If any surplus is arrived at on such enquiry, then the extent of such surplus land may not qualify to be treated as land appurtenant to the building; (3) If there is any evidence to indicate that any portion of the land contiguous to the building was put to user other than the enjoyment of the building, then that provides a safe indication regarding the extent of land put for such user. For instance, the land used by the occupiers for commercial, agricultural and horticultural purposes, although forming part of the land adjacent to the building, does not qualify to be treated as land appurtenant to the building; (4) If the owner or occupier is deriving any income from the land which is not liable to be assessed as income from house property under s. 22 of the I.T. Act, then the extent of such land does not qualify to be treated as land appurtenant to the building; and", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-22", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "extent of such land does not qualify to be treated as land appurtenant to the building; and (5) any material pointing to the attempted user of the building for purposes other than the effective and proper enjoyment of the house would also afford a safe guide to determine the extent of surplus land not qualifying to be treated as land appurtenant to the building.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-23", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "19. The above tests are illustrative and by no means exhaustive. It is for the tax authorities to apply their mind properly to the facts of each case and to devise tests suitable and appropriate to each case. \n20. In the present case, it is stated that the total extent of land is 13,029 sq. yards and this included the land on which the building is constructed. It is also stated that four co-owners are separately residing in this building prior to its acquisition. Although the AAC did not spell out how the land appurtenant should be determined, he merely directed the ITO to make an enquiry to determine the extent of land that is reasonably appurtenant to the building. We do not find any error in the direction given by the AAC. While it is true, as Sri Parvatha Rao, learned counsel for the assessee, contends, that there is no material on record to indicate that the land was put to any non-residential user and the building and land was not treated as a single unit in the past, it is clear that the ITO did not apply his mind to the matter. If the ITO applies his mind and makes an appropriate enquiry to determine the extent of land appurtenant to the building in the present case, he may conceivably come to a conclusion that the entire extent of land appurtenant to the building could be treated as \"land appurtenant\" to the building. We see no reason why this enquiry directed by the AAC should be shut out, inasmuch as there is no legal infirmity in giving a direction to the ITO make an appropriate enquiry. In our opinion, the Tribunal was in error in coming to the conclusion that the AAC was not justified in directing the ITO to enquire into the matter for the above purpose.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "95f83f67a79f-24", "Titles": "Commissioner Of Income-Tax, ... vs Zaibunnisa Begum on 17 March, 1984", "text": "21. In the absence of necessary details, it is not possible for this court to indicate any answer to the question referred, that is to say, whether the entire land or any part of it could be treated as appurtenant to the building for the purpose of applying the provisions of s. 54 of the I.T. Act. We, therefore, return the reference unanswered with a direction that the ITO shall make an enquiry into the matter bearing in mind the principles set out above and come to an appropriate conclusion regarding the extent of land appurtenant to the building. The assessee will be entitled to adduce necessary evidence during the course of such inquiry. \n22. Reference returned unanswered.", "source": "https://indiankanoon.org/doc/1637616/"}
+{"id": "3979784dd670-0", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "JUDGMENT Sriramulu, J.   \n 1. The following three questions of law have been referred to this court by the Income-tax Appellate Tribunal, under Section 66(2) of the Indian Income-tax Act, 1922 : \n \" (1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessment on the association was invalid ? \n (2) Whether the Tribunal was within its powers to rehear the entire appeal and decide all issues which did not form the subject-matter of the reference before the High Court without any direction from the High Court? \n (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Appellate Assistant Commissioner has the power under law to uphold the ex parte assessment on the basis of an alleged non-compliance by D. D. Italia when the Income-tax Officer making the ex parte assessment did-not refer to that default at all in the assessment order?\"  \n 2. The material facts, so far as they are relevant for answering the above questions, are :", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-1", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "D. D. Italia, a member of the Hyderabad Deccan Liquor Syndicate (hereinafter referred to as \" the Syndicate \"), filed return of his individual income for the assessment year 1358 Fasli, which included his share income from the Syndicate of Rs. 77,972. According to him, the Syndicate had earned from its liquor business for the year 1358 F. an income of Rs. 2,07,926. The Income-tax Officer assessed D. D. Italia to income-tax for the assessment year 1358 F. in September 1952. Another member of the Syndicate, by name, Namchand, was also assessed to tax in respect of his share income from the Syndicate for the same year.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-2", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "3. Since the Syndicate did not file its return of income for the year 1358 F. before the expiry of the assessment year 1358 F. its income chargeable to tax for that year escaped assessment. Bansilal managed the business of the Syndicate, had maintained its accounts and also kept the account books of the Syndicate with him. Notices issued by the Income-tax Officer to Bansilal as representing the Syndicate, under Section 30(2) read with Section 46 of the Hyderabad Act, were returned unserved, on the ground that he had gone on pilgrimage to Benaras. Notice dated August 13, 1951, issued to Bansilal, as representing the Syndicate was affixed on the outer door of Bansilal's house, as he was out of station. On the basis of the report of the inspector submitted to him, the Income-tax Officer, in writing, held that there was a valid service of notice on Bansilal under Section 30(2) read with Section 46(1) of the Hyderabad Act. Since no return was filed on behalf of the Syndicate, best judgment assessment was made on the Syndicate in the status of an \"A.O.P.\" (association of persons) on a total income of Rs. 4,43,256.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-3", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "4. On appeal against the assessment, the assessee, inter alia, contended before the Appellate Assistant Commissioner that since the Syndicate was defunct on the date of assessment, best judgment assessment made on it, without serving notices on all the members of the A.O.P. was bad. It was also contended that no notice was served on Bansilal and the one served on him by affixture was only a \" summons \" under Section 49 for the production of the account books and not a \" notice under Section 30, read with Section 46 of the Hyderabad Act \", requiring him to rile a return. After considering the remand report which was submitted by the Income-tax Officer in pursuance of the remand order, the Appellate Assistant Commissioner held that Bansilal was duly served with a notice under Section 30(2) read with Section 46(1). The Appellate Assistant Commissioner also justified the best judgment assessment made on the Syndicate, on the ground that one of the members of the Syndicate, namely, D. D. Italia, was served with such a notice. \n 5. The Appellate Assistant Commissioner rejected all the contentions raised by the assessee and confirmed the assessment.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-4", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "6. In further appeal to the Income-tax Appellate Tribunal the assessee raised four objections. The first objection, was that the assessment made on the A.O.P. was bad in law, as it was made on the A.O.P. which was, admittedly, defunct on the date of the assessment. The Tribunal considered that the first objection raised by the assessee went to the very root of the matter and, therefore, considered only that objection, and did not go into other objections. On the strength of the decision of this court in Raja Reddy Mallaram v. Commissioner of Income-tax, [1960] 39 I.T.R. 636 (A.P.). the Tribunal upheld the contention of the assessee and set aside the assessment, as no notices were served on all the members of the erstwhile association of persons before making the assessment. \n 7. At the instance of the Commissioner of Income-tax, the following question of law was referred to this court: \n \" Whether an assessment can be made on a dissolved association of persons without service of notice on all the erstwhile members of the association ?\"", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-5", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "8. That question was answered by this court in favour of the department and against the assessee. The appeal was once again heard by the Tribunal. The Tribunal then considered the other objections raised before it by the assessee and found that what was served on Bansilal by affixture was only a \" summons\" and not a \"notice\" to file the return of income of the Syndicate. Notices issued in the name of D. D. Italia were served on his employee, Manchusha, and it was not a valid service. D. D. Italia was not the principal officer of the association. Having elected and assessed the individual members of the A.O.P. in respect of their share incomes, the Income-tax Officer could not once again assess the same income in -the hands of the A.O.P. The Tribunal, once again, set aside the assessment. \n 9. The aforesaid questions have, therefore, been referred to this court under Section 66(2) of the Indian Income-tax Act, 1922, at the instance of the Commissioner of Income-tax. \n 10. The first contention raised by the department was that the Income-tax Officer had not the necessary information with him on the basis of which he could be considered to have elected to assess the individual members of the A.O.P. instead of the A.O.P. By assessing the members of the A.O.P. it could not be said that the Income-tax Officer had elected to assess the individual members of the A.O.P. instead of the A.O.P. In support of this submission, the learned standing counsel for the income-tax department, Sri P. Rama Rao, strongly relied upon the decision of the Supreme Court in Income-tax Officer v. Bachu Lal Kapoor, .", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-6", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": ". \n 11. In order to appreciate the above contention it is necessary to notice the relevant provisions of the Hyderabad Income-tax Act. Section 3 of the Hyderabad Act (section 4 of the Indian Income-tax Act of 1922), which is the charging section, provides that income-tax shall be charged for any year, at the prescribed rates, in respect of the total income of the previous year of: (i) every individual, (ii) Hindu undivided family, (iii) company, (iv) firm or its partners, and (v) association of persons or the individual members of the association.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-7", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "Section 17(3) of the Hyderabad Act (Section 14 of the Indian Income-tax Act of 1922) provides that tax shall not be paid by an assessee if he is a member of an association of persons in respect of any portion of the amount which he is entitled to receive from the association on which tax has already been paid by the association. Section 56 of the Hyderabad Act (section 44 of the Indian Income-tax Act of 1922) provides that if the A.O.P. is dissolved, every person who was, at the time of its dissolution, a member of such association, shall in respect of the income of the association, be jointly and severally liable to assessment and for the amount of tax payable. Provisions of Chapter IV relating to deductions and assessment, apply to the assessment. \n 12. The decision of the Supreme Court in Income-tax Officer v. Bachu Lal Kapoor will not lend any assistance to the department. That was a case in which the Hindu undivided family was first assessed to tax and then after accepting the claim of partition of the Hindu undivided family the Income-tax Officer made assessments against the members of the Hindu undivided family. Subba Rao J. (as he then was), observed that after the proceedings initiated against the Hindu undivided family under Section 34 culminated in the assessment of the Hindu undivided family, appropriate adjustments had to be made by the Income-tax Officer in respect of the tax realised by the revenue on that part of the income of the family assessed in the hands of the individuals. To do so, was not to reopen the final orders of assessment but, in reality, to arrive at the correct figure of tax payable by the Hindu undivided family.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-8", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "13. In that very judgment, his Lordship Subba Rao J. (as he then was), pointed out that Section 3 conferred an option on the Income-tax Officer to assess either an A.O.P., or the members of the association, but no such option is conferred on the Income-tax Officer to either assess the Hindu undivided family or its members in respect of the income of the family.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-9", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "Therefore, that decision will not lend any assistance to the department's contention that, after making an assessment on the A.O.P., adjustments could be made in respect of taxes paid by the individual members of the A.O.P. \n 14. In Joti Prasad Agarwal v. Income-tax Officer, [1959] 37 I.T.R. 107 (All.). 23 members of an association of persons), out of 30, were assessed to tax in respect of their share incomes from the A.O.P. The Income-tax Officer then assessed the A.O.P. to tax. The legality of the assessment was challenged. The Allahabad High Court held that once the income of an association was charged to tax in the hands of the individual members and those assessments remained valid assessments, there could be no fresh assessment of the income in the hands of the association. Once an income has been charged to tax in the hands of one of the entities mentioned in Section 3 of the Act, it cannot be charged again in the hands of another of those entities subsequently. Section 3 of the Act, which is the charging section, only talks of charging the income of certain persons, and does not talk of income-tax being charged on persons. This implies that the charge is to be levied on income only once.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-10", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "15. In Commissioner of Income-tax. v. Murlidhar Jhawar & Puma Ginning and Pressing Facctory, , the Supreme Court held that the partners of an unregistered firm might be assessed individually, or they might be assessed collectively in the status of an unregistered firm, but the Income-tax Officer could not seek to assess the one income twice--once in the hands of the partners and again in the hands of the unregistered firm. In giving that decision, the Supreme Court followed the principle laid down by it in Commissioner of Income-tax v. Kanpnr Coal Syndicate, . That principle is : \n \" The Section (Section 3) expressly treats an association of persons and the individual members of an association as two distinct and different assessable entities. On the terms of the section the tax can be levied on either of the said two entities according to the provisions of the Act.\" \n 16. The exercise of the option to assess one or the other of the two entities under Section 3 of the Income-tax Act assumes knowledge on the part of the Income-tax Officer of the existence of two alternatives.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-11", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "17. In Rajareddy Mallaram v. Commissioner of Income-tax the facts were almost identical with the facts of this case. After serving notice under Section 34 of the Indian Income-tax Act, 1922, on one member of the A.O.P., the Income-tax Officer\" made an ex parte assessment on the A.O.P. for the year 1358 Fasli, and tried to recover the tax from another member of the A.O.P., Raja Reddy Mallaram. Raja Reddy Mallaram then challenged the legality of the assessment before this court. This court held that the assessment was bad in law, as the assessment was made on the A.O.P. and not on the members of the A.O.P., at the time of its dissolution, jointly and severally and, therefore, the demand of tax could not be enforced particularly against any member of the A.O.P. on whom notice under Sections 34 and 22(4) was not served. Aggrieved by the decision of this court, the Commissioner of Income-tax filed an appeal to the Supreme Court. The decision of the Supreme Court is now reported in Commissioner of Income-tax v. Raja Reddy Mallaram, [1964) 51 I.T.R. 285 (S.C.).. The Supreme Court reversed the decision of this court. The Supreme Court upheld the validity of the assessment on the A.O.P. and justified the demand of tax from Raja Reddy Mallaram. In corning to such conclusion, Shah J., speaking for the court, observed that :", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-12", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "\" Under Chapter IV of the Indian Income-tax Act, 1922, an association of persons may be assessed as a unit of assessment or the individual members may be assessed separately in respect of their respective shares of the income. The Act contains no machinery for assessing the income received by an association of persons in the hands of its members collectively. Nor can there be a partial assessment of the income of an association limited to the share of the member who is served with the notice of assessment. Section 44 ensures, by a fiction, the continuity of the personality of the association of persons even after its dissolution for the purpose of assessment, and the procedure for assessment after its dissolution of the pre-dissolution income of an association of persons is the same as that for assessment while it continues to exist. 'A notice under Section 22 or Section 34 to the appropriate person under Section 63(2) is, therefore, sufficient to enable the authority to assess an association of persons after its dissolution ; it is not necessary that all the members should be individually served with the notice of assessment. If notice is properly served on one of them the other members will be bound by the assessment and will be liable for the tax payable thereunder.\" \n 18. It is a rule of interpretation well-settled that, in construing the scope of a legal fiction it would be proper and even necessary to assume all those facts on which alone the fiction can operate. (See Commissioner of Income-tux v. S. Teja Singh, ),", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-13", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "19. It emerges from the aforesaid discussion that, under the charging Section 3 of the Hyderabad Act, the Income-tax Officer has got an option either to assess the A.O.P., or its individual members in respect of the income of the A.O.P. If the Income-tax Officer was in possession of information that an A.O.P. existed, he is bound to make up his mind either to assess the A.O.P., or its individual members in respect of the income of the A.O.P. The Income-tax Officer cannot assess both the A.O.P. and its individual members in respect of the income of the A.O.P. Even after the dissolution of the A.O.P., the assessment has to be made on the A.O.P. as if it continued to exist and, in such a case, the same procedure for assessment which would be applicable to an existing A.O.P. would also be applicable to a dissolved A.O.P. In the case of an assessment on an A.O.P. after its dissolution, in respect of its pre-dissolution income, notices for assessment need not be served on all those persons, who were members of the A.O.P. at the time of its dissolution. It is sufficient to serve the notice of assessment on the appropriate member of the association. It is immaterial whether all the individual members of the A.O.P. are assessed to tax in respect of their share incomes of the A.O.P. or some of them. In either case, the Income-tax Officer will be considered to have elected to assess the individual members of the association, and that would be a bar to the making of assessment on the A.O.P. once again on the income of the A.O.P.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-14", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "20. In the case before us, two of the members of the A..O.P., namely, D.D. Italia and Namchand, have been assessed to tax in respect of their share incomes from the A.O.P. for the assessment year 1358 F. Those assessments have remained valid and, we are told, that even taxes have been paid by them. Those individual assessments would, therefore, operate as a bar against the Income-tax Officer making an assessment on an A.O.P. once again in respect of the same income for the year 1358 F. provided the Income-tax Officer knew or had information in his possession that there was in existence an A.O.P. If the Income-tax Officer did not, at the time of making the assessment on individual members, know about the existence of the A.O.P., then it cannot be said that the Income-tax Officer had consciously elected to assess the individual members, and not the A.O.P.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-15", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "21. In his letter dated April 2, 1951, the Income-tax Officer, City Circle No. III, informed the Income-tax Officer, City Circle No. II, that the Syndicate was carrying on its business within his jurisdiction and had earned an income of Rs. 2,07,926. By that very letter the Income-tax Officer, City Circle No. Ill, requested the Income-tax Officer, City Circle No. II, to take steps to assess the Syndicate and to intimate him the share income earned by his assessee, D. D. Italia. The Incorne-tax Officer, City Circle No. III, also cautioned the Income-tax Officer, City Circle No. II, that if the Syndicate had applied for registration, the question of registration should be carefully considered in the light of the instructions communicated by the Commissioner of Income-tax recently in regard to illegal partnerships. With reference to notice under Section 34 of the Income-tax Act, dated July 27, 1951, D. D. Italia informed the Income-tax Officer, City Circle No. II, that nine persons carried on business in liquor, but that the Syndicate did not exist in 1357 Fasli. Through that letter, D. D. Italia also informed the Income-tax Officer that the account books of the Syndicate were with Bansilal Shivcharan. These letters, in our opinion, amply indicate that the Income-tax Officer, City Circle No. II, who assessed the A.O.P., knew about the existence of a group of persons who carried on liquor business. That the Income-tax Officer was aware of the existence of the Syndicate, i.e., a group of persons carrying on business, is also borne out by what he said in the assessment order itself. This is what he said :", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-16", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "\"The assessment of the Syndicate, is still pending. The income admitted by the assessee is provisionally accepted and will be revised in respect of information from the Income-tax Officer, ' B ' Ward, who holds jurisdiction to assess the Syndicate.\" \n 22. It was then incumbent on the Income-tax Officer to make a further probe into the matter in order to find out whether that group of persons was an A.O.P. or a firm, or whether it was granted registration, etc., whether he made such investigation or not, it is abundantly clear that he was aware that there was an association of persons which carried on business within his jurisdiction and earned an income which attracted tax. At that time, the Income-tax Officer should nave been careful enough to exercise the option and to elect to assess either the A.O.P. or the members of the association.1 We are, therefore, satisfied that the assessments on the individual members of the A.O.P. may, at best, be considered to have been made by the Income-tax Officer under an erroneous impression of law, rather than under ignorance of necessary facts. After having made assessments on the individual members of the association in such circumstances, it was not open to the Income-tax Officer, under Section 3 of the Act, to once again make an assessment on the A.O.P. in respect of the same income. We have, therefore, no hesitation in holding that the assessment made on the A.O.P. after making assessments on two of the members of the A.O.P. is bad in law.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-17", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "23. Although the assessment made on the A.O.P. is liable to be set aside on the ground that the assessments made on the individual members would bar a further assessment. on the A.O.P., we would, however, like to consider the question of validity of the service of notices on the members of the association, as it was argued at great length, and also in view of its importance. \n 24. At this stage, it is necessary to note that the assessment on the A.O.P. in question is not a regular assessment made under Section 31 of the Hyderabad Act, but an assessment made under Section 46(1) of the Act in respect of the escaped income. \n 25. Courts have held that the issue of a notice under Section 148 of the Indian Income-tax Act, 1922, is a condition: precedent to the validity of an assessment under Section 147, and if no notice has been issued, or if the notice issued is invalid, or is not served in accordance with law, the assessment would be bad. Any number of authorities we can find in support of this proposition. A long line of authorities in support of the above proposition is given in the foot-notes at page 786 in the VIth edition of Law and Practice of Income-tax by Kanga and Palkhivala, under items 16, 17 and 18. It is sufficient to notice some of the decided cases. In Y. Narayana Chetty v. Income-tax Officer, Nellore, .", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-18", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": ", the Supreme Court has observed that the notice prescribed by Section 34 of the Income-tax Act, for the purpose of initiating reassessment proceedings, is not a mere procedural requirement. The service of the prescribed notice on the assessee is a condition precedent to the validity of any reassessment made under Section 34 of the Indian Income-tax Act, 1922. If no notice is issued, or if the notice issued is shown to be invalid, then the proceedings taken by the Income-tax Officer without a notice, or in pursuance of an invalid notice, would be illegal and void. \n 26. Section 34 of the Indian Income-tax Act, 1922, corresponds to Section 46(1) of the Hyderabad Act. \n 27. The same view has been taken by the Calcutta High Court in Sewlal Daga v. Commissioner of Income-tax, [1965] 55 I.T.R. 406 (Cal), and by the Mysore High Court in C.N. Nataraj v. Fifth Income-tax Officer, City Circle No. II, Bangalore, [1965] 56 I.T.R. 250 (Mys.)..", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-19", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "28. It was then argued that the service of such a notice cannot be waived as held by the Allahabad High Court in Benarasi Silk Palace v. Commissioner of Income-tax, [1964] 52 I.T R. 220 (All.). Notices under the Income-tax Act have to be served in the same manner as summons under the provisions of the Civil Procedure Code. Section 78 of the Hyderabad Income-tax Act provides that the provisions of the Hyderabad Civil Procedure Code (No. III of 1323-Fasli will apply to the service of such notices, whereas under Section 63 of the Indian Income-tax Act, 1922, the provisions of the Indian Civil Procedure Code (No. V of 1908) will apply to service of notices. Sub-section (1) of Section 63 of the Indian Income-tax Act, 1922, provides that a notice may be served on the person therein named either by registered post or, as if it were a summons issued by a court under the code of Civil Procedure Sub-section (2) of Section 63 provides that, in the case of an A.O.P., notice may be served on the principal officer thereof. The words \"service by registered post \" and \" service on the principal officer\" in respect of an A.O.P. which are present in Section 63 of the Indian Income-tax Act, 1922, are absent in Section 78 of the Hyderabad Act. Would that make the procedure prescribed under the Hyderabad Act, for service of notices and summons, different from the procedure prescribed for service of notices under the Indian Income-tax Act, 1922? This aspect of the matter has been considered by this court in the assessee's own case in Commissioner of Income-tax v. Hyderabad Deccan Liquor Syndicate.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-20", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "29. Considering Section 63 of the Indian Income-tax Act, 1922, and Section 449 of the Hyderabad Civil Procedure Code, which governed the service of notices and summons, this court in Commissioner of Income-tax v. Hyderabad Deccan Liquor Syndicate, [1963] 50 I.T.R. 6, 15 (A.P.) [F.B.]., at page 15, observed thus :   \"It  is  manifest  that there is no  material difference  between the\nsecond part of Section 63 of the Indian Income-tax Act and the first part of Section 449 of the Hyderabad Civil Procedure Code  (III of 1323-F.).    The\nonly difference between them is that, while section  63(2) includes a joint\nfamily or an association of persons, Section 449 relates only to firms.    But", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-21", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "that cannot drive us to the Conclusion that this section is inapplicable to service on association of persons. In this behalf, it cannot be overlooked that the Hyderabad Income-tax Act does not contain any other provision in regard to service of summons. We must, therefore, take it that the intention of the legislature was that this would apply equally to association of persons or joint families. So, we may proceed on the assumption that this section comes into operation even in regard to association of persons, \" \n 30. Even otherwise, under Section 29 of the Hyderabad Income-tax Act, the principal officer of an A.O.P. is made liable to file a return of income on behalf of an A.O.P. Section 2(15) of the Hyderabad Income-tax Act defines \" principal officer \" as an agent of the A.O.P. or any person connected with the association who has been served with a notice by the Income-tax Officer of his intention to treat him as the principal officer thereof. Thus, even under the Hyderabad Income-tax Act, notice for making an assessment on an A.O.P. must be served on its principal officer. \n 31. The assessment order makes it clear that the Income-tax Officer had considered Bansilal as the principal officer of the association of persons.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-22", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "The very fact that the Income-tax Officer had considered the service of notice on Bansilal for making the assessment on the A.O.P. shows that he had recognized Bansilal as the principal officer of the association. Neither D.D. Italia was the agent of the A.O.P. nor was he treated by the Income-tax Officer as the principal officer of the association after service of notice. \n 32. Valid service of notice under Section 30(2) read with Section 46(1) of the Hyderabad Income-tax Act on Bansilal, who was the principal officer of the A.O.P., was, therefore, a condition precedent for making a valid assessment on the A.O.P. \n 33. We will consider the question of the necessity of service of a valid notice on Bansilal for making a valid assessment on the A.O.P. from a different angle.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-23", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "34. Indian Finance Act (No. 25 of 1950) which came into force on April 1, 1950, extended the application of the Indian Income-tax Act of 1922 to the Part B State of Hyderabad and repealed the Hyderabad Act. Section 13 of that Act preserves the operation of the State income-tax law for the purposes of levy, assessment and collection of tax in respect of the income of the previous years, relevant to the assessment years prior to 1951. Obviously, the State income-tax law applied to the income of the previous year ending September 30, 1948, relevant to the assessment year 1358-F., which was earlier to the previous year relevant to the assessment year 1951. To \"levy\" a tax means \" to impose or assess\" or \" to impose, assess or collect under the authority of law \". It is a unilateral act of superior legislative power to declare the subjects and rates of taxation and to authorise the collector to proceed to collect the tax. \" Assessment \" is the official determination of liability of a person to pay a particular tax. \" Collection \" is the power to gather in money for taxes, by enforced payment if necessary. The levy of taxes is generally a legislative function, assessment is a quasi-judicial function, and collection, an executive function. \n 35. In Hazari Mal Kurthiala (A Firm) v. Income-tax Officer, Special Circle, Ambala Cantonment, [1956] 30 I.T.R. 500, 510 (Punj.)., Bhandari C. J. of the Punjab High Court, speaking for the court, observed that:", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-24", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "\"These three expressions 'levy', 'assessment' and 'collection' are of the widest significance and embrace in their broad sweep all the proceedings which can possibly be imagined for raising money by the exercise of the power of taxation from the inception to the conclusion of the proceedings.\" \n 36. In A.N. Lakshman Shenoy v. Income-tax Officer, Ernakulam, , the Supreme Court approved the meaning given to the words \"levy\", \"assessment\" and \"collection of tax\" by the Punjab High Court in Hazari Mal's case. \n 37. In S. Chattanatha Karayalar v. Income-tax Officer, Nagercoil, [1960] 38 I.T.R. 325 (Mad.)., the Madras High Court, in similar circumstances, held that the Indian law would apply and not the State law to Travancore. \n 38. However, we do not find any discussion as to why the learned judges held that the Indian law and not the State law was applicable. \n 39. Following the decisions of the Punjab High Court and of the Supreme Court, we hold that the service of notice in this case has to be examined with reference to the provisions of the Hyderabad Income-tax Act. Under the provisions of the Hyderabad Income-tax Act, as we have stated above, a valid notice has to be served on the, principal officer before making a valid assessment on an A.O.P. \n 40. The Tribunal, as a matter of fact, found at page 88 of the printed book, that no service of a notice under Section 46(1) has been made on Bansilal. This is a finding of fact arrived at by the Tribunal after discussing at great length the material which has been brought on record by the income-tax authorities.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-25", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "41. In a reference under the Income-tax Act, the High Court is not a court of appeal and it is not open to it to embark upon a re-appraisal of the evidence and to arrive at a finding of fact contrary to the Tribunal. It is the duty of the High Court to confine itself to the facts as found by the Tribunal and answer the question of law referred to it in the setting and context of those facts. \n 42. In Commissioner of Income-tax v. Kamal Singh Rampuria, .", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-26", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": ", the Supreme Court observed that: \n \"...in a reference the High Court must accept the findings of fact reached by the Appellate Tribunal and it is for the party who applied for a reference to challenge those findings of fact, first, by an application, under Section 66(1). If the party concerned has failed to file an application under Section 66(1) expressly raising the question about the validity of the findings of fact he is not entitled to urge before the High \"Court that the finding was vitiated for any reason. \" \n 43. Since the department has not asked in its application under Section 66(1) or 66(2) to refer to this court a question challenging the correctness of the above finding of fact that no notice under Section 46(1) of the Hyderabad Act was served on Bansilal, it is not open to the department to urge before us that the said finding of fact is either vitiated or defective. \n 44. We have, therefore, necessarily to agree with the assessee's counsel that no notice under Section 30(2) read with Section 46(1) of the Hyderabad Act was served on the principal officer of the A.O.P. This is the second reason on the basis of which we agree with the Tribunal that the impugned assessment on the A.O. P. is bad in law. \n 45. Since D.D. Italia Was not the principal officer of the association, nothing turns upon the validity or otherwise of the service of notice on him under Section 46. \n 46. Although the impugned assessment is invalid for more than one reason, set out in the foregoing paragraphs, we will, however, consider the validity of the service of notices on Bansilal and D.D. Italia.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-27", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "47. The notice dated August 13, 1951, even assuming for a moment it was a notice under Section 30(2) read with Section 46 of the Hyderabad Act, was affixed on the outer door of Bansilal's house. Earlier notices issued to Bansilal were returned unserved on the ground that he had gone to Benaras on a pilgrimage. Notices issued in the name of D.D. Italia were served on one Manchusha, who was an employee of D.D. Italia. \n 48. Order V, Rule 12, of the Civil Procedure Code of 1908 (corresponding to Section 90 of the Hyderabad Civil Procedure Code) provides that, whenever it is practicable, service must be made on the person concerned unless he has an agent empowered to accept the service in which case service on such agent shall be sufficient. \n 49. Order V, Rule 17, of the Civil Procedure Code of 1908 (corresponding to Section 94 of the Hyderabad Civil Procedure Code), provides that, where the person concerned refuses to sign the acknowledgment or where the serving officer, after using all due and reasonable diligence, cannot find him, and there is no agent empowered to accept service of the summons on his behalf, the serving officer shall affix it on the outer door of the house of the person concerned. \n 50. The validity of the service of notice effected under both the above Sections came to be considered by the Calcutta High Court in Tripura Modern Bank Ltd. v. Bansen and Company, . Sinha J. observed thus : \n \" What constitutes ' due and reasonable diligence' depends on the facts and circumstances of each case ; but the mere temporary absence of a defendant from his residence or place of business does not justify service by affixation.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-28", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "The question as to what was 'a reasonable time' must be decided against the background of a particular case, and no hard and fast rule can be laid down. If the person is absent from his residence, then all possible enquiries are to be made to find out as to when he was likely to return or else when he was likely to be found at his residence. The result of such enquiry must be tested against all the known facts about the defendant, his habits, his station in life, his occupation and so forth. There no doubt exist inveterate process dodgers who are bent upon being obstructive. That, however, is no justification for relaxing the requirements of the law. If determined efforts are made, service can be satisfactorily effected in the majority of cases. , In a really difficult case, the Code has provided an adequate remedy......... \n In the case of a service by affixation, it is not sufficient to state in the affidavit of service that the process-server was satisfied upon enquiry that the defendant could not be found at his residence within a reasonable time. Facts must be stated in the affidavit to show what enquiries were made and whether it was reasonable under the circumstances to assume that the defendant could not be found at his residence within a reasonable time. The court must be satisfied that the process-server was justified in coming to such a conclusion, and in the absence of particulars it cannot do so.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-29", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "Reading Order 3, Rule 6, with Order 5, Rule 9, there can be no doubt that the empowering of an agent under Order 5, Rule 9, can only be in the manner indicated in Order 3, Rule 6, and verbal authority is not enough, Rules 16 and 17, coming as they do after Rule 9, do not refer to a different kind of agency than what is referred to in Rule 9. But even if a liberal interpretation is put upon the word 'agent' in these rules, it would not be sufficient to say that a particular person was the agent of the defendant and had authority to accept service, without adducing evidence to show how such a person came to be the agent of the defendant and how such authority was conferred upon him.\"  \n 51. We will judge the validity of the affixture of the notice on the outer door of Bansilal's house in the light of the above circumstances. Earlier notices issued in the name of Bansilal were returned unserved on the ground that he had gone to Benaras on a pilgrimage. The serving officer did not make any enquiry as to when he would be returning. There is no evidence on record, on the basis of which we can come to the conclusion that Bansilal was evading service. The serving officer, in our opinion, had not used due and reasonable diligence in serving the notice on Bansilal. We, therefore, unhesitatingly hold that there was no justification for the serving officer to serve the notice on Bansilal by affixture.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-30", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "52. Manchusha was only an employee of D.D. Italia. A mere servant employed to carry out the orders cannot be considered to be an agent appointed for accenting service of summons. D.D. Italia did not, in writing, appoint Manchusha as his agent to accept service of summons issued to him. The fact that on earlier occasions he had received such notices issued in the name of D.D. Italia will not be sufficient to infer that Manchusha was his \"agent\" within the meaning of Order III, Rule 6, of the Civil Procedure Code, duly constituted to accept service of summons issued in the name of D.D. Italia. We, therefore, hold that there was no valid service of notice on D.D. Italia under Section 30(2) read with Section 46(1) of the Hyderabad Act. \n 53. Even assuming that a procedural irregularity in the service of a notice of reassessment can be waived or ignored, if the assessee has admitted to have received the notice, or on facts it could be found so, still it must be established that D.D. Italia had admitted that he had received the notice. There is no evidence on record to show that D.D. Italia had anywhere admitted to have received the notice issued by the Income-tax Officer under Section 30(2) read with Section 46(1) requiring him to file a return on behalf of the A. O. P.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-31", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "54. Thus, the assessment on the A. O. P. is bad for two reasons : one is that the Income-tax Officer had assessed to tax the individual members of the A. O. P. in respect of their share incomes from the A. O. P. and in doing so, he had elected to assess the individual members of the association. It was not, thereafter, open to him, in law, to make an assessment on the A. O. P. and the second is that no notice was served on Bansilal, who was the principal officer of the A. O. P., before making an assessment on the A. O. P. and that, in any case, service on him by affixture was bad in law. \n 55. Service of notice of assessment on D.D. Italia was also bad and, even assuming it was good and valid service, still it would not help the department in getting the assessment upheld by this court, because D.D. Italia was not the principal officer of the association. \n 56. Section 81 of the Hyderabad Income-tax Act does not also lend any help to the department, Under that section, no assessment could be quashed as void if merely there was a defect in the form of the notice-issued. However, that section does not say that even if the notice is not duly served on the assessee, the assessment would be valid. \n 57. We, therefore, answer question No. 1 in the affirmative, i.e., the assessment on the A.O.P. was invalid.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-32", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "58. The Tribunal had decided only one contention raised by the assessee, because it went to the very root of the matter. The Tribunal, however, did not consider the other grounds urged by the assessee. The Tribunal accepted the contention of the assessee that the assessment made on the A.O.P. without serving notices on all the members of the association, was bad. On a reference, the High Court answered that question in favour of the department, holding that the assessment was valid. The matter then came up before the Tribunal once again. The Tribunal was competent to decide the other objections raised by the assessee and which were left undecided on the earlier occasion. For that purpose, the Tribunal does not require any direction or authority of the High Court to dispose of the other grounds of appeal. We, therefore, hold that the Tribunal was justified in disposing of the other contentions raised by the assessee in its appeal. The question No. 2, is, therefore, answered in the affirmative. \n 59. We will then take up the third contention. In the assessment order, the Income-tax Officer did not consider the question of the validity of service of the notice on D.D. Italia. In the appeal filed before him the Appellate Assistant Commissioner suo motu went into the question and held that there was service of notice on D.D. Italia. The question is whether the Appellate Assistant Commissioner was competent to consider such a ground which was neither raised nor determined by the Income-tax Officer in the assessment order. Considering the powers of the Appellate Assistant Commissioner in disposing of an appeal before him, we are of the opinion that the objection raised by the assessee's counsel is untenable.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "3979784dd670-33", "Titles": "Commissioner Of Income-Tax vs Hyderabad Deccan Liquor ... on 31 July, 1972", "text": "60. In Ramgopal Ganpatrai & Sons Ltd. v. Commissioner of Excess Profits Tax, [1953] 24 I.T.R. 362 (Bom.)., the Bombay High Court held that the appellate court may even reverse or modify the order on a point of law taken by itself suo motu without being asked to do so by the appellant. Consequently, under Section 17 of the Excess Profits Tax Act, 1940, the Appellate Assistant Commissioner has jurisdiction to deal with an order of the Excess Profits Tax Officer on any ground of law which applies to the facts on which that order was based. \n 61. In Commissioner of Income-tax v. Shapoorji Pallonji Mistry, [1962] 44 I.T.R. 391 (S.C.)., the Supreme Court has pointed out that in an appeal filed by an assessee, the Appellate Assistant Commissioner has no power to enhance the assessment by discovering new sources of income not mentioned in the return of the assessee or considered by the Income-tax Officer in the order appealed against. That does not, however, mean that the Appellate Assistant Commissioner is not competent, or has no power to allow a ground of appeal to be raised by the assessee which was not raised by him before the Income-tax Officer. We, therefore see no substance in this contention. We, therefore, answer question No. (3) also in the affirmative. \n 62. The reference is answered accordingly. The department shall pay the costs of this reference to the assessee. Advocate's fee Rs. 250.", "source": "https://indiankanoon.org/doc/1612990/"}
+{"id": "d5735b6710f3-0", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "JUDGMENT Gopal Rao Ekbote, J.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-1", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "1. This is a reference made under Section 66(1) of the Income-tax Act, 1922, and the question referred is : \n \"Whether the interest payment of Rs. 2,38,614 represents an element of the actual cost of the machinery, plant, etc., to the assessee and as such depreciation and development rebate are admissible with reference to this amount also ?\" \n 2. The essential facts are: The assessee in this case is a public limited company engaged in the manufacture and sale of sugar. The company went into production from January 22, 1958. Its first accounting period which relates to 1959-60 assessment year ended on June 30, 1958. The company claimed depreciation and development rebate on the sums which they paid by way of interest. The payment of interest was Rs. 2,38,614. It appears that the company borrowed considerable sums of money from the Industrial Finance Corporation of India for the installation of machinery and other assets. It is on this borrowed capital that the interest was paid. The interest related to the period prior to the commencement of the business from the date of the borrowing. The assessee contended that this payment of interest added to the cost of machinery, plant, etc., to the assessee and as such while calculating depreciation admissible to the assessee the interest paid should be treated as a part of the cost of the machinery, plant, etc., to the assessee. \n 3. The Income-tax Officer rejected this claim holding that interest paid from year to year is an admissible item of revenue expenditure. No depreciation, however, can be allowed on the capitalised amount of the expenditure incurred under interest. No part of the above amount can, therefore, be taken as expenditure which can be attributed to the erection of the machinery or other assets on which depreciation is allowable, said the Income-tax Officer.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-2", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "4. Aggrieved by that order of the Income-tax Officer, the assessee preferred an appeal to the Appellate Assistant Commissioner, Vijayawada. The appellate authority by its order dated 30th March, 1963, disagreed with the conclusion of the Income-tax Officer. In a brief disposal of that aspect of the case, the appellate authority stated that during the time of construction when the moneys are borrowed for the purposes of purchasing the machineries and also for installing them, the cost of maintaining this borrowal, namely, the interest payment is necessarily an item which goes to increase the cost of construction, which is included as a part of the capital cost. The appellate authority, therefore, allowed the depreciation claimed. \n 5. The matter was carried to the Income-tax Appellate Tribunal. Noting the fact that the interest payments in dispute represented payments on borrowed capital utilised for the purchase of machinery, erection, construction, etc., it held that \"the cost to the assessee must necessarily include all expenditure, which it has to incur for acquiring and installing the asset. The interest paid or payable during the period of such acquisition and installation has, therefore, to be considered only as a part of the cost to the assessee. The appeal, therefore, was dismissed. \n 6. At the request of the department, the Tribunal has referred the above said question to this court.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-3", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "7. The question in this case arises on the construction of a few words of Sections 10(2)(vi) and. 10(5) of the Income-tax Act relating to the computation of the income-tax and the deduction which can be made in such computation in respect of business income. It has so far evoked only a single judicial opinion, and, therefore, the soil in this respect seems to be almost virgin and no one therefore would be readily inclined to express his opinion as not admitting a doubt or a difference of opinion. We have, after bestowing our best consideration of which we are capable, come to the conclusion which forces us to answer the reference against the assessee and in favour of the department. \n 8. Now, the words \"actual cost\" are not defined specifically in the Act. From, the Explanation to Sub-section (5), however, it appears that it is meant for the purpose of that sub-section. It states: \n \" ... . the expression 'actual cost' means the actual cost of the assets to the assessee reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by Government or by any public or local authority, and any allowance in respect of any depreciation carried forward under Clause (b) of the proviso to Clause (vi) of Sub-section (2) shall be deemed to be depreciation ' actually allowed'.\" \n 9. It becomes immediately plain that this is a restricted definition of the term and is not very useful for the present enquiry. Section 43(1) is the new prevision for Explanation 1 to Sub-section (5) of Section 10 of the old Act. It is almost on the same lines and does not render much assistance in reaching the conclusion on the problem before us.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-4", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "10. We have, therefore, to find out the true meaning of this term and its scope in the context of other provisions of the Act read with Section 10 itself. \n 11. Now, the provisions of Section 10 indicate that in the computation of the tax payable by an assessee under the head \"Profits and gains of business\" the assessee is entitled to certain deductions by way of certain allowances and one such allowance is depreciation allowance in respect of machinery, the property of the assessee. The allowance allowable is at a certain prescribed percentage on the written down value. \n 12. There are three purposes for which it becomes necessary to ascertain the original actual cost to the assessee of the asset in respect of which depreciation allowance is claimed: (1) The cost is the basis of allowance in respect of ocean-going ships; (2) the written down value is calculated with reference to the cost in the case of other assets; (3) under Section 34(2)(i) the aggregate of all depreciation allowance must not exceed the original cost to the assessee, and therefore it would be necessary to ascertain the original cost in order to decide whether the assessee is no logger entitled to the benefit of the relevant provision of the Act.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-5", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "13. The method of computation of the written down value is two-fold as provided In Clauses (a) and (b) of Sub-section (5) of Section 10 of the Act, In determining the written down value, a term which is defined in Section 10(5), of the assets the following has to be kept in view : in the case of assets acquired in the previous year the actual cost to the assessee and in the case of the assets acquired before the previous year the actual cost minus the depreciation actually allowed. \n 14. It is evident that the word \"actual\" by itself would give us very little assistance. It merely lays emphasis on the word it immediately follows. It is to be the cost, the whole cost and nothing but the cost. That can only be the meaning of the word \"actual\". It removes any question of estimate. The term \"actual cost\" cannot be read to mean anything more than cost accurately ascertained. \n 15. The ordinary dictionary meaning of the word \"actual\" is \"existing In fact or fact as opposed to imaginary or past state of things\". Likewise the dictionary meaning of the word \"cost\" is \"what is laid out or suffered to obtain anything\". The word \"depreciation allowance\", as understood in the commercial field, is deduction from profits which a business man ordinarily makes with a view to making good the capital investment,, which, sooner or later, will have to be replaced on account of the wear and tear of the assets during the course of the business. It is thus clear that the said statutory provision, i.e., Section 10(2)(vi), permits an allowance to the assessee carrying on trade or business in respect of diminution in the value of their plant or machinery by reason of wear and tear. The assessee makes a deduction obviously from the profits and the deduction would be based on the value of the machinery and its expected life.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-6", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "16. The phrase \"actual cost\", therefore, plainly indicates that the section is intended to confine the relief to an aggregate equal to the sum of money which the person has expended out of his own resources, called cost, of which the burden has ultimately fallen upon him. In other words, what a person expends on machinery seems to us to be the actual cost to him of acquiring and installing that machinery. The term therefore guides one to the conclusion that all expenditure on the machinery by the assessee will be the actual cost to the assessee. The actual cost therefore to the assessee is what he in fact expends or lays out for acquiring and installing the asset, in this case the machinery.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-7", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "17. It is true that such an expenditure would vary from assets to assets and would depend upon its nature and availability. For example, in a case of cost of a cinema theatre, the said term would include the payment made to a third party for assistance in preparing plans for the construction and for securing permits, priorities, import licences and foreign exchange for the materials. It will include a profit paid by him to a contractor if one has been employed. In other kinds of assets, other sorts of expenditure might be included. No hard and fast rule can be laid down as to what items of expenditure will be included in that term. Nor is it advisable to make any attempt in that direction as there are bound to be innumerable and varying assets which are acquired. Each case depends and has to be decided upon the facts and circumstances of that case. It can, however, be broadly stated that in acquiring an asset of machinery, not only the invoice costs are to be included but the cost which the assessee incurs in transporting the machinery and erecting it for the purpose of his business will also have to be included in the said term. The services of the technicians or engineers necessary for designing and erecting the machinery including its supervisory cost will also have to be included in the said term. \n18. Thus all expenditure incurred directly or intimately on the machinery can be said to be included in that term. It would not be correct to treat the words \"actual cost\" to mean the cost paid to the vendors of the machinery alone. The term being what it is, has to be, in our view, liberally construed.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-8", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "19. But is it possible even under such a liberal construction of the term to include the interest paid by the assessee on the borrowed capital for the acquisition of machinery. In other words, can it be said that the amount of interest paid on the capital, which is used for the acquisition of the machinery, is a part of its actual cost ? We do not think that the interest paid on the borrowed capital which went into the acquisition of the asset forms a part of its actual cost. \n 20. Now, the capital which has gone into the acquisition of the asset, in this case the machinery, may be the assessee's own capital or he may have borrowed it or even got it by way of subsidy or grant from the Government or any other authority. Once the amount conies into his hands, it becomes his own, irrespective as to by what mode and from what source he has received it. The amount in his hands would be his capital and it is that capital which he used in acquiring the assets on which the depreciation is claimed. \n 21. In Corporation of Birmingham v. Barnes, [1935] A.C. 292; 19 T.C. 195; 3 I.T.R. (Eng, Cas.) 26, 30, 31 (H.L.) Lord Atkin observed at page 30: \n \"What a man pays for construction or for the purchase of the work seems to me to be the cost to him; and that whether some one has given him the money to construct or purchase for himself; or before the event, has promised to give him the money after he has paid for the work.; or after the event, has promised or given the money which recoups him what he has spent.\" \n 22. The learned Lord observed further at page 31:", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-9", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "22. The learned Lord observed further at page 31: \n \"Here there are no qualifying words, and I think the phrase guides one to the conclusion that the expenditure on capital improvements by the person, regardless of source, will be the same as actual cost to the person, also regardless of source \".", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-10", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "23. We do not find any valid and compelling reason to hold that where a\nplant is constructed  out of borrowed  moneys, interest paid on the loan\nup to the date of commencement of the business can be capitalised and\ntreated as part of the actual cost of the plant.    In our view, it would not\nbe correct to treat the interest paid on the borrowed capital on par with\nthe services rendered or supervision made by technicians  to select  and\nerect the machinery and expenses incurred in that behalf.    Because  while\ninterest is paid not on the acquisition of the asset but on borrowed capital\nand the fact that the borrowed money has gone into the acquisition of the\nplant may be a factor but is  certainly not directly or intimately connected\nwith the acquisition of the asset itself.    The interest paid, therefore, is on\nthe capital which he obtained by borrowing and  has little to do with the\nactual cost to the assessee of the machinery which is his asset.    It   must be\nremembered  that  the source  of   capital   is   hardly   relevant.    What   is\nrelevant and pertinent is what actual  cost the assessee has incurred in\nacquiring and erecting the machinery.    We are, therefore, clear in our view\nthat when Sections 10(2)(vi) and 10(5) speak of  original and actual cost of\nmachinery to the assessee, it only means the amount expended  or laid out\nby the assessee in acquiring and installing machinery.   The interest paid on\nthe borrowed capital, which went into the acquisition of an asset, cannot, in\nour opinion, form part of the actual cost of the asset.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-11", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "24. We are strengthened in our view by the following provisions of the Act expressing clearly the intention of the legislature. Section 19 of the 1961 Act relates to deductions from interest on securities. The income chargeable under the head \"Interest on securities\" is directed to be computed after making the deductions mentioned in that section. Clause (ii) of that section reads as follows: \n \"Any interest payable on moneys borrowed for the purpose of investment in the securities by the assessee.\" \n 25. Similarly, Section 24, which relates to deductions from income from house property, categorically allows deduction in Clause (vi) of Sub-section (1): \n \"Where the property has been acquired, constructed, repaired, renewed or re-constructed with borrowed capital, the amount of any interest payable on such capital.\" \n 26. Section 10(2)(iii) of the Act of 1922 itself provides a third category of cases where the legislature expressly allowed deduction of interest on borrowed capital. If the legislature wanted that interest paid on the borrowed capital, which went into the acquisition of an asset, should be deducted, nothing could perhaps have prevented the legislature from adding an Explanation as they did in fact to Sub-section (5) of Section 10 in regard to other matter to make this matter also very clear. Wherever the legislature wanted the interest on borrowed capital to be given as deduction, the legislature expressly provided for it. The absence of any provision in this behalf, therefore, is meaningful and supports the view which we have taken.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-12", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "27. It was then argued that the accounting practice permits the capitalisation of interest and treats it as part of the cost incurred in acquiring the assets. Reliance in this behalf was placed on an extract appearing at page 15 of Members' Handbook Series No. 1 issued by the Institute of Chartered Accountants of India (Statement on Auditing Practices). Paragraph 2, 19 at page 15 reads : \n \"Interest on borrowings :", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-13", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "\"Interest on borrowings : \n The question often arises as to whether interest on borrowings can be capitalised and added to the cost of fixed assets which have been created as a result of such expenditure. The accepted view seems to be that in the case of a newly started company which is in the process of constructing and erecting its plant, the interest incurred before production commences may be capitalised. 'Interest incurred' means actual interest paid or payable in respect of borrowings which are used to finance capital expenditure. In no circumstances should imputed interest be capitalised, such as, interest on equity or preference capital at a notional rate. Interest on capital during construction paid in accordance with the provisions of Section 208 of the Companies Act, 1956, may, however, be capitalised as permitted by that section. Interest on monies which are specifically borrowed for the purchase of a fixed asset may be capitalised prior to the asset coming into production, i.e., during the erection stage. However, once production starts, no interest on borrowing for the purchase of machinery (whether for replacement or renovation of existing plant) should be capitalised. For an existing business, the only interest which may be capitalised is interest paid for financing a completely new unit or a substantial expansion undertaken by the company. Even here, only the Interest on monies specifically borrowed for the new expansion may be capitalised and that only for the period before production starts. Interest payable on fixed assets purchased on a deferred credit basis should not be capitalised after commencement of production.\"", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-14", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "28. It need not be doubted that the method of accounting and allowing the interest paid on the borrowed capital to be capitalised for certain purposes is recognised in accounting practice. But merely because the method of accounting is followed in the way in which the above-said extract indicates, it does not necessarily follow that the legislature has adopted this principle when it said that the \"actual cost\" to the assessee of machinery should alone be deducted. How the assessee writes the accounts or what mode he adopts in treating a particular expenditure is hardly relevant. What is relevant is the actual words employed in the section and what meaning they give. We do not therefore think that merely because such commercial practice exists, we must interpret the term to include the interest after it is capitalised and added to the cost of the machinery as part of the actual cost of the machinery to the assessee within the meaning of Section 10(2)(vi).", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-15", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "29. It is true that if the statute is one passed with reference to a particular trade, business or commerce, and words are used therein which everybody conversant with that trade, business or commerce knows and understands to have a particular meaning in it, then the words are to be construed as having that particular meaning which may differ from the ordinary or popular meaning. But Section 10 is not legislated for any particular trade, business or commerce. It is a general legislation applicable to all those who get caught in its net. That apart, \"actual cost\" does not appear to be a technical business, trade or commercial term used as such and is known and understood in the way in which it is now sought to mean. The above-said extract does not make any claim of that sort. Furthermore, in order that an alleged trade, business or commercial use of a term shall prevail, it must appear that such commercial meaning is the result of established usage in business, trade or commerce and that, at the time of the passage of the Act, such usage was definite, uniform and general and not particular, local or personal. No such case, in our view, is made out in this case. Moreover, we feel that the interpretation we have placed on the said term is more agreeble to the object and intention of the legislature.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-16", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "30. Let us then examine the authorities cited at the Bar. Calico Dyeing and Printing Works v. Commissioner of Income-tax, [1958] 34 I.T.R. 265,273 (Bom.) is a case which pertains to Section 10(2)(iii) and renders us no assistance in this enquiry. In that case, the assessee-firm, which carried on the business of bleaching, dyeing and printing cloth, borrowed money in the year of account in order to extend its business, purchased land and erected additional plant and machinery and paid interest on the borrowed capital. In its assessment to income-tax in the relevant assessment year the claim of the assessee to the deduction of the interest so paid under Section 10(2)(iii) of the Act was rejected on the ground that the plant and machinery were not used for the business in the year of account. On a reference, the High Court of Bombay held that the assessee was entitled to the deduction claimed, even though the plant and machinery were not used in the year of account. That question does not, in our case, arise. Their Lordships dealing with Section 10(1) and (2) observed: \n \"Therefore, the scheme of Section 10(1) and (2) is clear. To start with, there must be a business which is being carried on for the purpose of earning profits and those profits are being assessed to tax. It is in respect of that business that the assessee claims various allowances under Section 10(2) and one of the allowances is depreciation, whether normal or initial.\" \n 31. And it is, in the context of the facts of that case, that their Lordships held\" \n \"An assessee is entitled to claim interest paid on borrowed capital provided it is for the purpose of the business irrespective of what may be the result of using the capital which he has borrowed.\"", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-17", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "32. We are not concerned with any such question in this enquiry. \n 33. The next case cited to us is G.J. Coelho v. State of Madras, [1960] 40 I.T.R. 686 (Mad.). That was a case relating to the agricultural income-tax. The assessee in his assessment to tax on his agricultural income from his plantation for the assessment year 1955-56 under the Madras Agricultural Income-tax Act, 1955, claimed deduction of the entire interest paid by him on monies borrowed for the purpose of purchasing plantation. Rejecting that claim, the Madras High Court held that the interest was not an allowable deduction under Section 5(k) of the Act as it was not an expenditure on the land within the meaning of that section. Their Lordships, however, held that the expenditure by way of payment of interest was not of a capital nature. The decision in that case was exclusively upon the language of the particular enactment, which fell for their Lordships* consideration and cannot be said to render any assistance to us. No observation in the said judgment is also useful for our purpose.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-18", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "34. Then comes Habib Hussein v. Commissioner of Income-tax, [1963] 48 I.T.R. 859 (Bom.). It is upon this decision that the two tribunals below have mainly relied. In that case, the assessee obtained a licence from the owner of a plot to enter upon the land and erect a cinema theatre, business premises and residential quarters on the land, on payment of a rental of Rs. 4,200 per month. For the purpose of erection of the theatre and starting the business, the assessee entered into an agreement with the owner of the plot, who was an influential businessman, by which the latter agreed to help the assessee in getting prepared suitable plans and designs for the cinema theatre and other buildings, in obtaining permission from the Bombay Municipality for constructing an additional sixth floor, in procuring the required finance to enable the assessee to complete the construction of a modern theatre and other buildings, in procuring various priorities and permits for scarce materials including cement, steel and petrol for transport, in securing import licences for various goods for the purpose of the cinema theatre, in securing foreign exchange facilities to enable the assessee to import from abroad the goods required for the purpose of the theatre and other buildings and to advise the assessee from time to time during the course of construction of the cinema theatre and buildings. In consideration of the aforesaid services and assistance rendered by the owner, the assessee agreed to give the latter for a period of 20 years 2 per cent. of gross annual income earned by him in his cinema business. Subsequently, a new agreement was entered into by which the parties agreed that in full satisfaction of payment of 2 per cent. of the annual gross income for 20 years as provided in the original agreement, the assessee should pay to the owner a sum of Rs. 3,30,000 within a period of five years by twenty quarterly instalments of Rs.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-19", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "3,30,000 within a period of five years by twenty quarterly instalments of Rs. 16,500. The amount of Rs. 3,30,000 was debited by the assessee at the close of the account year. The assessee claimed in the subsequent accounting year that the said sum should be included in the actual cost of the depreciable assets to the assessee for the purpose of determining the depreciation allowance allowable to him under Section 10(2)(vi) of the Act.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-20", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "35. The Bombay High Court held that the meaning of the expression \"actual cost to the assessee\" as used in Section 10(5) of the Act was what the assessee had, in fact, expended or laid out for the purpose of acquiring the depreciable assets; the expenditure incurred in getting prepared suitable plans and designs for the construction of the cinema theatre, for construction of a minuet theatre, for securing various priorities and permits for scarce materials including cement, steel, piping and petrol for transport, in securing import licences for various goods for the purpose of the cinema theatre, and for securing foreign exchange facilities to enable the assessee to import from abroad goods required for the purpose of the said cinema theatre was liable to be included in the cost of the depreciable assets to the assessee and that, therefore, such portion of the remuneration as was attributable to these services should be included in the cost of the depreciable assets. \n 36. Their Lordships specifically declined to allow the deduction claimed by the assessee in regard to the commission amount which the assessee had paid for procuring the capital which went into the construction of the property. It was categorically observed : \n \"It is clear that the services mentioned in Clauses (b), (c), (e) and (j) cannot be said to be in any manner connected with the acquisition of the depreciable assets.\"", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-21", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "37. This decision supports the view which we have taken that not every item of expenditure which is indirectly or remotely connected would go as part of the cost of the asset but it is only those items which are directly and intimately connected with the acquisition of an asset that may be included in the term \"actual cost\" within the meaning of Section 10(2)(vi). That is why their Lordships, while allowing some items, rejected the others. This decision, however, is not authority for the proposition that interest paid on the borrowed capital also comes within the term \"actual cost\" to the assessee. \n 38. The only decision which takes the view which can be said to be contrary to our view is Commissioner of Income-tax v. Standard Vacuum Refining Co. of India Ltd., [1966] 61 I.T.R 799, 802, 808 (Cal.) We have, therefore, very closely and carefully examined this decision. In that case, the assessee-company borrowed moneys on debentures in June, 1953, interest to run from that date, and utilised the amount along with other moneys financed by it for setting up a refinery which started work on September 1, 1954. All expenses incurred during the period of construction including a sum of Rs. 23,53,284 being the interest which had accrued on the aforesaid debentures from the date of the borrowings to the date of commencement of the business were capitalised and depreciation on the full amount was claimed. The Tribunal had held that the assessee-company was entitled to depreciation on the capitalised interest also. On a reference to the High Court by the department, the Calcutta High Court held :", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-22", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "\"The interest paid on the debentures issued formed part of the actual cost incurred by the assessee-company in acquiring the capital asset and under Sections 10(2)(vi), 10(2)(via), 10(2)(vib) read with Section 10(5), such interest must be taken into consideration for the purpose of depreciation and development rebate.\"", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-23", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "39. This conclusion was reached on a set of reasoning. The judgment states; \n \" Capital asset may be acquired by the assessee either out of his own savings or with borrowed capital. When capital asset is acquired with borrowed capital the assessee is ordinarily required to pay interest on such amount borrowed while the capital asset is being acquired, that is to say, until it is fit for the commencement of business. Expenses are incurred by the assessee in paying for the other materials including machinery for the construction of the capital asset, in paying wages of labourers engaged for the work of construction and in paying remuneration to erection engineers, architects, designers, etc. It is not disputed that such expenses do form part of the actual cost to the assessee in acquiring the capital asset. If a machine is imported from abroad, amounts paid on account of freight and for transporting it from the harbour to the factory site certainly form part of the actual cost to the assessee in acquiring the capital asset. In the case of a machine, invoice price alone is not the actual cost; certain other expenses incurred in installing the machine also enter into the actual cost. Whatever expenses are essential to the erection of the capital asset are certainly included in the actual cost to the assessee.\" \n40. So far as these reasons go, there can hardly be any quarrel. Their Lordships, however, further observed:", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-24", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "\"When a capital asset is acquired by an assessee with his own money he is not required to pay any interest; so it may be argued that payment of interest is not essential to the acquisition of a capital asset but this argument does not bear scrutiny. Employment of an erection engineer may be necessary in one case and may not be necessary in another. From this it cannot be said that in an appropriate case the employment of an erection engineer is not essential to the erection of a factory. Similarly, where an assessee cannot acquire a plant except with the aid of a loan, the loan is essential to him for the acquisition of the plant, and payment of interest being essential to the procurement of loan, payment of interest too must be regarded as essential to the acquisition of the plant.\" \n41. With due respect to the learned judges, we find it very difficult to see the similarity between the instances mentioned. It may be that for the purpose of erection of a factory, consultation of an engineer in a particular case may not be necessary. But then since no cost on account is incurred it will not be computed towards interest. What similarity that example bears with the payment of interest is not quite clear. Merely because a person is hard pressed for money and has necessarily to borrow for the purpose of acquiring an asset, that by itself need not drive one to the conclusion that payment of interest since it became essential to a particular person forms part of acquisition cost of the machine. We have already indicated and we are supported by an English authority of the House of Lords that source of capital is hardly relevant. It was argued before their I ordships on behalf of the revenue that when interest is paid even after the commencement of the business, such interest, must be added to the cost of the plant. It was repelled in the follow no manner :", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-25", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "\"The short answer is that such interest is paid other the plant has been established and hence, it cannot form part of the cost of establishing the plant.\" \n 42. It is difficult to appreciate this reasoning. If the interest on borrowed capital forms part of the actual cost of the machinery to the assessee, then till the depreciation is permissible the interest paid on such borrowed capital should necessarily fall within the ambit of that term. How does the commencement or non-commencement of the business alter this situation surpasses our comprehension. \n 43. It may be that the interest paid on the borrowed capital after the commencement of the business is sought to be brought within Section 10(2)(iii) and, therefore, the assessee may not be interested as it is not in his interest to claim depreciation on the interest paid on the borrowed capital, which went into the acquisition of the estate. The deduction under Section 10(2)(iii) would definitely be much more than what is deducted by way of depreciation under Section 10(2)(vi). Whether the capital borrowed before the business commenced and which went into the erection of machinery can be said to fall within the meaning of Section 10(2)(iii) or not, does not fall for our consideration in this case. But merely because the assessee claims the interest under Section 10(2)(iii) after the commencement of the business, assuming that it is done validly, even then how the real position which existed, that is to say, that the interest which was paid on the borrowed capital and which formed part of the actual cost, according to the said decision, would alter its position merely because of the commencement of the business ?", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-26", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "44. It cannot be actual cost before the commencement of the business and subsequent thereto become a borrowed capital for the purpose of business within the meaning of Section 10(2)(iii), We do not, therefore, consider that this aspect should have any impact upon the question which falls for our consideration in this case. \n 45. Their Lordships further stated : \n \"On general principle there is scarcely any distinction between payment made to a supervisor who supervises the erection of a plant and the payment made by way of interest on the amount borrowed for the acquisition of the capital asset. If payment to a supervisor is an element in the actual cost incurred by the assessee in having the plant, there is no reason why payment of interest should not be an element in such cost.\" \n 46. We have already stated that these two instances have very little in common between them, and as we are clearly of the opinion that the source of the capital is not relevant for the purpose of this enquiry, this reasoning also does not impress us much. \n 47. Their Lordships then referred to the practice prevailing in the commercial circles to which we have already made reference and expressed our opinion in that behalf.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "d5735b6710f3-27", "Titles": "Commissioner Of Income-Tax vs Challapalli Sugars Ltd. on 5 September, 1969", "text": "48. This is all the reasoning which the learned judges have given to reach the conclusion to which they reached that interest paid on borrowed capital forms part of the actual cost of the machinery to the assessee within the meaning of Section 10(2)(vi). With profound respect to the learned judges who expressed that opinion, we find it very difficult to accept that view as correctly interpreting Section 10(2)(vi) read with Section 10(5). We have already narrated the reasons which compel us to take the view which we have taken. We are, therefore, satisfied that the Appellate Assistant Commissioner and the Tribunal have erred in allowing the deduction under Section 10(2)(vi) for the interest paid on the borrowed capital. We would, therefore, answer the reference in the negative, in favour of the department and against the assessee. The assessee will pay the costs to the department.", "source": "https://indiankanoon.org/doc/1256357/"}
+{"id": "864af7950f7a-0", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "JUDGMENT Ekbote, C.J. \n\n 1. This case first came before our learned brother K. Ramachandra Rap J. In view of conflict in certain decisions, he referred the matter to a Bench. When it came before a Bench, it was noticed that \"the case raises a very important question as to whether a writ petition under Article 226 lies against Kakatiya Medical College which though privately run is affiliated to the Osmania University and receives grants from the public exchequer from the State of Andhra Pradesh.\" \nThe case therefore was referred to a Full Bench by an order dated 24-1-1974 for an authoritative judgment on this 'vexed question' and that is how this case has come to us. \n\n2. Kakatiya Medical College was established in 1959 by some enthusiastic officials and non-officials. The then Chief Minister showed keen interest. A managing committee headed by the Collector. Warangal was formed. The Regional Medical Education Society was registered under the Societies Registration Act, The Medical College so started is affiliated to the Osmania University. The Government Hospital. Warangal is attached to this College. The State Government is giving grants to this Medical College. Sometimes it draws upon the bounty of the Central Government. Apart from receiving capitation fee from each student it receives the fees prescribed from the students. The University and the State Government have their representatives on the managing committee. \n\n3. The Osmania University is governed by Act IX of 1959, the Osmania University Act. Section 2 (a) defines the affiliated College to mean \"a college within the University area affiliated to the University in accordance with the conditions prescribed.\" \n\n4. Section 2 (a) (i) defines the term 'aided college'. \"It means a college other than a Government College which receives aid out of the State Government funds.\"", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-1", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "5. Section 2 (f) then defines the term 'Professional College' which means \"a college established and maintained by the University, or affiliated to the University for providing courses of study leading to the professional degrees of the University, in accordance with, the Regulation prescribed.\" \n\n6. The term 'teacher' includes a teacher working in the affiliated professional college. Section 4 lays down the Powers, functions and objects of the University, one of which is to affiliate or recognise colleges and institutions and to withdraw such affiliation and recognition. The other is to supervise and control the conduct and discipline of the students of the University and its affiliated and recognised colleges and institutions and to make arrangements for promoting their health and general welfare. \n\n7. Yet another is to inspect affiliated and recognised colleges and institutions and to take measures to ensure that proper standards of instruction are maintained in them. It is the function of the University to hold the examinations and to confer degrees on persons who have pursued a course of study in its affiliated or recognised colleges. It can take over and maintain colleges and hostels. \n\n8. Under Section 18 of the Act, the Senate of the University has the power to prescribe general conditions of affiliation and recognition of colleges and institutions and to suspend or to withdraw affiliation or recognition, as the case may be on the recommendation of the Syndicate and after consultation with the Academic Council. It has also power to control in general all colleges and institutions in the University area in the manner prescribed by the statutes. It can enter into any agreement with a private management for ensuring the management of any institution and taking over its properties and liabilities or for any other purpose, not repugnant to the provisions of this Act.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-2", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "9. The Syndicate under Section 21 of the Act has power to affiliate colleges to the University under conditions prescribed or recommend their suspension or withdrawal of such affiliation. It also has power to direct the inspection of affiliated colleges and to call for reports, returns and other information from affiliated colleges. \n\n10. From these provisions of the Act it would be abundantly plain that not only the courses of studies are prescribed by the University but the appointment of teachers, admission of students, holding examinations and conferring degrees all rest with the University. It can affiliate or withdraw such affiliation. It can inspect and call for reports from the affiliated colleges. There is thus an ample control of the University on the affiliated colleges. The affiliation and other things of the private aided colleges are regulated and controlled not only by the provisions of the Act but also by the statutes, ordinances, or Regulations made by the University in pursuance of the power conferred on it by the Act. \n\n11. Thus the University as well as the affiliated colleges are bound not only by the provisions of the Act but also by the subordinate legislation in the form of statutes, ordinances or regulations made by the University. \n\n12. Section 44 of the Act empowers the Senate to make statutes determining the condition of affiliation or recognition of colleges and institutions. It is in pursuance of this power that the Senate made the Regulations regarding the affiliation or its withdrawal of the private colleges. \n\n13. Rule 1 authorises the Syndicate after consultation with the academic council to affiliate any college.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-3", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "14. Rule 5 lays down the conditions which must be satisfied. Firstly that it is under the management of a regularly constituted governing body properly appointed by the Society duly registered. Such governing body shall have at least one representative of the University and one of the education department. It fixes the minimum and maximum number of members of such a governing body. It forbids exclusion from admission to the college on the ground of religion, caste, race, or sex place of birth or any of them. It also ensures the qualifications of the teachers and conditions governing their tenure of office. \n\n15. Rule 15 empowers the Syndicate to appoint a commission once in five years to inspect the affiliated colleges. \n\n16. Rule 17 authorises the Syndicate to suspend or withdraw the affiliation. \n\n17. Rule 19 then enjoins that every college shall have a duly constituted Selection Committee for recruitment to the teaching staff. The Government and the University shall be represented on the Selection Committee. \n\n18. Rule 20 then lays down the qualification for the teachers and the principals. \n\n19. Rule 21 lays down the minimum pay scales for the teaching staff of the affiliated colleges. \n\n20. Rule 22 authorises the college to frame rules which must be sent to the University relating to promotion, (sic) or retirement, leave, fixation of pay and provident fund. The University has retained the power to direct amendment of any rules so submitted to the University. It further declares that the teachers appointed permanently in the affiliated colleges shall be entitled to serve till they complete the age of 60 years. It can be extended with the permission of the University unto 65 years. It also enacts that an appeal shall lie with the Syndicate in case there is any dispute between the management and teaching staff.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-4", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "21. Rule 26 then states that terms, vacations, conditions for admission of students attendance examination promotion and hours of work in the affiliated college shall be the same as those of the constituent colleges of the University. \n\n22. Rule 32 enjoins that every college affiliated to the University shall conform to and be bound by the Rules of the University now in force or framed from time to time. \n\n23. It is in this background of these provisions that we have to examine whether judicial review is available in this case.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-5", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "24. The question of availability of judicial review is the first question which must be answered by the Court in every case. This task is no more in controversy because of Article 226. The Constitution itself makes it available. That is what is meant by rule of law. It cannot be taken away or limited by any statute. Whether the power to review should be exercised in any given case is altogether a different question. Our administrative law like that of England is squarely founded on the doctrine of ultra vires i. e. jurisdiction. The courts approach a challenged administrative act on the footing that it is either lawful o unlawful, intra vires or ultra vires. In the former case they have no concern with it. In the latter case, they will quash it or declare it void. From this view point, it really becomes irrelevant that there may be parallel jurisdiction in some other body or some alternative administrative remedy. The Courts are concerned only with the question whether there has been a breach of the law in the situation before them, and on those they must focus to the exclusion of everything else. In any case, where a Court has jurisdiction it must of necessity be ready to remedy illegalities of all kinds. It is of course understood that since the writs are discretionary remedies, the Courts may withhold them if there are special circumstances which deprive their application on merit. There have come into existence some self-imposed restrictions on the exercise of this very wide and extraordinary power of the High Court.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-6", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "25. The question in this regard is often posed: against whom writs and orders can issue? It must however, be realised that the methods by which an administrative action can be removed by the courts include the issue of certiorari, mandamus, prohibition etc. etc. The question as to against whom such a writ can issue must therefore depend upon the nature of the writ asked for. We have in this case to consider the question relating to certiorari and mandamus. These are the reliefs asked for in the two writ petitions with which we are concerned.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-7", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "26. In regard to certiorari Lord Atkin. L. J. made the following statement in R. v. Electricity Commissioner, (1924) 1 KB 171 at p. 204):\n\"Both writs are of great antiquity, forming part of the process by which the King's Courts restrained courts of inferior jurisdiction from exceeding their powers. Prohibition restrains the tribunal from proceeding further in excess of jurisdiction; certiorari requires the record or the order of the court to be sent up to the King's Bench Division, to have it legally inquired into, and if necessary to have the order quashed. It is to be noted that both writs deal with questions of excessive jurisdiction, and doubtless in their origin dealt almost exclusively with the jurisdiction of what is described in ordinary parlance as a Court of justice. But the operation of the writs has extended to control the proceedings of bodies which do not claim to be, and would not be recognised as, courts of justice. Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority they are subject to the controlling jurisdiction of the King's Bench Division exercised in these writs.\" \n27. From the above statement two questions arise: First, in respect of what acts is certiorari available; second, on what grounds i. e. in respect of what defects, will it issue?", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-8", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "28. If we take up the first question, it will be seen that Atkin. L. J.'s dictum extracted above shows that the availability of certiorari has extended historically from the courts in the strict sense to bodies which would not normally be regarded as courts. In England while it is available to quash the decisions of Courts of summary jurisdiction, of country courts, of Corroners' Courts, the National Insurance Commissioner. Rent and other Tribunals, it is also granted in respect of decisions given by bodies whose functions are normally considered as far removed from those of a court. \n\n29. Although the proposition laid down by Lord Atkin, L. J. is neither uniquely authoritative nor self-explanatory and although in some situations it has offered a court uncertain guidance; in others it has appeared unduly restrictive, nevertheless one has necessarily to analyse the implications of the learned Lord's observation in order to appreciate the present state of law. \n\n30. We have seen that according to the learned Lord \"Whenever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially act in excess of their legal authority, certiorari may issue.\" The words \"any body of persona\" naturally give rise to question as to against whom a given writ can be issued. While we have noticed that certiorari will issue against the authorities mentioned above, it would be erroneous to confine its operation to only statutory bodies. Even a non-statutory body if it falls within the ambit of the abovesaid dictum a certiorari can go against such non-statutory body. The wording of Article 226 is sufficiently wide and according to it writ can be issued \"to any person or authority including any Government.\"", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-9", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "31. Now the words \"any person\" in Article 226 only mean any person to whom according to well-established principles a writ would lie. In Janardhan Reddy v. State of Hyderabad. ():\n\"The power given to this Court under the provision is a large one. But it has to be exercised in accordance with the well-established principles.\" \nThe above observations of the Supreme Court are applicable also to the wide powers of the High Court under Article 228 and they have, therefore, to be exercised in accordance with well-established principles. \n\n32. Certiorari was for long dogged by the absurd verbal confusion which the Courts made out of the supposed requirement that it lay only to quash 'judicial' or 'quasi judicial' acts, when in fact it had, even in England, for centuries been, used to quash administrative acts. Fortunately a healthy reaction has new supervened and it is now dear that certiorari lies to control purely administrative decisions such as licensing, slum clearance and making of rating valuation lists. It may, here-after, therefore be capable of reaching beyond the area of legal power strictly so called. \n\n33. The distinction between a Judicial or quasi-judicial action and an administrative act is now practically wiped out. It is now fairly settled that even an administrative act of any person or authority which affects the right or interest of a citizen can be challenged in a proceeding under Article 226. \n\n34. The words \"having legal authority\" were still recently taken to mean a statutory authority. Recently a strong Divisional Court held that a public body required to make determination affecting individual interests in a judicial manner was subject to review by certiorari despite the fact that it was neither constituted by a statute nor endowed with jurisdiction by statute.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-10", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "35. In R. v. Criminal Injuries Compensation Board. ((1967) 2 All ER 770), this question has been thrashed out. In 1964, the Criminal Injuries compensation scheme was established by which compensation is payable to persons injured by crimes of violence. The scheme was set up under the executive power and not under a statutory one. The Parliament's approval of the necessary annual expenditure is however given annually. The scheme is administered by the Board. The principles it has to apply when awarding compensation and the procedure it has to follow in determining applications are laid down by the Home Secretary. There is no enforceable legal right to compensation even if the Board makes an award. Lain applied for certiorari for error of law on the face of the record. The Board did not deny that it had a duty to act judicially but argued that it was not amenable to certiorari as, with reference to Atkin L. J.'s dictum, (a) it has no 'legal authority' and (b) it did not \"determine questions affecting the rights of the subjects\". The Court held (a) that the Board's authority was legal though it was not set up by statute (b) that the word 'rights' was not confined to legally enforceable rights; or more widely, that the words \"the rights\" might be omitted from Atkin, L. J.'s dictum. Lord Parker. C. J. said at page 778 that certiorari will not issue to private or domestic tribunals which \"have always been outside the scope of certiorari since their authority is derived solely from contract, i. e. from the agreement of the parties concerned.\"", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-11", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "36. The dictum of Lord Atkin L. J. then requires that the authority must have to determine questions affecting the rights of subjects. The word 'right' is used in a very wide sense. It has therefore to be understood in a very broad sense and is not to be confined to the jurisprudential concept of rights to which relative legal duties are annexed. It comprises an extensive range of legally recognised interests, the categories of which have never been closed. In a number of cases the granting or refusal of a licence which analytically is a privilege or liberty has been held to be reviewable by certiorari.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-12", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "37. Coming then to the last of the observations of Lord Atkin L. J. i. e, \"having the duty to act judicially\", certiorari will not issue to quash the order of a body that has acted in a purely ministerial capacity. But it is not necessary that in every action there must be a lis between the parties. There are cases in which a duty to act judicially in accordance with the rules of natural justice has been held to arise by implication, from the nature of power and its impact upon the rights of individuals despite the absence of any express duty to follow a procedure analogous to the judicial. There are also cases in which certiorari has been issued to quash decisions made in excess of authority despite the fact that the body concerned was under no express or implied duty to afford a hearing to two contending parties. What follows therefore is that the duty to act judicially may exist in situations other than those in which there is express statutory provision for the determination of an issue analogous to a lis inter partes. Thus the duty might arise in widely different circumstances which it would be impossible, and, indeed, inadvisable, to attempt to define exhaustively. The general approach in recently reported decisions, English and Indian, towards the permissible scope of certiorari has been very liberal. It is now clear that certiorari can issue to bodies exercising discretionary powers and having no duty 'to act judicially' in the sense of a duty to follow a judicial type procedure; some are tempted to assume baldly that certiorari will issue to qua purely administrative as well as judicial acts and decisions. The administrative decision, however, must be such as to affect the right or interest of a person.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-13", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "38. It will thus be seen that the administrative law relating to certiorari has been in the slow process of evolution. The exact limits of certiorari, however, were never rigidly laid down. They have varied from time to time, with a view to meet the changing conditions. At one time the writ was issued to an inferior court. It was subsequently extended to statutory tribunals determining a lis inter partes. Later again it extended to cases where there was no lis in strict sense of the word but where rights or interests of citizen were affected. The only constant limits throughout have, however, been that it was performing a public duty. Thus certiorari may issue to inferior non-statutory tribunals discharging functions of a public nature. We have thus reached the position when the ambit of certiorari can be said to cover every case in which a body of persons of a public as opposed to a purely private or domestic character has to determine matters affecting the subjects provided always that it has a duty to act judicially. And the term 'judicially' would now include quasi judicially or fairly. It can sometimes even be implied. It is usually implied when the action affects in the broad sense rights or interests of the subjects. It would include administrative acts of such character which affect the rights or interests of citizens and in which they are in any base required to act, openly, fairly and impartially.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-14", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "39. Halsbury's Laws of England. 4th Edition at page 104 says:--\n\"In order to establish that certiorari or prohibition will issue, it appears to be enough to show that the body in question was obliged to act in a judicial manner, in the sense that it was under an express duty to adopt a procedure analogous to a judicial procedure, or that it was required to determine questions of law and fact or otherwise to exercise a limited or judicial discretion, or that it was under an implied duty to act judicially in accordance with natural justice, or even under a more loosely formulated duty to act fairly. A duty to act judicially may be inferred from the severity of the impact made by the exercise of a power or duty on individual interests.\" \n40. One of the best features of our administrative law is the range and the effectiveness of the remedies provided in Article 226 of the Constitution. In our modern highly organised society were administrative acts and decisions intimately affect the wall being and happiness of so many citizens, particularly those who are poor, life would be intolerable if there were no means of ensuring that interference by administrative action with the liberty or property of the individual did not exceed that which had been authorised by a representative legislature and also by the Constitution and that the administrative decisions so authorised were fairly made. \n\n41. That it is the proper role of the High Court to ensure needs no urging. But unfortunately the methods of review provided are shrouded in the thicket of technicalities. If we once recognise the need to control administrative acts and decisions, then the courts should not be slow in devising the means but shake off the hesitancy to assume the role of doing so. The situation at present recognises it and the development of remedies justifies such an attitude.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-15", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "42. Moreover, the important aspect of the writs enumerated in Article 226 is that they belong exclusively to public law with the exception of habeas corpus. Their primary object is to make the machinery of Government and administrative tribunals and bodies work properly rather than to enforce private rights. This introduces a valuable 'public interest' element. An application for certiorari, as the title of the case indicates, is a proceeding by a superior court to call some public body or authority to account for exceeding or abusing its power. Similarly in a proceeding for mandamus the superior court is calling for the proper discharge of some public duty. Although private persons are of course the real applicants, the public character of the proceedings is more than a mere form. In reality, thus, the applicant may be an ordinary citizen but the fiction of a \"Crown suit\" broadens the basis of the whole proceeding. As Lord Delvin once said :\n\"Orders of certiorari and prohibition are concerned principally with public order, it being part of the duty of the High Court to see that inferior courts confine themselves to their own limited sphere.\" \nA citizen who comes forward to point out defect of jurisdiction is in a sense public benefactor. \n\n43. This then is the present position of law relating to certiorari.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-16", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "43. This then is the present position of law relating to certiorari. \n\n44. When we come to the writ of mandamus, it is seen that it is writ which commands a public body to perform a public duty imposed on it by law. A distinction must therefore be made between a duty and a mere power. The distinction between the two is clear and obvious. Mandamus is not limited to judicial acts. It will issue at the instance of a person whose legal right is involved and a corresponding statutory obligation is also involved. The remedy of mandamus is discretionary. It is not issued as a matter of course. Nor it can be claimed as a matter of right. Thus there must be a legal right existing in the petitioner and a corresponding legal duty upon the public officer or authority in order to issue a mandamus. \n\n45. It is in this background of prevalent position of law regarding certiorari and mandamus that we have to consider whether a writ of certiorari or mandamus can issue against a private aided college affiliated to the University.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-17", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "46. A Bench of this Court consisting of Gopal Rao Ekbote J. (as he then was) and Ramachandra Raju J. held in Kailash Pati v. Governing Council, (1971) 2 An WR 352):", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-18", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "\"There is no doubt that a College may not be a statutory body but in view of the fact that it is heavily aided under the Grant-in-aid code by the State Government from the State Exchequer which comes from the tax payers' money and is affiliated to the University in accordance with the statutes made by the University in pursuance of the University Act passed by the State Legislature it is amenable to the jurisdiction of this Court under Article 226 of the Constitution. It is of course true that it must also satisfy the other requirements. Whatever may have been the view held in the past it can safely now be said that the recent factors favourable to the expansion of certiorari have been many including the factor that certiorari will issue to a non-statutory body exercising public functions. The Courts of late have readily held that those orders can He to administrative tribunals deciding issues of law and facts between parties. Although they have usually said that only judicial or quasi-judicial acts could be supervised by them, at the same tune, they have wished and have attempted to control as many forms of administrative action as possible. If this trend is to be taken as the basis, then it would not be difficult to hold that the said writ not only can be directed against the statutory bodies or authorities but also against bodies or authorities although non-statutory in their character, yet discharging public duties, provided of course that they have an authority to decide questions affecting the rights of others and have the duty express or implied to act judicially. If the body is constituted and is registered under the Societies Registration Act and if such body is receiving substantial grant out of public Exchequer and is affiliated to the University, since it discharged public obligation and is performing public duties, such a body surely comes, within the ambit of Article 226 of the Constitution. Such a body is amenable, therefore, to the jurisdiction of this Court under Article 226 of the Constitution.\"", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-19", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "It was further observed:\n\"It would be patently clear that the college is a body of persons of a public character which has to determine sometimes matters affecting civil rights of the teachers and also students of the College. The college has to necessarily act judicially while determining the service of a teacher on disciplinary grounds or expelling students on grounds of indiscipline. Even in case where a non-statutory body like the college invades the civil rights of teachers or students and affects them economically or otherwise, the college owes a duty towards the teachers and students to observe the principles of natural justice wherever there are no specific rules made in that regard. Article 226 of the Constitution although qualifies the word 'rights' by the words 'conferred by Part III' the words 'for any other purpose' are of wide amplitude. These words would include rights which are legally enforceable and created not only by the statute but Would also include rights created by common law.\" \n47. That was, however, a case terminating the services of a Principal of private aided and affiliated college. This case was cited before another Bench consisting of Obul Reddi and Ramachandra Raju JJ. in Subhadra Devi v. Andhra Girls College. ((1973) I An WR 94). The learned Judges felt that since the said decision was \"not in conformity with the de-clared law of the Supreme Court in Madan Gopal Rungta's case. , they were not called upon to refer the question involved to a Full Bench. The learned Judges also referred to the fact that the earlier Bench decision had relied upon Regina v. Criminal Injuries Compensation Board, Ex parte Lain (1967) 2 QB 864. They also noted what the case has decided. They, however, recalled what Mukherjea, J. had said in T. C. Basappa v. T. Nagappa, . They extracted the following passage:", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-20", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "\"In view of the express provisions in our Constitution, the Court need not now look back to the early history of the procedural technicalities of these writs in English Law, nor feel oppressed by the difference or change of opinion expressed in particular cases by English Judges.\" \n48. Although they have not said so expressly but it is clearly that they held that the English Judgments on administrative law cannot be relied upon in Indian Courts.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-21", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "49. Thus the earlier Bench decision was considered opposed to the decisions of the Supreme Court on two grounds. Firstly that the existence of the legal right said to have been infringed is a condition precedent for an application under Article 226 and secondly English cases ought not to have been relied upon. \n\n50. In so far as the first ground is concerned, the question of the existence of the legal right in early days arose for consideration because of the language of Article 226. The Article says \"for the enforcement of any of the rights conferred by Part III and for any other purpose.\" The High Court thus has wide power to issue directions and writs not only for the enforcement of fundamental rights but also for 'other purposes'. A conflict arose as to the true meaning of the expression 'and for any other purpose,' One view was that the principle of ejusdem generis writ apply in order to understand the meaning of this expression and accordingly it was held that the writ will issue only for the enforcement of fundamental rights and not for the purpose of enforcement of ordinary legal rights. The other view was that the rule of ejusdem generis does not apply and therefore the said expression will include the enforcement of ordinary legal rights which do not amount to Fundamental rights. The second view prevailed. What follows is that moral rights, obligations and matters, which just fall within the region of propriety and decency but all outside the region of law cannot he dealt with under Article 226. In other words, unless the breach of legal right or a provision of law or of the Constitution is alleged and proved or there is a violation of principles of natural justice, the High Court will not interfere. It is only in this context that the Supreme Court decisions in Madan Gopal Rungta's case, and State of Orissa v. Ram Chandra, have always been understood.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-22", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "51. It must, however, be noted that it is not necessary for invoking the powers of the High Court under Article 226 that the applicant must, in every case, have suffered a 'personal injury' or must seek the enforcement of 'personal right'. Thus an application for habeas corpus may be made by a person other than the person under the detention. So also an application for a writ of quo warranto is maintainable although the applicant does not seek the enforcement of any of his personal rights. Surely it cannot be argued that the result of the Supreme Court decision is contrary to this position. No doubt the Supreme Court has said \"the existence of the right is the foundation for the exercise of jurisdiction of the Court under Article 226\". But if under the law an application can be made by a person although he has not suffered a personal injury and does not seek redress of a personal grievance or the enforcement of a duty personally in his favour or his benefit, there can be any objection to saying that such a person has a 'right' to make the application. Thus although Article 226 can only be invoked for the enforcement of legal right, such right need not be the personal right of the applicant in cases where the nature of the writ according to well-established principles does not require that the applicant must be personally injured.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-23", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "52. The development in this branch of law must be borne in mind if one is not to go wrong. The latest view is that the restrictive rules about 'standing' are in general considered inimical to a healthy system of administrative law. The rules about 'standing' are now extremely liberal. Indeed in the case of certiorari and prohibition, the two remedies so largely concern with the jurisdiction, it can almost be said that there are scarcely rules about 'standing' at all. The doctrine is that anyone, even a mere stranger may apply. If the applicant is a person aggrieved, the remedies lie ex debito justitiae. If he is mere stranger, they lie only in the discretion of the courts. See Bernard Schwartaz and H. W. R. Wade on 'Legal Control of Government' page 293. If a person with a good case is turned away merely because he is not sufficiently affected personally, that means that some Government agency is left free to violate the law and that is contrary to the public interest. Litigants are unlikely to expend their time and money unless they have some real interest at stake. In the rare cases where they want to sue merely out of public spirit, why should they be discouraged? The said Supreme Court decision therefore should not be literally taken and mechanically followed. It has to be understood in the backdrop of various remedies and their scope and purpose in the administrative law. If they are literally taken and applied to all remedies and in all situations, then the tax or rate payers' cases challenging various actions of the local bodies or consumers' actions can never be justified. With due respect to the learned Judges, therefore, we do not think that that could have been a ground on which the earlier Bench decision could have been held opposed to Supreme Court decision.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-24", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "53. In the earlier case the termination of Principal's service was found to be in accordance with the law and as a result no writ was issued. In our judgment, however, the case rightly decides that a private aided and affiliated college is amenable to writ jurisdiction whenever it acts in excess of jurisdiction, commits an error of law or violates principles of natural justice. \n\n54. In the later case under examination, the lecturer was temporarily appointed. She was not qualified to be appointed as Lecturer. She had thus no right to hold the post. In these circumstances the termination of her temporary service was quite valid.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-25", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "55. Let us then take the second around on the basis of which the earlier decision was considered as bad in law. We have noticed that the earlier case had relied upon the well-known and often cited case (1967) 2 QB 864. It is pertinent to note that this case has been cited with approval by Bernard Schwartz and H. W. R. Wade in their Book \"Legal Control of Government\" at p. 104. Halsbury's Laws of England 4th Edition, at page 150 also quotes it with approval. It is a case which has opened up a new vista in the administrative law. The learned Judges, however, thought that the said judgment being an English case ought not to have been followed. We are not persuaded to agree with this view. First of all reliance on to support the view which the learned Judges have taken was not quite apposite. The observations of Mukherjea J. merely invite us to take cognizance of Article 226 but do not preclude us from following the English and American cases on administrative law. Long back Banerjee, J. said in Union of India v. Elbridge Watson, \"It is necessary to bear in mind the difference between the several writs and I would recommend to persons concerned a careful study of the nature of the writs from the English books\".", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-26", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "56. Article 226 accepts the remedies which have been invoked in England. Not only the nomenclature but their content, scope and purpose are also accepted. It therefore becomes necessary not only to know the nature of these writs but their scope and extent of operation also. Their growth and development in England must also be closely followed. The phraseology employed in Article 226 compels us to know the principles which are well established for the use of these remedies effectively. Even in a case which went from Ceylon the Privy Council said:--\n\"...............There can be no alternative to the view that when Section 42 gives power to issue those mandates 'According to law' it is the relevant rules of the English common law that must be resorted to in order to ascertain in what circumstances and under what conditions the court may be moved for a prerogative writ. These rules then must themselves guide the practice of the Supreme Court of Ceylon.\" \n57. In ; Fazl Ali, J. in reference to Article 32 said:--\n\"The power given to the Court under this provision is a large one but it has to be exercised in accordance with well-established principles.\" \n58. In fact the case on which reliance has been placed by the learned Judges itself decides that in determining whether a particular writ, direction or order will issue, the High Court will take into consideration the historic background of the writ, direction or order and the general principles applicable to the prerogative writ. See T. G. Basappa v. T. Nagappa, . See also Asiatic Engineering Co. v. Achhru Ram, ; R. C. Naidu & Sons v. I. T. Officer, ; and Narasimha Setty v. Dy. C. T. Officer, .", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-27", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "59. It is true that these principles are not the foundation of the jurisdiction of the High Court. That foundation is provided by Article 226. Nevertheless the principles are the same. Thus the principles of the English law are applicable to the issue of the writs mentioned in Articles 32 and 226 of course in so far as they do not conflict with any provision of the Constitution or Indian law and subject to such conditions as the Court may deem it necessary to attach importance to in the exercise of its discretion in regard to the issue of the writs, in view of the special conditions in India That is why we find not only the Supreme Court but every High Court profusely and quite often relying upon English and American decisions wherever they are applicable. The administrative law is almost similar in these countries. In any case, we fail to see how the earlier decision of the Bench can be disregarded on the ground that it has preferred to rest its conclusions on an English case without holding that the principles laid down in the English case are not good law in India. We carefully considered the earlier Bench decision and we find ourselves in entire agreement with the views expressed therein. \n\n60. The learned Judges then considered whether a private aided and affiliated college is a 'State' within the meaning of Article 12 of the Constitution. They held that it is not a State. Since no arguments were advanced to us in this behalf, we do not propose to express any opinion one way or the other.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-28", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "61. The learned Judges nextly considered the question \"whether the extraordinary jurisdiction of this Court under Article 226 of the Constitution can be invoked by the Lecturer in such a private College.\" They first held that the petitioner had no legal right which can be enforced under Article 226. If the reasoning is that she was temporarily appointed and therefore had no right to hold the post, and further she was not qualified and the University had not granted any exemption, then we agree with the view that her services were rightly terminated. The learned Judges, however, relied upon the Praga Tools Corporation v. G. V. Imanual, and U. P. State Warehousing Corporation. Lucknow v. Chandra Kiran Tyagi, along with some other cases. They arrived at the conclusion on that basis that the writ can be issued only to a statutory body in a case where such a body has violated any provision of a statute. Accordingly they held that the appointment of the petitioner was not made under any statute. The appointment was only on a contract basis unconnected with any statutory provisions. They observed;--\n\"That being the case it cannot be said that the appellant has a legal right under any law, regulation or rules in force to enforce her non-fundamental rights.\" \n62. Since the complaint was made regarding termination of services arising out of breach of contract by a private body, it was held that such a dispute was cognisable by a civil court,\n \n\n63. The question therefore is whether a writ of certiorari can issue against an affiliated college regarding the dismissal of a college lecturer.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-29", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "64. In P. R. Jodh v. A. L Pande (1965) 2 SCR 713 writ was issued to a college affiliated to the Saugar University. The college was managed by a governing body. It was aided by the Government. The applicant was a lecturer. He was dismissed by the governing body on certain charges. In the writ petition his complaint was that his services were terminated in violation of the rules of natural justice. \n\n65. The High Court rejected the writ petition. The High Court held that the conditions of service of the appellant were governed not by the 'college code' but by the contract made between the appellant and the governing body. The High Court also took the view that the provisions of the 'College Code' were merely conditions prescribed for the affiliation of college and no legal right was created by the College Code in favour of the lecturers as against the general body. \n\n66. The Supreme Court held that the 'College Code' was intra vires of the power of the University contained in Section 12 read with Section 4 (6) of the University Act. The provisions of Ordinance 20 known as 'College Code' have the force of law. It confers legal right on the teachers of the affiliated colleges and it is incorrect to contend that the college code merely regulates the relationship between the University and the affiliated colleges. The provisions of the College Code relating to the pay scale of teachers and their security of tenure properly fell within the statutory power of affiliation granted to the University under the Act. \n\n67. The Supreme Court also held that there was violation of Clause 8 (6) of the College Code and therefore the order terminating the services of the appellant was illegal and ultra vires and was therefore quashed by granting necessary relief.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-30", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "68. In Vidya Ram v. S. J. N. College, , a lecturer, appointed by the Managing Committee of a College affiliated to Lucknow University, was dismissed by the Managing Committee. This order was challenged in a writ petition filed before the High Court on the ground of violation of principles of natural justice. It was dismissed on the ground that the relationship between the lecturer and college was that of master and servant and even if his services were terminated in breach of natural justice the remedy lay in a suit for damages and not under Article 226. \n\n69. The Supreme Court on appeal referred to the U. P. State Warehousing Corporation Lucknow v. Chandra Kiran Tyagi, and Indian Air Lines Corporation v. Sukhdeo Rai . Following them it was held that since the relationship was of a master and servant even if the master wrongfully dismissed the servant the employment is effectively terminated. \n\n70. The Supreme Court also referred to Vidyodaya University v. Silva, ((1964) 3All ER 865) and following it held that a teacher appointed by a University constituted under a statute did not hold an office or status. \n\n71. Referring to Statute 151 it was held that it only provides that the terms and conditions mentioned therein must be incorporated in the contract to be entered into between the College and the teacher. It does not say that it has legal force. The terms and conditions mentioned in statute 151 have proprio vigore no force of law. \n\n72. It was further held that the College or the Managing Committee is not a statutory body and so the argument that the case will fall under the third exception cannot be accepted. It was necessary that the statutory body must violate statutory provision.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-31", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "73. It is quite relevant to note that (1965) 2 SCR 713 was distinguished on the ground that the terms and conditions in Clause 8 (6) of the 'College Code' had the force of law and had conferred rights on the appellant. \n\n74. is to the same effect. \n\n75. The authority both of and has now considerably shaken. The two earlier decisions of the Supreme Court, i. e. and on the basis of which was decided have now been distinguished in a way disapproved in Sirsi Municipality v. C. K. F. Tellis, . The decision refers to the three categories of employment. The third category of cases with which we are concerned of master and servant arises in regard to the servant in employment \"of the State or of other public or local authorities or bodies created under the statute.\" \n\n76. In regard to this class of employment, it was held that:--\n\"When a Public body is empowered to terminate employment on specific grounds or when a public body does not observe the procedure laid down by the legislature, i. e. improperly delegates power of dismissal to another body the Courts have declared such dismissal from public employment to be invalid.\" \n77. It was also held that the dismissal or termination of the services of employees without complying with the provisions of Statute, scheme or order is invalid. The dismissal will be invalid if it is contrary to the bye-laws or to rules of natural justice.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-32", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "78. This decision, if we may say so makes a notable break through and is an important landmark in the growth of the administrative law. It removes the effects of the above said two earlier decisions of the Supreme Court and revises the position of law as it existed before the said two Supreme Court decisions. Now the employees not only of the State but also of statutory bodies, public and local authorities can avail of the protection which Article 226 provides if they point out any violation of a delegated legislation or scheme or order or bye-law or breach of natural justice. A large number of employees who were denied access to the High Court for redressal of their grievance have now been again brought under the protective umbrella of Article 226. \n\n79. Even in India at one time the writ only went to an inferior court. Later its ambit was extended to statutory tribunals determining a lis inter partes. Later again if, was extended to cases where there was no lis in the strict sense of the word but where immediate or subsequent rights of citizens were affected. It now stands extended to public bodies discharging public functions. The only constant limits throughout were that the body concerned was under a duty to act judicially or fairly and that it was doing a public duty.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-33", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "80. It is also relevant to note that the English decision in ((1964) 3 All ER 865) on which reliance was placed in is no more good law in view of Malloch v. Aberdeen Corporation, (1971) 1 WLR 1578. In that case, a lecturer in Scotland was dismissed by the Education Committee. It was challenged on the around of being against natural justice. The House of Lords held that the lecturer had a right to be heard before being dismissed as he was holding an office. The House of Lords thus refused to follow the Privy Council decision in Silva's case, (1964) 3 All ER 365 where the University had dismissed a Professor without hearing him and the Privy Council refused to quash the order of dismissal. Vidyaram's case noted the fact that Silva's case was criticised by academic writers. Nevertheless observing that the decision may be correct or not in effect followed it. \n\n81. The decision in Silva's Case (1964) 3 All ER 865 was also commented upon in Malloch's case (1971) 1 WLR 1578, Lord Wilberforce said:\n\"...............I must confess that I could not follow it (the Silva case) in this country in so far as it involves a denial of any remedy of administrative law to analogous employments. Statutory provisions similar to those on which the employment rested would tend to show to my mind, in England or in Scotland that it was one of a sufficiently public character, or one partaking sufficiently of the nature of an officer to attract appropriate remedies of administrative law.\" \n82. For the same reasons, the decision of this High Court in 1973-1 An WR 94 cannot be said to be good law. We find it difficult to agree with it.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-34", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "83. What therefore follows is that now we have to bear in mind and . These decisions therefore call upon us to consider two questions :\n1. \"Whether the college in question falls within the decision of", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-35", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "2. Whether a writ of certiorari will issue even if it is found that an affiliated college is not a statutory body but a public body discharging public duties and even if it is found that the rules of affiliation have no force of law. Whether a writ can issue if the administrative instructions in rules of an affiliation or admission rules made by the Government are violated or there is a breach of Rule of natural justice?'\" \n84. In so far as the first question is concerned, it could not be disputed that the affiliation rules noted above are made in pursuance of the power conferred on the University by Section 44 (3) of the University Act. The rules therefore have force of law. It cannot be said that they Constitute power of management only. The rules requiring the governing body to be a registered body and that it should have on it representatives of the Government and the University and the qualifications of the teaching staff and the conditions governing their tenure of office all lend support to a tripartite contract between the governing body, the teacher and the approving authority i. e. the University and the Government. The teachers in such colleges have status under the rules and in any case they hold office. Apart from the express rules, the security of their tenure of office can easily be spelt out from the various provisions of the rules of the University as well as the grant-in-aid code of the Government. The Rules relating to the pay scales of the teachers and their security of tenure properly fall within the statutory power of affiliation granted to the University under the Act. We have no manner of doubt that these rules create certain \"rights\" in the teachers of the affiliated colleges. They are not mere servants of the college employee purely on contract by the managing committee of the college. They have a 'status' although they enter into a contract and in any case they hold office. We are therefore satisfied that such cases are clearly governed by the decision in .", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-36", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "85. Even otherwise, we think in an appropriate case a writ of certiorari can go against a private College although it is not a statutory body. The rules of affiliation, even if taken to be non-statutory but mere administrative instructions issued by the University or the grant-in-aid code by the Government they would not come in the wav of issuance of such a writ. We thus come to consider the second question. \n\n86. We have seen that laid down that writ can issue against a public body or authority or bodies created under statute apart from the State. We have also seen that violation of any statutory provision, rule, regulation, scheme, order or bye-law or principles of natural justice can be a ground for the issue of such a writ. The logical next step from this premise is that a writ can issue against a non-statutory body even if it violates administrative or executive directions or instructions or acts in violation of principles of natural justice. This logical sequence finds sufficient support from the two Supreme Court decisions. \n\n87. has issued a writ against a private college which was a non-statutory body. It is true that in that case a preliminary objection was raised that mandamus will not go against a non-statutory body but it was disregarded on the ground that it was not raised at appropriate time. But there could not be any difficulty in so far as writs of certiorari, prohibition or declaration are concerned.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-37", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "88. In AIR 1973 SC 355 = (1973 Lab IC 453) their Lordships have referred to the decision of the House of Lords in McClelland v. Northern Ireland General Health Services Board. ((1957) 1 WLR 594). It was held in that case that the dismissal of the plaintiff by the Board on the ground of redundancy of staff was not one of the grounds specified in the terms and conditions of service. It was found that the dismissal could be on specified grounds, i. e. gross misconduct. A declaration was granted in favour of McClelland on an originating summons as to whether the agreement of service was validity terminated. It is quite important to note that it was not a case of Government servant. There was no question of breach of statutory provisions. The employment was based on contract. The court found that the express power of the Board did not include reduction on the ground of redundancy. The most important aspect which lends support to the view we are taking is that the court spelt out security of status in employment.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-38", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "89. In R. v. Criminal Injuries Compensation Board. Ex parte Schofield. ((1971) 1 WLR 926) a lady made a claim to the Criminal Injuries Compensation Board, a body established in 1964 for compensating victims of violent crime. Neither the Board, nor the compensation scheme were statutory. They were set up merely administratively, the Government explaining the details to Parliament and Parliament voting the money. The applicant claimed that she was entitled to an award under the published rules of the scheme which covered personal injury directly attributed either to a criminal offence or to an arrest or attempted arrest. She had been knocked down while a suspected thief was being chased, and the Board held that since she was a mere bystander she could not qualify. The Court quashed that decision for error if law on its face. This decision enforced non-legal and non-statutory rules against the non-statutory body and enforced a right which was not legally enforceable before The classic formula under which certiorari issues to bodies deciding question affecting the rights of subjects has therefore now become too narrow. \n\n90. Bernard Schwertz and H. W. R. Wade in their book on \"Legal Control of Government\" at page 104 regarding this case say:\n\"This move may open an important new territory. The Government may sometimes be tempted to establish administrative schemes on a non-legal basis in order to give themselves an entirely free hand and exclude judicial interference. The new decision shows that the Courts may not held themselves barred by that expedient and that their arm may be long enough to reach into the regions of non-statutory discretion.\" \n91. The abovesaid decision followed an earlier important case (1967) 2 QB 864. This is the case on which reliance was placed by the earlier bench decision of this court referred to above.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-39", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "92. In that case, a strong Divisional Court held that a public body required to make determinations affecting individual interests in a judicial manner was subject to review by certiorari despite the fact that it was neither constituted by the statute nor endowed with jurisdiction by a statute. In that case, the Board was set up by purely administrative action for the purpose of determining in accordance with clearly formulated rules, claims to \"ex gratia payment\" to be made from finances supplied by parliament by virtue of criminal violence, was not allowed to escape the judicial superintendence merely because it did not rest on a formal statutory basis.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-40", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "53. Lord Parker. C. J., while considering the question whether the Board was a body of persons amenable to the supervisory jurisdiction of the Court, considered (1924) 1 KB 171, particularly the observation which we have extracted above. The learned Chief Justice then said :\n\"I can see no reason either in principle or in authority why a Board set up as this Board was set up, is not a body of persons amenable to the jurisdiction of this Court. True, it is not set up by a statute. But the fact that it is set up by executive Government under the prerogative does not render its acts any the less lawful Indeed the writ of certiorari has issued not only to courts set up by statute but to courts whose authority is derived, inter alia from the prerogative. Once the jurisdiction is extended, as it clearly has been, to tribunals as opposed to Courts, there is no reason why the remedy by way of certiorari cannot be invoked to a body of persons set up under the prerogative. Moreover, the Board though set up under the prerogative and not by statute and in fact the recognition of Parliament in debate and parliament provided the money to satisfy it awards.\" The learned Chief Justice at page 882 lurcher observed :", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-41", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "\"The position as I see it is that the exact limits of the ancient remedy by way of certiorari have never been and ought not to be specifically defined. They have carried from time to time being extended to meet changing conditions. At one time the writ only went to inferior Court. Later its ambit was extended to statutory tribunals determining a lis inter partes. Later again it extended to cases where there was no lis in the strict sense of the word but where immediate or subsequent rights of a citizen were affected. The only constant limits throughout were that it was performing a public duty. Private or domestic tribunals have always been outside the scope of certiorari since their authority is derived solely from contract, that is, from the agreement of the parties concerned.\" \nThe learned Chief Justice finally observed at the same page :\n\"We have as it seems to me reached the position when the ambit of certiorari can be said to cover every case in which a body of persons of a Public as opposed to a purely private or domestic character has to determine matters affecting subjects provided always that it has a duty to act judicially.\"", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-42", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "94. In Hannam v. Bradford City Council, (1970) 2 All ER 690, the plaintiff, a school master at an aided voluntary school maintained by the Council, absented himself and refused to return to the duties in the school. His appointment was terminated at a meeting of the school governors and he was given notice. Thereafter a sub-committee of the Council met and held an enquiry whether the council should exercise its power to prohibit the dismissal of the plaintiff. This power was crystallised in the school's Articles of Government and the council's conditions o service of teachers which included a right to have a hearing. Three of the ten members of the sub-committee were governors of the school, none of them, however, had attended the meeting of the governors of the school. The staff sub-committee resolved not to prohibit the plaintiff's dismissal and this decision was later approved by the full council. It was held that the decision of the staff sub-committee which was a quasi-judicial decision could not stand because the fact that the three governors of the school sat on the sub-committee gave rise to the possibility of bias.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-43", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "95. In Herring v. Templeman, (1973) 3 All ER 569, the plaintiff was a student at a teacher training college, a charity constituted by a trust deed. The plaintiff brought an action against three representative members of the governing body in which he sought a declaration that the resolution of the governing body and the recommendation of the Academic Board were ultra vires null and void, and an order that he be readmitted as student. The defendants moved for an order that the plaintiff's statement of claim be struck out and the action dismissed as disclosing no reasonable cause of action. It was held that the allegations in the statements of claim would be struck out as there has been no breach of the rules of natural justice. \n\n96. In Regina v. Aston University Senate, (1969) 2 WLR 1418, the applicants were University students. They failed in subsidiary subjects. The marks of all students who had failed were considered in the light of their Academic and personal histories. As a consequence, the applicants were asked to withdraw from their course. The students applied for a certiorari to quash the decision asking them to withdraw and the mandamus requiring the University to determine according to law whether they should re-sit for examination or be asked to withdraw.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-44", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "97. It is relevant for our purpose to note that the University of Aston was incorporated by Royal Charter in 1966, the Charter giving power to make ordinances and regulations. Regulations duly provided that candidates who failed in examination might be required to withdraw. A Royal Charter confers the powers of a natural person only and this results in a sharp distinction between chartered and statutory bodies. Having no statutory force the regulations were administrative only. In spite of these facts, the petition was entertained and although it was held that the students should have been given an opportunity of being heard and since it was not given, there had been a breach of natural justice, the petition, however, was dismissed on the ground that prerogative remedies \"should not be available to those who sleep upon their rights.\"", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-45", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "98. In this connection it is quite relevant to refer to Halsbury's Laws of England, IV Edition, page 150, where it is said:\n\"Certiorari may issue to inferior statutory tribunals such as the Patents Appeal Tribunal and to inferior non-statutory tribunals discharging functions of public nature.\"", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-46", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "99. These decisions make it abundantly plain that the earlier Bench decision in (1971) 2 An WR 352 was rightly decided. The jurisdiction to supervise the exercise of their jurisdiction by inferior tribunals has never been dependent upon the source of the tribunal's authority to decide issues submitted to its determination except where such authority is derived solely and exclusively from agreement of the parties to the determination. This latter case falls within the field of private contract and is within the jurisdiction either of an arbitrator or the civil court. In so far as certiorari prohibition and declaration are concerned, these writs can be issued against a non-statutory body discharging public duties. More so when these public bodies receive grants from the Government as voted in the Legislature and are affiliated to the University which is a statutory body and controlled by it. Public bodies such as affiliated colleges placed as they are cannot be called as pure private bodies discharging purely private duties. Nor they can be characterised as domestic tribunals in the strict sense of that word. The relationship of teachers with such colleges is based on a tripartite arrangement and contract. Their appointment is made by a committee constituted under the statute as above, The appointment is to be approved by the University. There can be an appeal against any order in any dispute between the teacher and the college to the University as well as to the Director of Public Instruction. The University can direct the teacher to be reinstated: so also the Director of Public Instruction can. The teachers' salaries are fixed. The tenure of office assured. In some cases their salaries can directly toe paid to them by the Director of Public Instruction. All these and other features clearly and unmistakably point out that the teachers of affiliated colleges have a status apart from their contractual relationship and in any case they hold office.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-47", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "100. We think that a pure \"master and servant case\" must be distinguished from the case of a teacher in an affiliated college. A \"pure master and servant case\" may mean a case in which there is no element of public employment or service, no support by statute, nothing in the nature of an office or a status which is capable of protection. If any of these elements exist, as many of them exist in the instant case, then, in our opinion, whatever the terminology used, and even though in some inter partes aspects the relationship may be called that of master and servant, there may be essential procedural requirements to be observed, and failure to observe them may result in a dismissal being declared to be void. (See Malloch v. Aberdeen Corporation (1971) 2 All ER 1278 at p. 1294). \n\n101. Similar is the position with regard to students. Their admissions are governed by the University Rules and regulations. Government also has made certain rules relating to the admission to medical colleges. The affiliated colleges and the teachers and students of those colleges are all bound by these rules and regulations. Any administrative action which adversely affects the student must be taken after observing the rules of natural justice. \n\n102. Thus whether it is a lecturer of an affiliated college or its student everyone of them can take advantage of the remedies provided in Article 226 of the Constitution.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-48", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "103. Let us in this background examine the instant case. The petitioner applied on 27-10-1973 for admission to the First Year Integrated M. B. B. S. Course in Kakatiya Medical College. He filed along with the application a domicile or Mulki certificate. The College authorities can verify the certificates so filed. Since in 1971 an application made by the petitioner was rejected on the ground not very clear, the college authorities wanted to verify the certificate. The petitioner was therefore directed to appear before the authorities on 10-9-1973 for verification of the domicile certificate along with this father or guardian. Accordingly the petitioner appeared but his father could not. He asked the authorities to postpone the consideration. A later date 14-9-1973 was therefore fixed orally. It is contended by the petitioner that it was 15th and not 14th. According to the College authorities since the petitioner did not appear along with his father on 14-9-1973, his admission was rejected and he was informed accordingly. On the other hand, the petitioner contends that he was present on 15-9-1973 with his father but no one cared to call them. It is conceded that the petitioner had passed the Entrance Test and was put in the list of admitted candidates. Since the necessity of Mulki certificate in the present context has lost significance, we do not propose nor are we called upon by the parties to decide the conflict between them with regard to the date of the petitioner's appearance. It is not held that the domicile certificate was bogus be forged one. In fact no enquiry was made. The admission of the petitioner therefore could not have been rejected without observing the rules of natural justice. In view of the breach of natural justice, the petitioner, in our judgment is entitled to the relief he has asked. It is of course open to the college authorities even now to verify the authority of the domicile certificate. The petitioner and", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-49", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "course open to the college authorities even now to verify the authority of the domicile certificate. The petitioner and his father will therefore appear before such college authorities as they are asked in writing to appear. If the authorities are satisfied about the domicile certificate after due enquiry, it is plain that the admission which has been given shall continue. It is understood that till such enquiry is concluded, the petitioner shall continue his studies in the college.", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "864af7950f7a-50", "Titles": "Harijander Singh vs Selection Committee, Kakatiya ... on 17 April, 1974", "text": "104. The writ petition is accordingly allowed, the impugned order quashed by the issue of a writ of certiorari and a direction as above is issued. In the circumstances of the case, however, we make no    order    as    to    costs.    Advocate's    fee Rs.  100/-", "source": "https://indiankanoon.org/doc/1457597/"}
+{"id": "e33f9695f36a-0", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "JUDGMENT Satyanarayana Raju, J.   \n (1) This is an appeal from the judgement ans decree of the Court of the Subordinate Judge, Anantapur, in Original Suit No. 58 of 1955. \n (2) The facts material for appreciating the question debated before us are not in dispute. The plaint schedule proporties belonged to one Toomula Hanumappa, resident of Kottalapalli in the Anantapur District. His wife was Viyyamma. He had a son and a daughter. His son, Peddayya died shortly after his marriage. Hanumappa executed a will on 19th December, 1941. He died on 22nd July, 1942. His widow Viyyamma, died on 22nd February, 1954. Peddakka, the daughter of Hanumappa, who was married to the 1st defendant predeceased her mother on 8th July 1945. Defendants 1 and 2 arebrother and are the sister's sons of Hanumappa. Plaintiff is the son of another sister of Hanumappa. He instituted the suit on 17th November, 1955 for a declaration of his title to a 1/3rd share out of the properties comprised in the estate of Hanumappa and for partition and seperate posession of one such share.", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-1", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "(3) The genuineness of the will was not seriousl disputed by the plaintiff. It could not have been otherwise because the will was registered and the testator lived for seven months after its execution. It was, however, contented by the plaintiff that the will in question duly executed and also that the estate created by the testator in favour of his daughter was contingent on her surviving her mother, and that as the daughter predeceased her mother, there was a lapse and the estate should devolve on the reversioners as on intestacy. Both these contentions were negatived by the lower court, with the result that the suit was dismissed. Against the decision of the trail court, the plaintiff has preferred this appeal. \n (4)     Two questions arise for decision in this appeal:", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-2", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "1.     Whether the formalities required by law for the execution of a valid will were complied with? \n\n \n\n 2.     Whether, on a true construction of the terms of the will,  the testator  conferred  on  his  daughter  an  estate contingent  on  her surviving her mother?  \n\n \n\n (5)     Under  Sec.  63  of the Indian  Succession  Act,  the first condition  requisite to render valid any testamentary  disposition  is that such disposition should be'in writing' though no particular  form is required.  The next condition prescribed for the validity of a  will is that it should be duly signed by the testator.  The third  statutory requisition is that it should be attested by at least two witnesses.", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-3", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "(6) The will, Ex. B. 3, was executed by Hanumappa on 19th December, 1941. After the usual preliminary and disposing of clauses, the will concluded with the name of the testator written by the scribe. The testator was admittedly illiterate. His thumb impression was not affixed at the foot of the document. Two witnesses, Chennareddi and Chinnapareddi, attested the will. The scribe of the document there after subscribed his signature. On the day of its execution, the will was presented by the testator in the Office of the Sub-Registrar Gooty. In token of his having admitted the execution of the will, the testator put his thumb impression before the Sub-Registrar. He was there identified by the two attesting witnesses, and the Sub-Registrar then admitted the document for registration. \n (7) The evidence as to the execution of the will is that the testator held the pen and the scribe wrote his name at the foot of the document. The first and third conditions of a valid testament disposition have undoubtedly been satisfied in this case. It is, however, argued that the second condition prescribed for the validity of a will, viz., that it should be signed, has not been complied with by reason of the testator's mark not having been affixed at the foot of the document. \n (8) According to S. 63 of the Indian Succession Act, the testator must sign or affix his mark to the will, or it must be signed by some other person in his presence and by his direction. The fruther requirement under this section is that \"the signature or mark of the testator, or the signature of the person signing for him, shall be so placed that it shall appear that it was intended thereby to give effect to the writing as a will.\"", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-4", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "(9) It is contended by the learned Avocate General, on behalf of the appellant, that the writing of the name of the testator by the scribe would not constitute due execution within the purview of Sec. 63 of the Succession Act. It support of this contention he relied upon the decision in Radhakrishna v. Subraya Mudaliar, ILR 40 Mad 550: (AIR 1917 Mad 900). In that case, with a view to execute a will the testatrix who was a marks woman touched the pen and gave it to another who affixed to the will a mark and wrote against it the name of the testatrix and added beneath it his own name as the person who affixed the mark. It was there held by the Division Bench, consisting of Wallis, C.J. and Phillips, J., that the will was invalid as not complying with the provisions of Sec., 50 of the Indian Succession Act (X of 1865) (which is in terms identical with S. 63 of the present Act), and that considered as a signed will, as it might be, it was equally invalid as the signature of the testatrix was put by another and there were not two other attestors be sides the one so signing. At page 556 (of ILR Mad): (at p. 901 of AIR), we find the following passage: \n \"If the signature, as distinct from the mark of the testatrix, is taken to have been affixed by Doraiswami Aiyanger in her presence and by her direction, the will fails for want of due attestation.......\"", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-5", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "The learned Judges were willing to hold that what was done might amount to a signature by some other person in her presence and by her direction within the meaning of the section, and if attested by two witnesses other than the signatory would be sufficient. On the language of Sec.50 it was held that the person who signed by the direction of the testatrix could not be one of the two attesting witnesses required by the section. The conclusion reached by the learned Judges in that case is no authority for the position that when some other person signs for the testator by writing out the testator's name in his presence and by his direction it would not amount to due execution within the purview of S. 63(a) of the Succession Act. \n (10) In Dasureddi v. Venkatasubbammal, AIR 1934 Mad 436: ILR 57 Mad 979 the question for consideration was whether a will executed in the following circumstances could be deemed to be in conformity with Sec. 63 of the Succession Act. Rangamma an illiterate woman executed a will. It was in the handwriting of P.W. 2. The execution of the will, which also was in the handwriting of the scribe consisted of the words in Tamil, equivalent to the English, \"this scratch: the mark of Rangammal\". It was attested by four witnesses. After attestation, there was the customary memorandum by the scribe that it was in his handwriting. It was contended that the will was not validly executed by Rangammal even if was found to be genuine. The appeal was heard by Sundaram Chetty and Walsh, JJ. Who differed in their conclusion about the due execution of the will.", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-6", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "The point for difference between the learned Judges was this: Sundaram Chetty, J. was of opinion that when the execution of a will by a person other than the testator in his presence and by his direction took place, it was sufficient for that other to affix the signature of the testator himself. Walsh, J. thought that this was not the effect of S. 63 of the Succession Act, but a proper execution under the section required that the other person executing the will under the direction of the testator must sign in his own name with sufficient indication to show that he had executed it under the testator's direction. Pandalai, J. by whom the appeal was disposed of, consequent on the difference of opinion between the two learned Judges who heard the case in the first instance, agreed with Sundaram Chetty, J. in holding that when the execution of a will by a person other than the testator in his presence and by his direction takes place, it is sufficient for that other to affix the signature of the testator himself, and that the form of such signature is for the other person to sign the name of the testator and not his own. \n (11) Under Sec. 3(56) of the General Clauses Act, the word 'sign' has been defined to mean a mark in the case of a person who is unable to write his name. On a true construction of the words 'it shall be signed by some other person in his presence and by his direction,' in Sec. 63(a) the proper form of such signature is, always has been recognized to be, for the other person to sign the name of the testator and not his own. In the above view, it must be held that the substantial requirements of law have been complied with and that the will has been properly executed.", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-7", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "(12) It is contended for the respondents that even supposing the requirements of Sec. 63 have not been complied with, yet the thumb-impression of the testator, which there is evidence to show was made from the deceased's thumb in the presence of the Sub-Registrar and the attesting witnesses who identified the testator, would constitute a proper execution. In Therasa v. Francis J. Misquita, AIR 1921 Bom 156 Fawcett, J. has, in fact, held that where an illiterate testator admits the execution of a will before a Sub-Registrar and affixes his thumb impression thereto, there is proper execution of the will apart from the question whether there was such proper execution before. On this ground also, it must be held that Ex.B. 3 was duly executed. \n (13) The more substantial question is whether the bequest in favour of the testator's daughter the termination of the life estate should be deemed to bea vested interest or only a contingent interest. As the argument in the appeal turned largely on the precise language employed in the document, it is necessary to quote textually its terms:", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-8", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "\"Now I am about 60 years old and I am in a sound disposing atate of mind. But as my legs and hands are shaking due to cough and asthama fron which I am now suffering, I have made the following arrangement with regard to my immovable and movable properties so that there may not be any objection by my heirs and others after my life time. I have a wife, son, daughter, by names Biyyamma, Peddiah and Peddakka respectively. I got my son married with a girl by name Naramma. About two years after the marriage, my son by name Pedaiah died. After the death of the said son of mine, I gave to my daughter-in-law, Ramanamma, all the Sthridhana properties that were given to her at the time of her marriage and (i) gave (also) a cash amount of Rs, 1,200/ (in words rupees twelve hundred) towards her life long maintenance also. I got also the marriage of my daughter Peddakka performed with Guraka Sunkireddi's son China Bayanna, resident of Peddavaduguru. Now my wife Bayamma and my daughter Peddakka are alive. After my life time, my wife Bayyamma should possession of the immovable properties belonging to me, that is, the lands which are in my possession and enjoyment and which are in the fields of the village of Dimnagudhi, Nagalapuram, Penakalapadu and Peddalvaduguru in this Taluk and the house and the hay-rick yard in Kattalapalli, the hamlet of Penkalapadu and the entire movable and immovable properties remaining after my life time and she shall enjoy all the said properties without alienating them in any manner. After her life time, my daughter Gurala Chinna Bayyanna's wife", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-9", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "any manner. After her life time, my daughter Gurala Chinna Bayyanna's wife Peddakka, shall enjoy (the said property) with (powers) of gift, sale etc. But neither my heirs nor others shall have any manner of right or interest. This will shall come into effect after my life time. I shall have the power to cancel this will whenever I please. To this effect is this will executed by me out of free will.\"", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-10", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "(14) For the appellant it is maintained that the testator contemplated the contingency of his daughter, Peddakka, surviving his wife. It is urged that the words \"after her life time, my daughter..... Peddakka shall enjoy the said property with powers of gift, sale etc.\" are indicative of the intention of the testator that he comtemplated that his daughter should possess and enjoy the property after the death of her mother. It is on the other hand contended by the respondents that a life estate was bequeathed to the mother with an absolute gift over of the remainder to the daughter. \n (15) The point for determination now is whether Peddakka got a vested or a contigent interest under the terms of the will. \n (16) The distinction between vested and contingent interest is explained by a Division Bench of the Madras High Court in Shree Chand Sowcar v. Kasi Chetty, AIR 1933 Mad 885 thus: \n \"The ordinary distinction between vested and contingent interest consists in the nature of the event or condition upon which the done should take the property. If the interest created in favour of a person should take effect on the happening of an event which must happen, it is a vested interest, but if it is to take effect on the happening of a specified uncertain event which may or may not happen, the interest is a contingent one.\" \n ( 17)     Now,  Sec.  104 of the Succession Act provides  that  if  a legacy  is given in general terms, without specifying the time when  it is to be paid, the legatee has a vested interest in it from the day  of the death of the testator, and, if he died without having received  it, it shall pass to the representatives.", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-11", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "(18)     The following passage from Jatman on Wills, volume 2. eighth edition, page 1346  may be usefully extracted here:", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-12", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "\"'The law', says Mr. Jarman, is said to favour the vesting of estates, the estates, the effect of which principle seems to be, that property which is the subject of any disposition, whether testamentary or otherwise, will belong to the object of gift immediately on the instrument taking effect, at the death of the testator, it follows that any deviseor bequest in favour of a person in essesimply (i.e. without any intimation of a desire to suspend or postpone its operation), confers an immediately vested interest. \n \"If words of futurity are introduced into gift, the question arises whether the expressions are inserted for the purpose of protracting the vesting, or point merely to the deferred possession or enjoyment.\"  \n At page 1347 occurs the following passage: \n \"Mr. Jarman continues: \"It may be stated as a general rule that where a testator creates a particular estate, and then goes on to dispose of the ulterior interest, expressly in an event which will determine the prior estate, the Words descriptive of such event, occuring in the later device, will be constructed as referring merely to the period of the determination of the possession or enjoyment under the prior gift, and not as designed to postponethe vesting. Thus, where a testator devises lands of A for life, and after his decease to B in fee, there spective estates of A and B (between whom the entire fee simple is parcelled out) are both vested at the instant of the death of the testtor, the only difference between the devisees being, that the estate of the one is in possession, and that of the other is in remainder.\" \n (19) This rule is embodied in Sec. 119 of the Succession Act, which reads:", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-13", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "\"Where by the terms of a bequest the legatee is not entitled immediate possession of the thing bequeathed, a right to receive it at the proper time shall, unless a contrary intention appears by the will, become vested in the legatee on the testator's death, and shall pass to the legatee's representative if he dies before that time and without having received the legacy, and in such cases the legacy is from the testator's death said to be vested in interest. \n (20)    The words of futurity in the present case are to be found in the penultimate clause of the will.  They are:", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-14", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "\"After the life-time of my wife, my daughter, Peddakka shall enjoy the property.\"", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-15", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "The words \"after the death of my wife\" are to be construed as merely referring to the period of the determination of the life-interest of his wife. There are no other terms in the will showing an intention on the part of the testator postponing the vesting till after the death of the widow. The words \"after the death of my wife\" received a similar construction by a Division Bench of the Calcutta High COurt in Sissir Chandra v. Ajit Kishore,AIR 1938 Cal 466. \n (21) The decision of a Division Bench of the Madras High COurt consisting of Coutts-Trotter, C. J. and Srinivase Aiyangar, J. in Ernest William Adams v. Mrs. H. S.F. Gray, 48 Mad LJ 707: (AIR 1925 Mad 599) is also in point. The learned Judge observed at page 713 (of Mad LJ): (at p. 602 of AIR) as follows:", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-16", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "\"It is perfectly clear from all the text-books and the decided cases that if a bequest is to a person for llife and after his death to his children, the bequest becomes vested in each child as and when he or she is born and the vesting is not postponed till the death of the life tenant. The expression 'after his death' is taken to indicate merely the time when the gift over becomes reduced to possession and not the time when the reight to such possession and not the time when the right to such possession vest...... The priniciple underlying this rule is that no contingency is imported by the mere fact that the legacy is given after a life-estate in the property bequeathed. As nothing is more certain than that every person who lives must due, the death of a life tenant is an event not contingent but certain; and therefore a gift on the death of a life-tenant is a bequest to take effect not on a contingency but on an event certain to happen...\" \n (22) In Bhagabati Baramanya v. KalicharanaSingh, ILR, 38, Cal 468 (PC) the testor by his will gave life-estates to his mother and wife and provided that on their death, his sister's sons G. and A, \"this is to say their (sister's) sons who are now in existence as also those as may be born hereafter shall in equal shares hold the said property in possession and enjoyment by right of inheritance\". Their Lordships of the Privy Council held that the nephews were intended to take a vested and transmissible interest on the death of the testator though their possession and enjoyment were postponed.", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-17", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "(23) In Bilaso v. Munnilal, ILR 33 All 558 the testator gave all his property after the death of himself and his wife daughter and nephew. The nephew survived the testator but predeceased his wife. It was held that the nephew took a vested interest in the property on the death of the testator although possession and enjoyment were postponed till the death of the testator's wife and that vested interest so taken by the nephew was transimissible to his sons. \n (24) In Rewan Prasad v. Mt. Radha Beeby, 4 Moo Ind App 137 (PC) the testator, by his will, gave his widow a life estate in all his property, and after her death he gave a moiety to his two sons. The brother and one of the sons died during the life time of the widow. The widow of the deceased son claimed her husband's share. On these facts, their Lordships of the Privy Council held that the sons took vested interest in the moiety bequeathed to them a tenants-in-common the actual enjoyment of the expectant interest being postponed till the termination of the life estate, and that in such circumstances it was not necessary that the deceased son's share should be reduced into possession during his life time to enable his widow to succeed to it. \n (25) It is contended by the learned Advocate General that no gift was expressed in favour of the daughter until the death of the widow and no right vested in her unless she survived that period. In support of this contention reliance was placed on the decision of the Privy Council in Chota Raja Saheb Mohitai v. S. Sundaram Ayyar, AIR 1936 PC 131. There the material portion of the grant ran as follows:", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "e33f9695f36a-18", "Titles": "Chilamakuri Chinna Pullappa vs Guruka Chinna Bayanna And Ors. on 14 December, 1960", "text": "\"On the death of the last surviving widow the daughter of the late Raja, or, failing her the next heirs of the late Raju, if any, will inherit the property.\" \n Their Lordships of the Privy Council held that no gift was expressed in favour of the daughter until the death of the last survived widow, and no right vested in her until she survived that period. It was held that the words \"or failing her\" meant failing her survivance at the death of the last surviving widow. The decision in that case turned upon the words \"failing her the next heirs of the late Raja\"' which were considered to mean as containing a clear indication on the part of the testator that the daughter should inherit the property only in the event of her surviving the widow. We do not think that his decision is helpful in construing the will in the present case. \n (26) On the construction of the terms of the will, Ex. B.3, we feel no difficulty in holding that Peddakka, the daughter, had a vested interest. There are no words of defeasance. It may be that the traditional words of a conveying counsel that a life estate should be followed by an absolute estate could have been employed; but if the testator was contemplating a defeasance, it is reasonable to assume that he would have provided for the contingency of the daughter not surviving his widow. There cannot be a vacuum where there is a life-estate followed by an absolute estate because the residue must rest some where. In the utimately analysis, this is a case of deferred possession, not deferred vesting. We, therefore, hold that Peddakka had a vested interest in the suit property, and the conclusion reached by the Court below is correct. \n (27) For the above reasons, the appeal fails and is dismissed with costs. \n (28) Appeal dismissed.", "source": "https://indiankanoon.org/doc/954396/"}
+{"id": "faa83b2ed0e4-0", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "JUDGMENT Subba Rao, C.J.  \n (1) The Income-tax Appellate Tribunal, Madras Bench \"B\" referred the following questions under S. 66 (1), Indian Income-tax Act to the High Court of Judicature, Madras\n   \n\n (i) \"Whether there was definite information in the possession of the Income-tax Officer in consequence of which he could have discovered that there was an under-assessment within the meaning of Section 34 as it stood before its amendment in 1948? \n\n (ii) Whether the re-assessment of Rs.11,185/- is a vliad.\" \n The said reference was tranferred to this Court afterits constitution. \n\n (2) The facts that gave rise to the reference may be breiefly stated. M. M. A. K. Mohiddin Thumby and Co., was a firm having four tanneries at Eluru and one at Guntur. Its head office was situated at Eluru. The following were the six partners of the firm:\n 1. M. M. Mohamed Mama Labbai,\n \n\n 2. M. K. A. S. Syed Mohammad. \n\n 3. Vavoo Mohammad Hasana Labbai. \n\n 4. O. M. Ahmed Mohideen Sadaktulla. \n\n 5. Velak Mohammed Shekna Labbai.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-1", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "5. Velak Mohammed Shekna Labbai. \n\n 6. Velak Mohammad Mohideen. \n Though they were carrying on business at Eluru, they were permanent resident of Kayapatnam village in Tinnevelly District. For the assessment year 1940-41 the assessee filed a return showing a total income of Rs.21,420/- durin tghe scrutiny of the accounts, the Income-tax Officer came across a transfer of Rs.1,15,000/- from the account of V. Syed Moahmed Ali of Calcutta to the accounts of the following four partners of the assessee firm:\n  1. M. M. Mohammad Mama Labbai            Rs.  25,000/-\n 2. A. K. Mohamed Omar Sahib     Rs.  30,000/-\n 3. V. M. K. Dawood  Labbai     Rs.  30,000/-\n 4. N. K. A. S. Syed  Mohammad                     Rs.  30,000/-", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-2", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "Though the Income-tax Officer suspected that the said amount represented the secret profits of the fir, he was not able to get any definite information to hold that the said sum also was part of the profits of the firm. Ignoring that item, he made an order of assessment dated 17-3-1941. On 31-3-1941, the said amount was spread over the accounts of the fourteen partners. The explanation of the assessee was that in October 1939, 14 persons contributed amounts totalling Rs.1,15,000/- with the view of constituting a partnership, that the said amounts were remitted to Syed Mohamed Ali of Calcutta as the money was urgently required for purchasing skins for the partnership and that the money was subsequently adjusted on 31-3-1941 by transferring the same to the capital account of the four partners and thereafter to that of the 14 parners. \n\n In addition to the enquiries started by the Income-tax Officer before 17-3-1941, he addressed the Income-tax Officer, Tuticorin, to make an enquiry in respect of the financial position of the said four partners. On 17-2-1942, he sent a report that none of the partners had any private interest of his own apart from his interest in the business of the assessee. On receiving the said information, the Income-tax Officer issued a notice under S. 34, Indian Income-tax Act for the purpose dof re-opening the assessment.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-3", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "After following the procedure prescribed, he re-opened the assessment and found that the aforesaid amount of Rs.1,15,000/- transferred from Syed Mohammed Ali's account to the credit of the four partners really represented the profits of the firm. The was satisfied that the financial position of the said four partners was not such as to enable them to advance such a large amount towards capital. On that basis, he assessed the company to tax. \n\n (3) The Assessee filed an appeal to the Apellate. Assistant Commissioner of Income-tax, Nezwada, but he accepted the view of the Incoem-tax Officer and confirmed and assessment. when an appeal was filed to the Tribunal, that was dimsised. Thereafter the present reference was made at the instance of the assessee. \n\n (4) Learned counsel for the assessee contended that under s. 34, Indian Income-tax Act, the Income-tax Officer has jurisdiction only to re-open an assessment already made if he discovers that any income has escaped assessment in consequence of definite information which has come into his possession and that in the present case the income-tax Officer did not re-open the assessment on my such basis but only because he changed his opinion on the facts, which were within his knowledge at the time the first assessment was made.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-4", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "Section 34 reads:\n \"If in consequence of definite information which has come into his possession the Income-tax Officer discovers that income profits or gains chargeable to income-tax have escaped assessment in any year ............................. the Income-tax Officer may in any case which he has rreason tobelieve that the assessment has concealed the particulars ................................ serve on the person liable to pay tax on such income. profits............................ and may proceed to assess or re-assess such incoem profits and gainst and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section\". \n The necessary conditions for the application of the section are;\n (i) Subsequent to the assessment, the Income-tax Officer comes into possession of information,\n \n\n (ii) that information must be definite and\n \n\n (iii) by reason of that information, he discovers that the income has escaped assessment. \nThe scope of these three conditions has been the subject of judicial scrunity. It will be convenient at this stage to consider those decisions to ascertain the settled law on the subject. \n\n (5) In -- 'FAzal Fhala v. Commr. of Income-tax. B. and O.', AIR 1944 pat 338 (A), the assessee was assessed for the year 1937-38 on 4-9-1937 but proceedings under Section 34 were started on 7-5-1938 on the ground that the income of the Madras Branch of the assessee had escaped assessment. In that case, the Income-tax Officer had in mind the existence of the Madras Branch of the business when the assessment was completed on 30-8-1938.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-5", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "He did dnot come into possession of any new definite information subsequently which enabled him to reopen the assessment already made. As the conditions laid down in Section 34 had not been complied with, the learned Judges held that the assessment was invalid. \n\n (6) In -- 'Badar Shoe Stores, Agra v. commr. of Income-tax, C P. and U. P. Lucknow', AIR 1949 All 164 (B), the assessee a dealer in shoes returned gross profits varying between 5 and 5.6 per cent. of the gross turnover for the four years including the accounting year 1930-40. As the return for the accounting year 1939-40 aroused the suspicion of the Income-tax Officer, he examined the accounts of that year in detail and foiund that an item on the debit side of the accounts had been inflated by a sum of Rs.5,000. His suspicion was also around in respect of the balance brought forward in 1939-40 accounts from previous years.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-6", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "When the assessee was asked to produce accounts for the accounting years ending 31-3-1937, 31-3-1938 and 31-3-1939, he replied that they were sold away as waste paper. The Income-tax Officer thereafter issued a notice under Section 34. The learned Judges held that the Income-tax Officer had definite infromation in consequence of which he discovered that the assessee's income of 1938-39 had escaped assessment in the assessment year 1939-40. The learned Judges, at page 168, defined the crucial words as follows:\n \"Our conclusion from a consideration of these authroities is that, so far as the word 'discovers' in the amended Section 34 is concerned , it requires that the Income-tax Officer should have formed an honest and reasonable behlief upon materials which could reasonably support such belief. In the nature of things, it cannot amount to a conclusion of certainly .......................................;\n These present less difficulty, but it has to be remembered that both what is a 'discovery' and what is 'derfinite information' must necessarily vary with the circumstances of the case. We think that the words 'definite inforamtion' are placed in Section 34, Indian Income-tax Act to protect the subject against an assasult by the Income-tax Officer based upon mere suspicion. The definite information which is something more than mere gossip or rumous must lead to the discovery or belief as we have described it above. \n\n But we are not prepared to engage ourselves to the view that, provided the information is is definite and does lead to that belief, it need necessarily be information of fact, though in ninety-nine cases out of a hundred it would investably be information of fact\".", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-7", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "(7) In -- 'Kedar Nath v. Commr. of Income-tax, U. P. and C. P. and Berar, Lucknow', AIR 1947 All 153 (C), the assessee a practising Barrister was assessed for the assessment year 1940-41 by the Income-tax Officer on 28-1-1941 and, in the course of that assessment, it transpired that the assessee had purcahsed and sold shares in companies and suffered losses in the course of those transactions. But the Income-tax Officer did not allow any deductions on that account. Subsequently, on 12-12-1942, a new Officer started proceedings under Section 34 in respect of the year 1940-41 and enhanced the assessment.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-8", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "He made the assessment in respect of the profits said to have been earned by the assessee in what was foiund to be a business in the purcahse and sale of shares. Thelearned Judges held that the officer did not receive any new and definite information and that the assessment, having been based only on a change of opinion based on the same facts, was invalid. At page 155, the learned Judge observed:\n \"It still remains a fact that there is not an iota of material in this record to show that the Income-tax Officer re-opened, the matter in consequence of any iformation he had received, definite or otherwise, prior to the re-investigation ........... the Second Income-tax Officer was dissatisfied with the view taken by the first and therefore decided to re-open the matter\".  \n (8) In -- 'Gaya, Ram Gabbu Lal v. Commissioner of Income-tax', (D), the Income-tax Officer gave notice under Section 34 of the Act for re-opening the assessment for the year 1940-41. When he found fictitious depsoits during the course of the assessment for the year 1941-42, he made enquiries and found that the rates of purchase shown in the books of account of the assessee and supported by memoranda for the assessment year 1940-41 were much higher than the rate shown in the books of other dealrers and that the assessee had a large sum of money which he showed in the accounts of the next year as deposits in the names of certain persons which entries were wrong.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-9", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "On the basis of this new information, he issued a notice under Section 34. The learned Judges held that he had jurisdiction to do so. The reasons for so holding are found at page 326, in the following terms :\n \"Before notice can be issued, the Income-tax Officer must be satisfied and the satisfaction must be that of a reasonable man i.e., the definite information in his possession should lead to the conclusion that income has escaped assessment\". \n (9) In -- 'Haji Ahmad Haji Esak and Co. v. Commissioner of Income-tax', (E), it was contended that the books of account were present before the first officer and all the facts, which were elicited from those books, could have been elicited by the first officer, and, therefore, no fresh information came into the possession of the officer who decided to act under S. 34 of the Act. Chagla, C.J., and Tendolkar, J., observed at page 301 :\n \"Does Section 34 or S. 15 contemplate that it information could have come into the possession of the officer by due diligence, then although in fact he had no knowledge of that information for the purposes of these two sections, it must be deemed that he had the information and he could not act one that information although in fact he came to know of it subsequently. In our opinion, the section does not and cannot bear that interpretation. 'Information' meanse something that the mind had acqired. \n\n The mere fact of the presence of a book before a person does not give him the information or the contents of that book unless he opens the book and reads it. According to Sir Jamshedji, the mere fact that a book was placed before an officer is sufficient to give him information of its contents. That may be constructive notice of the contents, but Section 15 does not deal with contructive notice.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-10", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "Section 15 deals with actual notice andin order that an officer should be incapacitated from acting under Section 34 or S. 15, he must have actual knowledge of certain facts which knowledge he is again using for the purpose of acting under these sections. If actual knowledge was about -- it is immaterial how that actual knowledge was absent -- then when the actual knowledge does come about it confers jurisdiction upon the officer to act under those two sections\". \n These observations, therefore, support the view that the mere fact that an Income-tax Officer before the assessment could have discovered the facts which he came to know at a subsequent stage, if he acted with diligence even before the assessment, could not in law preclude him from acting under Section 34, if as a matter of fact, he received definite information subsequently. \n\n (10) In -- 'Jitan Ram Nirmal Ram v. Commissioner of Income-tax', (F), learned Judges held that the phrase 'definite information in Section 34 cannot be construed in an universal sense and its meaning must depend and must necessarily vary with the circumstances of each case. But they made it clear that it is necessary that the information should be more than mere gossip or rumour. \n\n (11) In -- 'Commissioner of Income-tax, Madras v. Janab S. Kaderwalli Sahib', (G), the Madras High Court held that a mere change of opinion based on the same facts and figures, which were present to the mind of the Income-tax Officer at the time of the original assessment, does not amount to 'discovery' within the meaning of Section 34, Indian Income-tax Act, 1922. There the assessee was a partner in a registered firm consisting of three individuals.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-11", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "During the course of assessment proceedings, the Income-tax Officer made enquiries as regards the acquisition of house property by the assessee during the year of account and he came to the conclusion that a sum of Rs. 16,000/- invested by the assessee on the purchase of house property came from his share of the profits of the partnership of which he was a member. On that basis, he added that sum to the income of the firm and the profits of the partnership were assessed on an estimate. \n\n Against the assessment of the firm, an appeal was filed and the Assisstant Appellate Commissioner held that the inclusion of Rs. 16,000/- in the firm's income was not justified. Thereafter the Income-tax Officer purported to take proceedings under Section 34, Indian Income-tax Act and added the sum of Rs. 16,000/- to the income of the assessee and assessed hin afresh. The learned Judges held that the assessment was invalid. At page 994, they observed :\n 'It is clear that a mere change of opinion based on the same facts and figures which were present to the mind of the Income-tax Officer at the time of the original assessment does not amount to discovery. The must be the result of definite information, that is to say, new information that has come to the knowledge of the Income-tax Officer.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-12", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "The Income-tax Officer cannot act under this section even though the tax-payer has escaped assessment if he is acting on information which was already in his possession and within his knowledge\". \n (12) In -- 'Debi Prasad Malviya v. Commissioner of Income-tax', (H), the Income-tax Officer, though he knew that the assessee had a one-third share in a partnership firm and the profits from that firm had to be included in his total income, finished the assessment and observed in the assessment order that as the assessment of the firm had not been completed, necessary action for revising the assessment by inclusion of the assessee's share of profit in the firm would be taken later on the receipt of the report from the Income-tax Officer assessing the firm. \n\n Subsequently the Income-tax Officer issued notice under Section 34 for including in the assessment the share of profits of the assessee from the firm. The learned Judges held that the notice under S. 34 was wrong and the Income-tax Officer had no authority to re-open the assessment already made by him. At pages 227-228, the learned Judges give their reasons for so holding as follows : \n \"As regards the question referred to us under Section 66 (1) we find that the facts on the basis of which notice under Section 34 was issued were all know to the Income-tax Officer concerned except of course the actual amount of profits that had been made by the Kanpur Iron Supply and Co., in the two years in question ............... the Income-tax Officer knew that the assessee had a one-third share in the partnership firm Kanpur Iron Supply Co., and that the profits of that concern had to be added to the total income of the assessee .................... Section 23, Indian Income-tax Act contemplates that the Income-tax Officer should make and complete assessment on the basis of the total income of an assessee.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-13", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "It is not open to him to make assessments piecemeal and in case where the Income-tax Officer has proceeded to assess one part of the income and has decided to asses the rest of the income on a later date, he cannot rely on the provisions of Section 34 for the purpose of re-opening the assessment ............. It cannot, therefore, be said that the fact was discovered later that the assessee laid been under-assessed. \n (13) From the aforesaid discussion of the caselaw, the law on the subject may be summarised thus. Section 34 was enacted both in the interests of the State and the subject. If it is necessary to prevent evasion of tax, it is equally important to protect a citizen from undue harassment by over-zealous officers. The Act does not contemplate peicemel assessment and ordinarily it is expected of an Income-tax Officer to complete his assessment for a particular year once and for all. He cannot resort to the method of piecemeal and compartmental assessment. But, at the same time. to detect evasion and to assess the escaped income, the section confers on an officer power conditioned by the provisions of the section itself. \n\n Unless he gets definite information i.e, clear and unambiguous information not based on gossip, rumour or surmises, which in its turn leads him to arrive at a reasonable belief that the income escaped assessment etc., he had no power to start an enquiry under Section 34. No doubt, the word 'discover' cannot in the context mean arriving at a final decision but it can be interpreted to mean only a reasonable belief on the part of the Income-tax Officer that the income had escaped assessment.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-14", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "There is also an essential distinction between discovery based upon a new fact brought to the notice of the Income-tax Officer and a change of opinion arrived at by him on the facts that existed prior to the assessment for, in the latter case, he does not receive any new information. All the facts were already within his knowledge. \n\n (14) Applying the said principles, can it be said that in this case that the Income-tax Officer received definite information on the basis of which he came to a reasonable belief that the income of the assesse escaped assessment ? From the statement of facts, it is clear that even before the first assessment, the Income-tax Officer had not only a doubt, but even a shrewd suspicion that some fraud was committed in respect of the item of Rs. 1,15,000/-. Though he made enquiries he did not get any definite information before the closing of the assessment to induce him to come to any reasonable belief that the said item represented the profits of the firm. \n\n On receipt of the definite information from the Income-tax Officer, Tuticorin Circle to the effect that the said four partners had no income other than that which they got from the firm assessed and that they did not sell any properties of their own to advance large amounts towards the capital of the partnership, the lingering doubt in his mind was crystallised into a reasonable belief that the said sum represented the profits of the firm. The Income-tax Officer did not change his opinion on the facts, which were already before him at the time of first assessment. The fact that the partners had no other resources for advancing large amounts towards the capital of the business was not before him.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-15", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "It was communicated to him only subsequent to the assessment and that fact really and naterially turned the scales against the assessee. We would, therefore, hold that 'discovery' within the meaning of the section was made by the Income-tax Officer on the receipt of definite information from the Income-tax Officer. Tuticorin Circles, and therefore, the action taken by the Income-tax Officer under S. 34 the Act was right. \n\n (15) It was then contended that the information given by the Income-tax Officer was not of a fact but only based on his surmises. The report clearly shows that he made the enquiries and the enquiries convinced him that the partners had no other source yielding the required amount for making a deposit, towards the capital of the business. We cannot, therefore, say that the communications made by the Income-tax Officer, Tuticorin was not 'definite information\" within the meaning of the section. \n\n (16) Learned counsel then contended that the re-assessment under Section 34 was based upon pur surmises, ignoring the definite and direct evidence adduced by the assessee. This is not one of the questions referred to us. Further the question raised is one of fact. The Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal considered the entire material and came to the conclusion that the said item represented the profit of the firm and was therefore liable to assessment. We cannot in this reference question a finding of fact arrived at by them.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "faa83b2ed0e4-16", "Titles": "M.M.A.K. Mohiddin Thamby And Co., ... vs Commissioner Of Income-Tax, ... on 15 April, 1955", "text": "(17) No contention has been raised before us that when the assessment was re-opened, the Income-tax Officer had no jurisdiction to find out the other items that escaped assessment at the earlier stage. The Income-tax Officer added Rs. 11,185/- to the assessable income on account of undervaluation of stock discovered by him. The Assisstant Commissioner and the Tribunal agreed with him. \n When once it is not disputed that the Income-tax Officer has jurisdiction to reopen the other items. we cannot go into the correctness of the figures arrived at by the Tribunal. We accordingly answer the question referred to us. The applicant will pay the consts of the respondent which we fix at Rs. 200/-. \n\n (18) Answer accordingly.", "source": "https://indiankanoon.org/doc/909761/"}
+{"id": "57b2a9f6bb38-0", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "JUDGMENT Ramanujulu Naidu, J.   \n 1. In this Writ Petition the legality of levy of exercise duty in a sum of Rs. 22,55,795.76 on the cost of jute bags in which excisable commodity of cement manufactured by the petitioner-company, hereinafter referred to as the Company, was packed and sold between 1-10-1975 and 8-1-1976 is questioned and refund of the amount of excise duty paid by the Company under protest prior to or at the time of the removal of the commodity is prayed for.   \n 2. In W.P. No. 1532 of 1976 filed by the K.C.P. Limited, engaged in manufacture of cement at Macherla, Guntur District, an identical question was raised and answered in favour of the assessee therein by a Division Bench of this Court consisting or one of us and Sri Kondaiah, the former Chief Justice. The said Writ Petition was disposed of along with a batch of Writ Petitions filed by some other assessees in which the scope of Section 4 of the Central Excise and Salt Act, 1944 as amended by the Central Excise and Salt (Amendment) Act, 1973 which came into force on 1-10-1975, was canvassed. The decision of the Division Bench was reported in Indo-National Limited, Nellore-4 and others vs. Union of India and others, 1979 ELT 334 (AP). In paragraph 63 of the judgment, which disposing of the batch of Writ Petitions, the Division Bench observed :", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-1", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"........the only question raised by the petitioner-company is the legality of levy of excise duty on the cost of jute bags in which the excisable goods manufactured by the Company were packed and sold between 1-10-1975 to 8-1-1976. Admittedly, even after the amended Section 4 came into force, till 4-12-1975, the excise authorities did not include the cost of jute bags in the assessable value. However, from 5-12-1975 to 9-1-1976, the excise authorities made a demand in a sum of Rs. 2,08,791.05 towards excise duty on the cost of jute bags. The petitioner objected to the demand, but, however, paid the amount under protest. For the earlier period between 1-10-1975 and 4-12-1975, a demand was subsequently made by the 3rd respondent in a sum of Rs. 3,85,835.46 towards excise duty on the cost of jute bags on the ground that by mistake the sum was not collected earlier. For the reasons assigned by us, while dealing with the claim of exclusion of the cost of packing in Writ Petition No. 5948 of 1975, we hold that the cost of jute bags in which the goods of the company were packed and sold is not liable to be included in the assessable value of the goods. We may also observe that, realising the mistake committed by the excise authorities, the Government of India also issued the notification dated 9-1-1976 exempting payment of excise duty on the cost of jute bags in which cement is packed and sold by the manufacturers of cement. The petitioner-company is, therefore, entitled to refund of the amount of excise duty on the cost of jute bags levied and collected between", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-2", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "refund of the amount of excise duty on the cost of jute bags levied and collected between 5-12-1975 and 8-1-1976. The demand dt. 31-3-1976 made upon the petitioner for payment of excise duty in a sum of Rs. 3,85,835.46 on the cost of jute bags for the period from 1-10-1975 to 4-12-1975 is, therefore, liable to be quashed.\"", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-3", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "Following the decision of the Division Bench, we quash the order dated 11-8-1978 passed by the 3rd respondent confirming the levy of excise duty, in a sum of Rs. 22,55,795.76 on the cost of jute bags in which the excisable duty of cement manufactured by the Company was packed and sold between 1-10-1975 and 8-1-1976.   \n 3. Sri K. Srinivasamurthy, learned counsel for the Company submits that the Company is entitled to the consequential relief of refund of the amount of excise duty paid under protest. Sri K. Subrahmanya Reddy, learned counsel appearing for the respondents strenuously contends that the entire amount of excise duty levied and collected from the Company was passed on by the Company to its consumers and that any refund of the amount of excise duty to the Company, if ordered, would amount to unjust enrichment of the Company. The plea put forward on behalf of the Union of India and founded upon the doctrine of unjust enrichment was not advanced in the batch of writ petitions disposed of by the Division Bench referred to supra.   \n 4. Before we advert to the decisions cited in support of the rival contentions advanced before us we may extract Rule 11 of the Central Excise Rules, 1944 providing for refund of duties or charges erroneously paid. It runs thus :", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-4", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"11. No refund of duties or charges erroneously paid, unless claimed within three months. - No duties or charges which have been maintained with the Collector under Rule 9, and of which repayment wholly or in part is claimed in consequence of the same having been paid through inadvertence, error or misconstruction, shall be refunded (unless the claimant makes an application for such refund under his signature and lodges it with the proper officer) within three months from the date of such payment or adjustment, as the case may be.\"   \n The above rule was omitted by the Central Excise (Fifteenth Amendment) Rules, 1980 by reason of insertion of Section 11-B in the Act by Finance (No. 2) Act, 1980 which runs thus :   \n \"11B. Claim for refund of duty. - (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date :   \n Provided that the limitation of six months shall not apply where any duty has been paid under protest.   \n (2) If on receipt of any such application the Assistant Collector of Central Excise is satisfied that the whole or any part of the duty of excise paid by the applicant should be refunded to him, he may make an order accordingly.   \n (3) Where as a result of any order passed in appeal or revision under this Act refund of any of excise becomes due to any person, the Assistant Collector of Central Excise may refund the amount to such person without his having to make any claim in that behalf.   \n (4) Save as otherwise provided by or under this Act, no claim for refund of any duty of excise shall be entertained.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-5", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "(5) Notwithstanding anything contained in any other law, the provisions of this section shall also apply to a claim for refund of any amount collected as duty of excise made on the ground that the goods in respect of which such amount was collected were not excisable or were entitled to exemption from duty and no Court shall have any jurisdiction in respect of such claim.   \n .............................................\"    \n 5. In Sales Tax Officer vs. Kanhiya Lal - it was held by their Lordships of the Supreme Court :   \n \".........if it is once established that the payment, even though it be of a tax, has been made by the party labouring under a mistake of law the party is entitled to recover the same and the party receiving the same is bound to repay or return it. No distinction can, therefore, be made in respect of a tax liability and any other liability on a plain reading of the terms of S. 72 of the Indian Contract Act.   \n .............................................  \n To hold that tax paid by mistake of law cannot be recovered under S. 72 will be not to interpret the law but to make a law by adding some such words as \"otherwise than by way of taxes\" after the word \"paid\".    \n Their Lordships also added that merely because the State had not retained the monies paid as Sales Tax by the Assessee, but had spent them away in the ordinary course of business of the State would not make any difference to the position and under the plain terms of Section 72 of the Contract Act, the assessee would be entitled to recover back the money paid by him to the State under mistake of law and that equitable consideration could scarcely be imported when there was a clear and unambiguous provision of law which entitled the assessee to the relief claimed by him.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-6", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "6. In Patel India vs. Union of India - excess levy of duty levied by the Customs authorities under the Sea Customs Act on some of the goods imported by the appellant-company therein on the ground that the invoice price was not the real value of the imported goods was held to be without authority of law. The Union of India refused to refund to the appellant-company therein the amount of excess duty paid on the ground that no such claim was made within three months from the date of payment. Reliance was placed upon Section 40 of the Sea Customs Act, which is in pari materia with Rule 11 of the Central Excise Rules, 1944. Adverting to the said plea, their Lordships of the Supreme Court observed :   \n \"Section 40 on which the Union of India relied in its return, provides that no customs duties or charges which have been paid, and of which repayment wholly or in part, is claimed in consequence of the same having been paid through inadvertance, error or misconstruction, shall be returned, unless such claim is made within three months from the date of such payment. The section clearly applies only to cases where duties have been paid through inadvertence, error or misconstruction and where refund application has to be made within three months from the date of such payment.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-7", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "As rightly observed by the High Court, the present case was not one where the excess duty was paid through any of the three reasons set out in S. 40. The excess duty was demanded on the ground that the invoice price was not the real value of the imported goods and payment under protest was also made on that footing. The ultimate result in the appellant-company's revision was that charging of excess duty was not warranted under the Act, and that the value on which duty should have been assessed was the invoice price and nothing else. That being the petition, Section 40 did not apply and could not have been relied upon by the customs authorities for refusing to refund the excess duty unlawfully levied on the appellant-company.   \n From the fact that the customs authorities refunded the excess duty on items 22 to 29 and 33-35, it follows that the customs authorities had fully realised that the excess duty had been levied without the authority of law, for otherwise they would not have agreed to refund it, and further that they could not lawfully retain it. If the customs authorities were not entitled to levy the excess duty and retain it, they were bound to return it to the appellant-company who had paid it under protest and only with a view not to incur demurrage charges, unless there was some provision of the Act which debarred the appellant-company from recovering it.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-8", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "The only provision relied on by the Customs authorities was Section 40 of the Act. Indeed, their refusal to refund the excess-duty both in their return and in the High Court was on the ground of the omission of the appellant-company to apply for the refund within the time provided by that section. It is necessary to emphasis that it was not their case that the invoice price of the items in question was not the real value or that the excess duty was lawfully levied or that the appellant-company was not entitled to the refund thereof for any reason except the omission to apply for it within the time prescribed by S. 40. But since Section 40 did not apply to the facts of the case, the respondents could not retain the excess duty except upon the authority of some other provision of law. No other provision was pointed out by them which would disentitle the appellant-company to the refund on the ground of its right being time-barred or otherwise. No such provision other than Section 40 which disentitled the appellant-company to the refund having been put forward and the customs authorities not being entitled to retain the excess duty, there was a legal obligation on the part of the respondents to return the excess duty and a corresponding legal right in the appellant-company to recover it. Besides except S. 40, the Act contains no other provision laying down any limitation within which an importer has to apply for refund. The refusal to return the excess duty on the ground that the appellant-company had not applied within time provided by the Act was clearly unsustainable. Since there was not and could not be any dispute with regard to the invoice price being the real value there was no point in filing any appeal; nor could the omission to file any appeal be a proper or valid ground for refusing relief to the appellant-company, when there remained no longer any dispute between the parties as to the invoice price being the real value of the imported items.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-9", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "7. In State of Madhya Pradesh vs. Bhailal Bhai - Sales Tax assessed and paid by the dealers in the State of Madhya Bharat was declared by the High Court of Madhya Bharat to be invalid in law. In some cases refund of the amount of sales tax paid was also ordered. Questioning the decision of the High Court of the State of Madhya Bharat, the State of Madhya Pradesh preferred appeals to the Supreme Court. Their Lordships of the Supreme Court held that the payment of tax was one made under a mistake within the meaning of section 72 of the Contract Act and so the Government to whom the payment was made by mistake was bound to repay it and that the High Court had, in exercise of its jurisdiction under Art. 226 of the Constitution of India, power for the purpose of enforcement of fundamental rights and statutory rights to give consequential relief by ordering repayment of money realised by the Government without the authority of law. Their Lordships, however, added :", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-10", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"At the same time we cannot lose sight of the fact that the special remedy provided in Art. 226 is not intended to supersede completely the modes of obtaining relief by an action in a civil court or to deny defences legitimately open in such actions. It has been made a clear more than once that the power to give relief under Art. 226 is a discretionary power. This is specially true in the case of power to issue writs in the nature of mandamus. Among the several matters which the High Courts rightly take into consideration in the exercise of that discretion is the delay made by the aggrieved party in seeking this special remedy and what excuse there is for it. Another is the nature of controversy of facts and law that may have to be decided as regards the availability of consequential relief. Thus, whereas, in these cases, a person comes to the court for relief under Art. 226 on the allegation that he has been assessed to tax under a void legislation and having paid it under a mistake is entitled to get it back, the court, if it finds that the assessment was void, being made under a void provision of law, and the payment was made by mistake, is still not bound to exercise its descretion directing repayment. Whether repayment should be ordered in the exercise of this discretion will depend in each case on its own facts and circumstances, it is not easy nor is it desirable to lay down any rule for universal application. I may however state as a general rule that if there has been unreasonable delay the court ought not ordinarily to lend its aid to a party by this extraordinary remedy of mandamus. Again, where even if there is no such delay the Government or the statutory authority against whom the consequential relief is prayed for raises a prima facie triable issue as regards the availability of such relief on the merits on the grounds like limitation, the court should ordinarily refuse to issue the writ of mandamus for such payment. In both these kinds of cases it will be", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-11", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "to issue the writ of mandamus for such payment. In both these kinds of cases it will be sound use of discretion to leave the party to seek his remedy by the ordinary mode of action in a civil court and to refuse to exercise in his favour the extraordinary remedy under Art. 226 of the Constitution.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-12", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": ".............It appears to us however that the maximum period fixed by the legislature as the time within which the relief by a suit in a civil court must be brought may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under Art. 226 can be measured. This court may consider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy but where the delay is more than this period, it will almost always be proper for the court to hold that it is unreasonable. The period of limitation prescribed for recovery of money paid by mistake under the Limitation Act is three years from the date when the mistake is known.\"    \n 8. In State of Kerala vs. Aluminium Industries Limited - 16 STC 689 a Bench of seven judges of the Supreme Court while affirming the view laid down in State of Madhya Pradesh vs. Bhailal Bhai (Supra) added :   \n ........Where tax is levied by mistake of law it is ordinarily the duty of the State subject to any provision in the law relating to sales tax (and no such provision has been brought to our notice) to refund the tax. If refund is not made, remedy through court is open subject to the same restrictions and also the period of Limitation (See Art. 6 of the Limitation Act, 1908). Namely, three years from the date when the mistake becomes known to the person who has made the payment by mistake (See State of Madhya Pradesh vs. Bhailal Bhai : ). In this view of the matter it was the duty of the State to investigate the facts when the mistake was brought to its notice and to make a refund of mistake was proved and the claim was made within the period of Limitation.\"", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-13", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "9. In Suganmal vs. State of Madhya Pradesh - 16 STC 389 their Lordships of the Supreme Court reaffirmed the view taken in State of M.P. vs. Bhailal Bhai (supra).", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-14", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "In the said case, the appellant, therein was the Managing Proprietor of Bhandari Iron and Steel Co., which had its foundry at Shilnath Camp, Indore, where it carried on the business of mechanical engineers, iron, brass and malleable iron founders and re-rollers in steel. There was in force in the Indore State, the Indore Industrial Tax Act, 1927, for the imposition of industrial tax on cotton mills. Excess profits duty was payable under the Indore Excess Profits Duty Order, 1944. The company did not run any cotton mill. Still, when the company was called upon to submit its returns and to deposit industrial tax whenever its balance-sheet showed profits, it did so. In all, the company paid a sum of Rs. 18,234.52 in 1944 in advance on account of industrial tax prior to the tax being provisionally assessed by the Assessing Officer. The provisional assessment for the years 1941-43 was made in 1945 and for the years 1945-46 in 1946. The tax was assessed at Rs. 62,809.52. Deducting the amount of Rs. 18,234-5-2 deposited in advance in 1944 an amount of Rs. 44,575 was deposited by the appellant on or before June 9, 1948. The tax for different years was finally assessed in 1951 and 1952. The appellant filed appeals against the various assessment orders to the appellate authority. The appeals were decided in June 1955. The appeals against the assessment of industrial tax were allowed on the ground that the company was not liable to pay industrial tax as it did not carry on any business which was liable to be assessed to that tax and the various assessment orders under appeals were quashed. No direction was, however, given by the appellate authority for the refund of tax which had", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-15", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "No direction was, however, given by the appellate authority for the refund of tax which had been realised from the company. Thereafter the company approached the various officers of the State Government of Madhya Bharat for the refund of tax amounting to Rs. 2,37,770-14-2 after appropriating Rs. 37,951-7-0 to excess profits duty from Rs. 1,75,722-5-2 paid by the company towards the tax and excess profits duty. The Government adjusted the amount due for excess profits duty as requested by the company and refunded Rs. 74,961-9-0 paid subsequent to January 26, 1950 when the Constitution came into force. It, however, refused to admit the claim for refund of the amount of Rs. 62,809-5-2 which had been realised from the company prior to that date and, therefore, refused to refund that amount, the company thereupon filed a writ petition praying for the issue of a writ of mandamus against the State of Madhya Bharat and the other respondents, directing them to perform their statutory duty and/or to refund or cause to be refunded to the appellant the amount of Rs. 62,809-5-2 which, it was alleged they were entitled in law to receive. The respondents contested the claim and the High Court dismissed the writ petition holding that there was no statutory obligation on the State to refund the amount, that the order of the appellate authority did not necessarily imply an order the State to refund the amount and that the writ of mandamus could not be issued for the purpose of refund of the tax wrongly realised as held by the appellate authority as that would amount to ordering the execution of the decisions of the appellate authority. The order of the High Court was assailed by the company in the Supreme Court. Two questions arose for determination by the Supreme Court in the Appeal. The first was whether a petition under Art. 226", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-16", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "determination by the Supreme Court in the Appeal. The first was whether a petition under Art. 226 of the Constitution praying solely for the refund of money alleged to have been illegally collected by the State as tax was maintainable under Art. 226 adverting to the first question, their Lordships of the Supreme Court observed :", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-17", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"We are of opinion that though the High Courts have power to pass any appropriate order in the exercise of the powers conferred under Art. 226 of the Constitution, such a petition solely praying for the issue of a writ of mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as tax. We have been referred to cases in which orders had been issued directing the state to refund taxes illegally collected, but all such cases had been those in which the petitions challenged the validity of the assessment and for consequential relief for the return of the tax illegally collected. We have not been referred to any case in which the courts were moved by a petition under Art. 226 simply for the purpose of obtaining refund of money due from the state on account of its having made illegal exactions. We do not consider it proper to extend the principle justifying the consequential order directing the refund of amounts illegally realised, when the order under which the amounts had been collected has been set aside, to cases in which only orders for the refund of money are sought. The parties had the right to question the illegal assessment orders on the ground of their illegality or unconstitutionality and therefore could take action under Art. 226 for the protection of their fundamental right, and the courts, on setting aside the assessment orders, exercised their jurisdiction in proper circumstances to order the consequential relief for the refund of the tax illegally realised, we do not find any good reason to extend this principle and, therefore, hold that no petition for the issue of a writ of mandamus will be normally entertained for the purpose of merely ordering a refund of money to the return of which the petitioner claim a right.\"  \n In the view expressed above, the appeal preferred by the Company was dismissed and the order of the High Court was confirmed.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-18", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "10. It may be noted that in the present case not only the legality of levy of excise duty on the cost of jute bags is questioned but also refund of the same paid under protest is prayed for. There is also no delay whatsoever on the part of the company in seeking refund of the amount of excise duty paid under protest. The claim of the company even if it were enforced by way of a suit could not have been resisted by the respondents by raising any plea of limitation as the same having been made well within the period of limitation.   \n 11. In D. Cawasji & C. vs. State of Mysore - the appellants therein sought refund of amounts of Education Cess paid under a mistake of law, by way of writ petitions filed before the High Court of Mysore under Art. 226 of the Constitution of India, the Act authorising payment of Educating Cess was struck down by the High Court of Mysore in an earlier proceedings. Refund of amounts of Education Cess levied and paid was not prayed for in the earlier proceeding. The High Court of Mysore declined to exercise its jurisdiction under Art. 226 of the Constitution of India and the writ petitions were dismissed. The appellant thereupon moved the Supreme Court. The Supreme Court confirmed the decision of the High Court. Their Lordships of the Supreme Court quoted with approval the principles laid down in State of M.P. vs. Bhailal Bhai (Supra) and State of Kerala vs. Aluminium Industries Limited (Supra) and added in paragraph 10 of their judgment :", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-19", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"A tax is intended for immediate expenditure for the common good and it would be unjust to require its repayment after it has been in whole or in part expended, which would often be the case, if the suit or application could be brought at any time within three years of a court declaring the law under which it was paid to be invalid, be it a hundred years after the date of payment. Nor is there any provision under which the court could deny refund of tax even if the person who paid it has collected it from his customers and has no subsisting liability or intention to refund it to them, or, for any reason, it is impracticable to do so.\"   \n 12. In Abdul Quader & Co. vs. Sales Tax Officer - , the vires of Section 22(2) of the Hyderabad General Sales Tax Act, 1959 which laid down that any amount collected by way of tax by any person otherwise than in accordance with the provisions of the Act must be paid over to the Government and in default of such payment, the said amount would be recovered from such person as if it were arrears of land revenue, was challenged. Their Lordships of the Supreme Court held that the impugned Section 11(2) of the Act was not within the competence of the State Legislature under Entry 54 of List II of Schedule VII of the Constitution and that the provisions of Section 20(2) being consequential to Section 11(2) would also fall along with it. Their Lordships added :   \n \"If a dealer has collected anything from purchaser which is not authorised by the taxing law, that is a matter between him and the purchaser, and the purchaser may be entitled to recover the amount from the dealer. But unless the money so collected is due as a tax, the State cannot by law make it recoverable simply because it has been wrongly collected by the dealer.\"", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-20", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "13. In Sales Tax Officer vs. Tata Oil Mills Co. Limited - 36 STC 232 (SC) their Lordships of the Supreme Court held :   \n \"It would not, however, be permissible for the State Legislature to enact a law under entry 54 for recovery by the State of an amount which could not be recovered as Sales Tax or purchase tax in accordance with the law on the subject and which was wrongly realised by a dealer as sales tax or purchase tax. Such a law plainly would not be a law relating to tax on the sale or purchase of goods but would be one in respect of an amount wrongly realised by a dealer as sales tax or purchase tax. It looks perhaps odd that a dealer should recover in the course of business transactions certain sums of money as sales tax or purchase tax payable to the State and that he should subsequently decline to pay it to the State on the ground that the same amount is not exigible as sales tax or purchase tax. Whatever might be the propriety of such a course, the question with which we are concerned is whether the State Legislature is competent to enact a law under entry 54 for recovery by the State of an amount, which though not exigible under the State law as sales tax or purchase tax was wrongly realised as such by a dealer. The answer to such a question has to be in the negative.\"   \n The decision in Abdul Quader & Co. vs. Sales Tax Officer (Supra) was quoted with approval.   \n 14. In Atic Industries vs. Assistant Collector, Central Excise - , their Lordships of the Supreme Court while setting aside the assessment to excise duty made by the excise authorities on the dye-stuffs manufactured by the appellants wherein directed the respondents to refund to the appellants forthwith the amount collected in excess of the correct duty of excise leviable in accordance with the principles laid down in the judgment delivered therein.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-21", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "15. In Annapurna Match Industries, Cuddapah vs. Union of India and another - . The legality of imposition and collection of excise duty on matches manufactured by Annapurna Match Industries was assailed in a proceeding instituted under Article 226 of the Constitution of India. Refund of the excise duty so collected was also prayed for. A Division Bench of this court declared the imposition and collection of excise duty to be without jurisdiction and not authorised by law. Adverting to the claim of refund of the excise duty asked for, the Division Bench observed :   \n \"The respondent cannot be allowed to appropriate the duty so collected. As the duty was collected under a void provision the petitioner is also entitled to an Order for refund of the duty collected from him by the respondents.\"", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-22", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "16. In Union of India vs. Mansingka Industries Pvt. Ltd. - 1979 ELT 158 (Bombay), Mansingka Industries Private Limited, a company incorporated under the Indian Companies Act filed a suit in the Court of the Civil Judge, Senior Division at Jalgoan contending that the Union of India illegally recovered from it certain monies purported to be excise duties under the Central Excises and Salt Act. The suit was decreed. The decree was assailed by the Union of India in the High Court of Bombay of the ground that Section 40 of the Central Excises and Salt Act excluded the jurisdiction of Civil Court to recover duty illegally collected by the Government. Repelling the contention, Mukhi J., held that Section 40 of the Central Excises and Salt Act merely enacted immunity or protection against claims for damages against the Government itself or any of its officers for acts done in good faith and that questions of collection of illegal duty and/of its recovery or refund were not questions covered by the said section and that Section 40 of the Central Excises and Salt Act did not bar the jurisdiction of civil or criminal courts from recovery of duty illegally collected. In result, the appeal preferred by the Union of India was dismissed.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-23", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "17. In Associated Bearing Company Limited vs. Union of India and another - 1980 ELT 415 (Bombay), following the earlier decision of the Division Bench of the High Court of Bombay in Union of India vs. Mansingka Industries Private Limited (Supra), a Division Bench of the High Court of Bombay held that the jurisdiction of the authorities under the Central Excise Act was to recover duty according to law, that if any duty was recovered on post-manufacturing expenses or on a price which was not permissible in law, such a levy clearly amounted to exercising excess of jurisdiction or acting without jurisdiction and could not be held merely an error of jurisdiction that it could not, therefore, be construed as resulting due to any inadvertance, error or misconstruction on the part of the Department for purposes of limitation as contemplated under Rule 11 of the Central Excise Rules, 1944, that once the recovery of the excise duty by the Department was held to be illegal, the provisions of Rule 11 would not be attracted, that a claim for such a refund could be entertained within three years from the date when the mistake of law was discovered and that there was no provision in the Central Excise Law under which a manufacturer could be denied the refund of duty illegally collected from him even though he had recovered it from the customers and had no intention to refund it to them and that the claim of refund of duty illegally collected by the Department could be entertained even in a proceeding under Article 226 of the Constitution.   \n The Division Bench of the High Court of Bombay placed reliance upon paragraph 10 of the judgment of the Supreme Court in D. Cawasji & Co. vs. State of Mysore (Supra), extracted earlier.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-24", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "18. In Maharashtra Vegetable Products Pvt. Ltd. and another vs. Union of India and others - 1981 ELT 468 (Bombay) a Division Bench of the High Court of Bombay again held, following the earlier decisions of its two Division Benches in Union of India vs. Mansingka Industries Private Limited (Supra) and Associated Bearing Company Limited vs. Union of India and another (Supra), that the excise authorities had no jurisdiction to take into account any post-manufacturing expenses for purpose of chargeability of excise duty, that if excise duty was wrongly collected on post-manufacturing expenses, it clearly amounted to exercising of powers without jurisdiction and outside the provisions of the Central Excises Act, that it wound not attract the bar of limitation prescribed under Rule 11 of the Central Excise Rules, 1944 for purposes of refund, that the amount of duty illegally collected was refundable even though it was recovered from the consumers by the manufacturers and might result in unjust enrichment, that where the constitutional validity of a levy was in question and the departmental action amounted to recovery of tax without authority of law, it could not be said that a suit was a remedy equally expenditious, efficacious and adequate as a proceeding under Article 226 of the Constitution and that the period of limitation for filing a proceeding under Art. 226 of the Constitution was three years from the date of the court declaring the law under which the duty was paid to be invalid.   \n 19. The Union of India applied to the Supreme Court for special leave to appeal against the decision in Maharashtra Vegetable Products Pvt. Ltd. and another vs. Union of India and others (Supra) and leave was refused by their Lordship of the Supreme Court consisting of the Chief Justice and Mr. Justice Eradi on 3-4-1981.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-25", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "20. In Paper Products Ltd. vs. Union of India - 1981 ELT 538 (Bombay), a single Judge of the Bombay High Court held that if duty paid by mistake was declared by a competent Court to be invalid in law, it would fall within the purview of Section 72 of the Contract Act and the Government would be under an obligation to refund it.   \n 21. In Madras Fertilisers Ltd. vs. Assistant Collector of Central Excise, Madras & others - 1981 ELT 194 (Madras) it was held by Varadarajan J., that the Government was not entitled to retain the excess duty recovered or collected as there was a legal obligation on its part to return the same and as there was a corresponding legal right in the assessee to recover the same.   \n 22. In Prem Cables Pvt. Ltd. vs. Assistant Collector (Principal Appraiser) Customs, Bombay and Others - 1981 ELT 440 (Raj.) it was held by a Division Bench of the High Court of Rajasthan that the High Court could issue a direction for enforcement of fundamental rights to give constitutional relief by way of refund of money paid under a mistake of law and realised by the Government without the authority of law and that if a proceeding under Article 226 of the Constitution of India was instituted within three years from the date the mistake of law became known to the assessee, the amount could be refunded by issuing a writ of mandamus and institution of a suit in a Civil Court was not necessary for the purpose.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-26", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "23. In I.T.C. Limited and Others vs. Union of India and Others (Supra) it was held that the revenue had no right to retain taxes of any kind illegally levied and collected if the same were not authorised by law and the aggrieved assessees claiming refund of such duties could not be denied the remedy under Art. 226 of the Constitution.   \n 24. In Assistant Collector of Customs : Madras and Others vs. Premraj and Ganapat Raj and Co. (P) Ltd. - 1978 ELT 630 (Madras) a Division Bench of the Madras High Court directed refund of excise duty to the assessee on the ground that the recovery of duty was without the authority of law.   \n 25. In Vazir Sultan Tobacco Co. Ltd. vs. Union of India and Others 1981 ELT 140 (Delhi) a single Judge of the Delhi High Court held that any duty realised in excess of what was permissible under the Central Excise Act, would be realisation outside the provisions of the Act and the time limit laid down for refunds in Rule 11 read with Rule 173J of the Central Excise Rules, 1944 would not apply in such cases and that where the Government realised the duty in contravention of the law the court was fully competent to allow the refund of the excess amount of duty under Art. 226 of the Constitution even though the claim of refund had been held to be time bared by the departmental authorities.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-27", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "26. In Hyderabad Asbestos Cement Products Ltd. vs. State of Andhra Pradesh - 24 STC 487 the appellant therein was a public limited company carrying on the business manufacturing and selling asbestos cement sheets and other products with its factory situated at Sanatnagar, Hyderabad in the State of Andhra Pradesh. For the year 1959-60, the Commercial Tax Officer, in assessing the turnover of the Company allowed a deduction of Rs. 57,590.37 in respect of railway freight on articles supplied to outstation customers. The Deputy Commissioner of Commercial Taxes later revised the assessment and directed that the railway freight paid in respect of the goods sold be included in the turnover. In appeal the Appellate Tribunal set aside the order passed by the Deputy commissioner of Commercial Taxes. But the order passed by the Tribunal was set aside by the High Court of Andhra Pradesh and the order passed by the Deputy Commissioner was restored. A writ petition moved by the Company challenging the assessment was also dismissed. The company thereupon moved the Supreme Court. The Supreme Court held that under the terms of the contract there was no obligation on the part of the company to pay the freight and the price received by the Company for the sale of the goods was the invoice amount less the freight. In that view the appeals preferred by the Company were allowed by the Supreme Court. Adverting to the plea put forward on behalf of the State that the Company realised sales tax on the freight from its customers, their Lordships observed :", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-28", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"If, apprehending that it may have to pay sales tax on the freight, the Company collected sales tax on the freight, the true nature of the contract between the Company and the purchasers cannot on that account be altered. The Company may be liable to refund the amount of excess sales tax to its purchasers. But that is a matter between the Company and the purchasers and the State cannot seek to levy tax on railway freight if it is not made a part of the price\".   \n 27. To sum up, the excise authorities have no jurisdiction to levy excise duty except in conformity with and as empowered by the provisions of the Central Excise Act and the rules made thereunder. Any duty collected otherwise is without authority of law and is liable to be refunded to the assessee. The Union of India has no right to retain the duty so illegally levied and collected. In a proceeding instituted under Art. 226 of the Constitution of India questioning the levy of such illegal excise duty, the assessee is entitled to the consequent relief of refund of the duty so illegally collected when the illegal levy is quashed in the said and same proceeding, unless a plea of limitation is available to the Union of India in case the claim were to be enforced by way of a suit. The assessee's claim for refund of excise duty illegally levied any paid by him under protest stands on a still higher footing. (The discretionery jurisdiction of the High Court under Art. 226 of the Constitution cannot, however, be exercised merely for the purpose of obtaining refund of the duty declared to have been collected illegally in an earlier or a different proceeding). Even if the assessee passed on to his consumers, the duty illegally recovered from him, it is a matter between him and his consumers and the High Court cannot deny refund of the illegally levied and collected duty, to the assessee even if it results in unjust enrichment of the assessee.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-29", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "28. On behalf of the Union of India, reliance is placed on the decision in Madras Aluminium Company Ltd. and Another vs. Union of India, 1981 ELT 478 (Madras). The petitioners therein filed writ petitions before the High Court of Madras questioning levy of excise duty on aluminium properzi rods and praying for refund of the duty paid under mistake of law. Adverting to the claim of refund of excise duty, Division Bench of the High Court of Madras observed :   \n \"There is one other impediment in the way of the petitioners claiming refund of excise duty in this case. The petitioners, after paying the excise duty as per the classification made ny the excise authorities, have passed on the same to the actual consumers and in fact, the actual consumers have borne the entire liability towards excise duty. The petitioners admit that they are not able to trace at this stage as to who are the ultimate consumers in respect of the goods which have suffered excise duty, in respect of which refund is now sought for by them. Though excise duty is levied at the production or manufacture of goods for home consumption, in substance it is a tax on consumption, and therefore, if at all it is the consumer who can claim the refund of the excise duty paid in respect of the article purchased and consumed by him and not the petitioners who produced the articles and who have recouped themselves to the extent of the excise duty paid to the State.  \n .......................................................", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-30", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": ".......................................................     \n In respect of sales tax paid by the dealers and which has been passed on to the consumers courts have held that the money paid as tax primarily belonged to the consumers who paid it and not to the dealers (vide 16 STC 973 - IS, C.R. 735 and 30 STC 120). Therefore, the petitioners having passed on the excise duty, paid by them to the state, to the consumers, they cannot have any beneficial interest on the excise duty if and to be refunded by the State and the beneficial interest is vested only if all the consumers who had ultimately borne that burden. As pointed out by the Supreme Court in R.C. Jall vs. Union of India, 1962 Supp. 3 SCR 436 at page 451........", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-31", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"Excise duty is primarily a duty on the production or manufacture of goods produced or manufactured within the country. It is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, that is, its ultimate incidence will always be on the consumer. If the ultimate incidence of the excise duty is on the consumer than the ultimate benefit of the refund of excise duty should also go to the consumer and not to the producer or manufacturer. Thus, even in the event of the court being satisfied that excise duty is not excisable on the molten aluminium which is aluminium in crude from, the court is not bound to direct refund of the duty if it ultimately results in the unjust enrichment of the producer and unfair deprivation of the benefit to the consumers. As already stated, the petitioners are not in a position to say as to who are the ultimate consumer who had in fact borne the excise duty. Therefore, there is no question of the petitioners refunding the excise duty pro rata to the actual consumers. It is true this court can in its discretion direct refund of the excise duty illegally corrected from the petitioners. But in the circumstances of this case, where the petitioners cannot in their turn refund the excise duty pro rata to the actual consumers, such a refund will result in their unjust enrichment to the extent of the amount directed to be refunded and the court will be justified in refusing to exercise its discretionary jurisdiction to direct the refund of the excise duty collected from the petitioners.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-32", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "It is well established that the right of the petitioners to get a refund of the excise duty is subject to questions of estoppel, limitation and the like. If peculiar circumstances existed and they showed that the amount the State has to refund really belongs not to the petitioners but to the consumers, then the court will be justified in refusing to direct refund. In this case, any direction to refund the excise duty to the petitioners will result in their retention of the duty collected by them from the consumers and the court will be siding an unjust enrichment by the petitioners by such a direction. Admittedly the petitioners have passed on the excise duty to the consumers and this was done on the basis that they have paid excise duty to the State. But for the payment of excise duty to the State the petitioners will not be entitled to or enabled to pass on the duty to the consumers. Therefore, if there is no possibility of excise duty being refunded to the actual consumers, the petitioners will have the benefit of both the collection of excise duty from the consumers and the benefit of refund from the State. Thus the court will indirectly and unjustly be enriching the petitioners by directing a refund of the excise duty paid by them. We are, therefore, satisfied that having regard to all the circumstances the petitioners are not entitled to get a refund of the excise duty if they are not in a position to trace the actual consumers and pay back the excise duty collected from them. The discretionary jurisdiction of this court under Art. 226 of the Constitution should be exercised for public good and not to facilitate the petitioners to make an unlawful gain at the instance of the public (consumers) on the one hand and the State on the other, and the exercise of the extraordinary jurisdiction of this court must advance the cause of justice and not subserve the object of the petitioners to enrich themselves unjustly by getting a refund of the excise", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-33", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "the object of the petitioners to enrich themselves unjustly by getting a refund of the excise duty from the State and retaining the same without refunding in to the consumers.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-34", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "...............              \"............\"", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-35", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "The Division Bench added :   \n \"If, in fact the petitioners have no beneficial interest in the amount paid to the State as excise duty, as they have already recouped themselves to that extent from the consumers the claim for refund can in law be taken to be a claim made on behalf of the consumers. As already pointed out, it is impracticable to trace the actual consumers of the goods produced by the petitioners with reference to which excise duty was collected and therefore the court is justified in not directing the refund of the amount to the petitioners but directing the retention of the amount by the State as a deposit with a view to ultimately refund the same pro rata to the actual consumers, as otherwise, a direction to refund the exercise duty to the petitioners will result in their unjust enrichment, and the court will be actually giving an unjust benefit to them. In this view, even if there is any excess collection of excise duty in this case as contended by the petitioners, the petitioners are not entitled to get a refund. The excess collections, if any, will be retained by the State as deposit for the purpose of payment out at pro rata to the actual consumers who come forward and prove their claim for refund\".  \n It may be noticed that the various decisions rendered by the Supreme Court and referred to earlier, recognising the right of the assessee to claim refund of duties or taxes illegally levied from him and the corresponding legal obligation on the part of the Union of India or the State to refund the same to the assessee were not noticed by the Division Bench of the High Court.   \n 29. Reliance was also placed upon the decision of a Division Bench of this court in G.S.G.A. & Co. vs. State of A.P. - 30 STC 120 wherein, adverting to a claim for refund of sales tax which was held to be illegally collected, it was held :", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-36", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"Even if the court is satisfied having regard to all the circumstances that the petitioners are entitled to refund of the tax, the petitioners may still not be granted this discretionary relief if it results in retention of the sales tax collected by them from the public and imposes the burden of refunding the tax on the State which it had collected under a valid assessment order. The discretionary jurisdiction of this court should be exercised for public good and not to facility the individual to make an unlawful gain at the expense of the public on the one hand and State on the other. The extraordinary jurisdiction of the High Court under Art. 226 must advance the cause of justice and not subserve the ends of the individual for retaining the sales tax illegally collected by him..........   \n More than anything else, one fact which must strongly weigh against the claim of the refund of sales tax by the petitioners is that the petitioners have already collected the tax and any direction in these writ petitions to refund such tax as they have paid would result in allowing them to retain the tax illegally collected from the consumers and thus make an unauthorised gain for themselves, while the State which is in charge of the public funds and which has collected the tax as per the final orders of assessment, would be now obliged to return the same for the personal benefit of the dealer at the expense of the public from whom he has collected the tax. The extraordinary jurisdiction of this court must not be allowed to be invoked and the discretionery relief granted for the benefit of a private individual in this manner at the expense of the public and the State. The discretionary jurisdiction of this Court under Article 226 of the Constitution must not be allowed to be exploited to defeat the ends of justice.\"", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-37", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "It may be noted that in the above case sales tax collected from the dealers and sought to be refunded was levied under valid assessment orders which became final. That circumstance weighed with the Division Bench in refusing to grant the discretionary relief. The following observations of the Division Bench are pertinent :", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-38", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"If the assessment order is not void but is only erroneous in law, the assessee is obliged to get the assessment order set aside. Otherwise as laid down in State of Vindhya Pradesh vs. Raghunath Mannulal - 1952 - 3 STC 256), \"if the sales tax authority has jurisdiction, and has exercised it, may be wrongly, then the aggrieved party cannot go to the civil court, but should go to the Tribunal mentioned in the Sales Tax Statute itself, if, on the other hand, this authority had acted without jurisdiction, then the aggrieved party must go to the civil court, because its grievance is a general grievance and not one under the special law. If the assessment order is merely erroneous in law, the assessment cannot claim refund without getting the assessment order quashed by availing himself of the alternative remedy provided under the statute. He cannot invoke the jurisdiction of a civil court for questioning the legality or propriety of the assessment order and if that order cannot be questioned, then the amount paid or recovered pursuant to that order cannot be directed to be refunded by a civil court. If that be so then this court exercising jurisdiction under Article 226 of the Constitution must necessarily take into account whether a party who has by his own laches has not chosen to avail himself of the alternative remedy provided by the statute for questioning the erroneous decisions of the assessing authorities by taking the matter in appeal or in revision and also by reference to this court and has allowed the assessment orders to become final, which assessment orders are not allowed by the statute to be questioned even by way of a civil suit, should be granted the indulgence to invoke the extraordinary jurisdiction of this court of the grant of the discretionery relief. Even this court cannot direct refund of tax paid in pursuance of such orders without quashing the assessment orders themselves. If the assessment orders have to be quashed, this court cannot shut its eyes to the long interval", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-39", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "If the assessment orders have to be quashed, this court cannot shut its eyes to the long interval between the orders of assessment and the writ petitions\".", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-40", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "30. In Hyderabad Asbestos Cement Products Ltd. and another vs. Union of India and others - 1980 ELT 735 (Delhi), the legality of levy of excise duty on asbestos fibre was questioned and refund of the duty paid was prayed for in the Delhi High Court. A Division Bench of the Delhi High Court held that the imposition was valid. Having recorded the said finding, the Division Bench observed in paragraph 32 of the judgment :   \n \"In the petition there was also a claim for the refund of duty which had been paid. In view of my finding on the validity of imposition of the excise duty that question does not arise. Even if I had found otherwise a question may well have arisen whether an order of refund could be passed in favour of the petitioners. The reason is that excise duty and additional duty which has been imposed and as has been recognised by the Supreme Court is ultimately passed on to the consumers........................... ................................................. The benefit if any of the refund of illegally levied excise duty and additional duty should in all fairness normally belong to the consumers. In such a situation a question may well be raised that the petitioners cannot be allowed to unjustly enrich themselves by obtaining refund of the excise duty and additional duty which amount they have already recovered from the consumers when asbestos fibre was disposed of. This is on the equitable plea that if there is illegal levy and some refund is due the same should be disbursed to the buyers from whom the excise duty and additional duty was realised and not appropriated by the petitioners who in equity are not entitled to it\".  \n We are of the opinion that the above observations of the Division Bench of the Delhi High Court are obiter dicta.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-41", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "31. In Ogale Glass Works Ltd. vs. Union of India and others - 1979 ELT (J 468) Bombay, the questions that arose for consideration were whether the cost of packing and packing materials could be included in the assessable value of glass and glassware manufactured by Ogale Glass Works Limited and whether the assessee was entitled to refund of the amounts of duty paid on the cost of packing and packing material. A Division Bench of the High Court of Bombay held that the cost of packing and packing materials could not be legally included in arriving at the wholesale cash price of the excisable goods manufactured by the assessee. The Division Bench, however, declined to grant refund to the assessee of the amounts excess duty collected from the assessee without the authority of law Mukhi J., speaking on behalf of the Bench observed :   \n \"It requires to be noticed that the amount comes to nearly Rs. 12 lakhs and the result of an order in their favour would be that the petitioners would be enriched to that extent without any real claim to that money in so far as the record shows that the moneys were recovered by the petitioners from their customers and then passed on to the respondents.    \n ..............................................  \n In the petition before us, I am unable to persuade myself that justice lies on the side of the petitioners and that this court will be doing justice in ordering the respondent to refund the amount of Rs. 12 lakhs to the petitioners when, to begin with, that money never came from the petitioner's pocket. It is true that the respondents may not have the legal right to retain that money, but in the circumstances of the case justice does not require that moneys moneys should be transferred from the respondents (who have no right to it) to the petitioners who also have no right to it\".", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-42", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "It may be noted that the decision of the Division Bench of the High Court of Bombay suffers from the same comment levelled against the decision in Madras Aluminium Company Ltd. and another vs. Union of India (supra).   \n 32. In Hindustan Pilkington Glass Works Ltd. vs. Superintendent, Central Excise, Asansole & others - 1978 ELT (J 229) (Cal.) a single Judge of the Calcutta High Court held that refund of duty, though paid under a mistake, but without a protest, could not be granted in a proceeding under Art. 226 of the Constitution of India. The decision in Ogale Glass Works vs. Union of India (supra) was relied upon by the learned Judge.   \n 33. In Electric Lamp (India) Pvt. Ltd. vs. Collector of Central Excise, Calcutta and Orissa and others - 1978 ELT 84 (Calcutta) a single Judge of the Calcutta High Court held that a manufacturer who had already collected the excise duty alleged to have been paid in excess by mistake could not be allowed to have an unjust enrichment by claiming again refund of the same amount.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-43", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "34. In Union Carbide Co. Ltd. vs. Assistant Collector of Central Excise and others - 1978 ELT 180 (Calcutta), a single Judge of the Calcutta High Court held that refund of duty paid under mistake of law could be claimed by way of a petition under Art. 226 of the Constitution, provided such petition was filed within three years. The decision in Electric Lamp (India) Pvt. Ltd. vs. Collector of Central Excise, Calcutta and Orissa and others (supra) was relied upon on behalf of the Union of India for negativing the claim of refund of excise duty on the ground that the assessee passed on the same to the actual consumers. Adverting to the said plea, the learned Judge observed :   \n \"Of course the facts of the instant case are different from the facts in that case, inasmuch as there was positive evidence that the manufacturer had realised duties from the consumers. Such evidence is not available in the instant case but it may be presumed that though as a matter of law excise duty is payable by the manufacturer, as a matter of fact it is passed on to the consumers. But that in my opinion is no ground to invoke the theory of unjust enrichment. If unjust enrichment is not to be permitted to a litigant, it should not also be permitted to the State. The State has no right to collect unauthorised tax or illegal tax. Good fiscal administration enjoins that all lawful taxes should be properly collected and taxes which are not due if realised by the State should be refunded. Such fiscal administration alone ensures the atmosphere of tax compliance. But a question of limitation also arises in this case.\"", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-44", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "35. In Birla Jute Manufacturing Company Ltd. vs. Union of India and others - 1980 ELT 593 (M.P.) two writ petitions were filed in the High Court of Madhya Pradesh by the manufacturers of Portland Cement questioning levy of excise duty on the cost of packing of cement in gunny bags from 1st Oct., 1975 to 8th Jan., 1976 and praying for refund of the excess excise duty paid by them under protest. A Division Bench of the High Court while holding that the cost of packing of cement in gunny bags was not includible in the assessable value of cement under Section 4 of the Central Excises and Salt Act, 1944, also directed refund to the assessees, the amounts of excise duty paid by the assessee under protest. Adverting to the decision of the Division Bench of the Bombay High Court in Ogale Glass Works Ltd. vs. Union of India and others (Supra) relied upon by the Union of India in support of its contention that the assessee were not entitled to refund, it was observed :", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-45", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"It is not disputed that the duty on the cost of packing was paid by the petitioners under protest. If the petitioners are not liable to pay duty, they are also not liable to recover it from the parties to whom they sold the cement. The purchasers from the petitioners are entitled to recover that amount from them. The learned Standing Counsel for the respondents relied upon a judgment of the Bombay High Court in the Ogale Glass Works Limited vs. Union of India and others - (1979 ELT 468) in support of his submission that justice does not lie on the side of the petitioners in seeking refund. It does not appear whether in that case the petitioner had paid the duty under protest. When the petitioners in the instant case had paid the duty under protest and when the purchasers from them can claim recovery of the amount of duty which they may have paid as price to the petitioners, we fail to understand why justice does not lie in directing refund of that amount to the petitioners from the Government\".  \n We are in complete agreement with the view expressed by the Division Bench of the Madhya Pradesh High Court. We may add that the facts of, and the questions raised in, the present case are identical with those in the case referred to supra.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-46", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "36. In Wipro Products Ltd. and another vs. Union of India and another - 1981 ELT 531 (Bombay) a division bench of the Bombay High Court expressly dissented from the decision of the Division Bench of the Madras High Court in Madras Aluminium Co. Ltd. and another vs. Union of India (supra) and preferred to follow the earlier decision of a Division Bench of the said Court in Maharashtra Vegetable Products Pvt. Ltd. and another vs. Union of India and Others (supra). The observations made by the Division Bench of the Delhi High Court in Hyderabad Asbestos Cement Products Ltd. and another vs. Union of India and others (supra) in paragraph 32 of the Judgment of the Division Bench were relied upon on behalf of the Union of India. Adverting to the same, the Division Bench of the Bombay High Court held :   \n \"In the first instance it must be noted that the claim for refund of duty was turned down by the Delhi High Court on the ground that the imposition was perfectly valid. The learned Judge observed that the benefit, if any, of the refund of illegally levied excise duty should in all fairness normally belongs to the consumers and therefore a question may well be raised that the petitioners cannot be allowed to unjustly enrich themselves to obtain refund. The learned Judge declined to record any conclusive finding as the question did not specifically.\"   \n The following principles were laid down by the Division Bench of the Bombay High Court :   \n (1) Since the excise duty is leviable on the manufacture or production of goods, the expenses and profits attributable to post-manufacturing and non-manufacturing operation are not includible in the assessable value under Section 4 of the Central Excises Act.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-47", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "(2) If the levy of Central Excise is totally without jurisdiction and outside the provisions of Section 4 of the Central Excises Act, the bar of limitation prescribed under rule 11 of the Central Excise Rules is not applicable.   \n (3) If the recovery is illegal and without jurisdiction, the claim for refund will not be governed by the Limitation Act.   \n (4) if the duty is recovered without authority of law, the Government is bound to refund it even if the benefit is not passed on to the consumer.   \n (5) If the recovery of duty is constitutionally illegal it would be futile to drive the citizen to a Civil Court instead of approaching the High Court under Art. 226 of the Constitution.    \n 37. Examined from a different angle, the plea of unjust enrichment of the Company put forward on behalf of the Union of India does not also merit acceptance. If only the Company had rushed to this Court questioning the levy of duty on the cost of jute bags and obtained a direction from this Court restraining the respondents from collecting the said duty, the respondents could not have collected the same, in which case the question of refund of duty would not have arisen. The Union of India could not have recovered the same from the company under any provision of law on the ground that the Company passed on the same to its consumers. The Company cannot be placed in a disadvantageous position by reason of payment of the illegally levied duty under protest.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-48", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "38. It must also be noted that under Sub-Section (5) of Section 11-B of the Act inserted by Finance (No. 2) Act, 1980, the assessee is entitled to claim refund of any amount collected as duty of excise on the ground that the goods in respect of which such amount was collected were not excisable or were entitled to exemption from duty. It is further enacted therein that no Court shall have any jurisdiction in respect of such claim. Under Section 11-B(1) of the Act the claim for refund must be made to the Assistant Collector of Central Excise before the expiry of six months from the relevant date. The period of limitation does not, however, apply where any duty has been paid under protest. There is no provision in Section 11-B of the Act entitling the Assistant Collector of Central Excise to deny refund of the illegally collected duty of excise on the ground that the assessee passed on the same to his consumers. In other words, the doctrine of unjust enrichment is not recognised and embodied in the Act. We are, however, aware of the fact that Section 11-B of the Act does not govern the claim of the Company, as the impugned levy related to the period prior to coming into force of section 11-B of the Act. The only provision in force during the relevant period is that contained in Rule 11 of the Central Excise Rules, 1944 providing for refund of duties or charges erroneously paid. Rule 11 cannot be invoked by the Union of India where duty was collected without the authority of law, as noticed earlier.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-49", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "39. Sri K. Subrahmanya Reddy, learned counsel for the Union of India places strong reliance upon the decision in N.S. Mills vs. Union of India - for negativing the relief of refund of the illegally collected excise duty to the Company. In the said case, the price of sugar was controlled by the State of Uttar Pradesh by a notification. Several sugar millers writ petitions in the High Court of Allahabad challenging the notification and obtained stay of operation of the notification, on their furnishing bank guarantee to the Court for the excess price. Ultimately the millers failed in their challenge of the notification and the impugned notification was upheld by the High Court. But, crores of rupees were funnelled into the millers' tills during the period when the writ petitions were pending by virtue of stay of operation of the notification. While dismissing the writ petitions, the Division Bench of the Allahabad High Court made the following directions :   \n \"We, therefore, direct that the Registrar will take immediate steps to encash the security and recover the amount so over-charged by the petitioners and pay the same to the State Government which will keep it in a separate account. The petitioners will furnish to the State Government, within a period of six weeks of this order, a list of all such persons to whom they sold the levy sugar of 1971-72 season, together with their addresses, quantity of such sugar sold to and the amount of excess price charged from each of them. The State Government will then refund to the persons concerned the excess amount realised from each of them, if necessary, after verifying the claim for refund of such amount made by such persons.\"   \n Aggrieved by the above direction, the millers appealed the Supreme Court. All the pleas put forward on behalf of the millers were negatived by the Supreme Court and the following directions were made by the Supreme Court to benefit the ultimate consumers :", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-50", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "\"A. The security by way of bank guarantee furnished by every appellant will be encashed by the registrar of the High Court and kept in short-term deposit in the State Bank of India.  \n B. The Appellant will be given complete immunity from liability to any sugar buyer, wholesaler or other to whom sugar has been sold by the appellants at higher prices during the period covered by the High Court's stay order. If any exceptional case of claim were to be made by any buyer, it should be done by motion before the High Court which will be justly disposed of.   \n C. The Registrar, under orders of the High Court, will directly or by making over to the State Government, receive and dispose of claims from the ultimate consumer for excess price paid on proper proof. If the State Government is to undertake this task, a proper, easy and cheap machinery for distribution to the real, last buyers will be produced before the High Court and orders obtained. The process should not be too expensive or too formalised.   \n D. Wide publicity will be given about the project and method of returning small claims and the money sent by post or otherwise. The claims also would be received by post or otherwise and verified without delay.   \n E. The interest accruing from the bank deposits will be used for the incidentals to work out the distribution.   \n F. It will be open to the wholesaler to prove by vouchers the retailers and the latter in turn may prove who the ultimate buyers are the High Court may devise modifications of this scheme or direct the State Government to act on any scheme subject to the moneys reaching the real small buyers from the retailers.   \n G. If any further directions in the mechanics of the scheme are felt necessary, the High Court will report to this court.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-51", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "H. If, within one year from today, any amounts remain unclaimed they will go into a separate deposit in the High Court to be operated on application by any claimant.   \n I. If any legislation dealing with the subject were to be made before the amounts are disbursed, the legislative scheme will pro tanto prevail over the directions given above.\"    \n It may be noted that in the aforesaid case, crores of rupees were funnelled into the millers' tills on account of the orders passed by the High Court staying operation of the notification whereunder the price of sugar was fixed and controlled. That circumstance fully weighed with the High Court and the Supreme Court in making the Directions extracted above, lest there should be no judicial sanction of unjust enrichment of the millers.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-52", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "40. The learned counsel for the Union of India also places strong reliance on the decision in Shiv Shanker Dal Mills vs. State of Haryana - 1980 SC 1037. The appellants therein paid market fee at the increased rate of 3 per cent under the Haryana Act No. 22 of 1977. The levy was challenged by the appellants and the Supreme Court by its judgment delivered on 4-5-1979 ruled that the excess 1% over the original rate of 2% was ultra vires. The decision of the Supreme Court case a consequential liability on the market committees to refund the excess amounts levied and collected. No such order was, however, passed by the Supreme Court presumably because the ultimate persons from whom the market was collected could not be identified. Subsequently the appellants sought suitable directions to the concerned market committees for refund of the excess amounts or market fee collected. It was argued on behalf of the market committees before a bench of three judges of the Supreme Court that although refund of excess collections might be legally due to the traders, many of the traders had themselves recovered the excess percentage from their next purchasers and that the traders themselves had no percentage from their next purchasers and that the traders themselves had no more right to keep such small sums than the market committees themselves. Their lordships of the Supreme Court adopting the procedure laid down in N.S. Mills vs. Union of India (Supra), devised a scheme of refund by the market committees and redistribution of small amounts to those from whom unwarranted collections had been made and the following directions were given :   \n \"I. Subject to the directions given below, all the sums collected by the various market committees who are respondents in these various writ petitions or appeals shall be liable to be paid into the High Court of Punjab and Haryana within one week of intimation by the Registrar of the amount so liable to be paid into the court.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-53", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "II. A statement of the amounts collected in excess (1%) shall be put into this court by the dealers with copies to the various market committees aforesaid and furnished to the writ petitioners and appellants within 10 days from today, and if there is any difference between the parties it shall be brought to the notice of this court in the shape of miscellaneous petitions. On final orders, if any, passed thereon by this court, those amounts as so determined shall be treated as final.   \n III. The Registrar of the High Court shall issue public notice and otherwise given due publicity to the fact that dealers who have not passed on the liabilities to others and others who have contributed to or paid the excess one per cent covered by these writ petitions and appeals may make claims for such sums as are due to them from him within one month or such other period as he may fix. The Registrar shall scrutinise such claims and ascertain the sums so proved. He will thereupon demand of all the market committees concerned payment into the Registry of such sums in regard to which proof of claims have been made. On such intimation, the market committees shall pay into the Registry the amounts so demanded by the Registrar within one week of such intimation. The amount shall be paid together with interest at 10 per cent per annum from today upto the date of deposit with the Registrar.   \n IV. It shall be open to the Registrar to make such periodical claims on appropriate proof by claimants on the line stated above.   \n V. He will devise the mechanics of processing the claims as best as he may and, in the event of dispute, may refer to the High Court for its decision of such disputes, if he thinks it necessary. Otherwise, he may dispose of the objections finally.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-54", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "VI. If any further directions regarding the mechanics of the claim of refund or otherwise are found necessary from this court, the High Court will report about such matter to this court and orders made thereon will bind the parties.   \n VII. If parties eligible for repayment of amounts do not claim within one year from today the Registrar will not entertain any further claims. It will be open to such parties to pursue their remedies for recovery for any sums that may be due to them.   \n VIII. Each State Marketing Board will deposit within 10 days from today a sum of Rs. 5000/- before the Registrar for the preliminary expenses of publicity and other incidentals for the implementation of the directions given above. Any unexpended amount, at the end of one year, will be repaid to the respective State Marketing Board.   \n IX. We further direct that the unclaimed amounts, if any, shall be permitted to be used by the respective marketing committees for the purposes falling within the statute as interpreted by this court in C.A. No. 1083/77.\"    \n While making the aforesaid directions, Krishna Iyer, J., speaking on behalf of the Bench observed :   \n \"Article 226 grants an extraordinary remedy while is essentially discretionary, although founded on legal injury. It is perfectly open for the court, exercising this flexible power, to pass such order such as public interest dictates and equity projects.\"   \n \"Courts of equity may, and frequently do, go much further both to give and withhold relief in furtherance of the public interest than they are accustomed to go where only private interests are involved. Accordingly, the granting or withholding of relief may properly be dependent upon considerations as of public interest.....\"", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-55", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "It may be noted that refund of the excess amounts of market fee collected was not claimed in the proceeding in which the levy of the excess market fee was questioned and held to be ultra vires but was prayed for only in a subsequent proceeding. That circumstance must have weighed with their Lordships of the Supreme Court in making the directions extracted above.   \n 41. It may be recalled that in Sales Tax Officer vs. Kanhiya Lal (supra) a Bench of five Judges of the Supreme Court held that under plain terms of section 72 of the Contract Act the assessee would be entitled to recover back the money paid by him to the State under mistake of law and that equitable considerations could scarcely be imported when there was a clear and unambiguous provision of law which entitled the assessee to the relief claimed by him.   \n 42. As observed by us earlier, on 3-4-1981 their lordships of the Supreme Court consisting of the Chief Justice and Mr. Justice Eradi, refused special leave to the Union of India to appeal against the decisions of a Division Bench of the Bombay High Court in Maharashtra Vegetable Products Pvt. Ltd. and another vs. Union of India and others (supra) wherein the doctrine of unjust enrichment put forward by the Union of India was rejected.   \n 43. We, therefore, quash the order dated 11-8-1978 passed by the 3rd respondent confirming the levy of excise duty in a sum of Rs. 22,55,795.76 on the cost of jute bags in which excisable commodity of cement manufactured by the petitioner-company was packed and sold between 1-10-1975 and 8-1-1976. A writ of mandamus shall also issue directing the respondents to refund the same amount to the petitioner-company.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "57b2a9f6bb38-56", "Titles": "Kesoram Cements, Basantnagar vs Union Of India And Ors. on 31 December, 1981", "text": "44. The learned counsel appearing for the Company also submits that the Company undertakes to reimburse its consumers or the ultimate consumers in respect of the amounts of excise duty collected from them on the cost of jute bags as and when claims are made by them without driving them to institute suits for recovery of the same. This undertaking given on behalf of the Company by the learned counsel for the Company, recorded by us in this judgment rules out any unjust enrichment of the Company at the expenses of its consumers. We, however, direct the company to take appropriate steps to see that this undertaking is made known to all purchasers of cement on whom the ultimate burden has fallan, so that they can avail themselves of the offer made by the Company to refund to them excess duty collected from them.   \n 45. The writ petition is accordingly allowed. There shall be no order as to costs.   \n 46. As oral application for leave to appeal to Supreme Court is made on behalf of the Central Government. We consider this to be a fit case for granting leave to appeal to the Supreme Court as the following questions are involved :   \n 1. Whether the post-manufacturing expenses are liable to be excisable to excise duty ?   \n 2. Whether the petitioner is entitled to refund of the amount of excise duty collected, in the circumstances ?    \n An oral application for suspension of the operation of this judgment is made. We do not see any reason to grant stay. The amount will be refunded to the petitioner on condition that the petitioner executes a bank guarantee for the said amount in a nationalised bank.", "source": "https://indiankanoon.org/doc/1168518/"}
+{"id": "2b45969e4b12-0", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "JUDGMENT B.S. Raikote, J. \n 1. The Income-tax Appellate Tribunal, Hyderabad Bench \"B\", has referred the questions mentioned hereunder to this court for opinion under section 256(1) of the Income-tax Act, 1961, vide its order dated January 23, 1986, passed in R. A. Nos. 317 and 318/ (Hyd) of 1983 in appeals I. T. A. Nos. 605 and 620/ (Hyd) of 1982 for considering the following questions, i.e., question No. 2 in R. A. No. 317/ (Hyd) of 1983 and question Nos. 3, 4 and 5 in R. A. No. 318/ (Hyd) of 1983 :  \n Question No. 2 in R. A. No. 317/ (Hyd) of 1983 :  \n \"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that the sum of Rs. 47,104 representing fee for technical services constitute revenue expenditure allowable under section 37 of the Income-tax Act, 1961?\"  \n Questions Nos. 3, 4 and 5 in R. A. No. 318/ (Hyd) of 1983 :  \n \"II (3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the commission paid to the managing director, Dr. W. R. Carrea, should not be taken into consideration for purposes of computing the disallowance under section 40(c) of the Income-tax Act, 1961?", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-1", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "(III) (4) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessee is entitled for deduction under section 80V in respect of the interest disallowed under section 40A(8) of the Income-tax Act?  \n (IV) (5) Whether, on the facts and in the circumstances of the case the Appellate Tribunal was justified in holding that the amount of Rs. 74,124 was deductible?\"   \n 2. This matter pertains to the assessment year 1978-79. The assessee is one, Bakelite Hylam Limited, Hyderabad. It is a registered company.  \n 3. Learned counsel appearing on both sides do not dispute that the question No. 2(1) R. A. No. 317/ (Hyd) of 1983, has already been answered by a Full Bench of this court in Praga Tools Ltd. v. CIT . Hence, following the same, we answer this question in the affirmative, that is to say, in favour of the assessee and against the Revenue.  \n 4. Likewise, learned counsel appearing on both sides admitted that even question No. 4 in R. A. No. 318/ (Hyd) of 1983 also is covered by the decision in Jaipuria Samla Amalgamated Collieries Ltd. v. CIT . Hence, following the same, we accordingly answer this question also in the affirmative, that is to say, in favour of the assessee and against the Revenue.  \n 5. Learned counsel appearing on both sides placed their respective contentions with regard to questions Nos. 3 and 5 (II and IV) in R. A. No. 318/ (Hyd) of 1983.", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-2", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "6. We now take up question No. 3 (II). This question pertains to the claim of the assessee that the commission paid to Dr. W. R. Carrea, the managing director of the company, was an allowable deduction. In respect of this Dr. W. R. Carrea, the Income-tax Officer worked out disallowance under section 40(c) of the Income-tax Act (hereinafter referred to as \"the Act\") as under :  \n Rs. P.", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-3", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "\"Salary                     57,339.00\nRent, etc., after deducting 1/3rd for office was 7,995.00\nMedical expenses                 2,505.00\nCommission                    28,670.00\n                         ---------\nTotal                      96,509.00\n   Less : Allowable              72,000.00\n                         ---------\nDisallowance                   24,509.00\"\n               ---------", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-4", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "7. In the appeal preferred by the assessee, the Appellate Commissioner agreed with the order of the Income-tax Officer disallowing the commission paid to Dr. Carrea. On a further appeal by the assessee before the Income-tax Appellate Tribunal, the Tribunal, having regard to the absence to the word \"commission\" in section 40(c) in contrast to section 40(b) of the Act, held that the commission paid to Dr. Carrea, the managing director, was an allowable deduction. It relied upon its own decision passed on an earlier occasion regarding the present assessee for the assessment years 1973-74 to 1976-77 and, ultimately, held that if the commission was excluded from the purview of operation of section 40(c) of the Act, there could be no disallowance of any part of the amount paid to Dr. Carrea.  \n 8. Learned counsel appearing on both sides brought to our notice, the relevant provisions of the Income-tax Act and also certain judicial pronouncements in that behalf, to drive home the respective points. Section 40(b) and (c) of the Income-tax Act reads as under :  \n \"40. Amounts not deductible. - Notwithstanding anything to the contrary in sections 30 to 39, the following amounts shall not be deducted in computing the income chargeable under the head 'Profits and gains of business or profession',-. . . .  \n (b) in the case of any firm, any payment of interest, salary, bonus, commission or remuneration made by the firm to any partner of the firm;  \n (c) in the case of any company. -", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-5", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "(c) in the case of any company. -  \n (i) any expenditure which results directly or indirectly in the provision of any remuneration or benefit or amenity to a director or to a person who has a substantial interest in the company or to a relative of the director or of such person, as the case may be,", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-6", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "(ii) any expenditure or allowance in respect of any assets of the company used by any person referred to in sub-clause (i) either wholly or partly for his own purposes or benefit, if in the opinion of the Income-tax Officer any such expenditure or allowance as is mentioned in sub-clauses (i) and (ii) is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom, so, however, that the deduction in respect of the aggregate of such expenditure and allowance in respect of any one person referred to in sub-clause (i) shall, in no case, exceed -  \n (A) where such expenditure or allowance relates to a period exceeding eleven months comprised in the previous year, the amount of seventy-two thousand rupees;  \n (B) where such expenditure or allowance relates to a period not exceeding eleven months comprised in the previous year, an amount calculated at the rate of six thousand rupees for each month or part thereof comprised in that period.\"", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-7", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "9. Relying on section 40(b) and (c) of the Act, learned counsel appearing for the assessee contended that the intention of the Legislature has to be inferred from clauses (b) and (c) of section 40. He contended that so far as the firm is concerned, in section 40(b) of the Act, the Legislature has used the words \"any payment of interest, salary, bonus, commission or remuneration\" made by the firm to any partner of the firm, and so far as the company is concerned, under clause (c) of section 40, it has used the word only \"remuneration\" paid to the director by the company. The word \"commission\" was conspicuously absent from section 40(c) of the Act. Therefore, wherever a commission is paid to the director, section 40(c) of the Act does not apply and he, accordingly, supported the judgment of the Income-tax Appellate Tribunal.  \n 10. On the other hand, learned counsel appearing for the Revenue submitted that the word \"remuneration\" is wide enough so as to include any salary, commission, wages, wherever the same is paid towards the services rendered by the director. In the instant case, W. R. Carrea was paid this commission as remuneration for the services rendered by him. Therefore, the commission paid to Dr. Carrea was one covered by section 40(c) of the Act and it is accordingly disallowable. He invited our attention to a number of authorities to support his contention.", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-8", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "11. We have carefully considered the import of section 40(b) and (c) of the Act. Section 40(b) contemplates disallowance of the payments like salary, bonus, commission, or remuneration made to a partner of the firm and section 40(c) contemplates disallowances out of the expenses incurred by the company that if the expenditure has resulted directly or indirectly in the provision of any remuneration or benefit or amenity to a director. In order to understand the scope of section 40(b) and (c) of the Act, we have to notice the concept of the firm as a legal entity different from the company.", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-9", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "12. A person becomes a partner in the firm mainly for sharing the profits of the firm. Whenever the interest, salary, bonus, commission, etc., are paid to him, they are necessarily towards his share of the profit. So far as the company is concerned, either a director or an employee gets only a remuneration or a recompense for the services rendered by such employee of director to the company. In certain cases, such director or employee may be entitled to certain other benefit or amenities. From this analysis, it is clear that the Legislature has used the word \"remuneration\" in section 40(c) of the Act pertaining to the company. Such remuneration or a recompense paid to a director may be in different forms or under different names. The director may be paid remuneration in the form of salary or commission. Section 40(c) of the Act has three important limbs : (i) there must be an expenditure incurred by the company; (ii) such an expenditure must have resulted directly or indirectly in the provision of any remuneration or benefit or amenity to a director; and (iii) such an expenditure or allowance should be for the benefit of such director or relative or a person who has substantial interest in the company. If these conditions are fulfilled, then in whatever the form the recompense is given to the director, it is remuneration. The meaning of the word \"remuneration\" has been given in the Law Lexicon, complied and edited by P. Ramanatha Aiyer (1987 edition), as under :", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-10", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "\"Remuneration\" is a wider term than 'salary'.'Remuneration', means, a quid pro quo. Whatever consideration a person gets for giving his services seems to me a 'remuneration' for them. Consequently, if a person was in receipt of a payment or of a percentage, or any kind of payment which would not be an actual money payment, the amount he would receive annually in respect of this would be 'remuneration' (per Blackburn J., R. v. Postmaster-General [1876] 1 QBD 658, 663-664).\"  \n 13. In CIT v. Calcutta Stock Exchange Association Ltd. , the Supreme Court while interpreting the word 'remuneration' has held as under (at page 228) :  \n \"The word 'remuneration', though it includes 'wages', may mean payment, which, strictly speaking, may not be called 'wages'. It is a term of much wider import including 'recompense', 'reward', 'payment', etc. It, therefore, appears to us that the learned Chief Justice was not entirely correct in equating 'remuneration' with 'wages'. The sub-section further requires that the remuneration should be 'definitely related' to the specific services. In other words, it would be shown that those services would not be available to the members or such of them as wish to avail themselves of those services, but for specific payments charged by the association as a fee for performing those services.\"", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-11", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "14. From the above decision, it is clear that the word \"remuneration\" is a wider concept and that includes all kinds of recompense to a person for the services rendered by him. In another case, i.e. Gestetner Duplicators P. Ltd. v. CIT [1979] 177 ITR 1, the Supreme Court was considering a case, in which under a contract of employment, the assessee has been paying to its salesmen in addition to the fixed monthly salary \"a commission\" at a fixed percentage of the turnover achieved by the salesmen, the rate of percentage varying according to the \"class of article\" sold and category to which each salesman belonged. In that context, the Supreme Court held as under (at page 12) :  \n \"The definition of 'salary' in rule 2(h) includes dearness allowance if the terms of employment so provide and excludes all other allowances and perquisites. It does not in terms exclude 'commission' as such and, in our view rightly, for, though ordinarily according to the Shorter Oxford English Dictionary 'commission' means 'a pro rata remuneration for work done as agent', in business practice commission covers various kinds of payments made under different circumstances. In Raja Ram Kumar Bhargava v. CIT [1963] 47 ITR 680, the Allahabad High Court has pointed out how in certain circumstances commission payable to an employee may, in fact, represent the salary receivable by him for the services rendered to the employer. At page 694 of the report, the relevant observation run thus :", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-12", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "\"The word \"commission\", in business practice, covers various kinds of payments made under different circumstances. There are cases where a servant is employed by a businessman and, as a condition of his employment, it is agreed prior to the services having been rendered that he would be paid for his services at a fixed rate of percentage of the turnover or profits. In such a case, it is clear that the commission payable to the employee will, in fact, represent the salary to be drawn by him for his services. The payment on the percentage basis will only determine the measure of the salary.' It is thus clear that if under the terms of the contract of employment remuneration or recompense for the services rendered by the employee is determined at a fixed percentage of turnover achieved by him then such remuneration or recompense will partake of the character of salary, the percentage basis being the measure of the salary and, therefore, such remuneration or recompense must fall within the expression 'salary' as defined in rule 2(h) of Part A of the Fourth Schedule to the Act.\"    \n 15. From this ruling of the Supreme Court, it is clear that if a \"commission\" is paid to a director or to an employee, by the company towards the services rendered by such employee or a director, it would be a remuneration. In fact, in CIT v. Avon Cycles (P.) Ltd. , the High Court of Punjab and Haryana was considering the distinction between clauses (b) and (c) of section 40 as under :", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-13", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "\"It may be observed that in section 40(b), the Legislature used the words 'any payment of interest, salary, bonus, commission or remuneration made by the firm to any partner of the firm'. If the word 'remuneration' also connotes the concept of commission, it was not necessary for the Legislature to have used the word 'commission' in clause (b) of section 40. The Legislature advisedly did not use the word 'commission' in clause (c) of section 40 of the Act. . . . It is a well-settled proposition of law that if there is any ambiguity in a particular provision of the Income-tax Act, the statement of the Finance Minister, which formed the basis for the introduction of the Bill can also be taken into account. Reference in this connection may be made to the decisions of their Lordships of the Supreme Court in Sole Trustee, Loka Shikshana Trust v. CIT and Indian Chamber of Commerce v. CIT . The Finance Minister in his speech gave reasons for the proposed amendment in clause (ix) of the Finance (No. 2) Bill, 1971, by which the provisions of section 40(c) of the Act were sought to be amended in the following words (see [1971] 80 ITR (St.) 93, 96) :", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-14", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "'I am firmly of the view that the fiscal instrument must be deployed to discourage payment of high salaries and remunerations which go ill with the norms of egalitarian society. I, accordingly, propose to impose a ceiling on the remuneration of company employees which would be deductible in the computation of taxable profits. The ceiling is being set at Rs. 5,000 per month. Together with the existing ceiling of Rs. 1,000 per month in the case of perquisites, the allowable overall ceiling on remuneration and perquisites, for the purposes of taxation, will be at Rs. 6,000 per month. In addition, I am proposing to reduce the tax deductible limits of daily allowance to employees while on tour.' The note on this clause of the Finance (No. 2) Bill, 1971, is as follows ([1971] 80 ITR (St.) 143, 146) :  \n 'Sub-clause (b) seeks to amend section 40(c) under which expenditure incurred by a company on the provision of any remuneration or benefit or amenity to directors, persons who have a substantial interest in the company and their relatives and the expenditure or allowance in respect of any assets of the company which are used by such persons for their own purposes or benefit is not allowed as a deduction to the extent such expenditure or allowance is, in the opinion of the Income-tax Officer, excessive or unreasonable. Under the amendment, the deduction on account of such expenditure or allowance will be further subject to an overall ceiling limit of Rs. 72,000 in respect of any one director or person who has a substantial interest in the company or relative of a director or of such person.' The speech of the Finance Minister and the note would suggest that the provisions were amended to discourage the payment of high salaries and remunerations to the persons mentioned in the section.\"", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-15", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "16. In the above decision, the High Court of Punjab and Haryana was considering a \"commission\" paid by the company to another firm in discharge of contractual obligations, for the services rendered by the firm in its business activity to the company. Their Lordships held that if any commission is paid to a third party-firm under some contractual obligation, that would not be a commission paid to a director, incidentally, the partners in that firm might be the directors. From this decision, it is clear that as per the statement made by the then Finance Minister on the floor of the House, section 40(c) was specifically inserted, so as to discourage payments of high salaries and remuneration or benefit or amenity to directors or to persons, who have substantial interest in the company or relatives and also the expenditure or allowance in respect of any assets of the company, which are used by such persons for their own purposes or benefit, by making such remuneration or allowance not deductible to the extent such expenditure or allowance was in the opinion of the Income-tax Officer excessive or unreasonable. Under the said amendment, the deduction on account of such expenditure or allowance was made subject to an overall ceiling limit of Rs. 72,000 in respect of a director or a person, who has substantial interest in the company or a relative of a director or of such person. Therefore, the object of section 40(c) was that under the guise of some other name, a director or a person having substantial interest in the company or his relative should not derive benefit more than the ceiling imposed by the section at Rs. 72,000. Finally, having regard to the facts and circumstances of that case, the High Court of Punjab and Haryana held that a \"commission\" paid to a third party under contractual obligation of the company would not be a remuneration. This decision would be relevant for this case, since it was held in that case \"remuneration\" includes", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-16", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "would be relevant for this case, since it was held in that case \"remuneration\" includes \"commission\" also. In fact, the principle laid down in that case has been approved by the Supreme Court in CIT v. Avon Cycles P. Ltd. - S. L. P. (Civil) No. 7477 of 1981 as noticed in [1983] 144 ITR (St.) 14 under the heading \"From our reporter at the Supreme Court\" under \"Amounts not deductible\": Amount paid by company to sole selling agent whose partners are its directors, which reads as under :", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-17", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "\"26-9-1983 : Their Lordships, P. N. Bhagwati and V. Balakrishna Eradi JJ., dismissed a special leave petition by the department against the judgment dated May 12, 1980, of the Punjab and Haryana High Court in Income-tax Reference No. 56 of 1979, , whereby the High Court, on a reference, held that the commission paid by the assessee-company to its sole selling agent, a firm whose partners were also the directors of the assessee, was not paid to the directors of the assessee, but as commission to its sole selling agent and the partners who got a share in the profits of the firm got it as partners of the firm and not as directors of the assessee and that, therefore, section 40(c) of the Income-tax Act, 1961, would not apply to such payment : CIT v. Avon Cycles P. Ltd. (S. L. P. (Civil) No. 7477 of 1981).\"", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-18", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "17. In the light of the above decisions, we hold that if a commission is paid to the managing director for the services rendered by him to the company, such commission is remuneration under section 40(c) of the Act. The same has also been the view expressed by the High Court of Calcutta in CIT v. Vikram Shridhar Shriram (sic). Applying this principle, we hold in this case that the commission paid to Dr. W. R. Carrea, the managing director of the company, would constitute \"remuneration\" for the purpose of computing disallowance under section 40(c) of the Act. Therefore, both the Income-tax Officer and the Appellate commissioner have rightly held that such commission was remuneration and the said managing director was entitled to such remuneration up to the ceiling limit of Rs. 72,000 prescribed under that section and as such, the Tribunal was wrong. Accordingly, we answer this question in the negative, that is to say, in favour of the Revenue and against the assessee.  \n 18. The other question that is required to be considered by us is question No. 5 (IV). This question relates to the disallowance of Rs. 74,124 out of the provision for gratuity of Rs. 3,07,792, which was also paid during the year. The provision was worked out as under :  \n           Managerial    Non-Managerial     Total\n         Rs         Rs.       Rs.\nProvision for\n  1977 :    1,29,838      1,03,831     2,33,669\nProvision for\n  1976 :     20,798       53,326      74,124\n        --------      --------     --------", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-19", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "--------      --------     --------\n        1,50,636      1,57,156     3,07,792\n        --------      --------     --------", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-20", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "19. The Income-tax Officer took the view that only the amount of Rs. 2,33,069 pertaining to the year alone could be allowed on the basis of the mercantile system of accounting and he disallowed an amount of Rs. 74,124 out of the total provision for gratuity of Rs. 3,07,792, on the ground that it related to the previous year. It was the assessee's case that the said shortfall in respect of 1976 was not anticipated and it was ascertained on the basis of the actuary's certificate only during the year. But this case of the assessee was not accepted by the Income-tax Officer and, therefore, he preferred an appeal before the Income-tax Appellate Commissioner, who confirmed an appeal before the Income-tax Officer. It is in these circumstances, the assessee preferred an appeal before the Income-tax Appellate Tribunal, which allowed the appeal, by holding that the gratuity fund was recognised by the Commissioner and the assessee was eligible on the basis of the provision made by it and also on the fact that the amount was actually paid during the year. The Appellate Tribunal took the view that when the assessee has actually paid towards recognised gratuity fund, the same is allowable under section 36(1) (v) of the Act and if such gratuity is towards liability of the previous year and a provision was made in the accounting year, the same also was allowable under section 40A(7) (b) (i) of the Act, on the basis of the mercantile system, which the assessee was following.", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-21", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "20. Learned counsel for the Revenue contended that the gratuity amount of Rs. 74,124 pertaining to the year 1976 was not allowable, since the same did not accrue in that year. The assessee could have provided for the same in the year 1976 itself. But, on the other hand, learned counsel appearing for the assessee contended that in the previous year, i.e., 1976, the shortfall in respect of such gratuity could not be anticipated and the same could be ascertained on the basis of the actuary's certificate only during the current year and the provision was made for gratuity of the year 1976 during the year and, therefore, it was allowable under section 40A(7) (b) (i) of the Act. Moreover, he submitted that it is also available because the gratuity was actually paid during the year as per section 36(1) (v) of the Act.  \n 21. In order to appreciate the rival contentions of learned counsel, it is necessary to note section 36(1) (v) of the Act, which reads as under :  \n \"36. Other deductions. - (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28. ...  \n (v) any sum paid by the assessee as an employer by way of contribution towards an approved gratuity fund created by him for the exclusive benefit of his employees under an irrevocable trust.\"   \n 22. Section 40A(7) (a), (b) (i) reads as under :  \n \"40A. Expenses or payments not deductible in certain circumstances. -....", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-22", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "\"40A. Expenses or payments not deductible in certain circumstances. -....  \n (7) (a) Subject to the provisions of clause (b), no deduction shall be allowed in respect of any provision (whether called as such or by any other name) made by the assessee for the payment of gratuity to his employees on their retirement or on termination of their employment for any reason.  \n (b) Nothing in clause (a) shall apply in relation to, -  \n (i) any provision made by the assessee for the purpose of payment of a sum by way of any contribution towards an approved gratuity fund, or for the purpose of payment of any gratuity, that has become payable during the previous year.\"    \n 23. In the instant case, two things are admitted : (i) a provision was made in the present year towards the gratuity payable for the previous year and also for the current year; and (ii) the gratuity of the previous year was also paid along with the gratuity payable in the current year. In Shree Sajjan Mills Ltd. v. CIT , the Supreme Court noticed the intention of the Legislature while enacting section 40A(7) and section 36(1) (v) of the Act as under (at page 600) :  \n \"The intention of the Legislature in enacting the provision of section 40A(7) would be apparent from the Notes on Clauses of the amendment wherein paragraph 46, after referring to the provisions of section 37(1) and section 36(1) (v) of the Act, it was observed , inter alia, as follows :", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-23", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "'A reading of these two provisions clearly shows that the intention has always been that the deduction in respect of gratuities should be allowed either in the year in which the gratuity is actually paid or in the year in which contributions are made to an approved gratuity fund. A doubt has been expressed that the relevant provisions, as presently worded, do not secure the underlying objective and that a provision made by a taxpayer in his accounts in respect of estimated service gratuity payable to employees will be deductible in computing the taxable income in a case where the provision has been made on a scientific basis in the form of an actuarial valuation. In order to remove uncertainty in the matter, it is proposed to specifically provide in the law that no deduction will be allowed, in the computation of profits and gains of a business or profession, in respect of any reserve created or provision made for the payment of gratuity to the employees on retirement or on termination of employment for any reason. This restriction will, however, not apply in relation to a provision made for the purpose of payment of a sum by way of contribution towards an approved gratuity fund that has become payable during the relevant account year, or for the purpose of meeting actual liability in respect of payment of gratuity to the employees that has arisen during such year.'", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-24", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "24. This intention and the purpose of the Legislature was carried into effect by inserting sub-section (7) in section 40A by ensuring the overriding effect over the other provisions of the Act. Therefore, in interpreting or in trying to find out the meaning of that provision, one should, if possible, and in this case it is not at all straining, give effect to that intention and not to make a nonsense of that intention. Clause (a) of the said sub-section provides that no deduction will be allowed in respect of any provision (whether called as such or by any other name) made by the assessee for the payment of gratuity to his employees on their retirement or termination of their services for any reason. The expression 'provision' has not been defined in the Act and is not used in any artificial sense but in its ordinary meaning. This is clear from the words (whether called as such or by any other name) occurring in the sub-section. According to Webster, 'provision', in its ordinary sense, means 'something provided for future use'.", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-25", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "25. On a plain construction of clause (a) of sub-section (7) of section 40A of the Act, what it means is that whatever is provided for future use by the assessee out of the gross profits of the year of account for payment of gratuity to employees on their retirement or on the termination of their services would not be allowed as deduction in the computation of profits and gains of the year of account. The provision of clause (a) was made subject to clause (b). The embargo is on deductions of amounts provided for future use in the year of account for meeting the ultimate liability to payment of gratuity. Clause (b) (i) excludes from the operation of clause (a) contributions to an approved gratuity fund and amounts provided for or set apart for payment of gratuity which would be payable during the year of account. Clause (b) (ii) deals with a situation where the assessee might provide by the spreadover method and provides that such provision would be excluded from the operation of clause (a) provided the three conditions laid down by the sub-clauses are satisfied.  \n 26. The submission of the assessee that if no provision is made by the assessee for gratuity, still the same will be deductible and section 40A(7) will have no application, would defeat the very purpose and object of section 40A(7) and render it nugatory.\"", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-26", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "27. From this law declared by the Supreme Court, it is clear that wherever a \"provision\" is made in the accounting year, towards the gratuity payable, the same is allowable under section 40A(7) of the Act. The same principle was followed by this court in CIT v. D. B. R. Mills Ltd. , wherein it was held that when a provision is made in the accounting year for such liability, the same is allowable. This court further made a distinction between any sum paid under section 36(1) (v) and any provision made under section 40A(7) (b) (i) of the Act and ultimately held that the assessee cannot claim such payment as allowable, without making any provision in the accounting year. In a similar case in CIT v. G. T. N. Textiles Ltd. , the High Court of Kerala held as under (as page 9) :  \n \"Clause (a) of sub-section (7) contains, subject to clause (b), a general prohibition against any deduction being allowed on the basis of a mere provision in respect of gratuity. The exceptions to the prohibition are mentioned in clause (b). Sub-clause (i) of clause (b) contains two limbs. The effect of the first limb of that sub-clause is that the prohibition under clause (a) shall not apply to a provision made in terms of section 36(1) (v). The second limb of that sub-clause in effect provides that the provision made during the 'previous year' shall be governed by the law as it stood prior to the amendment introduced by the Finance Act, 1975, with effect from April 1, 1973. This means that deduction on the basis of a provision made in the relevant previous year will be allowed, notwithstanding the amendment.\"", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-27", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "28. In Triplicane Permanent Fund Ltd. v. CIT [1989] 179 ITR 492, the High Court of Madras summarised the legal position with reference to section 36(1) (v) and section 40A(7) of the Act as under (at page 504) :  \n \"While considering the incremental liability arising in the matter of contribution made to the gratuity fund, this court, in the case of CIT v. Madras Rubber Factory Ltd. (No. 2) , restated the legal position on this point as under :  \n 'As pointed out by this court in CIT v. Sitalakshmi Mills Ltd. , it has now become well-established that where an employer has a gratuity scheme rendering him liable to pay gratuity to workmen and where having regard to the liability which might arise under the scheme, the employer obtains a scientific actuarial calculation under which the present discounted value of the gratuity liability is ascertained and where the employer charges his profit and loss account with the incremental value of the year and also makes a provision for that amount, the employer will be entitled to compute his net profits after deducting the figure of incremental liability. That the assessee will be entitled to deduct the incremental liability for payment of gratuity during the accounting year, if he had made a claim on the basis of actuarial valuation, is clear from the decision of the Supreme Court in Vazir Sultan Tobacco Co. Ltd. v. CIT .'", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-28", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "29. A similar question also arose before this court in the case of CIT v. Andhra Prabha P. Ltd. , wherein it was held as under (headnote) :  \n \"That section 36(1) (v) of the Act provided for deduction of any amount actually paid by way of contribution to an approved gratuity fund created by the employer while section 40A(7) introduced by the Finance Act, 1975, with effect from April 1, 1973, prohibited deduction of a provision for gratuity, the prohibition, however, not extending to, (a) provision for contribution to an approved gratuity fund, or (b) provision for payment of gratuity for which a liability has arisen during the year. These two provisions did not cover the case where a provision was made for a future payment on a \"scientific\" method of calculation. The present claim being of a provision made for a future payment calculated on scientific basis, the amount was not covered by any of the specific provisions of the statute and hence, was allowable in the computation of the profits under section 28 itself.'", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-29", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "30. This decision was confirmed by the Supreme Court in CIT v. Andhra Prabha P. Ltd. . The Supreme Court in CIT v. Andhra Prabha P. Ltd. , pointed out that the legal position on this point has been analysed by this court in its recent decision in Shree Sajjan Mills Ltd. v. CIT . Thus, the Supreme Court in 156 ITR 585, after considering all the prior decisions, on this point, summarised the legal position as under (headnote page 587) :  \n 'The position till the provisions of section 40A(7) were inserted in the Act in 1973 was as follows :  \n (1) Payment of gratuity actually made to the employee on his retirement or termination of his services was expenditure incurred for the purpose of business in the year in which the payments were made and allowed under section 37 of the Act.' Even after the introduction of the provisions of section 40A(7) in the Act in 1973, there is no change in the legal position so far as the actual payment of gratuity is concerned. Hence, the actual payment made towards gratuity liability is allowable in the year in which it is paid.\"", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "2b45969e4b12-30", "Titles": "Commissioner Of Income-Tax vs Bakelite Hylam Ltd. on 25 April, 1995", "text": "31. In the light of the judicial pronouncements referred to above, we are of the opinion that whenever an assessee, by making a provision for the gratuity payable for the previous year, has paid the same by making a provision in the accounting year, the same is allowable under section 36(1) (v) read with section 40A(7) (b) (i) of the Income-tax Act. By applying this principle to this case, we hold that the gratuity amount of Rs. 74,124 for which a provision was made and actually the same was paid in the accounting year, is accordingly allowable, and the Income-tax Appellate Tribunal is correct in allowing the same by setting aside the orders of the Income-tax Officer and the Appellate Commissioner. Accordingly, we answer this question in the affirmative, that is to say, in favour of the assessee and against the Revenue.  \n 32. In the result, this reference case is accordingly answered; we make no order as to costs.", "source": "https://indiankanoon.org/doc/1232792/"}
+{"id": "356fd83fcc09-0", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "JUDGMENT Jaganmohan Reddy, J.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-1", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "1. In this appeal, the appellant seeks to challenge the Judgment and decree of the lower Court dismissing the suit filed by him for a perpetual injunction against the Government and for the return of the deposit amount of Rupees 2,949/- as earnest money. \n 2. It appears that the Government in the Excise Department notified the sale by auction of the leasehold rights for 1364 F. of country liquor shops at Akbarjah Bazaar, Malakunta and Sultan Bazar localities in Hyderabad City to be held on 18-8-1954. The toddy or sendhi auctions for the same year were fixed for 23-8-1954. On the date fixed for the auction of country liquor, objections were raised by the intending bidders before the Deputy Excise Commissioner who was the auctioning Officer authorised under the rules that the auction notifications for the country liquor do not specify whether the Sabucha tax is leviable on the toddy brought into the city or not. It may be stated that Sabucha tax is a tax of Rs. 7-8-0 imposed by the Government on each pot of toddy or sendhi of 40 seers on its entry into the City of Hyderabad. The bidders stated that they sought this clarification from the Deputy Commissioner before the auction started, because the imposition or otherwise of this tax is bound to affect the liquor sales.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-2", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "It is alleged that the Deputy Commissioner accepted this objection and adjourned the liquor auctions to 24-8-1954 by which date the sale of sendhi shops would have been held and the matter would have been by then clarified. Thereafter on 23-8-1954, the sendhi shop leases were auctioned subject to the sendhi contractors paying Sabucha tax and the next day, the country-liquor shops were auctioned on the basis of the Sabucha tax being levied on Sendhi. Plaintiff being the highest bidder, his bid was accepted and he deposited an amount of Rupees 2,949/-. Thereafter on 4-9-1954, the Excise Commissioner, purporting to act under Clause 10 of the proclamation of auction sales, set aside the auction held on 23-8-1954 an directed their reauction on 15-9-1954 without the imposition of Sabucha lax. Immediately thereafter on 7-9-1954, the plaintiff filed a petition before the Excise Commissioner saying that the auctions for toddy now directed to be held not subject to Sabucha tax are likely to affect, the liquor sales, inasmuch as Sendhi would be sold at a cheaper rate and the demand for liquor would correspondingly be decreased. He accordingly prayed that the shop rentals may be scaled down, but if the Excise Commissioner was not prepared to this, his offer must be deemed to be with drawn and the auction revoked.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-3", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "The Excise Commissioner did not accept this stand taken by the appellant and by his letter Ex. P. 1 dated I5-9-1954 informed the appellant with reference to his application dated 7-9-1954 that his petition is not acceptable and in case of his failure to rent the shops in accordance with the rules and regulations and to pay to the Government amounts in time, proceedings will be taken against him. By Ex. P.6, dated 17-9-1954, he further informed the Deputy Commissioner that the petitioner's prayer was incorrect and as such he was directed to take action as per rules. Pursuant to these directions, the shops were re-auctioned at a loss of Rs. 31,9837- and the appellant was required by a notice dated 13-10-1954 to pay this amount within two weeks, which notice, according to the appellant, was received by him on 17-11-1954. Immediately thereafter a petition was filed before the Hon'ble Minister for Excise on the same day praying for the cancellation of that order and for directing the Excise Commissioner not TO collect any moneys as claimed. The Minister gave a stay order, but the matter was finally disposed of only on 23-8-1955 rejecting the appellant's contention. The Minister by the said order gave three months' time from that date staying the demand made on the petitioner at his request that if that time was given for filing a civil suit, he win file a suit and obtain a stay for collection of arrears. It was further observed that if within three months any order is passed by the Civil Court, the Commissioner should art according to the orders; otherwise, the amount should be collected from the personal property of the defaulter.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-4", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "3. The case of the respondent Government was that the auctions were complete on its being Knocked down in favour of the appellant as the highest bidder and his contention that his bid was dependant upon the Sabucha tax has no force and at any rate, the auction of one cannot affect the other. It was also contended that inerely because the Excise Commissioner had a right to cancel the auction within thirty days from the date of the auction, it does not amount to a conditional acceptance of the offer. The respondent also took the plea that the suit was time-barred as the same has not been filed within six months from the date of the contract as contemplated under the Abkari Act.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-5", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "4. On the pleadings, issued were framed relating to whether the auction of sendhi shops dated 18-8-1954 was postponed for the reason mentioned in para 1 of the plaint and any assurance was given to the appellant as stated in the same para; whether the suit contract was conditional or complete in itself and what is the effect of the Commissioner's right to cancel the auction within 30 days of the date of the auction; whether the plff.-appellant resiled from the contract and intimated the same to the Commissioner on 7-9-1954 and what is its effect on the suit contract; what Is the effect of the second auction on the suit contract and whether the plaintiff is liable to pay the loss sustained in the reauction in accordance with the terms of the contract; was the plaintiff entitled to the refund of the earnest money and was the suit within the period of limitation. On the first issue, it was held on evidence that no undertaking was given by the Excise Commissioner that We lease of the Sendhi Shops will be subject to the payment of the Sabucha tax and the bidders did not bid at the liquor auction on such express assurance and that there was no basis for the argument that the auctions hold on 24-8-1954 were subject to the imposition of Sabucha tax on sendhi shops leased out by auction held on 23-8-1954. On issues 2 and 3 also the lower Court held that the contract was a completed one and that the right reserved in the Commissioner of Excise does not make it incomplete and that further it was not shown that the appellant had resiled from the contract. The appellant was accordingly held liable for the loss of Rs. 31,983/- and that he was not entitled to a refund of the earnest money. On the question of limitation, the Court held that the suit was not barred by time, as the time spent in agitiating the matter", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-6", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "held that the suit was not barred by time, as the time spent in agitiating the matter before the Revenue Minister can be taken into account.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-7", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "5. The only two points that have been urged in this appeal are firstly, that the contract was not a concluded contract when the appellant withdrew his offer and consequently there is no contract at all between the parties and the appellant is entitled to the declaration asked for and the refund of the money paid; secondly that the suit is barred by limitation having regard to Section 41 of me Hyderabad Abkari Act.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-8", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "6. On the first point, it is admitted by both the parties that the appellant had written the letter of 7th September 1954 in which he asked the Commissioner to scale down the rentals suitably having regard to the directions that no sabucha tax should be charged on the toddy brought into the city and if this is not accepted, then he withdraws the offer made by him. The validity of this contention depends on Rule 10 of the proclamation of Auction sales and the principles laid down in the Contract Act The proclamation of auction sales was purported to have been made under Sections 3 and 15 of the Hyderabad Ab-kari Act, 1316 F., and Section 5 of the Hyderabad intoxicating Drugs Act, 1333 F. and Section 5 of the Indian Opium Act, 1878. Clause (1) prescribes the conditions to be satisfied before a person is permitted to bid at the auction such as the solvency certificate etc. while Clause (2) lays down that a former solvency certificate will not be sufficient and for entry into the auction hall a ticket will have to be obtained on submission of the solvency certificate or agreement bund. Clause (3) states that bidding will be permitted only to the extent of double the value of the property mentioned in the certificate or the amount for which security is given; and if any increase in bidding is to he done, payment of cash to the extent of the difference will have to be made. Clauses 4, 5, 6 and 7 deal with the bidding and tenders in respect of shops either individually or groupwise. Clause 7(2) deals with the conditions to be complied with by the tenderer. Clause 8 deals with the power of the auctioning authority to reject the bid by any person who is convicted of any crime or punished for the contravention of the licences. The sub-clause states that the auctioning authority may", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-9", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "for the contravention of the licences. The sub-clause states that the auctioning authority may refuse to accept the bid of any person without assigning any reason therefor. Clause 9 prohibits the granting of a contract for Abkari or intoxicating drugs to the persons named therein.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-10", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "7. At this stage it would be convenient to examine the language of Clause 10, as the point to be determined would depend upon the construction to be placed upon it. Clause 10 is as follows: \n \"It will be competent for the auctioning officer, i.e., in the Districts the Collector, and in the cities of Hyderabad and Secunderabad and Hyderabad District, the Deputy Commissioner of Excise, to approve the third call. However, the Excise Commissioner has the power within one month from the date of the approval of the auction to suspend or revoke the approval of the auction of any group or shops whether the auctionee has been given possession or not and can order its re-auction or make such other arrangements. In this particular, the decision of the Excise Commissioner shall be final. No appeal shall tie against this order of the Excise Commissioner. If the Excise Commissioner does not pass orders suspending or cancelling the approval of the auction within one month of the approval of the auction, the auction shall become final.\" \n 8. It is contended by the learned advocate for the appellant on the strength, particularly of the last portion, of this clause that the approval of the Deputy Commissioner of the third bid is provisional till the period of one month prescribed under that clause for the cancellation or suspension of the contract by the Excise Commissioner is over, and as such a person can withdraw his offer till the auction has become final.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-11", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "Learned Government Pleader, on the other hand, submits that the clause relating to the cancellation or suspension by the Excise Commissioner is a condition subsequent and has nothing to do with and does not affect the contract which has become final between the parties. He also refers to the other clauses of the proclamation of sales viz., Clauses 15 and 16, where under the person whose third bid has been accepted has to forthwith deposit the earnest money within the period prescribed failing which, under Clause 16, if the advance money or surety bond or solvency certificate is not paid or filed within the prescribed period, the earnest money and other amounts deposited shall be forfeited and the lease shall be put up for auction again or some other arrangement made, in which event any loss incurred by the Government is liable to be recovered from the person in whose favour the auction has been concluded. But on the other hand, by reason of reauction or other arrangement, if there is any increase, he will not be entitled to that increase. Learned Government Pleader contends that these clauses indicate definitely that when once the third bid is approved, there is a concluded contract and the bidder cannot resile from it. In our view, the consideration of these rival contentions would depend upon the principles governing offer and acceptance and the point of time at which the contract is said to have been concluded and binding between the parties.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-12", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "9. It is a well-established principle of law that only when an offer is accepted that the contract is concluded and binds the parties. It is equally well settled that before an offer is accepted, the offerer can withdraw his offer, but if the acceptance is conditional or is not final, men there is no concluded contract. Section 5 of the Indian Contract Act states that a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards, Similarly, an acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards. \n Generally, in a sale by auction, the auctioneer is the agent of the person whose property or rights are being auctioned. The agent invites offers and every bid is an offer and it is only binding on either side when it is assented to, that is, when the hammer falls at the third bid. Sometimes the owner reserves a right as part of the conditions of auction and even though the bid is the highest it need not necessarily conclude the agreement.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-13", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "Before the final acceptance of the bid or before the hammer falls, it is always open to the bidder to withdraw his bid and the condition to the contrary in auction that the bid shall not be retracted has been held to be invalid. Following the English rule, in Agra Bank v. Hamlin, 1LR 14 Mad. 235 it was held by a Bench consisting of Muttusami Ayyar and Best, JJ. that it was competent for a bidder at a Court auction to withdraw his bid. Two estates by name 'Chembali' and 'Burnside' being the properties of the judgment debtor, were put up for sale by Court auction. At the sale, one person acting on behalf of the plaintiff made a bid for both the properties, but later intimated to the Nazir that he wished to withdraw these bids and also informed the court the next day of his wish to withdraw. A reference was made to the High Court as to whether it was permissible for bidders at court sales to withdraw their bids. \n Muttusami Ayyar, J. answered the question in the affirmative and pointed out that until the lot is knocked down and the sate is concluded, the court may, in its discretion, adjourn the sale. He observed: \n \"It is clear then that until the lot is knocked down, the court has a loeus penitentiae and it follows, in the absence of some specific provision to the contrary, that bidders are intended to be placed in a similar position.\" \n Best, J. concurred and said: \n \"An offer to buy or sell may be retracted at any time before it is unconditionally and completely accepted, by words or conduct . . . . \"", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-14", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "Later Leach, C. J., delivering the judgment of the bench in Somasundaram Pillai v. provincial Government of Madras, AIR 1947 Mad 366, referred 1o the dictum of Muttusami Ayyar, J. -- Particularly to the observations, \"It appears that, in the case under reference, it was not one of the conditions of sale that bidders were not at liberty to with draw their bids\" and said at page 368, that they do noy regard this statement as a definite acceptance of the proposition that where there is such a condition a bid cannot be withdrawn, and expressed dissent if Muttusami Ayyar intended to hold so.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-15", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "In Somasundaram Pillai's case, AIR 1947 Mad 365, the appellant was the highest bidder for four shops and his bids were provisionally accepted by the Sub-Collector, but the Collector accepted only two of them. He refused to confirm the bids made by the appellant for the other two licences and directed that the sale should be continued under the conditions of sale. Pursuant to this the Tansn-dar informed the appellant that his bids for the two shops had not been accepted and that the Collector had ordered that the auction sale should be continued from the bids already made by him. The appellant, however, presented a petition to the Tahsildar on the day fixed for the continuance of the auction, in which he stated that he did not require the two shops and asked that the amount of his deposit should be returned to him. This petition was rejected forthwith and subsequently his pleader wrote on his behalf pointing out that his bids had not been accepted by the Government and that he was entitled to withdraw them. The Collector, after referring to the rule that bids could not be withdrawn, rejected this contention and accepted his bid, but the appellant refused to take out licences, which resulted in a loss to the Government of Rupees 1148/-.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-16", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "The Advocate General on behalf of the State conceded that the publication of the conditions of sale did not amount to a notification under Section 69 of the Madras Abkari Act and said that they were merely rules drawn up by the Board for the conduct of sales of liquor licences and had no statutory force. It was consequently held that the lower court was wrong in holding that the conditions of sale had the force of law. The learned Judges referred to the case in Joravarmull Champalal v. Jeygopal das Ghanshamdas, ILR 45 Mad 799 : (AIR 1922 Mad 488 and the cases considered by that Bench in Payne v. Cave, (1789) 3 TR 148 : 100 ER 502 and Cooke v. Oxley, (1790) 3 TR 653: 100 ER 785, approving the dictum in both the cases, particularly of Lord Kenyon in the latter case that nothing could be clearer than that at the time of entering into the contract, the engagement was all on one side and that the other party was not bound and therefore it was a nudum pactum. \n Leach, C. J., observed at page 367 as follows: \"To have an enforceable contract there must be an offer and an unconditional acceptance. A person who makes an offer has the right of withdrawing it before acceptance, in the absence of condition to the contrary supported by consideration. Does the fact that there has been a provisional acceptance, make any difference? We can see no reason why it should. A provisional acceptance cannot itself make a binding contract. There must be a definite acceptance or the fulfilment of the condition on which provisional acceptance is based.\" \n In the result it was decided that the appellant was entiti-", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-17", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "In the result it was decided that the appellant was entiti-\ned to withdraw his bids, because a prohibition against withdrawal has no force of law. This case is sought to be distinguished by the learned Government Pleader on the ground that under Rule 10, the acceptance was final and not provisional and the condition of cancellation or sus pension by the Excise Commissioner within thirty days It only a condition subsequent. In support of this argument he relied on the judgment of Safyanarayana Rao, J., sitting singly in Rajanagaram Village Co-operative Society v. Veera- \nsami Mudaly, and the passage in Pollock and Mulla -- 8th Edition -- | pages 44-45. Satyanarayana Rao, J. in Rajanagaram case, tries to distin guish the Bench decision in Somasundaram Pillai's case, AIR 1947 Mad 366 on the ground that there is a difference between a provisional acceptance and a conditional ac ceptance. In the former case the officer accepting the offer provisionally has no authority to accept the bid. As such the offeror can withdraw, while in the latter case the offeror cannot withdraw. In his view Somasundaram Pillai's case, AIR 1947 Mad 36B is one where the auctioning authority had only power to accept the bid provisionally and pass it on to the Collector for his confirmation. \n At page 488 (of Mad LJ): (at pp. 324-325 of AIR) he observed:", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-18", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "\"Under the terms of the sale    which were approved by the Board of Revenue, he could only signify a kind of provisional acceptance     whatever   that     expression   might mean; but the final and actual acceptance rested with the Collector.    The   appellant who   was  the   highest bidder   in that case did not    thereby acquire any rights under the sale as there was no concluded contract in his favour.\"", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-19", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "The learned Judge then proceeds to observe that an absolute acceptance is where the sale officer, or the auctioneer as the case may be, is given full authority to accept a bid    unconditionally   and   that   a   provisional   acceptance   means    that the auctioneer had only a right to receive the bids and    pass them on to his superior who Is the final authority to    confirm and conclude the contract, while a conditional acceptance has the effect of binding the highest bidder to the contract If finally there Is the approval or confirmation by the superior person indicated in the terms of sale. As such he cannot resile from the contract, nor is it open to him to withdraw the offer.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-20", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "With great respect, we fail to appreciate this distinction. In our view, where the offer and acceptance culminating in a concluded contract are themselves subject to conditions and are not final, there is no contract at all till these conditions are fulfilled and an offer before the fulfilment of these conditions can be withdrawn. The distinction between a condition and an ordinary term of the agreement must not be confused, for, the non-performance of a term would give rise to a right to an action for the breach of the contract while the failure of a condition acts as a release of the corresponding duty. Such a condition is one where the promisor's obligation becomes effective only if some state of facts exists or if and when some future event happens. In other words, it is said to be a condition precedent. Learned editors of Pollock and Mulla's Indian Contract Act classify both these cases and another case of Chittibobu Adenna v. Garimalla, AIR 1916 Mad 75, as cases of a condition precedent where the didder could have retracted his offer before the final acceptance, as in Sundaram Pillai's case, AIR 1947 Mad 366. It was further submitted by them that the two cases, viz., Chittibobu's case, AIR 1916 Mad 75 and Rajanagaram case, 1950-2 Mad LI 436: (AIR 1351 Mad 322) were wrongly decided. In the first case, it is said that the Court misunderstood the nature of a condition subsequent. With respect to tne second case, it is observed that the acceptance is either absolute or conditional and there is no half-way house between the two. If an acceptance is conditional, the offeror can withdraw at any moment until absolute acceptance has taken place.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-21", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "In that case before Salyanarayanarao, J. the terms of the auction sale were that the sale will be knocked down in favour of the highest bidder subject to the approval or the Mahasabha and the District Bank. The plaintiff had become the highest bidder in the auction and deposited the necessary price money and later on the bank took up the matter for consideration and accepied the bid, but before it could be communicated to the plaintiff, the Bank rescinded it and ordered re-sale. The question was whether there was a concluded contract. There can be little doubt that where the acceptance is conditional, as in this case, there is no concluded contract and the offreor can withdraw. A condition precedent is a condition which must happen before either party becomes bound by the contract and since there was in fact no approval, there can be no concluded contract and the Bank was justified in ordering the resale. The decision of the single bench of the Madras High Court, was, in our view, not warranted either on principle or on the authority of the Bench decisions which preceded it. \n An examination of Chittibobu's case, AIR 1916 Mad 75 would show that the decision of the Bench was based on there being a condition precedent and not a condition subsequent. A condition subsequent is one which arises only on there being a concluded contract. A condition subsequent is one, which follows the performance of the contract, and operates to defeat and annul it, upon the subsequent failure of either party to comply with the condition. It goes to the discharge of the obligations under the contract. The statement of Poilock and Mulla at pages 44-45 dealing with Chittibobu's case, AIR 1916 Mad 75 which has been relied upon by the learned Government pleader, is in the following terms:", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-22", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "\". . . . It is a resolutive condition, as distinct from a suspensive condition or condition precedent, which prevents the existence of any obligation until the condition is satisfied. Yet the Court clearly decided that there was no binding agreement at any rate until V, the special agent, approved. In other words, their Lordships held that the condition was a condition precedent, for had the condition been a condition subsequent, there would have been a binding contract the moment D's bid was accepted, name-to be defeated by V's failure to approve. Appropriate wording to impose a condition subsequent would have been to the effect that the bid was accepted, but if V should not approve the contract was to be at an end.\"", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-23", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "10. Even at the risk of repetition, it is necessary to point out that the important thing to note in a condition subsequent is that the promisor's duty is perfect in its inception, but later events, according to express or unexpressed terms of the agreement, may absolve him from performance wholly or in part. \n 11. Applying these principles to the facts of this case, the question is whether there has been a concluded contract and whether the Excise Commissioner's power to suspend or cancel the contract within one month is a condition subsequent or a condition precedent. The answer to this question would necessarily depend upon the view we take of the terms of Clause 10. It is not denied by the learned advocates that this condition is not a statutory condition. There is nothing in the Abkari Act which reserves a power such as that in Clause 10 to the Excise Commissioner. The learned Government pleader had at one stage referred us to Section 4 in his attempt to spell out that the condition in Clause 10 is a statutory condition, but on examination of Section 4, he was unable to sustain it. In our view, his initial contention is not justified on a reading of the section which is as follows: \n (4) Subject to such conditions as may deem fit, the Government may grant, for a fixed period to any person at any place, (1) a lease jointly or severally for the supply, manu facture or sale of any inebriating or intoxicating drug or mohwa flower.  \n Explanation: A lease shall not take effect until the Collector or any other competent officer has issued a licence in the prescribed form. \n (2) The Government may confer on any officer tne power mentioned in Sub-section (1).", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-24", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "What this section is dealing with is a condition relating to the grant of a lease to any person at any place and for a fixed period, which are in fact the terms of the contract whereby the lease is granted and not to reservation of powers relating to the very grant of the fease which relate to the promisee's and promisor's obligations. Clause 10 must, therefore, be considered as relating to the formalities requisite for the conclusion of the contract and must be governed by the general law of contracts. A perusal of Clause 10 would make it evident that the auction is not final until the expiration of one month, because within that period, the Excise Commissioner can suspend or revoke the auction. The Deputy Excise Commissioner has no doubt the power to accept the bid, but that bid is not final till after the expiry of one month, during which period the Excise Commissioner has the power of revocation. We are unable to see any difference between acceptance of a bid subject to approval and the acceptance of the bid subject to its rejection or suspension. The one is in the positive form and the other is in the negative form in either case, we are not persuaded by the argument of the teamed Government pleader that it is a condition subsequent, nor can the last sentence of the passage tram Mulla cited above, be of any assistance to him, because, there what is envisaged is the condition following the conclusion of the contract. The language of Rule 10 throughout meticulously used the words approval of the auction and the rejection by the Excise Commissioner within the period specified of the approval of the auction, The clue to the intention of that clause is, in our view, found in the last stipulation where thee auction is said to become final only after the expiration of one month, if during that period the Excise Commissioner has not cancelled or suspended the auction. If the approval of the auction is not binding on the Government, within that period, it is certainly not binding", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-25", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "approval of the auction is not binding on the Government, within that period, it is certainly not binding on the bidder also.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-26", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "In the language of Pollock and Mulla, there can be I no halfway house between the two, nor can it be said that the offer is unconditionally and completely accepted. The other conditions relating to the deposit of money, payment of advance rentals, this execution of security bond etc. immediately alter the bid is approved by the Deputy Excise Commissioner are tentative and subject to the auction becoming final, if the Excise Commissioner does not finally approve the approval of the auction and directs suspension or revocation, it cannot be contended that the amounts paid are not returnable. The payment in such circumstances of these amounts immediately on the Bid being approved by the Deputy Excise Commissioner does not affect the legal position that the auction is only final on the expiry of one month. That the auction is not final is also evident from the fact that even where the successful bidder is put in possession, he can be ousted, if the auction is not finally approved, and it is reauctioned or suspended. Such a unilateral reservation of power makes the acceptance a provisional one. In this view, the appellant can certainly withdraw his offer before the expiration of that period. The Excise Commissioner had in fact cancelled the toddy auctions in exercise of the powers vested in him under Clause 10 and had ordered their reauction, which was the reason for the appellant' to withdraw his hid before the expiration of one month, as he considered that the auction on the part of the Excise Commissioner had prejudiced his interests. \n 12. The only other question which has been strenuously urged by the [earned Government Pleader is of limitation based on Section 41 of the Abkari Act, which is in the following terms:--", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-27", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "41 (1) No action for damages shall he entertained by a Civil Court against Government or against any Abkari officer for any act done or ordered to he done in good faith and in accordance with this Act (2) All actions against any Abkarj Officer and all actions which may be lawfully brought against Government or against any Abkari Officer on account of any act or thing alleged to have been done in accordance with this Act, shall not be entertained after six months from the date of doing the act or the thing. \n (3) If, in a suit for compensation for damages it is proved that adequate compensation was being tendered before the institution of the suit, it shall be lawful for the Court in its judgment to disallow costs to the plaintiff and lay on him the costs of the defendant.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-28", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "It would appear that Sub-section (1) bars suits for damages against Government or against Abkari officers for acts done in good faith, while Sub-section (2) prescribes a period of limitation of six months for all actions which may be lawfully brought against Government or against Abkari officers. Learned advocate for the appellant, shri Raghuvir, sought to contend that this is confined to suits for damages, but later recognised the force of the contention of the learned Government Pleader that all suits which can be lawfully brought, whether for damages or otherwise, are governed by the limitation prescribed therein. There is in our view no ' difficulty in the applicability of this section to the present suit inasmuch as it arises out of the action of the Excise Commissioner and the Excise Department in claiming loss incurred by the Government as a result of the purported breach of contract by the appellant. In order to determine whether the suit is in time and whether the period spent in agitating the matter before the Minister for Excise could be taken into account in computing the period of six months, it would be protitable to note the several dates relating to this transaction.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-29", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "As we have already stated, on 24-8-1954 the bid of the appellant was accepted by the Deputy Commissioner. On 4-9-1954 the Excise Commissioner revoked the sendhi auctions and directed their reauction. On 7-9-1954 the appellant filed a petition for revision of the rentals, failing which he stated that he was withdrawing his offer. On 15-3-1954 the Excise Commissioner rejected the petition and a demand for payment was made on 13-10-1954 which reached the appellant on 17-11-1954. The alleged demand itself is not before us, but these dates and facts are not disputed. On the same date, the appellant filed a petition before the Minister for excise and the petition was dismissed by the Minister on 23-8-1956. On 16-11-1955, the suit was filed. If the period of six months is to be reckoned as from the date of the rejection of the petition on 15-9-1954. or even for that matter if it is t be reckoned from the date of the receipt of the demand viz., 17-11-1954, the suit is beyond six months. But if the period spent in agitating the matter before the Minister is to be taken into account, and in this case it has been noticed that the Minister has specifically given three months.' time to file a suit and obtain stay orders from the Civil Court -- then the suit will be within six months whether from the date of the, rejection of the petition, or the date of the receipt of the demand for payment.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-30", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "It may, however, be stated that the relief sought for in the suit is a perpetual injunction and recovery of the deposit. In so far as the first relief is concerned, the appellant's cause of action would be a continuing one as long as the threat to recover the amount continues. It is admitted that no steps have so far been taken to recover this amount by the revenue officers as required by Sections 116 to 123 of the Land Revenue Act. The only step taken in pursuance of the demand for payment is that the Excise Superintendent of Mahboobnagar has addressed a letter to the Tahsildar intimating to him that there is demand of the Excise Department against the appellant. But the Tahsildar has to give a notice as required by Section 118 of the Land Revenue Act, which has not been done. In any case, the appellant has clearly averred in paragraph 16 of his plaint that the cause of action arose on 23-8-1955 when the Honourable Minister for Revenue directed him to obtain necessary orders from a civil court. The question is whether this could be taken as the point of time from which the period of six months limitation could be reckoned.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-31", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "The lower Court allowed the period spent in agitating the matter before the Minister under the Suits Against Government Act V of 1320 F. This Act has, however, been repealed by Act V of 1955 on 29-4-1955 and consequently the contention of the learned Government Pleader, Shri N. S. Raghavan is that when the suit was not filed in accordance with that Act, the provisions of that Act would not apply. There is force in this contention nor could it be said that this was a pending proceeding, because under that Act, the application to file a suit against the Government duly verified as required by the Code of Civil Procedure should be filed before the Legal Adviser to the Government and it such an application had been filed, then certainly Sub-clause (2) of Section 2 of the repealing Act V of 1955 saving pending proceedings would come to the rescue of the appellant, but an application to a Minister is not an application under the Suits Against Government Act. In the circumstances, the judgment of the lower court on this point cannot be sustained.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-32", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "It is then contended by the learned advocate for the appellant that the application before the Minister would be deemed to have been disposed of under the powers vested in the Government in accordance with the rules framed under Clause (0) of Sub-section (2) of Section 3 of the Abkari Act which came into force on the 14th April 1955. It is further contended that though the Minister had powers of revision as from the 14th of April, 1955, he could can for the record and rectify the orders passed before that date. In support of this contention, he refers to the case of Indira Sohanlal v. Custodian of Evacuee Property, (S) . But an examination of the facts of that case would show that this contention cannot be sustained. It appears that originally under Section 5-B of the East Punjab Act 14 of 1947, any original order passed by the Custodian or Additional Custodian is not subject to appeal or revision and it was specifically declared to be final and conclusive. Under Section 30(1) (b) of the Central Ordinance No. 12 of 1949, though an appeal to the High Court was provided, there was no provision for revision against an order of the Custodian or Addl. Custodian or authorised Deputy Custodian. Subsequently, under Section 24 of the Central Ordinance No. 27 of 1949, it was, provided inter alia that any person aggrieved by an order made under Section 38 which corresponds to the previous Section 5-A of the East Punjab Act 14 of 1947, may prefer an appeal in such manner and within such time as may be prescribed to the Custodian General where the original order has been passed by the Custodian, Addl. Custodian or an Authorised Deputy Custodian.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-33", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "Section 27 provided for revisional powers of the custodian General, but it was specifically confined to appellate orders and there was no power given thereunder for revision by the Custodian General of an ordinal order passed by me Custodian. This however, was changed under the Central Act 31 of 1950 which repealed and replaced the Central Ordinance 27 of 1949. Though the provision for appeal was virtually the same as under Section 24 the Act provided by Section 27 for general revisional powers of the Custodian General to call tor and examine the records either on his own motion or on an application made to him in this behalf for the purposes of satisfying himself as to the legality or propriety of any such order and to pass such order in relation thereto as 1m thinks fit. An application for confirmation was pending on the date of this Ordinance and the confirmation was only made on 20-3-1952. It was this confirmation order that was revised by the Custodian General on 20-5-1953, which order was disputed before the Supreme Court. It cannot, therefore, be said that this case is an authority for the proposition that acts prior to the conferment of the revisional powers could be revised on the subsequent conferment of such powers.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "356fd83fcc09-34", "Titles": "Raghunandhan Reddy vs State Of Hyderabad Through Secy. ... on 17 January, 1962", "text": "13. It would, however, appear to us on a reading or Section 3(1) (a) of the Abkari Act which empowers the Government to appoint a Commissioner and other officers of the Abkari Department, that the Commissioner who is appointed under the Act is to function under the control and subject to the orders of the Government. In other words, his acts are to be controlled and supervised by the Government. In this view, the appellant could certainly move the Government to revise the order of the Commissioner disallowing his application withdrawing his offer. Consequently, tne appellant would be entitled to file a suit within six months from that order of the Government which confirmed the order of the Commissioner and directed collection of the amount of loss from the appellant alleged to have been incurred by the Government. Section 41 also envisages suits against acts of the Government. In this view the suit is within time. In any view the claim for refund of earnest money deposited is not governed by Section 41 of the Abkari Act. The general law of limitation will be applicable thereto under which a suit could be brought within 3 years. We accordingly confirm the finding of the lower court holding the suit to be within time, but for different reasons. \n 14. In the result, the appeal is allowed with costs and the suit of the appellant for perpetual injunction and for recovery of the deposit amount paid by him is decreed with costs. The amount will bear interest at 4% from the date of the suit to the date of recovery.", "source": "https://indiankanoon.org/doc/980589/"}
+{"id": "6c9c3d342db4-0", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "JUDGMENT Jayachandra Reddy, J.  \n 1. This Writ Petition is for the issuance of a writ of mandamus or any other writ or direction declaring the sale of the petition-schedule properties by the Andhra Pradesh State Financial Corporation, i.e., the 2nd respondent, under Section 29 of the State Financial Corporation Act, 1951 in favour of the 4th Respondent, as unconstitutional, illegal and void, and the same came up for hearing before one of us (Sambasiva Rao, J., as he then was). During the course of the arguments, the learned counsel for the petitioner questioned the constitutional validity of the Section 29 of the State Financial Corporation Act, 1951, hereinafter referred to as \"the Act\", and as the same has to be heard by a Division Bench, the writ petition was directed to be posted before a Bench and accordingly it has come up before us.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-1", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "2. The essential facts for appreciating the contentions on behalf of the petitioner, may briefly be stated. The writ petition schedule properties consisting of both movable and immovable properties, which are necessary for the purpose of maintaining the Khandasi Sugar factory situated at Narasmhunipeta, Bobbili Taluk, belonged to Sri Venugopal Khandasari Sugars of which the 5th respondent was the Managing Partner. The 5th respondent approached the 2nd respondent for a loan of Rs. 1,50,000. It was sanctioned upon the terms and conditions and against the security mentioned in the mortgage deed executed and registered on 26-11-1963 by the 5th respondent in favour of the 2nd respondent. The loan was subsequently reduced to Rs. 1,24,000 and the same had to be repaid by instalments. On 11-2-1966 the first instalment was paid. On 23-10-1967 the petitioner wrote a letter to the 2nd respondent stating that the petition-schedule property was sold to them and that they will be responsible for the repayment of the loan amount by instalments due to the 2nd respondent. The petitioner having thus come into possession of the property become liable to repay the loan amount, but failed to pay off the arrears. In this regard and in regard to the transfer of assets by executing the necessary documents correspondence commenced from 28-11-1967 onwards the details of which will be given later. The 2nd respondent ultimately filed O.P. No. 47 of 1972 on 10-8-1972 in the Court of the District Judge, Srikakulam for the sale of the schedule properties under the provisions of Section 31 (1) (a) of the Act and for other necessary reliefs. During the pendency of this O.P. several interlocutory applications", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-2", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "for other necessary reliefs. During the pendency of this O.P. several interlocutory applications for appointment of a Receiver and other reliefs, were filed from time to time. Ultimately an Advocate-Receiver was appointed for the management of the properties. During the pendency of the O.P. the 2nd respondent-Corporation advertised in the Indian Express dated 28-7-1973 and in Andhra Patrika dated 30-7-1973 inviting tenders for purchase of the Khandasari Unit and among the tenders received the tenders of the 4th respondent was fund to be in order as it satisfied the necessary conditions. While that being so, the 2nd respondent filed I.A. No. 503 of 1973 with a request to advance O.P. No. 47 of 1971, and the permission to withdraw the O.P. The hearing of O.P. was advanced and on 27-8-1973, the O.P. was dismissed as withdrawn. On 28-8-1973 the 2nd respondent exercising its power under Section 29 of the Act executed a sale deed in favour of the 4th respondent.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-3", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "3. In this writ petition, which is filed questioning the above said sale by the 2nd respondent to the 4th respondent, it is mainly contended that Section 29 of the Act is violative of Article 14 of the Constitution of India. This plea was not originally taken, but subsequently the petitioner was permitted to raise the same and a petition seeking for the amendment to this effect is also allowed. Sri Challa Seetharamaiah, the learned counsel for the petitioner contends before us that firstly Section 29 of the Act is violative of Article 14 of the Constitution, secondly that the 2nd respondent having initiated proceedings under Section 31 of the Act cannot have recourse to Section 29 of the Act, and thirdly that the action of the 2nd respondent taken under Section 29 is opposed to principles of natural justice. To put it in other words the sum and substance of these contentions is that Section 29 of the Act is violative of Art. 14 of the Constitution and if Section 29 is to be struck down on this score, then the action of the 2nd respondent under Section 29 in selling the Khandasai unit to the 4th respondent is illegal and void. The principal grounds of attack against the validity of Section 29 of the Act are that the special procedure thereunder is more drastic and prejudicial than the procedure contemplated under Section 31, and though both these procedures cover the same filed there are no guidelines provided as to when the procedure under Section 29 can be resorted to, thereby permitting discrimination among the industrial concerns to whom the State Financial Corporation has given financial aid. The vice of discrimination, according to the learned counsel, lies in the unguided and unbridled power of singling out some industrial concerns amongst the same class of industrial concerns for being subjected to the special procedure under Section 29 which is more drastic and arbitrary.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-4", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "4. To appreciate the contention of the learned counsel it is necessary to refer to the provisions of Sections 29 and 31 of the Act. Section 29 is in the following terms : \n \"29. Rights of Financial Corporation in case of default : \n (1) Where any industrial concern which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan or advance or any instalment thereof or otherwise fails to comply with the terms of its agreement with the Financial Corporation, the Financial Corporation shall have the right to take over the management of the industrial concern, as well as the right to transfer byway of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation.  \n (2) Any transfer of property made by the Financial Corporation, in exercise of the power under sub-section (1), shall vest in the transferee all rights in or to the property transferred as if the transfer had been made by the owner of the property.  \n (3) The Financial Corporation shall have the same rights and powers with respect to good manufactured or produced wholly or partly from goods forming part of the security held by it as it had with respect to the original goods.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-5", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "(4) Where the management of an industrial concern is taken over by the Financial Corporation or any property is transferred and realised by it under provisions of sub-section (10, all costs, charges and expenses which in the opinion of the Financial Corporation have been properly incurred by it as incidental to such management, or transfer and realisation shall be recoverable from the industrial concern and the money which is received by it from such management or transfer and realisation shall, in the absence of any contract to the contrary, be held by it in trust to the applied firstly, in payment of such costs, charges and expenses and, secondly, in discharge of the debt due to the Financial Corporation, and the residue of the money so received shall be paid to the person entitled thereto.  \n (5) Where the Financial Corporation takes over the management of an industrial concern under the provisions of sub-section (1), the Financial Corporation shall be deemed to be the owner of such concern, for the purposes of suits by or against the concern, and shall sue and be sued in the name of the concern.\"   \n Under this section the Financial Corporation can straightway take over the management of the defaulting industrial concern as well as the right to transfer by way of lease or sale with the necessary incidental and consequential rights and liabilities. Section 31 of the Act is as follows:", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-6", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "\"31. Special provisions for enforcement of claims by Financial Corporation : (1) Where an industrial concern, in breach of any agreement, makes any default in repayment of any loan or advance or any instalment thereof or otherwise fails to comply with the terms of its agreement with the Financial Corporation requires an industrial concern to make immediate repayment of any loan or advance under Section 30 and the industrial concern fails to make such repayment, then, without prejudice to the provisions of Section 29 of this Act and of Section 69 of the Transfer of Property Act, 1882 any officer of the Financial Corporation, generally or specially authorized by the Board in this behalf, may apply to the District Judge within the limits of whose jurisdiction the industrial concern carries on the whole or a substantial part of its business for one or more of the following reliefs, namely : \n (a) for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation: or", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-7", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "(b) for an ad interim injunction restraining the industrial concern from transferring or removing its machinery or plaint or equipment from the premises of the industrial concern without the permission of the Board, where such removal is apprehended. \n (2) An application, under sub-section (1) shall state the nature and extent of the liability of the industrial concern to the Financial Corporation, the ground on which it is made and such other particulars as may be prescribed.\"", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-8", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "5. It is to be noted that under Section 31 also the Financial Corporation may apply to the District Judge for several reliefs mentioned therein which include the transfer of the management, the sale of the property pledged etc. Under this section also the District Judge can grant interim relief which are incidental and consequential. Section 32 of the Act lays down the procedure of the District Judge in respect of the applications under Section 31 of the Act. The several provisions under this section contemplate an adjudication of the rights and liabilities the Financial Corporation as well as the defaulting industrial concern. Sub-section (9) of Section 32 provides for an appeal to the High Court against the orders of the District Judge. It is needless to say that this procedure contemplated under Sections 31 and 32 is more or less the same as is found n the ordinary civil procedure and more beneficial to the defaulting industrial concern. Compared to this, the procedure under Section 29 does not give so much of protection to the defaulting industrial concern. The Financial Corporation can, under the circumstances mentioned in Section 29, take over the management of the defaulting industrial concern and sell the property pledged. So a plain reading of sections 29 and 31 of the Act clearly indicates that the procedures under both these sections operate in the same field and it goes without saying that the procedure under Section 29 is more drastic in the sense that the Financial Corporation can take over the management of the defaulting industrial concern and sell the property pledged without the intervention of the Court. But the real question is whether the mere existence of two remedies one more drastic than the order by itself amount to infringement of equality guaranteed under Art. 14 of the Constitution, or something more is necessary.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-9", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "6. It is well settled that where a statute provides for a more drastic procedure different from the ordinary procedure without giving any guideline in any form and when both of them operate in the same field, such a provision providing for drastic procedure will be hit by Article 14 of the Constitution, as the same suffers from the vice of discrimination. In State of West Bengal v. Anwar Ali Sarkar, the Supreme Court, while considering the constitutional validity of the West Bengal Special Courts Act, observed as follows: \n \"A rule of procedure laid down by law comes as much within the purview of Art. 14 as any rule of substantive law and it is necessary that all litigants, who are similarly situated, are able to avail themselves of the same procedural rights for relief and for defence with like protection and without discrimination. \n If a legislation is discriminatory and discriminates one person or class of persons against others similarly situated and denies to the former the privileges that are enjoyed by the latter, it cannot but be regarded as \"hostile\" in the sense that it affects injuriously the interests of that person or class.\"   \n In Kathi Raning v. State of Saurashtra, , the Supreme Court, while considering the constitutional validity of the Saurashtra State Public Safety Measures (Third Amendment) Ordinance, 1949 pointed that the claims of equal protection under Art.. 14 are to be examined with the presumption that the state action is reasonable and justified. It is profitable to refer to some of the observations made by Mukherjea, J., in that case, His Lordships observed :", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-10", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "\"A legislature for the purpose of dealing with the complex problems that arise out of an infinite variety of human relations, cannot but proceed upon some sort of selection or classification of persons upon whom the legislation is to operate. The consequence of such classification would undoubtedly be to differentiate the persons belonging to that class from others, but that by itself would not make the legislation obnoxious to the equal protection clause. \n Xx xx xx If the legislative policy is clear and definite and as an effective method of carrying out that policy a discretion is vested by the State upon a body of administrators or officers to make selective application of law to certain classes or groups of persons, the statute itself cannot be condemned as a piece of discriminatory legislation. In such cases, the power given to the executive body would import a duty on it to classify the subject-matter of legislation in accordance with the objective indicated in the statute. The discretion that is conferred on official agencies in such circumstances is not an unguided discretion, it has to be exercised in conformity with the policy, to effectuate which the direction is given and it is in relation to that objective that the propriety of the classification would have to be tested. If the administrative body proceeds to classify persons or things on a basis which has no rational relation to the objective of the legislature, its action can certainly be annulled as offending against the equal protection clause. On the other hand if the statute itself does not disclose a definite policy or objective and it confers authority in another to make selection at its pleasure, the statute would be held on the face of it to be discriminatory irrespective of the way in which it is applied.\"  \n Further in this case their Lordships indicted that the necessary guidance for the administrative body can as well be obtained or gathered form the policy and purpose of the enactment and from the objects sought to be achieved by the enactment.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-11", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "7. The Supreme Court in Kedar Nath Bajoria v. State of West Bengal, , after referring to the above two decisions, observed : \n \"There are cases where the legislature itself makes a complete classification of persons or things and applies to them the law which it enacts, and others where the legislature merely lays down the law to be applied to persons or things answering to a given description or exhibiting certain common characteristics, but being unable to make a precise and complete classification, leaves it to an administrative authority to make a selective application of the law to persons or things within the defined group, while laying down the standards or at least indicting in clear terms and underlying policy and purpose, in accordance with, and in fulfilment of, which the administrative authority is expected to select the persons or things to be brought under the operation of the law. \n Whether an enactment providing for special procedure for the trial of certain offences is or is not discriminatory, and violative of Art. 14 must be determined in each case as it arises, for, no general rule applicable to all cases can safely be laid down. \n In the case of such a statute it could make no difference in principle whether the discretion which is entrusted to the executive Government is to make a selection of individual cases or of offences, classes of offences or classes of cases. For, in either case, the discretion to make the selection is guided and controlled discretion and not an absolute or unfettered one and is equally liable to be abused, but as has been pointed out, if it be shown in any given case that the discretion has been exercised in disregard of the standard or contrary to the declared policy and object of the legislation, such exercise could be challenged and annulled under Art. 14 which includes within its purview both executive and legislative acts.\"", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-12", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "In Ram Krishna Dalmia v. Justice Tendolkar, , their Lordships of the Supreme Court summarized the earlier decisions and observed as follows : \n \"A statute may itself indicate the persons or things to whom its provisions are intended to apply and the basis of the classification of such persons or things may appear on the face of the statute or may be gathered from the surrounding circumstances known to or brought to the notice of the Court.  \n A statute may not make any classification of the persons or things for the purpose of applying its provision but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply. In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the Government in the matter of the selection or classification. \n A statute may not make a classification of the persons or things for the purpose of applying its provisions and, may leave it to the discretion of the Government to select and classify the persons or things to whom its provisions are to apply but may at the same time lay down a policy or principle for the guidance of the exercise of discretion by the Government in the matter of such selection or classification; the Court will uphold the law as constitutional. \n A statute may not make a classification of the persons or things to whom their provisions are intended to apply and leave it to the discretion of the Government to select or classify the persons or things for applying these provisions according to the policy or the principle laid down by the statute itself for guidance of the exercise of discretion by the Government in the matter of such selection or classification.\"  \n Their Lordships further observed :", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-13", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "Their Lordships further observed : \n \"In the tempo of the prevailing conditions in modern society events occur which were never foreseen and it is impossible for Parliament or any legislature to anticipate all events or to provide for all eventualities and, therefore, it must leave the duty of taking the necessary action to the appropriate Government.\"   \n 8. The learned counsel for the petitioner not only referred to the above mentioned decisions but also relied on Jyoti Pershad v. Union Territory of Delhi, , and contended that where there are two procedures, one being more drastic, operating in the same field the provision providing for such a drastic procedure should be struck down, particularly when there are no guidelines. In the above mentioned decision their Lordships, after referring to Ram Krishna Dalmia v. Justice Tendolkar, pointed out that : \n \"It is manifest that the above rule would not apply to cases where the legislature lays down the policy and indicates the rule or the line of action which should serve as a guidance to the authority. Where such guidance is expressed in the statutory provision conferring the power, no question of violation of Art. 14 could arise, unless it be that the rules themselves or the policy indicated lay down different rules to be applied to persons or things similarly situated. Even where such is not the case, there might be a transgression by the authority of the limits laid down or an abuse of power, but the actual order would be to set aside in appropriate proceedings not so much on the ground of a violation of Art. 14 but as really being beyond the power.\"  \n It is not, however, essential for the legislation to comply with the rule as to equal protection that the rules for the guidance of the designated authority, which is to exercise the power or which is vested with the discretion, should be laid down in express terms in the statutory provision itself.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-14", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "Such guidance may thus be obtained from or afforded by the preamble read in the light of the surrounding circumstances which necessitated the legislation taken in conjunction with well-known facts of which the Court might take judicial notice or of which it is appraised by evidence before it in the form of affidavits.\" \n 9. In all the abovementioned cases it will be noted that the Supreme Court did not hold that merely because two procedures are in existence, one more drastic than the other, that by itself is a circumstance to condemn the provision providing for such procedure as unconstitutional. On the other hand, it is very much pointed out that even in cases where the power is vested in the executive authority for the selection of a particular person and where certain guidance is available to him to so choose, the provision, does not suffer from the vice of discrimination. The learned counsel however particularly relied on State of Orissa v. Dhuirendranath Das, AIR 1961 SC 1715 wherein it is observed : \n \"If against two public servants similarly circumstanced enquiries may be directed according to procedure substantially different at the discretion of the executive authority, exercise were of is not governed by any principles having any rational relation to the purpose to be achieved by the enquiry, the order selecting a prejudicial procedure, out of the two open for selection, is hit by Art. 14 of the Constitution.\"  \n Again in paragraph 5 of the judgment it is observed : \n \"If the two sets of rules were in operation at the material time when the enquiry was directed against the respondent and by order of the Governor, the enquiry was directed under the Tribunal Rules which are \"more drastic\" and prejudicial to the interests of the respondent, a clear case of discrimination arises and the order directing enquiry against the respondent and the subsequent proceedings are liable to be struck down.\"", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-15", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "It may be noticed that their Lordships were referring to a case of clear discrimination resorted to without any reasonable basis. The learned counsel for the petitioner also relied on Northern India Caterers (Pvt) Ltd., v. State of Punjab, . The majority in that case took the view that : \n \"If the ordinary law of the land and the special law provide two different and alternative procedures one more prejudicial than the other, discrimination must result if it is left to the will of the authority to exercise the more prejudicial against some and not against the rest.\"  \n 10. But the decision is examined and scrutinised in the light of many other decisions by the Supreme Court, in M. Chhagganlal v. Greater Bombay Municipality, and ultimately the Supreme Court disagreed with the view of the majority in Northern India Caterers (Pvt.) Ltd., v. State of Punjab, . So this judgment of the Supreme Court by itself is of no help to the petitioner.  \n 11. In m. Chhagganlal v. Greater Bombay Municipality, the Supreme Court reviewed and summarized all the earlier decisions and held :", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-16", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "\"Where a statute providing for a more drastic procedure different from the ordinary procedure covers the whole field covered by the ordinary procedure, as in Anwar Ali Sarkar's case Suraj Mall Mohta's case without any guidelines as to the class of cases in which either procedure is to be resorted to, the statute will be hit by Article 14. Even there, as mentioned in Suraj Mall Mohta's case, a provision for appeal may cure the defect. Further, in such cases if from the preamble and surrounding circumstances, as well as the provisions of statute themselves explained and amplified by affidavits, necessary guidelines could be inferred in Saurashtra case and Jyoti Pershad's case statute will not be hit by Article 14. Then again where the statute itself covers only a class of cases as in Haldar's case and Bajoria's case the statute will not be bad. The fact that in such cases the executive will choose which cases are to be tried under the special procedure will not affect the validity of the statute. Therefore, the contention that the mere availability of two procedures will vitiate one of them, that is the special procedure, is not supported by reason of authority.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-17", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "The statute itself in the two classes of cases before us clearly lays down the purpose behind them, that is that premises belonging to the Corporation and the Government premises belonging to the Corporation and the matter of evicting unauthorised persons occupying them. This is a sufficient guidance for the authorities on whom the power has been conferred. With such an indication clearly given in the statutes one expects the officers concerned to avail themselves of the procedures prescribed by the Acts and not resort to the dilatory procedure of the ordinary Civil Court. Even normally one cannot imagine an officer having the choice of two procedures, one which enables him to get possession of the property quickly and the other which would be prolonged one, to resort to that latter. Administrative officers, no less that the courts, do not function in a vacuum. It would be extremely unreal to hold that an administrative officer would in taking proceedings for eviction of unauthorised occupants of Government property or Municipal property resort to the procedure prescribed by the two Acts in one case and to the ordinary Civil Court in the other. The provisions of these two Acts cannot be struck down on the fanciful theory that power would be exercised in such an unrealistic fashion. In considering whether the officers would be discriminating between one set of persons and another, one has got to take into account normal human behaviour and not behaviour which is abnormal. It is not every fancied possibility of discrimination but the real risk of discrimination that we must take into account. This is not one of those cases where discrimination is writ large on the face of the statute. Discrimination may be possible but is very improbable. And if there is discrimination in actual practice this Court is not powerless. Furthermore, the fact that the Legislature considered that the ordinary procedure is insufficient or ineffective in evicting and Corporation property and provided a special speedy procedure therefore is a clear guidance for the authorities charged with the duty of evicting unauthorised occupants. We therefore, find ourselves unable to agree with the majority in the Northern India", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-18", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "unauthorised occupants. We therefore, find ourselves unable to agree with the majority in the Northern India Caterers' case \"", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-19", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "12. In the same case Bhagwati, J., speaking for himself and for Justice Krishna Iyer, in a separate judgment observed : \n \"The view of discrimination, it was argued, consists in the unguided and unrestricted power of singling out for being subject to the special procedure some amongst a class of persons, namely, occupiers of Government or Municipal premises, all of whom are similarly situate and circumstanced, leaving others to be dealt with according to the ordinary procedure. The argument was sought to be supported by the majority decision of this Court in . We do not think this argument is sound. The majority decision is has no application in the present case, and din any event, we are of the view that that decision does not represent the correct law.\"  \n 13. It is opposite to refer to another judgment of the Supreme Court in Pandia Nadar v. State of Tamil Nadu, . The Bench which heard this case, after referring to M. Chhgganlal v. Greater Bombay Municipality, and following the same, unanimously held that the fact that in some cases the Executive will have the power of selection of the drastic procedure will not affect the validity of the statute, and rejected the contention that the mere availability of two procedures will invalidate the said provision of law. So it is necessary that various principles laid down in the aforesaid judgments of the Supreme Court and mainly in Chhagganlal v. Greater Bombay Municipality, , have to be borne in mind in resolving the question in this writ petition.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-20", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "14. From an examination of the aforesaid authorities of the Supreme Court, it is clear that every statute providing for two different procedures covering the same filed and making one of them drastic, does not ipso facto become violative of Article 14 of the Constitution of India. The guidelines as to when and under what circumstances the administrative authority can resort to a drastic procedure may sometimes be incorporated specifically in the statute itself. But in the tempo of the prevailing conditions in the modern society it is impossible for any legislature to anticipate all events or to provide for all eventualities. So the legislature can validly leave it to the discretion of the Executive Body to select a particular procedure. The discretion conferred on official agencies in such circumstances cannot be condemned outright as an unguided discretion if the statute indicates the guidance for the Executive for exercising such a discretion. Such guidance, although it is not there in the statute in the form of specific provisions, can as well be inferred from the preamble, surrounding circumstances and the provisions of the statute themselves explained and amplified by affidavits. It is only in such cases where there are no guidelines specifically in the statute and where the necessary guidance cannot also be gathered from an examination of the aforesaid aspects, the power conferred on the administrative body to choose one procedure or the other, can be condemned in an unguided one and the provision of law providing for such an unguided power suffers from the view of discrimination. But a statute which satisfied these tests cannot suffer from the vice of unconstitutionality. Further, as pointed out by the Supreme Court in Matalag Dobey v. H.C. Bhari, \"a discretionary power is not necessarily a discriminatory power is not necessarily a discriminatory power and that abuse of power is not to be easily assumed where the discretion is vested in the Government and not in a minor official\". When the necessary guidance is inferable from the statute, it cannot be fancied that the authorities vested with the power of selecting the", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-21", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "from the statute, it cannot be fancied that the authorities vested with the power of selecting the procedure will act arbitrarily and in an unrealistic fashion. If in a given case the authority acts arbitrarily and in unrelated (unrealistic?) manner to the objective of the statute, its action can certainly be annulled by the Court. But that may not be a ground for declaring the statute as unconstitutional.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-22", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "15. In the light of the aforesaid principles the constitutionality of Sec. 29 of the Act has to be examined. The State Financial Corporation Act, 1951 was enacted in order to provide immediate and long term credit to industrial undertakings which fall outside the normal activities of the commercial banks, etc. As such from the Statement of Objects and Reasons, the intention is that the State Corporations will finance medium and small scale industries. One of the main feature of the Bill was that the Corporation will be managed by a Board consisting of Directors nominated by the Government, Reserve Bank and the industrial Financial Corporation of India. It is also mentioned that the Corporation will have SPECIAL PRIVILEGES IN THE MATTER OF ENFORCEMENT OF ITS CLAIMS AGAINST BORROWERS Sen 3 of the Act deals with the establishment of State Financial Corporations. Sub-section (2) of Sec. 3 is in the following terms :-- \n \"(2) The Financial Corporation shall be a body corporate by the name notified under sub-section (1), having perpetual succession and a common seal, with power, subject to provisions of this Act, to acquire, hold and dispose of property and shall by the said name sue and be sued.\"", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-23", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "From the Objects and Reasons and Section 3 (2) of the Act it is clear that the Financial Corporation is a responsible body vested with the power to discharge various functions under the Act. Section 9 deals with 'management of Financial Corporations' and lays down that the general superintendence, direction and management of the affairs and business of the Financial Corporation shall vest in the Board of Directors and shall be assisted by an Executive Committee and the Managing Director. As we find in Sen. 10, very responsible and highly placed persons will be the Directors of the Board. Section 24 days with the 'general duty of the Board' and lays down that the Board is discharging its functions under the Act shall act on business principles, due regard being had by it to the interests of industry, commerce and the general public. Again under Section 25 it is the Corporation as managed by the Board, that is empowered to grant loans or advances to the industrial concern, repayable within a period not exceeding 20 years. Section 27 empowers the Financial Corporation to impose such conditions as it may think necessary or expedient for protecting the interests of the Financial Corporation and securing that the accommodation granted by it is put to the best use by the industrial concern. Now having regard to the scheme of the Act and these general provisions, Sections 29 and 31 are incorporated for safeguarding the interests of the Corporation. As already mentioned the two procedures mentioned in Sections 29 and 31 are different and there are no provisions by way of guidelines in these two sections as to when a particular procedure can be resorted to. The choice is left to the Corporation. It may also be noted that under Section 29 the Financial Corporation shall have the right to take over the management of the defaulting industrial concern as well as the right to transfer by way of lease or sale. Normally one would expect a responsible body like the Financial Corporation, to take action under this section when it becomes necessary depending on", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-24", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "a responsible body like the Financial Corporation, to take action under this section when it becomes necessary depending on the circumstances. From a combined reading of the Objects and Reasons and Sections 8, 9, 10, 24, 25 and 27, the requisite guidance can be inferred and a very responsible authority is vested with the power of selecting either of the procedures under Sections 29 and 31 respectively. So the statute itself discloses a definite policy and objective and it confers authority on the Corporation to make selection of the procedure. When that is so, a responsible body like the Financial Corporation will act in a realistic manner keeping in view the interests of the Corporation, industry, commerce and the general public. For these reasons, we are of the opinion that there is a guiding policy and principle available from the statute for the Corporation to act in this regard and accordingly we hold that Section 29 is not violative of Article 14 of the Constitution. Further, we are also of the view that in this case the Corporation acted with due care and caution and that it did not act arbitrarily or capriciously, and we will be considering this aspect in detail at a later stage.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-25", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "16. Now it remains to be seen whether there is any substance in the second contention, viz., that the Financial Corporation, having proceeded under Section 31, cannot again resort to Section 29. We have already held that Section 29 is a valid provision of law. When the Corporation has the choice, which is not unguided, to resort to either of the procedures, and if the Corporation in a given case, having withdrawn its application under Section 31, proceeds under Section 29, it cannot be said that such an action is illegal. As pointed out by the Supreme Court in T.K. Mudaliar v. Venkatachalam, \"it is to be presumed, unless contrary were shown, that the administration of a particular law would be done \"not with an evil eye and unequal hand\" and the selection made by the Government of the cases of persons to be preferred for investigation by the Commission would not be discriminatory\". However, the petitioner has no right to say that the Corporation should have no choice of proceedings when such a course is not barred from withdrawing its own application filed under Section 31 of the Act. As long as Section 29 is a valid piece of legislation, the Corporation has every right to proceed under Section 29, unless it is shown that it has acted arbitrarily or maliciously. Having held that Section 29 of the Act is not violative of Article 14 of the Constitution, now it remains to be seen whether in the instant case the Corporation has acted arbitrarily.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-26", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "17. As already mentioned, the petitioner wrote a letter to the 2nd respondent on 23-10-1967 mentioning that they have agreed to purchase the Khandasari unit from the 5th respondent and they are agreeable to pay the amount due to the 2nd respondent in instalments. On 28-11-1967 the 2nd respondent wrote to the petitioner complaining that the petitioner did not furnish their said partnership deed and other records to enable the 2nd respondent to take further action and also requested the petitioner to take immediate action, so that the affairs could be regularised. Again on 16-12-1967 the 2nd respondent reminded the petitioner and it is pointed out in that letter as follows :--- \n \"We invite your attention to our letter No. VKS/67/7579, dated 29th November, 1967 and regret very much to note your indifference in the matter Kindly note that if you do not furnish all the documents and information and complete the transfer before the 2nd of this month, we shall be forced to treat you as an unauthorised person in relation to properties mortgaged to us and proceed against the proprietor and the mortgaged properties.  \n Please treat this as specially urgent.  \n Sd/- xx MANAGING DIRECTOR.\"  \n Again by letter dated 5-1-1968 the 2nd respondent wrote to the petitioner that finally the petitioner is called upon to take immediate action to regularise the matter, failing which the 2nd respondent has no other alternative except to proceed against the owners and the mortgaged properties of the defaulting concern. On 14-8-1968 the 2nd respondent addressed another letter to the petitioner which reads thus :", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-27", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "Please note that if the mortgage agreement is not immediately taken up and finalised and the arrears cleared on or before 26-8-1968, we will be compelled to proceed against you and the owners of the above unit and the mortgaged properties \n  xx       xx     xx", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-28", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "To this ultimately the petitioner cared to reply on 23-8-1968 stating that he would come in the first week and would take necessary steps for registering the deed. On 19-11-1968 the 2nd respondent again wrote to the petitioner that the season was fast approaching and that the petitioner should expedite the things to regularise the affairs, and again reiterated that the proceedings for the sale of the entire unit for recovering the outstanding loans would be launched. Some ore correspondence passed between the 2nd respondent and the petitioner. Then on 15-7-1970 a registered notice was issued by the 2nd respondent to the petitioner to the effect that if the petitioner failed to pay the 2nd respondent the sums due by way arrears, necessary steps would be taken to recover the entire loan amount. Similar notices were issued on 4-12-1970 and 15-12-70 and being unsuccessful the 2nd respondent was compelled to file O.P. No. 47 of 1972 on 10-8-1972. As already mentioned, during the pendency of the O.P. also the attempts of the 2nd respondent to safeguard the interests of the Corporation were not fruitful. The petitioner, in spite of being in possession and running the unit failed to make the payment of the arrears due and thus committed wilful default. The proceedings in O.P. 47 of 1972 disclose that the matter dragged on till 27-8-1973. During the pendency of the O.P. the 2nd respondent-Corporation being anxious to safeguard its own interests, brought the matter before the Board of Directors at a meeting held on 27-7-1973 and the Board after considering the facts and circumstances authorised the Managing Director to take action under Section 29. A true copy of the resolution attested by the Managing Director is placed before us and the resolution is numbered as", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-29", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "copy of the resolution attested by the Managing Director is placed before us and the resolution is numbered as 25 (e) which reads as follows:", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-30", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "\"25 (e) SRI VENUGOPALA KHANDASAI SUGARS NARASIMHUNIPETA, BIBBILI TALUK PROCEEDINGS FILED UNDER SECTION 31 OF THE STATE FINANCIAL CORPORATIONS ACT -- PENDING THIRD PARTIES INTERESTED IN PURCHASE OF THE UNIT -- UNDER SECTION 29 OF THE STATE FINANCIAL CORPORATION ACT AND SELL THE SAME SOUGHT. \n --------------------- \n Read Managing Director's Memorandum. \n The Managing Director further brought to the notice of the Board that as the matter for the sale of the unit under Section 31 is being delayed for on reason or other in the Court and as the unit may not fetch any price once we lose the sugarcane crushing season, it is desirable that the Corporation should, if necessary withdraw the application from the court and proceed under Section 29 of the State Financial Corporation Act. \n The Board agreed with the opinion and authorised the Managing Director to take action under Section 29 of the State Financial Corporation Act and in that behalf authorised the Secretary Sri M.S.Varadachary or the Additional Secretary Sri K. Narayana Rao or the Law Officer Sri K. Chalapati Rao or any other officer to do such acts as necessary for realising the money due to the Corporation and to do such acts like selling the properties by tenders or by negotiation and execution of deeds for and on behalf of the Corporation that are necessary and incidental thereto.\"", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-31", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "It is only after this resolution the 2nd respondent advertised in the newspapers on 28-7-1973 and 30-7-1973 calling for tenders. The petitioner was also aware of these advertisements as is admitted in the writ petition. Even then he did not take immediate steps to clear off the arrears showing his bona fides. Now he contends in a futile manner that it was not known to him that the 2nd respondent was going to exercise the rights under Section 29. No weight can be given to such a plea. Having regard to all these circumstances we are of the view that the 2nd respondent justified in taking recourse to Section 29 of the Act and did not act arbitrarily in doing so.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-32", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "18. It is lastly contended that the action of the 2nd respondent affects the principles of natural justice. We have already held that Section 29 of the Act is a valid provision of law. In entering into an agreement with the 2nd respondent, the petitioner's predecessors viz., the 5th respondent, agreed for all the conditions mentioned in the agreement. Under Clause VI (23) of the agreement a condition is there that the loan secured by the mortgagee shall be subject to the terms and conditions of the sanction accepted by the mortgagor and the powers, provisions and conditions contained in the State Financial Corporation Act including any amendments thereof made from time to time. Clause VII (6) authorises the Corporation to take all the actions permissible including taking over the management as well as the right to sell. The language of the said clause is in substance the same basis found in Section 29. When the parties by way of an agreement, have agreed for such a course which is permissible under Section 29, a valid provision of law, the petitioner who got into the shoes of the 5th respondent who was a party to this agreement cannot complain that he was not given notice of the proposed action under Section 29. As already mentioned, the Corporation under the statute can choose either of the procedures and having regard to the language of Section 29 and clauses VI (23) and VII (6) of the agreement, the question of putting the petitioner on notice does not arise.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-33", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "19. But in this case we are satisfied that the petitioner in fact was informed and he had knowledge of the likelihood of the Corporation proceeding under Section 29. In A.K. Kraipak v. Union of India, it was held that \"The concept of natural justice has undergone a great deal of change in recent years. What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case the frame work of the law under which the enquiry is held and the constitution of the Tribunal or the body of persons appointed for that purpose.\"  \n The history of the case, ever since the petitioner came into picture i.e., from 23-10-67, till 28-3-1973, speaks for itself that petitioner was adopting delaying tactics. The letters dated 16-12-1967, 5-1-1968 and 14-8-1968 and the subsequent letters by the 2nd respondent to the petitioner fully show that the petitioner was intimated that the Corporation would be proceeding against him under law. The mere fact that in the first instance, instead of proceeding under Section 20, the Corporation proceeded under Section 31 is by itself not a ground to contend that there was no notice to the petitioner abut the proposed action under Section 29. A perusal of some of the letters would indicate the proposed action by the Corporation under Section 29 also. So, from the facts and circumstances, we are of the view that the petitioner had in fact known that the Corporation would be proceeding against him under Section 29 also, when situation warrant. As already mentioned, even during the pendency of the O.P. advertisements were made in the newspapers calling for tenders, about which the petitioner was aware. For all those reasons, we hold that the Corporation acted in good faith and its action under Section 29 was not done arbitrarily.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "6c9c3d342db4-34", "Titles": "Srinivasa Kandasari Sugars, ... vs Government Of Andhra Pradesh And ... on 11 April, 1975", "text": "20. Sri Sivarama Sastry, the learned counsel for the 2nd respondent contended that the Corporation is at liberty to take over the management of the industrial concern and sell on the basis of the terms of the agreement alone without having recourse to Section 29 of the Act. We have already held that Section 29 is a valid provision and the action taken under the same is legal and valid. So, it is not necessary to consider this contention raised on behalf of the 2nd respondent.  \n 21. No other points are urged before us. \n 22. This writ petition, therefore, fails and is dismissed with costs. Advocate's fees Rs. 100. \n 23. Petition dismissed.", "source": "https://indiankanoon.org/doc/44113/"}
+{"id": "36741ea33019-0", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "JUDGMENT K. Bhaskaran, C.J.  \n 1. This is one of the extraordinary cases without any parallel., not a lis of the mundane orthodox pattern. but a unique public interest litigation which seeks to explore the realm of accountability of the executive to the people through the judiciary, hence it assumes great significance and has naturally attracted considerable attention of the public.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-1", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "2. The petitioner, Sri Dronamrajii Satyanarayana, a public worker and the Organising Secretary of the Coastal Districts Congress-1 Committee of Andhra Pradesh filed four writ petitions :124ZS/87,124261/87. 12427/87 and 12805/87 in this Court on 24-8- 1987 alleging various violations of laws and constitutional provisions by Shri N. T. Rama Rao, the first respondent-Chief Minister, and the State Government, the second respondent. A common affidavit running into 193 pages was filed in support of the reliefs sought. He sought a writ of quo warranto in W.P. No. 12425/87 against the first respondent declaring that he was an usurper o f t he office of the Chief Minister of the State of Andhra Pradesh, and for a consequential direction for his removal therefrom. In Writ Petition No. 12426/87 he sought a writ of mandamus directing the central Government to appoint a judicial Commission under the Commissions of Inquiry Act, 1952 for enquiring into the misdeeds of \"Corruption and abuse of authority by the first respondent.\" In respect of the alleged fiscalerimes committed by the first respondent, the relief sought by the writ petitioner in W.P. No. 12805/87 is a direction to the Central Government by way of writ of mandamus to take approriate penal action including prosecution\" against the first respondent. In W.P. No. 12427/87, the petitioner sought a writ of mandamus directing the Central Government to exercise its Constitutional power discharge its Constitution; duty under Articles 355,, 356 and 357 of the Constitution of India decide whether the conditions contemplated in the aforesaid provisions are existing in the State of Andhra Pradesh: and if so to initiate constitutional action for imposing President's Rule in the State,", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-2", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "3. A Division Bench of this Court in view of the importance and the gamut of the questions of public law raised in the writ petitions, ordered notice on September 8 1987 to the respondents to show cause who the writ petitions should not be admitted notice was also issued to the Attorney-General of India requesting him to appear and assist the Court. A Full Bench of this Court after hearing Sri K. Parasaran, the learned Attorney-General, the learned counsel for the parties and interveners, including Sri N. A. Palkhivala, a noted Jurist, who appeared for the first respondent. dismissed the writ petitions W.P. No. 12425/87(Writ of Quo- Warranto); and W.P. No. 12427/87 (Writ of mandamus for imposition of President's Rule) by the judgment dated November 2. 1987. The other two writ petitions - W.P. No. 12426/87 (Writ of Mandamus for appointment of Commission of Inquiry) and W.P. No. 1280-5/87 (Writ of Mandamus for direction to the Central Government to prosecute the first respondent for fiscal offences) were admitted on the same day. In view of the importance of the complex questions of law raised this larger Bench of five Judges was constituted. This common judgment will dispose of both the writ petitions since the question for decision in both the writ petitions are interlinked.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-3", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "4. The allegations and the averments contained in the bulky affidavit are divided into seven parts by the petitioners presumably for the sake of convenience and easy reference. Allegations concerning fiscal crimes and breaches of fiscal laws by the first respondent are covered by Part-A. Acts of Arsonal corruption and dishonesty attributed to the first respondents are adverted to in Part-B. Averments pertaining to alleged political patronage, favouritism, misappropriation of public funds are set out in Part-C. Alleged breakdown of constitutional machinery and the resulting state of anarchy are dealt with in Part-D. Alleged extermination of extremists in fake encounters. and deaths in police Lockups and related atrocities are averred to in Part-E. Decisions of Courts - the Supreme Court and the High Court -- alleged to contain severe strictures against the first respondent and the State Government in respect of violations of law commtted by them are mentioned in Part-F. The extant situation obtaining in the State of Andhra Pradesh. the various prayers, and the several reliefs sought from this court by the petitioner. are set out in Part-P. Although the averments and allegations are particularised into seven parts, the petitioner avers inPara- G. 12of his affidavit : \"They have to be read as a whole with specific reference to the particular type of allegations and reliefs sought for.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-4", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "5. The first respondent in compliance with the notice issued on 8-9-1987 prior to the admission of the writ petitions had filed t brief counter-affidavit contesting mainly the locus standi of the petitioner to maintain the writ petitions and the jurisdiction of this Court to grant the reliefs prayed therein. In that counter-affidavit, the first respondent did not deny specifically the various accusations levelled against him by the petitioner. After the admission of the present two writ petitions, the first respondent, however, filed a comparatively lengthy counter running into fifty six pages on 4-12-1987. On the same day, on behalf of the second respondent, the State Government, a counter affidavit sworn to by, the Chief Secretary. running into 195 pages, vas filed. As the State Government is not a party-respondent in W.P. No. 12805/87 we have to presume that the counter-affidavit filed by the Chief Secretary is confined to writ Petition No.' 12426/87. The Chief Secretary's counter-affidavit was based on he assumption that the State Government is party-respondent in both the writ petitions. have also been filed on behalf of the Chairman, Central Board of Direct Taxes, the Reserve Bank of India, and he Commissioner of Income-tax, Hyderabad, who are respondents in the writ petition.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-5", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "6. Apart from denying specific accusations levelled by the petitioner, the main thrust in the counters filed by the first respondent and the Chief Secretary, on behalf of the State Government is that the two writ petitions are solely adversorial in nature and the motive is to settle political scores after the petitioner was defeated in the elections to the Andhra Pradesh State Legislative Assembly and the Office of Mayor of Visakhapatnam; and on his own showing the petitioner being a politician and Congress-1 leader, this Court should not go into justiciability or otherwise of the issues raised by' converting the adversorial litigation into public interest litigation.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-6", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "7. Sri Ram Jeth Malani, the learned counsel for the 1st respondent, very strenuously urged that by treating the present litigation as public interest litigation this Court should not disregard the rules relating to the pleadings, the 1st and 2nd respondents should be put on notice of what the actual case they had to meet if Court was to scrutinise any specific instances alleged by the petitioner in his voluminous affidavit., for this purpose unless the petitioner was directed to put his house in order by properly amending the affidavit and seeking appropriate relief, this Court should not proceed any further in the matter. If pleadings are properly amended, the learned counsel said, the 1st respondent would be in a position to meet them. He submitted that in the process of correcting executive errors the Court should not enter into political arena on policy decisions which are, by the Constitution, exclusively vested in the executive. The Court must guard itself against interfering in respect of executive and statutory orders without affording opportunity to the parties likely to be affected, the prescribed principles of natural justice should not be allowed to be breached. In t written submissions filed on behalf of the first-respondent it was specifically stated . \"The true public interest litigation is one in which a selfless citizen having no personal motive of any kind except either compassion for this and disabled or deep concern of stopping serious public injury approaches the Court for either of the following purposes : \n(i)Enforcement of fundamental rights of those who genuinely do not have adequate means of access to the judicial system or statutory provisions incorporating the directive principles of State Policy for amelioration of their condition,", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-7", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "(ii) Preventing or annulling executive acts and omissions violative of Constitution or law resulting in substantial injury to public interest.\"  \nPersonal rights could not be enforced in the garb of public interest litigation., a public spirited organisation or individual might espouse the specific causes of person, or groups, who were unable to approach this Court and such causes alone should be taken up by the Courts as public interest litigation. In support of these contentions, reliance was placed on the rulings of the Supreme Court reported in Bandhu Mukthi Morcha v. Union of India, , Prabodh Ve;ma v. State of U.P., , Shivaji Rao Nilangekar v. Mahesh N4adhav Gosavi, , Lakshmi Kant v. Union of India, , R. L. & E. Kendray. State of U.P. , State of H.P. v. Students Parent, Medical College, , Laxmi Kant Pandey v. Union of India, , Olga Telhsv. Bombay Municipal Corpn., , Chaitanya Kumarv. State of Karnataka, , D. C. Wadhwa v. State of Bihar, , Sheo Nandan Paswan v. State of Bihar, , Sachidanand Pandey v. State of W.B., AIR 1987 SC 1109 at p. 1134, Union of India v. Cynamide India Ltd., , Joint Woman's Programme v. State of Rajasthan, , Fertilizer Corporation, Kamagar Union v. Unionof India, AIR 1981 SC 344, 5. P. Gupta v. Union of India, AIR 1982 S C 140, People's Union for Democratic Rights v. State of Bihar, and Laxmi Kant Pandey v. Union of India, .", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-8", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "8. Towards the end of the argurnents on December 29, 1987 Shri Jeth Malani submitted that the 1st respondent was opposed to any inquiry being conducted by a Commission appointed by or at the behest of the Central Government. He added that , on the other hand, the 1st respondent was prepared and willing to subject himself to an enquiry to be conducted by a Judge or a panel of Judges of this Court nominated by the Chief Justice into the specific charges chosen by the learned Attorney-General. At the conclusion of the arguments by Shri Jeth Malani, the next day (30-12-1987) the Court desired to know from him whether, as stated by him the previous day, he would put in writing about the willingness on the part of the First respondent to have an enquiry conducted by a Judge or panel of Judges of this Court selected by the Chief Justice. In response to this he had put in a statement then and there and it forms part of the records of the case. To facilitate easy reference wt. would extract it below : \n \"It is the contention of R-1 that the present petition disposes no cause of action, its pleadings and averments are vague, prolix, rolled up. scandalous and false. The petition is a perplexing misjoinder of desperate complaints, grievances and alleged causes of action. The reliefs and allegations cannot be correlated. It raises disputed' questions of fact which cannot be disposed of on the affidavits filed except to dismiss the petition. On the other hand R-1 has nothing to hide or be ashamed of. He does not wish to avoid or shirk enquiry into any responsible allegations supported by prima facie evidence selected by the Attorney-General.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-9", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "On proper petitions being filed making out a precise case and claimed precise relief, R-1 will waive issue of a formal notice or rule nisi and participate in judicial investigation by any Judge or Judges of this Honorable Court.  \nR-1 makes it clear that the petitioner's allegations are false and he is not entitled to any relief whatsoever.-", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-10", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "9. Shri K. Parasaran, the learned Attorney-General, who appeared to assist the Court in deference to the notice issued, expressed his opinion on the constitutional aspects and the administrative law having a bearing on the issues involved in these writ petitions with his usual fairness, frankness and an absolute sense of detachment. The highlight of his address could be stated as follows : In a public interest litigation the jurisdiction of this Court is not adversorial, but inquisitorial. No particular form of pleading is required. What is required is the necessary factual material. Even if better material is not forthcoming in the first instance, the Court can issue commissions or call upon the Government to produce the records, and it is the duty of the Government or the Officers to produce all the relevant records, on production thereof, it was the duty of the court to carefully and with circumspection scrutinise the evidence, on consideration thereof if the Court comes to the conclusion that there is an infraction of the constitutional rights; or public injury is suffered by breach of any public duly, the Court cannot close its eyes and persuade itself to uphold publicly mischievous executive actions, which have been so exposed. The present case is unique in the sense that is seeks to explore the realms of accountability of the executive to the judiciary through persons professedly actiong pro bono publico; and the case involves an act of delicate balance. In this case the Court should adjudicate upon those issues which are clearly and specifically formulated in a pointed .manner for consideration and in that sense the issues must be legal, not merely with legal flavour. He projected the case essentially from the point of view of administrative law stressing that ' 'a careful and critical examination of the legality and propriety of the issues was called for. That apart, according to him, the case involves an area of choice, namely one between traditional approach which reiterates theoretical inquiries and another where moral deliberations inter- twined with the extension", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-11", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "approach which reiterates theoretical inquiries and another where moral deliberations inter- twined with the extension of locus standi in the context of the Court's duty to ensure the supremacy of the rule of law. Summing up his address the learned Attorney-General submitted that on a consideration of the evidence if the Court comes to the conclusion that there was violation of the constitutional rights; or public injury was suffered; or there was breach of public duty, then Court could give a declaration to that effect. In the course of his scholarly exposition of law he quoted profusely from the decisions of the Supreme Court as also from some decisions of the English Courts, which threw fight on the subject.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-12", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "10. Sri S. Ramachandra Rao, the learned counsel for the petitioner. wanted us to look at the problem from a realistic point of view without being obsessed by procedural technicalities and wrangles. The substance of his argument is : The law relating to procedure is intended to advance substantive justice. In the name of adhering to the procedure, the Court should not allow justice to be stiffled. Wages of procedural sin should not culminate in the mortality of justice. The common man's sense of justice, which sustains democracy, should not be allowed to be shattered by placing primacy on procedural aspects ignoring the substantive questions that cry for adjudication. About 200 allegations are levelled by the petitioner and in respect of most of them he was able to collect material facing very adverse circumstances and place them before this Court with the fervent plea that the constitutional values and supremacy of rule of law should be safeguarded by exercise of the power of judicial review. The petitioner is not seeking any personal gain for himself. His interest is confined to exposing the tyranny, despotism, and several acts of nepotism, favouritism and corruption on the part of the first respondent. In a case of this magnitude to expect the petitioner to strictly conform to the rules of procedure would amount to subverting the cause of justice, and abdication of the constitutional duties enjoined upon this Court. This Court is not merely a forum for adjudication of civil and criminal matters, but is a constitutional Court charged with higher responsibilities. The normal considerations in regard to procedural requirements that weigh with the court in deciding private litigation should not be extended to the present case in all their rigidity'. Shri Ramachandra Rao also contended that it was not open to the 1st respondent to contend that there were no reasonable grounds for inquiry into the charges levelled against him in these two writ petitions after he had, out of pricks of conscience, subjected himself to the probe by the", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-13", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "writ petitions after he had, out of pricks of conscience, subjected himself to the probe by the three-man Agarwal Commission ordered by his very Government as per G.O.Nos. 587 General Administration (Sc. E) Department dated November 28, 1987. According to him the only question now remains for the consideration of this Court is whether a mandamus would go from this Court to the Central Government for instituting a Commission under Section 3 of the Commissions of Enquiry Act, 1952 or, on the facts disclosed and established in the case, the relief to be granted is to be moulded in some other suitable form. With respect to the offer made by Shri Jeth Malani on 29-12-1987 and the statement given by him in Court on 30-12-1987, Shri Ramchandra Rao submitted that it was a clever move and a 'legal trap' conceived by the 1st respondent to delay and defeat the due process for law. He contended that the offer, as found its expression in the statement of Shri Jeth Malani on 30-12-1987, betrayed absolute lack of bona fides. According to him it was terribly belated and was nothing but a procrastinating tactics, and that the, Court had no power to accept any offer which had no legal basis whatsoever. He did not want the High Court Judge(s) to be reduced into a Commission whose finding was not binding on any one and which could be challenged in a Court of law. He pointed out that the 1st respondent himself had till the previous day resisted the appointment of any Commission on the plea that he had no faith in the efficacy of such Commission, and that it was a mystery that there was a sudden transformation of his attitude for obvious reasons that after all the arguments had been heard, documents perused, and pleadings considered by the five Judges of this Court during the course of the", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-14", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "documents perused, and pleadings considered by the five Judges of this Court during the course of the lengthy proceedings, 'he did not want a decision from this Court.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-15", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "11. What the specific allegations levelled by the petitioner are and how they are traversed by the respondents, and the relevancy and the extent of credibility to be accorded to the allegations, we shall deal with later.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-16", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "12. The threshold issue concerns with the locus standi of the petitioner. Shri Ram Jeth Malani (who appeared for the 1st respondent) and Shri E. Manohar, the learned Advocate General (representing the State Government the second respondent) have strongly urged that the doors of this Court should not be kept ajar for adjudication of adversorial issues brought in the garb of public interest litigation by politically motivated persons : and what could not be achieved by the Congress (I) party to which the petitioner belonged. unseated the ruling Telugu Desam Party in the elections, should not be permitted to be achieved indirectly. through the instrumentality of this Court. While conceding fairly that the Chief Minister did. not claim to be .above the law and the Constitution; and he was not clothed with any immunity from the processor law. Shri Ram Jeth Malani contended that the petitioner not being a bona-fide was disentitled to raise the pleas before this Court for adjudication; the reliefs prayed for by the petitioner were beyond the competence of this Court. the affidavit sworn to by the petitioner did not disclose any valid cause of action for judicial review : and if there was reasonable suspicion about the bona fide of the petitioner (and according to the learned counsel. the petition was totaly bereft of good faith), this Court should throw out the petitions at the threshold stage without going into the justiciability or otherwise of the pleas raised therein. He added that there were no remedies for all evils and the Republic had to live with many evils which were not eradicable. Political questions according to him, are outside the purview of adjudicatory arena; any attempt by the judicial wing of the State to encroach upon the lawful sphere of activity of the executive and legislature, would disturb the delicate balance between the three wings of the State., and the affidavit sworn to by the petitioner was full of manifest lies,", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-17", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "three wings of the State., and the affidavit sworn to by the petitioner was full of manifest lies, reckless, false, baseless and unverifiable assertions.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-18", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "13. It is beyond controversy that the petitioner is an active political worker, a leader of Congress-1 party and a former member of Lok Sabha and the Andhra Pradesh State Legislative Assembly. He was also the Chairman of the Visakhapatnam Urban Development Authority for a term. He was defeated in the elections to the Legislative Assembly and for the Mayorship of Visakhapatnam Municipal Corporation. \n14. Could it, however, be said that his background as a politician and Congress-1 leader carries with it any odium so as to disentitle him to espouse public caries, if otherwise, they are entertainable by this Court '? \n15. The petitioner, as pointed out by this counsel Shri Ramachandra Rao is not seeking any personal gain for himself he is not an applicant or an aspirant for any of the industrial licences, the sanctioning of which he has impugned in this writ petition. The first respondent's patronage and nepotism, are the vitiating factors, according to the petitioner, in granting largess by the State. The scores of allegations against the- first respondent involving acts of commission and omission, and the arbitrary functions of the second respondent, the State G6vernment have been brought to the notice of this Court by the petitioner. He has not merely catalogued the instances, but also has stated the details supported by relevant documents.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-19", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "16. The question of locus standi of the petitioner was debated at length before the Full Bench of this Court after notices were issued to the respondents pending admission of the writ petitions. At that stage also what was seriously contended related to the issue of locus standi. The Full Bench, (to which one of us, the Chief Justice, was a party) felt after considering the contentions advanced by Shri S. Ramachandra Rao, the learned counsel for the petitioner, Sri N. A. Paikhivala, the learned counsel for the first respondent, Shri K. Parasaran, the learned Attorney- General of India, who appeared as Amicus Curiae, and the learned Advocate General for the State Government, that these two writ petition should not be thrown out at that stage merely on the ground that they Were filed by a political worker belonging to a political party opposed to the ruling party. The writ petitions contain serious allegations touching matters of great public importance. Evidently, the Full Bench was prima facie satisfied that the writ petitions were not liable to be thrown out on the ground of locus standi. \n17. Locus standi doctrine is called in the United States Public Law as standing of the petitioner to maintain an action in Court. Political questions, it is true, are not adjudicated by Court. What are political questions,? The dominant consideration in determining whether a question falls within the category of political question as laid down by the United States Supreme Court in Coleman v. Miller. (1938) 307 US 433 are :", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-20", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "(1) \"the appropriateness under our system of Government of attributing finality to the action of political department\" and (2) \"the lack of satisfactory criteria for a judicial determination\". 'this was followed in Baker v. Carr, (1962) 369 US 186 \"The non- justiciability of a political question\" observed Justice Brennam delivering the majority opinion in the Baker case as \"primarily a function of the separation of powers .... Deciding whether a matter has in any measure been committed by the Constitution to another branch of Government, or whether the action of that branch exceeds whatever authority has been committed, is itself a. delicate exercise in constitutional interpretation, and as a responsibility of this Court as ultimate interpreter of the Constitution\". The learned Judge held : \"The political question doctrine, a tool for maintenance of governmental order, will not be so applied as to only disorder.\" The various formulations for ascertaining the political questions as enumerated by the learned judge are :\"Prominent on the surface of any case held to involve a political question is found a textually demonstrable constitutional commitment of the issue to a co-ordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for non-judicial discretion; or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due to co- ordinate branches of Government or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarassment from multifarious pronouncements by various departments on one question.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-21", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "18. In the United Kingdom and the United States, the Attorney-General is the competent authority for preventing public wrong by moving the appropriate courts. In Gouriet v. Union of Post Office Workers, (1977) 3 AB ER 70 the House of Lords while reversing the decision of Lord Denning, M. R., ruled that a private person was not entitled to bring an action in his own name for the purpose of preventing public wrongs and, therefore, the court had no jurisdiction to grant relief; and if the plaintiff had no interest in the subject matter of his action other than as member of the public, and if the Attorney-General refused consent to initiate proceedings, the plaintiff could not seek relief from the Court. This legal position was reiterated in Inland Revenue Commrs. v. National Federation of Self-Employed and Small Business Ltd, (1981) 2 WLR 722 at p..730. Speaking for the majority, Lord Wilber-force, said 'As a matter of general principle I would hold that one tax-payer had no sufficient interest in asking the Court to investigate the tax-affairs of another tax payer or to complain that the latter has been under-assessed or over- assessed . indeed, there is a strong public interest that he should not ......... That a case can never arise in which the acts or abstentions of the revenue can be brought before the court I am certainly not prepared to assert, nor that, in a case of sufficient gravity, the court might not be able to hold that another tax-payer or other tax-payers could challenge them. Whether this situation has been reached or not must depend upon an examination, upon evidence, of what breach of duty or illegality is alleged.\" Dissenting from this view. Lord Diplock held : \"It would in my view, be a grave lacuna in our system of public law if a pressure group, like the federation, or even a single public-spirited", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-22", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "of public law if a pressure group, like the federation, or even a single public-spirited tax-payer, were prevented by outdated technical rules of locus standi from bringing the matter to the attention of the court to indicate the rule of law and get the unlawful conduct stopped.' Lord Scarman viewed the position : \"the sufficiency of the interest is, .. a mixed question of law and fact. The legal element in the mixture is less than the matters of fact and degree ; but it is important as setting the limits within which, and the principles by which, the discretion is to be exercised ....... The one legal principle, which is implicit in the case-law and accurately reflected in the rule of court, is that in determining the sufficiency of an applicant's interest, it is necessary to consider the matter to which the application Debates. It is wrong in_law as I understand the cases, for the Court to attempt an assessment of the sufficiency of an applicant's interest without regard to the matter of his complaint. If he fails to show, when he applies for leave, a prima facie case, or reasonable grounds for believing that there has been a failure of public duty, the court would be in error if it granted leave. The curb represented by the need for an applicant to show, when he seeks leave to apply, that he has such a case is an essential protection against abuse of legal process. It enables the Court to prevent abuse by busy bodies, cranks, and other mischief- makers. I do not see any further purpose served by the requirement for leave.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-23", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "19. Lord Denning in his \"The Discipline of Law\" recorded his unhappiness at the extant legal position on locus standi in English law in the following terms: \"In administrative law, the question of locus standi is the most vexed question of all. I must confess that whenever an ordinary citizen comes to the Court of Appeal and complains that this or that Government department - or this or that local authority - or this or that trade union - is abusing or misusing its power - I always like to hear what he has to say. For I remember what Mr. T. P. Curran of the Middle Temple said in the year 1790 : \n \"It is ever the fate of the indolent to find their rights become a prey to the active. The condition upon which God faith given liberty to man is eternal vigilance.\"  \nThe ordinary citizen who comes to the Court in this way is usually the vigilant one. Sometimes he is a mere busybody interfering with things which do not concern Win. Then let him be turned down. But when he has a point which affects the rights and liberties of all the citizens, then I would hope that he would be heard., for there is no other person or body to whom he can appeal. But 1 am afraid that not every one agrees with me. In Judges' case in S. P. Gupta v. Union of India, the Supreme Court approvingly referred to the minority view of Lord Diplock in Inland Revenue Commrs. v. National Federation of Self-employed and Small Business 1Ad. (1981 (2) WLR 722).", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-24", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "20. The contours of public interest litigation are basically different from adversorial litigation. In the latter the holder of legal rights alone is entitled to bring forth the action in which event he must conform to the strict rules of pleadings, proof and prayed for relief. In adversorial litigation the person moving the Court for relief must establish at the threshold stage that he is a holder of right for the relevant laws.. Only then his standing to litigate and the sufficiency of his interest for seeking adjudication will be accepted. If a legal injury is caused to a person or to a determinate class or group of persons, by reason of violation of any constitutional or legal rights, and if such person or determinate class of persons by reason of poverty. helplessness or disability or socially or economically disadvantaged position unable to approach the court for relief, any member of the public can move the Court on their behalf. The view of Pro. Thio in his book on \"Locus Standi and Judicial Review' that the judicial function is primarily aimed to preserve the legal order by confining the legislative and executive organs of Government within their powers in the interest of the public was accepted by Bhagwata, J. (as he then was) in the Judge's case . If injury is caused to public interest but not to any specific individual, who can maintain an action for vindicating the rule of law, was the question posed and answered. \"The Courts cannot countenance such a situation where the observance of the law is left to the sweet will of the authority bound by it without any redress if the law is contravened. The view has therefore been taken by the courts in many decisions that whenever there is a public wrong or public injury, caused by an act or omission of the State or a Public Authority, which is contrary to the Constitution or the law, any member of the public acting bona fide and having sufficient interest can maintain an action for redressal of such public", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-25", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "public acting bona fide and having sufficient interest can maintain an action for redressal of such public wrong or public injury. The strict rule of standing which insists that only a person who has suffered a specific legal injury can maintain an action for judicial retires, is relaxed and a broad rule is evolved which gives standing to any member of the public who is not a mere busy body or a meddlesome interloper but who has sufficient interest in the proceeding ...........\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-26", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "\"But we must he careful to see that the member of the public who approaches the Court in cases of this kind is acting bona fide and not for personal gain or private or political motivation or other oblique consideration. The Court must not allow its process to be abused by politicians and others to delay legitimate administrative action or to gain a political objective........The court must take care to that it does violate over-step the limits of its judicial function and trespass into areas which are reserved to the executive. and the legislature by the Constitution.-  \n21. Merely, because the petitioner is a politician nius.1 we decline to go into the question raised by him. Both Sri Ram Jeth Malani and the learned Advocate General, argued Vehemently that the writ petitions were to be thrown out on the ground that they were politically motivated.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-27", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "22. Scores of allegations pointing out statutory breaches and constitutional violations with considerable specificity have been placed before us by the petitioner. It is not as if the Petitioner has merely made some wild allegations and washed off his hands. He has taken care to see that what he had alleged was a& supported by documents to the extent he could collect. Some of the allegations are so grave and the nature of the breach of Rule of law and Constitutional Provisions is so serious that objective considerations incline us to hold that the contention raised on behalf of the respondents 1 and 2 about the petitioner not having bona fides is without basis. We find it difficult to draw the inference that the petitioner \"aiming to delay any legitimate administrative action\" or seeking \"to gain a political objective'. The nature of the allegations and their broad sweep negate the inference that the petitioner is seeking a political objective. Being politician by itself is no sin. In our democratic setup Governments are run by political parties to power by the people. It is totally unrealistic to characterise any espousal of cause in a Court of law by politician on behalf of the general public complaining of constitutional and statutory violations by the political executive as a politically motivated adventure. There is no material to held that the petitioner is a busy body or interlopers; as already noticed apart from being a responsible citizen of India he was a member of Lok Sabba for one term and of the Andhra Pradesh State Legislative Assembly for two terms. In our opinion, in the setting of these cases. the petitioner's interest is \"personal\" in the sense that it is confined to ignite the jurisdiction of this court for exercising its power to uphold the Constitution and the rule of law without claiming any persons relief for himself.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-28", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "23. For the purpose of locus standi what really is relevant is the substance of the breaches of the Constitution complained of, not the antecedents or the status of the person who conveys the information to the Court. While protecting its jurisdiction, authority and time from abuse of process, this court at the same time should not abdicate its role as the sentinal qui vive of the rights and life of the citizens, as rightly pointed out that the learned Attorney General. The account- ability of the executive to the people through the judiciary cannot be set at naught by any self-induced doubts regarding the jurisdiction of the Court or the propriety of the Court to entertain matters raising genuine question of annihilation of constitutional values by the executive. When large scale violations or abuse of power by the first respondent and inaction of the Governmental machinery are alleged by the petitioner with sufficient material particulars, we cannot throw out the writ petitions on the untenable ground of locus. \n24. The rulings to which our attention was drawn by the learned Advocate General do not lay down any principle to the contra. Fertilizer Corporation Kamgar Union (Regd.), Sindri v. Union of India, (AIR 1981 SC 344) inter alia lays down that a busy body should not be permitted to invoke the jurisdiction of the Court in the matter of public interest litigation. The right of the union of the workers of the Fertilizer Corporation and certain other workers to invoke the jurisdiction of the Court was upheld on the ground that they had sufficient interest. The Court may invoke its jurisdiction in the sphere of public interest litigation at the instance of voluntary non- political organisations as was the case in D. S. Nakara v. Union of India and Akhil Bharatiya Soshit Karamchari Sangh Railway) v. Union of India, as the locus standi of the petitioners therein was found to be unquestionable.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-29", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "25. The learned Advocate General and Shri Ram Jeth Malani sought to build up an argument on the basis the only in respect of weaker sections and other disabled persons the Court should lend his helping hand by way of public interest litigation and that persons who were otherwise capable of approaching the Courts for enforcing any of their rights should not be allowed to take advantage of the public interest litigation. It is true that in respect of weaker sections and disabled persons the jurisdiction of the Courts can be invoked by any member of the public since the victims themselves are not in a position to approach the Court. The situation cannot be viewed from narrow perspectives and straight jacket formulae. If this Court is satisfied about the bona fides of the petitioner there should not by any further enquiry as to whether some one else with much higher interest could have brought the matter before the Court. The petitioner does suffer from any social or economic disability. He is disabled in the sense he has no access to all the relevant records relating to the various accusations levelled by him. In the very nature of things such a thing is not possible for any member of the general public. That is the reason why the Supreme Court approved rule that any member of the public acting bona fide can move the Supreme Court or the High Court for keeping the authorities within the bounds in public interest litigation. In public interest litigation, it is the duty of all the parties to help the Court to the best of their ability in ascertaining the truth and for moulding the appropriate relief. The adversorial procedure does not come into play in matters of public interest litigation either under Article 32 or 226 of the Constitution of India, as held by the Supreme Court in Bandhua Mukti Morcha v. Union of India, . The role of the court in this regard is creative rather than passive., and it assumes a more positive attitude in determining the facts. At the instance of private parties and public spirited citizens the Karnataka High Court struck down the action of the", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-30", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "At the instance of private parties and public spirited citizens the Karnataka High Court struck down the action of the Karnataka Government in the matter of awarding contracts for bottling arrack on the ground that it was unlawful, arbitrary, capricious, shocking to the judicial conscience, and in flag violation of the rule of law. The declaration was given by the Karnataka High Court even after recording a finding that the allegations of personal bias against the Chief Minister were false; and it did not record any finding on the question of mala fides on the ground that it was unnecessary. Some of the persons in whose favour contracts were awarded carried the matter in appeal to the Supreme Court although the State Government did not prefer appeal. While agreeing with the view, that in the guise of public interest litigation no scope should be given to any one to indulge in reckless allegations, the Supreme Court in Chaitanya Kumar v. State of Karnataka, observed :", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-31", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "'But, simultaneously, the Court cannot close its eyes and persuade itself to uphold publicly mischievous executive actions which have been so exposed. When arbitrariness and perversion are writ large and brought out clearly, the Court cannot shirk its duty and refuse its writ. Advancement of the public interest and avoidance of the public mischief are the paramount considerations. As always, the Court is concerned with the balancing of interests and we are satisfied in the present case that the High Court had little option but to act as it did and it would have failed in its duty had it acted otherwise and refused to issue a writ on the ground that the allegation of personal bias against the Chief Minister was false. Had that been done the public mischief perpetrated 'Would have been perpetuated. This is not what courts are for.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-32", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "26,. Sri Ram Jeth Malani contended that as some of the allegations levelled by the petitioner were palpably false, the writ petitions must be thrown out on that ground without any further inquiry. We are not inclined to agree with him. In public interest litigation, as already observed by us, the rigour of the procedural law breaks down. If issues are clearly, specifically and pointedly formulated this Court would certainly enquire into them. We do not find any justification to dismiss the writ petitions on the mere ground that some of the several allegations are found unsubstantiated. The petitioner's allegation that the first respondent disclosed in the year 1985 an income of Rs.7.5 lakhs in his individual capacity and wealth aggregating to about Rs.51.50 lakhs in his capacity as individual and as Kartha of the Hindu Undivided Family to the Income-tax authorities under voluntary disclosure scheme is totally false, says, Sri Ram Jeth Malani. The falsity does not pertain to the declaration under the voluntary disclosure scheme; but it is in respect of the year when the declaration was made. The learned counsel for the petitioner, Sri S. Ramachandra Rao, fairly conceded that the declaration was made in the year 1975 by the first respondent, but due to a mistake the year 1985 was mentioned in the affidavit of the petitioner. The lapse is there. The first respondent, however, had an effective and sufficient opportunity to bring, it to the notice of this Court when notice was issued to him before the writ petitions were admitted. He did not choose to controvert this fact in the counter-affidavit filed by him then. The failure of the first respondent to draw the attention of the court to this factual error also contributed to its creeping into the judgment of this Court in WP No. 12425/87. As between the petitioner and the first respondent, who is more to be blamed? We do not want to", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-33", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "between the petitioner and the first respondent, who is more to be blamed? We do not want to apportion the blame. The question relating to the evasion of tax, manifest from the voluntary disclosure, would have had relevance if the writ of Quo Warranto had been admitted, because the contention was that a proclaimed tax evader loses his moral right to continue in office.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-34", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "27. The questions raised in these writ petitions in our considered view are not political questions. If the acts alleged are in violation of the Rule of U. w or the provisions of the Constitution or any statutory law, it is no answer to say that because it is a political question it should not adjudicated. \"Constitutional Mechanism\" observed the .Supreme Court in Madhav Rao Jivaji Scindia v. Union of India, \"in a democratic polity does not contemplate existence of any function which qua the citizens be designated as politics and orders made in exercise whereof are not liable to be tested f or their validity before the lawfully constituted court.\" Negativing the contention that the question whether in a, particular state the situation, existing warranted-action under Article 365(1) is a political question entrusted by the Constitution to the Union Executive and, therefore, not justifiable before the Court Justice Bhagwati ( as he then was) observed in State of Rajasthan v. Union of India, 'We do not think we can accept this argument. Of course, it is true that if a question brought before the Court is purely a political question not involving determination of any legal or constitutional right or obligation, the Court would not entertain it, since the Court is concerned only with adjudication of legal rights and liabilities. But merely because a question has a political complexion, that by itself is no ground why the court should shrink from performing its duty under the Constitution if it raises an issue of constitutional determination. Every constitutional question concerns the allocation and exercise of governmental power and no constitutional question can, therefore, fad to be political. A Constitution is a matter of purest politics, a structure of power as pointed out by Charles Black in \"Perspectives in Constitutional Law.' \"Constitutional Law' symbolizes an intersection of law and politics, wherein issues of a political power are acted on by persons trained in the legal tradition, working in judicial institutions,", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-35", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "of a political power are acted on by persons trained in the legal tradition, working in judicial institutions, following the procedures of law, thinking as lawyers think.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-36", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "28. It will, therefore, be seen that merely because a question has a political colour, the Court cannot fold its hands in despair and declare \"Judicial hands off\". So long as a question arises whether an authority under the Constitution has acted within the limits of its power or exceeded it, it can certainly be decided by the Court. Indeed it would be its constitutional obligation to do so. It is necessary to assert in the clearest terms, particularly in the context of recent history, that the Constitution is Supreme the paramount law of the land, and there is no department or branch of Government above or beyond it. Every organ of Government, be it the executive or the legislature or the judiciary, derives its authority from the Constitution and it has to act within the links of its authority. No one howsoever highly placed and no authority howsoever lofty can claim that it be the sole judge of the extent of its power under the Constitution or whether its action is within the confines of such power laid down by the Constitution. This Court is the ultimate interpreter of the Constitution and to this court is assigned the deficatet ask of determining what is the power conferred on each branch of Government, whether it is limited, and if so, what the limits are and whether any action of that branch transgresses such limits. It is for this court to uphold the constitutional values and to enforce the constitutional limitations. The test regarding the determination of what constitutes political question as laid down in Baker v. Carr ((1962) 369 CS 186) was approvingly referred to by Bhagwati, J. (as he then was), in the aforesaid case. The American doctrine regarding the adjudication of political questions was accepted by Venkatramiah J., in. his separate judgment. In V.W. Sreerwna Rao v. Telugu Desam, A Political Party, , the technicalities of locus did not stand in the way of this Court from", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-37", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "A Political Party, , the technicalities of locus did not stand in the way of this Court from inquiring into the plea raised by the President of a political party called \"Sarvodaya Congress' opposing the, grant of election symbol to Telugu Desam party on the ground that it \"preached chauvinism, propagates cessionist tendencies.\" Our learned brother, P.A. Choudary, J., very realistically observed: 'Considering the fact that the issues raised by the writ petitioner are of paramount public importance to the democratic functioning of our society and taking into account the recent trends of. law funnelled by several court decisions freely upholding the right to sue as inhering even in those whose proprietary rights or personal interests are not directly affected, I reject the preliminary objection of Sri N.T. Rama Rao to the maintainability of this writ petition. The writ petitioner claims to be the President of a political party called \"Sarvoyada Congress\" and it undoubtedly appears to me that he is interested in a clean public life. He is not a mere interloper.' 29. In our constitutional setup there are no two classes of people - one privileged and the other not so privileged. The principle of non-discrimination adumbrated in Art. 14 of the Constitution should not be allowed to be breached. The political executive - either the head of the Government or any member of the cabinet does not enjoy any immunity in respect of breaches of law of the land committed : they have no claim to be treated on a separate footing higher than ordinary citizens (State of Karnataka v. Union of India, ).", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-38", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "30. No member of the political executive can take shelter under the pretext that the council of ministers being responsible to legislature, that alone is the forum for arraigning their actions but not the Court. This is the settled law in State of Jammu and Kashmir v. Bakshi Gulam Mohammad, and State of Karnatake v. Union of India, . \n31. The questions raised in. the writ petition on careful scrutiny, in our view, do not answer the description of political questions in accordance with the test laid down by United States Supreme Court and adopted by our Supreme Court. We, therefore, hold that the petitioner has locus standi; and the issues raised by an urge are justiciable, ad consequently, the writ petitions cannot be rejected on the threshold issue of locus standi.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-39", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "32. We have to dispose of a point concerning the issue of a writ of mandamus directing the Central Govemment to appoint a Commission under the provisions of Sec. 3 of the Commissions of Inquiry Act, 1955,, which, in essence and substance, is the prayer in W.P. No. 12426 of 1987. Sri Ram Jeth Malani for the 1st respondent and the learned Advocate General appearing for the second respondent, submitted that this Court would not be justified in issuing a writ of mandamus as prayed for in view of the clear provision of the Section which gives a discretion to the appropriate Government to appoint or not to appoint a Commission even when it is found that there 'was a definite matter- public interest to be gone into by Commission. It is true, it is only where resolution is passed by the House of the People or the Legislative Assembly of a State, as the case may be, that the Government would be under a compulsion to appoint a Commission in terms of the provisions of Sec. 3 of the Commissions of Inquiry Act. The learned Advocate General has cited before us the decisions in Vijay Mehta v. State of Rajasthan , Jagram v. Gwahor Town and Country Development Authority, Gwahor, AIR 1987 Madh Pra 11, Peoples Union for Democratic Rights v. Ministry of Home Affairs, , Rajendran v. Home Secretary, Kerala, and Bhagwat Dayal Sharma v. Union of India, . We have little difficulty in accepting their contention. Sri Ramachandra Rao, the learned counsel for the petitioner, though persistent in his argument that where this Court was convinced that there was infraction of constitutional or statutory rights or the rule of law, the procedural inhibitions should not stand in the way of issuing a writ of mandamus to the Central Government to appoint a Commission, if it on its own failed to do so, he hastened to add", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-40", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "to appoint a Commission, if it on its own failed to do so, he hastened to add that in any event it was for this court to mould the relief suitably so as to further the ends of justice., With respect to this, he has submitted that the learned Attorney-General himself had, during the course of his submissions, expressed this view in our considered view, this Court would not be justified in issuing a writ of mandamus directing the Central Government to appoint a Commission to go into the charges levelled against the first and the second respondents.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-41", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "We are, however, of the definite view that it is right and the duty of this Court to see that ends of justice should not be allowed to be frustrated, but this Court should exercise its discretion in moulding the relief in such manner as would meet the situation, Particularly in view of the fact that the comprehensive provisions of Art. 226 of the Constitution empower the High court to issue orders for any other purposes, apart from writs for the enforcement of any of the rights conferred by Part III. \n33. Shri Ram Jeth Malani during the course of his arguments and also in his written ubmission filed on 31-12-87 after the conclusion of the arguments in the case, pointedly emphasised : \"The petitions are supported by a common affidavit which violates every important rule of the Writ Rules of this Hon'ble Court. It is not properly verified as required by the Rules.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-42", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "34. The procedure concerning writ petitions is governed by the Rules framed by .this Court in exercise of its power under Article 225. They are commonly called the Writ Rules. It is undoubtedly true that this Court has prescribed a form for pleadings in respect of the writ petitions by way of an affidavit followed by a petition seeking the appropriate relief. Rule 5 lays down the form in which the affidavit has to be drawn for and what it should contain. It says that the deponent should disclose the source of his information in respect of the facts pleaded in the affidavit whether he has personal knowledge or whether he received the information from any. source. The affidavit of the petitioner is voluminous and contains nearly 200 allegations and the verification part of the petitioner's affidavit is as follows : \"Solemnly affirmed at Hyderabad on this ..... day of 1987 and signed in my presence.' It is evident from this verification that it does not strictly conform to the mode of verification prescribed by Rule 5 of the Writ Rules. In spite of the Writ Rules, prescribing, the procedure, a practice has grown in this Court to file a common affidavit containing several allegations seeking different reliefs without verifying the source of information and making verification by mere affirmation without disclosing the source of information. The prescribed procedure in the Writ Rules, in fact, has seldom been followed. So far. to our knowledge, this Court has not thrown out any writ petition on the ground of now compliance with the Writ Rules. That being the position, we find no valid reason to depart from it in the present case especially when it is public interest litigation. Any such departure, in our opinion, would be unjust. and harsh. The apprehension of Shri Jeth Malani is that any latitude shown in this regard would result in misjoinder of causes of action and miscarriage of justice. The first and second respondents have understood the averments in the affidavit in the relevant paragraphs. They have also", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-43", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "first and second respondents have understood the averments in the affidavit in the relevant paragraphs. They have also denied the allegations and put forth. their version. The writ petitions were filed on 24th August. A Division Bench of this Court after hearing the matter for some days issued notice on 8- 9-1987 before admission, to the learned Attorney-General requesting him to appear as amicus curiae and assist the Court on the questions involved in these writ petitions. Thereafter a Full Bench of three Judges. to which one of us ('the Chief Justice) is a party. beard the matter for nine days and passed orders admitting these two writ petitions and dismissing the other two. Sufficient time was given to the parties to file detailed couplers. The first and second respondents, in fact, filed detailed counter-affidavits traversing all the allegations levelled by the petitioner in his affidavit. In the circumstances, we find no, justification to accept the contention advanced by Shri Jeth Malani that his client was not put on notice as to what was the actual case he should meet. It is true that the prayer in one writ petition is for a mandamus to the Central Government directing them to appoint a Commission of Inquiry and the prayer in the other one is to initiate action for prosecution against the first respondent. It is settled law that this Court in applications filed under Article 226 of the Constitution has power to mould the relief taking into account the totality of the circumstances and the exigencies of the situation. Respondents 1 and 2 have fully understood the nature of the allegations made and traversed the same in detail in their counter-affidavits. Therefore, it cannot be said that any prejudice was caused to respondents 1 and 2.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-44", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "35. Though Shri Jeth Malani argued the matter at considerable length on two occasions, at no point of time did he make any attempt to meet the various specific allegations pointedly referred to and argued by the learned counsel for the petitioner with the sole exception of the allegation pertaining to the grant of license for manufacture of cordless telephones. According to Shri Rarnachandra Rao. the learned counsel for the petitioner. Shri Jeth Malani chose not to argue on merits meeting his contentions obviously for the reason that he hid no case to argue. \n36. We will now proceed to consider the merits of the case. The allegations are numerous. The learned counsel for the petitioner, Sri Ramachandra Rao obviously realising the difficulty from the point of view of time factor in taking us through all the allegations confined his contentions to a few of them for the purpose of highlighting the gravity of the breaches of law committed by the first respondent and the conspicuous acts of favouritism and nepotism and personal aggrandisement included in by him. We have permitted the learned counsel to do so for the obvious reason that in a public interest litigation the issues must be limited to specific and facts and accurately. In this context we consider it appropriate to point out that Sri Palkhivala, who appeared for the first respondent at the admission stage also had contended thug public interest litigation is entertainable concerning few specific instances. \n37. Among the specific instances with reference to which the petitioner's counsel argued the matter before us, we have chosen for critical examination some of the allegations with respect to which we find there is sufficient material on record to enter prima facie findings.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-45", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "38. Selection of Co-promoter in regard to the Electronic Telephonic Instruments Project: The Andhra Pradesh Electronic Development Corporation Limited, a State Government Undertakiiig (hereinafter referred to as \"the APEL\") decide( to set up an Electronic Telephone Instruments Project in the joint sector and for that purpose wanted to select a co-promoter. A notification was issued by the APEL in November 1985 inviting applications from : \n \"Reputed companies with good track record having turnover of not less than Rs.20 crores per annum and interested in implementing the project as Assisted Joint Venture of APEL....\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-46", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "for 'the manufacture of Electronic Telephone Instruments in respect of which the APEL was granted a letter of intent No. L 16003(84) dated 31-7-1984. The capacity of the project as per the notification is 3 lakh numbers per annum. The project cost is Rs.8 crores approximately and the turnover, Rs.18 crores approximately. The APEL in regard to this venture had already entered into an agreement with M/s. Siemens AG, West Germany for technical collaboration. In response to the notification 21 applications were received. M/s. K.C.P. Limited, Madras, was one of the applicants. The submission of Shri Ramachandra Rat) for the petitioner is that although Sri Naren Rajan, the third son- in-law of the first respondent, was not an applicant either in his individual capacity or as a director of any Corporate-body, was favoured with the intent by an indirect device at the behest of the first respondent. Sri Naren Rajan thus came to be, favoured with this project and this is a grave instance of abuse of power. The learned counsel says that there was absolutely no justification for this favour shown to Sri Naren Rajan, who was not eligible to apply for this project, and did not even applied for it. The prescribed picture was twisted and circumvented for conferring this favour on him, Sri Ramachandra Rao asserted.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-47", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "39. The allegations relating tofavouritism in granting letter of intent pertaining to Electronic Instrumentation Project in favour of tire third son-in-law of the first respondent, according to the petitioner in paragraph B48- of his affidavit, was traceable to an item published in English daily NEWS TIME dated 27-7-1987 according to which the Union Minister for Industries alleged that the first respondent misled the State Assembly by suppression the fact relating to favouritism shown to his third son-in-law in the matter of setting of telephone instrumentation project.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-48", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "40. We have carefully scrutinised the entire material placed before us-both the petitioner and also the second respondent, the State Government. Sufficient material required for forming an opinion in regard to by this allegation has-been produced before us. Sri Naren Rajan, admittedly, is not an applicant. M/s. K.C.P. Limited, Madras, was one of the applicants, and according to the counter filed by the State Government \"M/s. K.C.P ' Limited represented by Sri Naren Rajan is one among them.\" The list of applicants placed before us by the State Government does not show that M/s. KCP Limited was represented by Sri Naren Rajan. At serial No. 19 of the list of applicants produced before us we find 'KCP Limited, 123 Mount Road, Ramakrishna Buildings. Madras.' That it was represented by either Sri Naren Rajan or any one else is not stated there. The State Government's counter which claims to contain \"true and correct facts\" adverts to this aspect at page 79. The Government's version is that a Committee consisting of five Directors inclulding representatives of Central University,6f Government of India, President of Electronic Industries Association of Andhra Pradesh (E.L.I.A.P.), and Managing Director, A.P.I.D.C. Limited, etcetera, short listed ten applicants and called for further information on their technological, financial and other relevant information relevant to the project. The ten short listed applicants were asked to submit further information and called for interview on 4-,3-1986. Only five applicants appeared for the interview. The Committee at its meeting held on 4-3-1986 recorded the following decision \"The Sub-Committee discussed on the presentation of the five applicants and after due consideration, decided to select M/S. KCP Ltd. Madras, to implement the project, for manufacture of Electronic Telephones Instruments in view of its past", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-49", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "Madras, to implement the project, for manufacture of Electronic Telephones Instruments in view of its past good track record, comprising of Technocrat NRI involvement of the Chief Promotor and good managerial, technical, marketing abilities with very sound financial backing and experience in handing large projects.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-50", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "The decision of the Committee, thus, categorically shows that it was KCP Limited, Madras, which was chosen for the project. The counter-affidavit of the State Government merely mentions the names of three of the five Directors, who constituted the Committee to make the selection. Who the other two members of the Committee were, we have not been told. The counter4[ ambiguous whether from out of the Committee consisting of five Directors any subcommittee was constituted for the purpose of taking decision. From what was extracted above we are inclined to believe that in fact there was such a Sub-Committee. The Board of Directors, according to the Government's counter, held another meeting on 7-3-1986and confirmed the minutes of the Committee meeting held on 4-3-1986 of ',selecting KCP 1;mited, represented by Sri Naren Rajan to implement the Telephone Instruments Project under the Corporation's letter-of-intent. 'The important and essential link is as to how the 'KCP Limited, Madras' which was selected as co-promoted by the Sub-Committee had metamorphoses into 'KCP Limited, represented by Sri Naren Rajan. 'Was Mr. Naren Rajan at the relevant time a Director of KCP Limited? No material has been placed before us. What is indisputable is that the application was made KCP Limited, Madras, a Corporate entity. An extract of the minutes of the Sub- Committee meeting held on 4-3-1986 placed before us shows that M/s. KCP Limited was represented by five persons, including Sri Naren Rajan, Project in charge. The other four persons were, (i) Mr. P. Parankusam, Director, Parankusam Management Consultants Pvt. Ltd., (51) Mr. G.M. Krishna, Hoyasala Group Consultant,(iii) Mr. D.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-51", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "Mr. G.M. Krishna, Hoyasala Group Consultant,(iii) Mr. D. Seetharamaiah, Auditor and (iv) Mr. Y.S. Durga Prasad, Manager, KCP Ltd. The factors that weighed with the Sub-Committee inter alia were that the KCP group was having Rs.18 crores reserves, it pioneered in sugar and cement. plants and adopted application of electronics in cement plants in association with Siernens, West Germany, that KCP had fulfledged electronics division to maintain process control and instrumentation for sugar and cement plants; and that it had set' up various projects in Andhra Pradesh. It is, therefore, apparent that the KCP Group had possessed the requisite technical know how, financial resources and the ability to become a co-promoter with APEL for the implementation of the project in question. That is the reason why the Sub-Committee decided to select M/s. RCP Ltd., Madras to implement the project. As a next alternative, the Sub-Committee selected M/s. Aravind Mills, Ahemdabad and kept it on the panel. The sub-committee, as a second alternative to the KC-P Limited, selected M/s. Sandur Managanese and Iron Ore Limited and kept them on the panel.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-52", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "41. The facts noticed so far do not indicate even remotely that Mr. Naren Rajan was selected as a Co-promoter. How he came to he selected, according to the Government's counter, is that the Board of Directors on 30- 6-1986 reviewed the effective steps taken in implementation of the Telephone Instruments Project and \"noted that KFW-West Germany line of Credit was cleared for the Telephone Instruments Project. Land was already acquired and construction of budding was under progress. The first instalment of lumpsum payment towards M/s. Siemens Collaboration fee was remitted and an overall expenditure of Rs.20 lakhs which was about 50% of their equity participation was already incurred by the private promoters. In view of the above progress in the implementation of the project for manufacture of Telephone Instruments and EPABX system, the representation made by M/s. L' Avenir Telecoms Limited through Mr. Naren Raj'an, Director, the Board decided . \n(1)To waive execution of specific performance guarantee with APEDC and also the deposit of 2% of the project cost thereto. \nTo take effective steps to transfer letter of intent or industrial licence to M/s. L'Avenir Telecoms Ltd., in overall interests of the project for expeditious implementation.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-53", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "(2) From KCP 'Limited to M/s. L'Avenir Telecoms Ltd., the path of progress appears to be shrouded in mystery. No attempt, whatsoever, has been made by the learned Advocate General, appearing for the State Government to explain this change: Obviously, he could not do so.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-54", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "42. The factual situation of Sri Naren Rajan having been favoured with this project has been placed before us by the learned counsel for the petitioner. who filed a photostat copy of the news item appearing in 'Andhra Jyothi a Telugu Daily published from Hyderabad dated November 20, 1987. It describes the press interview taken by Shri Naren Rajan in connection with the working of the Telephone Instruments Project. The news item also shows a photograph of Sri Naren Rajan explaining M/s. L' Avenir's telephone models. The news item, which has not been doubted by the learned Advocate- General dispenses any lingering doubts about Sri Naren Rajan being the beneficiary of the project in question He is one of the Directors of M/s. L'Avenir Telecoms Ltd., in whose favour the letter of intent originally granted to M/s. KCP Ltd., was transferred. Beyond denying the allegation that he had indulged in acts of nepotisrn and favouritism, the first respondent has not stated anything relevant in the affidavit. Sri Ramachandra Rao has drawn our attention to a photostat copy Of the statement showing the waiver of performance guarantee deposit in issuing licences to Shri Naren Rajan for setting up telephone instruments project in the State, as, published in the Deccan Chronicle dated 26- 7-1987 found on page 82 of the petitioner's material papers filed along with the writ petition The photostat copy clearly mentions the name of the allottee and the date of allotment in column 6 as \"Shri Naren Rajan of K.C.P. Ltd. 2-2-1987.\" The correctness of this has not been disputed by the respondents 1 and 2 either in their counter- affidavits or during the course of the arguments of their counsel.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-55", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "43. In the matter of granting of Co- promotership for the manufacture of Electronic Telephone Instruments Project, we are prima facie of the view that there has been an abuse of power. It is claimed in the additional counter-affidavit of the Chief Secretary that the APEL and KCP limited incorporated a new company L'Avenir Telecom Ltd. of which Naren Rajan is Director to implement the project. It was M/s. KC-P Ltd., which had the required eligibility for selection as a co-promoter. The financial capacity of-the KCP, its technical know how and its past track record, were the considerations that weighed with the sub- committee in selecting it as a co-promoter. If any subsequent material had come to the notice of the Sub-committee or the decision taking authority suggestive of the unsuitability of M/s. KCP Ltd., for the choice, the project ought to have been given to M/s. Arvind Mills, which was selected as the next alternative and if for any reason that also was found to be deficient for the choice, the decision ought to have been in favour of the second alternative M/s. Sandur Mangan\" and Iron Ore Limited. Skipping over the two other alternatives and stripping M/s. KCP Ltd., of what has been conferred upon it, the order of Directors on a representation made M/s. L'Avenir Telecoms, Ltd. had decided transfer the letter of intent in favour of M/s. L'Avenir Telecoms Ltd in overall interests of the project for expeditious' ' What are the overall implementation interests for such a transfer have not been plaeded before us. How the memorandum of Understanding between APE-L and KCP Ltd. claimed in the additional counter-affidavit would effect such transfer remains vague . The whole exercise u ndertaken by the concerned Authorities prima facie, us to hold that he entire process of selection was manoeuvred ostensibly in violation of the Procedure.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-56", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "us to hold that he entire process of selection was manoeuvred ostensibly in violation of the Procedure. M/s. KCP Limited, which had the eligibility to apply was used as a facade for conferring the benefit on Sri Naren Rajan. W hat was the procedure followed for transfer of the letter of intent, what were the compelling circumstances to effect such a transfer and why the other two alternatives were ignored, the record was conspicuously silent. We are distressed to notice that no light has been thrown in this regard from the side of government or from the learned counsel appearing for the first respondent; Having laid down the procedure of or the grant of co-promotership, the authorities concerned were bound in Jaw to adhere to the same rigorously. \"An executive agency' as observed by Mr. Justice Frankfurter in Vitarelli V. Seaton. (1959)359 US 535 \"must be rigorously held to the standards by which it professional actions to be judged ..... This judicially evolved rule of administrative law is now firmly established and, if 1 may add, rightly so. He that takes the procedural sword shall perish with the sword\" This legal position obtaining in the United States Public Law was held by the Supreme Court to be part of our Jurisprudence. Bhagwati, J., as he then was, in Ramana v. I.A. Authority of India, stated the law thus :", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-57", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "\"It may be noted that this rule, though supportable also as emanating from Article 14, does not rest merely on that article. It has an independent existence apart from Article 14. It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority.\" Kasturdal case, reaffirms this prima facie.   \n44. The entire manoeuvring leading to Sri Naren Rajans L'Avenir Telecoms Ltd., becoming a co-promoter, prima facie negates good faith on the part of the concerned authorities. The prescribed product reappears to have been circumvented to confer undue and undeserving favour on Sri Naren Rajan, who is the son-in-law of the first respondent the Chief Minister of the State. When circumstances pointing out strong suspicion suggestive of abuse of power on the part of the first respondent are placed before us, it is for the latter to clear the suspicion by placing the relevant material. The State Government, on its part, produced documents which do not in any manner induce us to believe that the entire transaction was aboveboard. We, therefore, consider that the material available on record warrants a prima facie finding that in securing the advantages to his son-in-1aw Sri Naren Rajan., the first respondent abused his power as Chief Minister.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-58", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "45. Allegations Concerning Ramakrishna Studios. The first respondent purchased land admeasuring 8.000 sq. yards in Mushirabad near Golconda cross-roads in the heart of the twin cities of Hyderabad and Secunderabad, to construct Ramakrishna Cine Studio. He applied on July 8.1 1975, to the Government to sell 1,2000 sq. yards of Govt. land situated adjacent to the said site. Admittedly, as per the master plan for the city of Hyderahad, Musheerabad was declared as a residential Zone. He applied for zonal relaxation. In G.O. Ms. No. 480. Municipal Administration. dated October 12, 1976. the Government permitted conversion of the first respondent's land as 'special industrial use zone' for developing it into a cine-studio. The Govt. also ordered to allot 1,200 sq. yards of adjacent Govt. land at the rate of Rs.40/-per sq. yard. He was later asked to deposit Rs.10,000/- and take possession. He accepted the rate and deposited the amount. The Tahsildar, on deposit of Rs.10,000/- gave possession of the land on September 17. 1975 which later was found to be 1.762 sq. yards. The assignment and relaxation were subject to the condition of \"using the land as cine studio.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-59", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "It is already noted that the first respondent assumed office on January 9. 1983 as Chief Minister. In G. O. No. 401, M.A.. dated, has. 19,1983, the government permitted Shri Jaya Krishna (one of the sons of RI). the Managing . Director of Ramakrishna Cine Studio. to change the use of the land to be one for \"local commercial use\"- as cinema theatres. etc. This change of user was questioned in the Legislative Assembly. Thereon. it would appear, that a representation was made by Shri Jaya Krishna, on December 3. 198,3 to refer the user of the land to be one of \"special industrial use\". The law Department on February.16, 1994, opined that there may be objection to reconversion of the user of the land as \"Special Industrial Use\". On the basis thereof, in G.O.Ms. No. 1,30, M.A. dated February 7, 1987, orders were passed reverting the use to be one for Special Industrial Use Zone'. This delay has been explained in the counter-affidavit. In the meanwhile, Shri Bala Krishna (another son of respondent No. 1) again made an application on December 12. 1.986, for the change of the user to he one f or .. general commercial use for establishing shopping complex and Kalyana Mantapam\" and that was permitted. The date and details thereof are not furnished. The order became final. It is stated by the petitioner. and 11 is not denied by, the respondents, that the construction for commercial use was made contrary to the approved plan. converting the use. to one of shopping complex. etc., without permission; and that the Municipal Corporation had issued notice to demolish the construction. He was alloeed not to demolish the construction on his agreeing to pay", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-60", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "demolish the construction. He was alloeed not to demolish the construction on his agreeing to pay a compounding fee of Rs.20,000/-. The agreed rate of value of the land from Rs.40/- per sq. yard was reduced to Rs.15/- per sq. yard as per G.O.Ms.No. 862/M.A.datedMay 19, 1983. These are facts borne out by the record.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-61", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "46. The allegation in this regard by the petitioner is that the first respondent being the Chief Minister had abused his power in all by wing the conversion of the studio at several states to suit his convenience for commercial use contrary to the master plan. the original object of relaxation was to develop a cine studio for encouraging the film industry; but after his assumption of the office as the Chief Minister, he wanted to make use of the valuable land for commercial purpose, defeating the very object of the assignment of the land. It is also further stated that when conversion was objected to by the legislators on the floor of the House, a farce of an attempt to convert it to the original use viz., cine-studio was made. The papers were alleged to he kept pending till 1987 when the permission was granted relaxing the Zonal Regulation to use it as a \"commercial venture' - shopping complex and marriage halls. It is common knowledge that price of land in Hyderabad, for that matter in any urban area, shot up by leaps and bounds between 1975 and 1983; but surprisingly the first respondent. soon after assumption of office in 1983 got the accepted land value of Rs 40 per square yard prevailing in 1975, reduced to Rs.15/- per sq. yard in 1983, thereby causing a loss of about Rs.50,000/- to the State. The agreed compounding fee of Rs.20,000/- was reduced to Rs.1,000/-. The frequent change of the user of the land' contrary to the purpose of assignment is an abuse of power.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-62", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "47. It is admitted in the counter-affidavit that the application was made on February 16, 1984 for reconverting the user to the original use and it was pending for a long time,- till issue of G.O.Ms. No. 130 dated February7,1987. What is more astonishing is that it brooked no delay for first respondent to have it changed into general use on an application dated December 12, l986 feted by Mr. Balakrishna. Though an attempt has been made in the counter-affidavit by the Chief Secretary to make it appear that the papers relating to the application dated December 3, 1983 filed by Shri Jayakrishna had been mixed up with some other papers, and therefore, it was kept pending for long, it would be very hard to accept. One stark question is, when the file related to the family members of the Chief Minister, would any officer dare enough to allow the papers mixed up, or to keep it pending for such 'a long time unless there was some hidden reason or oblique motive - this is the argument of the learned counsel for the petitioner.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-63", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "48. We find the force of this argument. One would expect diligent effort to trace out the files immediately on the part of the Officers concerned if there is any truth in the allegation that files got mixed up. Perhaps for the reasons best known to them, it was kept pending; and ultimately orders were passed Converting the user of \"Special Industrial Zone' to be that of 'General Commercial Use Zone\" in succession. The contention of the learned Advocate-General is that the first Despondent did not deal with the file; the application for reduction of price was made at a time when Congress Government was in lower, the District Collector recommended on February 10, 1983, to reduce the price of and to Rs.15/-per square yard; the reduction of the compounding fee from Rs.20,000/- to Rs.1,000/- also was recommended; and Government merely accepted the recommendations.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-64", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "49. We find it difficult to agree with this Contention. When there was an upward trend n the value of land everywhere, is it Conceivable that without any pressure from any interested person, the officer could have recommended a reduction of the value from he rate of Rs.40/-,per square yard agreed to 1975 to a ridiculously low price of Rs.15/- per square yard as though the price of land In fast developing city like Hyderabad, Secunderabad showed a downward trend. The -recommendations of the District therefore, create suspicion in the mind of any right thinking person.. The compounding fee of Rs.20.000/- was voluntarily offered by Mr. Jayakrishna to have benefit of retaining the construction made without obtaining the necessary permission violation of the statutory provisions. He was otherwise required to demolish the entire construction, which would have meant considerable loss to him. After having taken in advantage arising out of the compounding .c, where is the need, and what is the satisfaction for reducing it from Rs.20,000/- to Rs.1,000/- ? There is absolutely no convincing reason coming forth The land user as been frequently changed. This extraordinary action is sought to be justified the counter-affidavit stating that mere use Sri Balakrishna happened to be the son of the Chief Minister his request could not be turned down. Has this been done in the normal course the beneficiary being Sri Balakrishan would not have been a matter for comment. The frequent changes in the land user and the reduction in the price of land and the compounding have been made after the first respondent came to power as Chief Minister; and the beneficiaries are none other than his family members. We are, therefore, prima facie of the view that the actions of the State Government in this regard are the result of abuse of power by the first respondent.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-65", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "50. Exemption of land at Nacharani from the Urban Land (Ceding and Regulation) Act : Shri A. Narayana, Reddy, owner of land admeasuring Ac.5-00 found in excess of the ceiling and covered by & Nos. 19711-B, 198B, 199B, 206-1-B situated in Nacharam within the Hyderabad Urban agglomeration filed an application before the Government for exemption so as to enable him to sell Ae. 4- 21/2 guntas in favour of Messrs. Ramakrishna Cine Studios, Musheerabad. It was claimed that R. K. Cine Studios were having agricultural lands adjacent to his land, they intended to' develop horticultural garden for outdoor shooting of films. The State Government in exercise of its power under Section 20(1) of the Act granted exemption of Ac.4-2V2 guntas (16440 Sq. metres) in favour of Shri Narayana Reddy through G.O.Ms. No. 501 (Revenue) dated 9-3-1983 so as to enable him to sell the land to M/s. R. K. Studios to develop a horticultural garden for outdoor shooting of films.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-66", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "51. On 23-3-1984 Shri Jayakrishna, one of the sons of the 1st respondent as a partner of R. K. Studios made an application to the State Govermnent to exempt Ac. 1 1-31 guntas (47,70) Sq. metres) byG.O.Ms. No. 450dated 3-5-1985 subject to use of the land only for horticultural garden for outdoor shooting of films, obviously by M/s. R. K. Studios. It is now an admitted fact that the State Government granted permission to Sri Balakrishna (another son of the first respondent) to convert M/s. R. K. Studios for local commercial use as far back as 19-5- 1983 by G.O.Ms. No. 401, Municipal Administration, the land use was changed from \"Special Industrial Zone to Local Commercial Use Zone\". It is admitted in the counter affidavit of the State Government at page 193 in paragraph 21 that Shri N. Balakrishna made an application for conversion of the land for general commerecial use as it was \"not desirable to have the Cine Studios in the midst of heavy congested area with heavy automobile traffic. The request of Mr. N. Balakrishna could not be negatived on the mere fact that he happens to be one of the sons of Sri N. T. Rama Rao and accordingly agreed for \"conversion of the land use from special industrial use zone to general commercial use zone. Sri N. Balakrishna, the owner of this property also submitted the proposals to demolish all the existing structures and replace them by weft planned shopping complex cum kalyana mantapam and this was agreed", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-67", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "52. It is therefore clear that after the R. K. Studios ceased to be a film producing centre, the need of Nacharam lands (47702 square metres) as horticultural garden for the purpose of outdoor shooting of films autornatically came to an end. In such a situation action ought to have been taken by the State Government to withdraw the exemption and resume the land on the ground that it was not being used for the purpose for which the exemption was granted. There is no mention in the counters of R-1.and R-2 that any action was initiated to withdraw the exemption and to resume the land. The beneficiaries in this regard being the members of the first respondent's family we find it hard to resist the prima facie conclusion that the omission in this regard is due to abuse of power by the first respondent. We find no force in the contention of the learned Advocate-General that as this issue also would come within the purview of Challa Kondaiah Commission of Inquiry, this Court had no jurisdiction to go into the question. The pendency of such an inquiry does not debar the exercise of jurisdiction of this Court under Article 226 of the Constitution. \nExemption Of Entertainment Tax In Respect Of The Two Theatres - \nRamakrishna 70 MM And Rarnakrishna 35 MM - Belonging To The Members Of The First Respondent's Family :", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-68", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "53. The Andhra Pradesh Entertainment Tax Act, 1939 by 5. 19-A confers power on the - State Government to grant exo\"iion from payment of entertainment tax' by the film exhibitors. On a representation made by the Film ExhibitorsAssociati6n (hereinafter referred to as 'the Association on 8-3-1985, the State Government issued G.O.Ms. No. 752 Revenue (5) Department dated 4-71985 laying down the guidelines for granting exemption from payment of entertainment tax. Natural calamities, national calamities, break-down in law and order, social customs and cancellation of licence are circumstances to be taken into consideration as per the G.O. for granting the exemption. It also lays down the procedure to be followed : an exhibitor, who seeks the benefit of exemption under the Act is required to submit application in the prescribed form to the Entertainment Tax Officer explaining the circumstances under which the exemption is clarified. On receipt of the application the Entertainment Tax Officer shall record his recommendations and forward it to the Commercial Tax Officer within a week from the date of receipt of the application. The Commercial Tax Officer is required to forward, application along with his recommendations to the Deputy Commissioner, who in turn shall examine and forward it to the Commissioner of Commercial Taxes. The procedure further contemplates that the Commissioner shall forward the application with his specific recommendations to the Government, who is the competent authority to grant the exemption Paragraph 6 of the G.O. lays down that the application for exemption shall he made within 30 days from the date of the close of the week in respect of which the Application for relief under Section 19-A\" is requested. In respect of pending claims from 1-1-1984 to 4-7-1985. the date of issue of G.O.Ms. No. 752, paragraph 7 of that G.O. lays down that the exhibitors shall submit", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-69", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "752, paragraph 7 of that G.O. lays down that the exhibitors shall submit applications seeking exemption in the prescribed manner 'within 30 days from the date of this order.-", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-70", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "54. In respect of Ramakrishna 70 MM theatre by G.O.Rt. No. 21-5 Revenue (5 Department dated 12-2-1987 the Government granted exemption of tax aggregating to an another order. G.O. Rt. No. 216. Revenue (5) Department dated 12- 2-1987 a tax of Rs.61,400/- was exempted in respec:t of Ramakrishna 35 MM theatre. In both the cases exemption was granted due to curfew on the demise to Smt. Indira Gandhi,'etc.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-71", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "55. The aforesaid point of exemption in respect of the two theatres was seriously challenged by the petitioner contending that this was an act of rank nepotism and dishonest abuse of power by the first respondent. The objection was sought to be met by the first respondent in his -counter by denying the Allegation; the applications of all the persons who applied for exemption it was well were considered by the proper authorities and orders were passed giving similar benefit. The counter-affidavit of the State Government was to the effect t hat in the twin cities \"not only these two theatres belonging to family members of the Chief Minister but also 17 other theatres were given exemption\"; the Sub-Inspector, Abids Police Station, issued a certificate regarding the closure of the theatres - Ramakrishna 70 MM and 35 MM - on the dates mentioned in their representations dated 6-3-1986 addressed the Commissioner of Police; and the concerned authorities, therefore, granted the exemption and so no illegality could be attributed.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-72", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "56. We have examined the matter very carefully with reference to the documents filed by the Government itself. The owners of the two theatres in question made two representations in respect of the two theatres on the same day, viz., 6-3-1985 (vide pages 429 to 4.31 and 439 to 443 of Government's material papers) to the Commissioner of Police requesting for issuance of a certificate for claiming exemption from the entertainment. tax. In the representation relating to 70 MM theatre it was mentioned that on certain elates in the years 1984, 1985 and 1986 the theatre was closed and consequently '84' shows were not exhibited. So far as 35 MM theatre was concerned the closure of the periods was confined to the Years 1984 and 1985 and the number of shows that could not he exhibited was '$U. On the same day. i.e., 6-,3-1986. on both the representations, theSub-1nspectoro(Police, Abids Station made an identical endorsement in the following terms :\"Certified that on the above dates shows were not screened at the theatre.\" According to the counter of the State Government (on page 96) \"After obtaining the necessary certificates from the Sub-Inspector, Abids Police Station, the Commissioner of Police\" by two memos forwarded 'the representations to the concerned Entertainments Tax Officer. What strikes us very prominently is that the representations seeking exemptions were f fled long after the stipulated period of 30 days limitation, in respect of the alleged closures of the two theatres for certain periods in the years 1984 and 1985 the representations were made 'Only on 6-3-1986. No authority concerned ever bothered to cheek up the crucial fact whether the representations were preferred within the period of limitation. What was the reason for overlooking such an apparent and important matter '? Was it allowed to be overlooked?", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-73", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "What was the reason for overlooking such an apparent and important matter '? Was it allowed to be overlooked? What is more startling is that on the same day when the representations were made, i.e., 6-3-1986, the Sub-Inspector of Police, Abids Station, made an endorsement certifying that on the dates mentioned in the representations shows were not screened. How could the Sub- Inspector of Police on 6-3-1986 verify the alleged factum of the closure of the theatres for certain days in the years 1984 and 1985 ? What was the material and the source with reference to which the Sub-Inspector could make such an endorsement ? In the representation relating to 70 MM theatre it was stated that only in respect of 3 dates during three weeks in 1984clevenshowswere not exhibited because of curfew. During the period 2-10.1984 to 4-10-1984'4' shows were not exhibited because of the demise of Smt. Basavarama Tarakam. Duringtheperiod31- 10-1984 to 1-11-1984 '3' shows were not -exhibited due to the demise of Smt. Indira Gandhi. On 31-7-1985 '4' shows we,-e not exhibited because of Andhra Pradesh 'Bhandh' and on 26-2-1986'4'shows were not exhibited due to Bharat Bandh. Thus, only in respect of '26' shows alone reasons were mentioned in the representation in the remarks column. For the remaining'58'shows (84-26) the representation did not contain any reasons. Likewise in the representation relating to 35 MM theatre it was mentioned, that on 9-9-1984'3\"shows were not exhibited due to disturbances and curfew, '4' shows were not held on", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-74", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "were not exhibited due to disturbances and curfew, '4' shows were not held on 2-10-1984 due to the demise of Smt. BasavaramaTarakan, shows were not held on 31-10.1984 because of Smt. Indira Gandhi's demise and'4'shows were not held on 31-7-1985 because of Andhra Pradesh Bandh. Thus in respect of '14' shows alone out of '&)'shows reasons were mentioned in the representation in the remarks column. As regards the remaining '66'shows (80714) no reasons whatsoever were mentioned. It is evident that the Sub-Inspector of Police was acting at the behest of comence in making blind endorsements certifying non-exhibition of'84'and'&)'shows respectively in the two theatres and they were in turn certified by the Commissioner of Police. As the two theatre belong to the family members of the first respondent, the patent infirmities relating to the period of limitation, the non-disclosure of the full particulars relating to the days when the shows were claimed to have been not exhibited and the failure to mention the reasons it would appear, were deliberately overlooked and the State Government headed by the first respondent granted exemption. The-learned Advocate-General endeavoured to support the two exemptions by contending that 'l7' (seventeen) theatres in the two in cities also were granted exemption from entertainment tax, the list of all the '19 theatres was also filed as a material paper. Under what circumstances exemptions were granted to those 17 (seventeen) of her theatres whether those theatres complied with all the procedural formalities we cannot enquire for the read on that no material in that regard has been placed before us. We are, therefore, prima facie of the view that the granting of the exemptions to the two theatres in question was due to abuse of power by", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-75", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "that the granting of the exemptions to the two theatres in question was due to abuse of power by the first respondent.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-76", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "57. License for N4ini Steel Plant : the Industrial Development Bank of India (IDBI) listed mini Steel plants as banned units for financial assistance and communicated the same to the A.P. State Financial Corporation (APSFC). The petitioner contends in paragraphs C.62 to C.78 of his affidavit that with a view to granting license and financial assistance to persons like Shri Naren Raian (third son-in-law of the 1st respondent) and Shri Murali Krishna (son of Shri P. Upendra,' leader of Telugu Desam Parliamentary Party) suspended without any authority the directions given by the IDBI, invited applications and granted financial assistance to the tune of Rs.75 lakhs each : in the case of Sri Naren Rajan it was done in one day without complying with the formalities. In the counter affidavit of the Chief Secretary it was admitted that the IDBI issued instructions declaring mini-steel plants has banned units and directed APSFC not to grant financial 'benefits to the mini-steel plants. It was also further admitted that the APSPC- suspended the operation of the directions, invited proposals to set up mini-steel plants, 39 proposals were received, the Screening Committee approved 12 proposals and granted financial benefits. They (APSFC) also admitted that the ban was restored subsequently but meanwhile financial benefits were granted to the nine mini-steel plants, including L'Avenir Steel (Pvt.) Limited. A list of the particulars of the mini-steel plants was furnished during the course of the bearing. It was admitted at the Bar by the learned Advocate General that P. V. Krishna Mohan and Parvataneni Sarat, the promoter-directors of Jagnar Steels are the sons of Shri P. Upendra,. but it was denied that L'Avenir (Pvt.) Ltd., belongs to Shri Naren Rajan.The list of the mini-steet plants furnished to us shows that one", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-77", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "Shri Naren Rajan.The list of the mini-steet plants furnished to us shows that one Shri C. H. Raghurami Reddy .Is the Managing Director and Shri T. Ajya Kumar Reddy, a Director of L'Avenir Steels. In the counter affidavit of the Chief Secretary at page 105 it was mentioned : \"if they happened to be related or connected to persons in power it is only accidental.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-78", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "58. Shri Ramachandra Rao, the learned counsel for the petitioner, contended that Shri Naren Rajan after obtaining financial ,assistance from APSFC, and the Andhra Bank, sold away his interest in L'Avenir (Pvt.) Limited to third parties during the pendency of these two writ petitions, and therefore he sought a direction from this Court to the APSFC to produce the relevant records. \n59. The whole transaction' excited suspicion. Suspicion of the ban imposed by the IDBI, has grant of loans to people closely related to men in power and the reimposition of the ban almost immediately thereafter are reasons strong enough to conclude prima facie that power has been abused by the first respondent. The two constraints on the power of the State to grant large . namely (i) choice of persons and (ii) terms and conditions as laid down in the ruling of the Supreme Court in Ramana's case do not appear to have been complied with. Although the Lok ALyuktha went into this question, his report, in our view does not deal with the question from the view point of the two relevant to laid down by the Supreme Court in the above case.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-79", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "60. Grant of exemption under Section 20(1)(a) of the Urban Land (Ceiling and Regulation) Act, 1976 in favour of Vijayawada Iron and Hardware Merchants Association: By G.O.Ms. No. 321 Revenue (U.C.) Department dated 8-4-87 an extent of land 2,29,964 Muare metres admeasuring (approximately Ae. 54-00) situated in Bbavanipuram within ' the urban agglomeration -of Vijayawada was exempted from the operation of the Urban Land (Ceiling and Regulation) Act, 1976 (hereinafter referred to as the Urban land Act') in favour of the - Vijayawada Iron and Hardware Merchants' Association (hereinafter referred to as 'the Association) in the public interest subject to certain conditions specified therein. Sri Ramachandra Rao for the petitioner contends that contrary to the purpose of the Urban Land Act the exemption was granted and thereby the 1st respondent committed flagrant abuse of power for collateral and corrupt considerations. The impugned action has supported by the 1st respondent who leaded in his counter that exemption was granted keeping in view the urgency to remove iron and hardware business from the present congested streets to the outskirts d he city and in order to relieve traffic congestion\". He also pleaded that the petitioner has no interest in the subject matter and the G.O., was not challenged by any person. The State Government's counter pages 21 to 24) seeks to justify the exemption to on the ground that it was felt necessary relieve the traffic congestion by shifting the iron and hardware business from the congested streets to the outskirts of Vijayawada. The Association submitted a representation on 8-3-82 stating that the entire extent 'was needed by the Association for the construction of business complex for allotment to its members and after a detailed examination of the case the", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-80", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "the construction of business complex for allotment to its members and after a detailed examination of the case the Government considered it expedient in the public interest to exempt the land....\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-81", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "61. The order of exemption, G.O.Ms. No. 321 dated 8-4-1987 does not recite that the exemption was granted for purposes of relieving traffic congestion; the only ground it mentions is 'public interest'. How public interest is subserved by granting exemption of a huge extent of nearly Ac. 54-00of land in favour of the Association for construction of business complex we fall to understand in the particular circumstances of the case. How many members are there in the Association and what was the requirement of each of the members has not been stated either in the order of exemption or in the counter filed on behalf of the 1st and 2nd respondents. We looked in vain for relevant material in this regard. In a huge extent of about Ac.54-00 of land one could build almost a township. Some of the objects of the Urban Land Act as set out in its preamble are : to provide for imposition of acciling on vacant land in urban agglomerations, for acquisition of such land in, excess of the ceiling limits with a view to preventing concentration of urban land in the hands of a few persons and to bringing about an equitable distribution of land in urban agglomeration to serve the common good. Section 11 of the Act concerns with payment of compensation for the vacant land acquired under the Act : the compensation payable is minimal - either the amount equal to 8-1/3rd times of net average income or if there is no such annual income at the rate of Rs.10 per square metre for lands failing within the urban agglomeration specified in Categories A and B of Schedule 1 and at Rs.15/- per square metre in respect of lands failing in urban agglomeration specified in categories C and D of the same schedule. Section 23(4) enjoins a duty on the State Government to dispose of the acquired land so as to subserve the common good on such terms and", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-82", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "State Government to dispose of the acquired land so as to subserve the common good on such terms and conditions as the State Government may deem fit to impose. Our Constitution by its preamble enjoins economic justice as one of the goals to be achieved. Article 39(b) ii- rates a directive to the State that the ownership and control of material resources of the community should be distributed in the best possible manner to subserve the common good. Operation of the economic system, according to the directive contained in Article 39(c) should not result in the concentration of wealth and means of production to the common detriment. Urban Land Act was enacted for the purpose of giving effect to the directive principles and the Constitutional objectives contained in the preamble. How was the State Government justified in granting exemption in respect of such a huge extent of valuable land about Ac.54-00 in extent from the operation of the Urban Land Act ? Had the Urban I-and Act been made applicable to the land, the entire excess could well have been distributed in a more realistic manner taking into consideration the exigencies of the situation, the requirement of public interest and other related matters. Even assuming that the Association members were in need of a separate business complex, that could have been satisfied by granting separate clients of land in favour of genuine members on lease for long periods and the remaining extent could have been saved for other more useful purposes, instead of allowing retention of the land by granting exemption. The State .Government while granting exemption did not appear to have taken into account the relevant factors. What is the common good in the act of the State Government in granting exemption of the entire extent of about Ac.-54- 00 of land straightway in favour of the Association ? Dealing with the purpose of Urban Land Act, its preamble and its relevance in the context of Article 39 (b) and (c) Krishna Iyer, J., in Bhim Singhji v. Union of India, held \"The purpose of the enactment. garnered", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-83", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "in Bhim Singhji v. Union of India, held \"The purpose of the enactment. garnered from the preamble, is to set a ceiling on vacant urban land, to take over the excess and to distribute it on a certain basis of priority. The whole story of the legislation, the long gestation of pre-legislative consideration, the brooding presence of Article 39(b) and (c) and the emphasis in Section23(4) on common good as the guiding factor for distribution point to public purpose, national development and social justice as the cornerstone of the policy of distribution ....... The touchstone is public purpose, community good and like criteria. If the power ks used for favouring a private industrialist or for nepotistic reasons the oblique act will meet with its judicial Waterloo. To presume probable graft, nepotism, patronage, political clout. friend ly pressure or corrupt purpose is impermissible. The law will be good, the power will be .impeccable but if the particular act of allotment is mala fide or beyond the statutory and constitutional parameters such exercise will be a casualty in court and will be struck down. We must interpret wide words used in a statute by reading them down to fit into the constitutional mould.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-84", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "We are not impressed by the argument of the learned Advocate General that hundreds of exemptions had been granted by the State Government ever since the Urban Land Act came into force and that a Commission of Inquiry headed by Sri Chalia Kondaiah, former Chief Justice of this Court, had been appointed to examine the exemptions so far granted from the inception of the Act. We are not concerned with the other exemptions nor have the circumstances relating to those exemptions been placed before us. \n62. We are, therefore prima facie of the view that G.O.Ms. No. 321 Revenue (U.C.) Department dated 8-4-1987 is a result of arbitrary exercise of power in disregard of the objectives of the statute, the constitutional goals set out in the preamble and the directive contained in Art. 39(b) and (c).", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-85", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "Purchase of Ac.22-00 of land  at Gaddiannaram from HUDA by the Agricultural      Market          Committee, Hyderabad \n \n\n63. An extent    of land  admeasuring Ac.22-00 covered by S. Nos. 124 to 128 at Gaddiannaram village in Hyderabad Urban Agglomeration along with some other extent of land was acquired by the Government for the benefit of the Hyderabad Urban Development Authority to as \"HUDA\"). The Government grant( permission by memo dated 24-1-1986 to the Agricultural Market Committee to take  the said Ac.22-W of land at the cost of Rs.3.50 crores from HUDA for establishment of fruit market by shifting the present fruit market at Jam Bagh. The Agricultural Market Committee has permitted to pay an initial  amount of Rs.2 crores and for the balance the  committee was advised to apply to the Government for issue of necessary sanction orders.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-86", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "64.    It was the contention of Sri Ramachandra Rao, the learned counsel for  the petitioner, that the Agricultural Market  Committee was forced to purchase this lane it the rate of Rs.15 lakhs per acre while it actual market value was less than Rs.4 lakhs per acre. For arranging this land deal, one A.S. Krishna of Guntur had given Ac.300 -00  of land, which includes mango garden in an extent of Ac.-150-00 and 300 buffaloes as a Consideration to the first respondent's relatives. According to the petitioner, this Allegation 'was contained in the statement made by one Shri B. Mohan Reddy, a former member of the  ruling Telugu Desam Party, and a former, Convenor of the city Unit of the Party. The further allegations levelled by the Petitioner in this regard are that the market value of the land in 1985-86 in Gaddiannaram was about Rs.80/- per sq. yard, but the first respondent   pressurised    the Market to purchase the same for Rs.3.50 crores for HUDA and in this transaction the Market Committee lost Rs.3 crores. The adjoining land in S. Nos. 911 and 9/6 was being sold at Rs.4 lakhs per acre and there was an extent of Ac.60-00 of land availablein Victoria  Memorial    House in     the neighbourhood. The Officers concerned are Thomas, Vice-Chairman, HUDA and Sri . P. Singh - were transferred becuase they did not oblige the Chief Minister.\"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-87", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "65. The 1st  respondent in his counter denied this allegation. He pleaded that the Government had appointed a Commission under the Commissions of enquiry Act to go to the Gaddiannaram land affair and the enquiry was in progress. The alleged transfer officials on the ground that they did not oblige him was also denied. The State Government iii its counter while denying the allegations as baseless and false stated that the inquiry before Justice Koka Ramachander Rao Commission appointed for this purpose was in progress. The notification for acquisition of the land was issued in January, '78 at the request of H UDA. As per the record the land originally belonged to J. Narasimha Reddy and J. Sudarshan Reddy. Subsequently it was brought to the notice of the Land Acquisition Officer that there was an agreement in favour of Messrs. A. S. Krishna & Company and after litigation between the Parties a decree was passed in     favour of the later, and the sale deed was executed in their favour in 1981, the award   was passed in June.'82 by the Land Acquisition Officer and possession was taken on 22-6-1982. The compensation awarded by the Land Acquisition Officer was Rs.42.000/- per acre. The Second Additional Judge, City Civil Court, Hyderabad, on a reference made under Section 18 of the Land Acquisition Act at the instance of the landholder enhanced the compensation at the rate of Rs.7,74,400/- per acre. The HUDA filed a review petition seeking review of the decree on the ground that the landholder A. S. Krishna hid entered into agreement of sale with third parties agreeing to convey the land at the rate of Rs.90,000/- per. acre and this material was now within the knowledge of HUDA when the reference under Section 18 was under inquiry. The review petition was dismissed by the Additional Judge. The HUDA preferred two", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-88", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "was under inquiry. The review petition was dismissed by the Additional Judge. The HUDA preferred two appeals - C.C.C.A. Nos. 54 and 55 of 1987 - which are now pending in the 1Aigh Court. After several meetings were held to consider the proposal to shift the fruit market to the outskirts of the City, the decision for construction of market complex in the Ac.22- (X) of land in Gaddianiaram was taken. The price of Rs.3.5ocrores was negotiated and agreed to by the HUDA and the Market Committee and accordingly the amount was paid. The land covered by S. Nos. 6/1 to 6/8 is in ,he occupation of Victoria Memorial House, which was endowed by the then Nizam of Hyderabad. And as the same was governed by, the A.P. Charitable and Hindu Religious Endowments Act it could not he acquired. The allegation regarding the transfer of the two official-was denied as false and baseless.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-89", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "66. The entire affair relating to Gaddiannaram  land is the subject matter of inquiry before Justice Koka Rarnachandra Rao Commission appointed by G.O.Ms. No. 568,      Municipal        Administration Department dated 22-5-'87 under the Commissions of Inquiry Act, 1952. Sri Justice Ramachandra Rao is one of our greatest Judges. whose eminence, integrity and objectivity cannot be questioned by anyone. The Commission of Inquiry not being a Court and a sits report is recommendatory in nature, this Court is not disabled from scrutinising the allegation in question. The sale was by, the HUDA, a public body, in favour of Agricultural Market Committee, another public body. Although at first blush it may appear that in a transaction involving two public bodies no private  individual could raise any doubts regarding its legality or propriety, on a closer examination we find that such a view is incorrect. The HUDA was not constituted for the purpose of making prof it like any other ordinary real estate dealer.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-90", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "67. The A.P. (Agricultural Produce and Livestock) Markets Act, 1966 regulates the purchase and sale of agricultural produce and products of livestock and the establishment of markets in connection therewith. The Government is empowered by Section 4 to constitute a Market Committee. for every notified area. The composition of Market Committee is dealt in Section 5. The Government has a very decisive role to play in the appointment of members. Every contract entered into by a Market Committee, Section 1'1 enjoins, shall be in writing and shall he signed on its behalf by the Chairman and two other members. All the monies received by a Market Committee shall be paid into a fund called the Market Committee Fund. Section 15 mentions the purposes for which the Market Committee Fund may be expended; one of the purposes is acquisition of site for the market. Section 27 confers revisional power on the Government in respect of any orders passed by the Director of Marketing. By Section 33 rule-making power is conferred on the government. Rule 143 specifically deals with acquisition of lands and execution of works thereon. It says that the land required for the purpose of Market Committee shall not be acquired otherwise than under the Land Acquisition Act. It provides for exception only in cases where the land to be purchased is at a rate negotiated by a Committee consisting of the Revenue Divisional Officer, the Assistant Director of Market in and the Chairman of the Agricultural Market Committee concerned, and the said rate must be finalised with the prior approval of the Director of Marketing. Sub-rule (2) of Rule 143 further lays down that the acquisition, purchase and disposal of movable or immovable property shall be in a manner specified from time to time by the Government.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-91", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "68. The counter-affidavits filed by respondents 1 and 2 did not state that Rule 143 was complied with. The Government material papers also do not show that Rule 143 has been complied with No Committee as contemplated by Rule 143 appears to have been constituted for arriving at a negotiated price. When law prescribes a particular mode for exercise of power, al) other modes of the exercise of power are forbidden. This is the settled position. (Vide, G.E. Board v. Girdharlal, ), Narbada Prasad v. Chhaganial, AIR [email protected] SC 395 and State of Gujarat v. Shantdal, . \n69. The        Government           accorded permission to the Agricultural Market Committee to purchase the land at a cost of Rs.3.50 crores on 24-1-1986 by Memo. No. 16854/Mkts. 11 (i)/S4-4. This was preceded by several meetings and discussion by the concerned officials. The Collector, Ranga Reddy  District, was asked to inquire into the market value of the land in question and ha accordingly by his letter No. DS/14757184 dated 29-9-1985 (Government material papers 109) informed the Secretary to the Government, Food and Agriculture Department : \n  \"As regards the market value the sale transactions during the year 1985,were took place between Rs.65/- to Rs.135/- per sq. yard. The local inquiry reveals that the prevailing' market rate is  retailing from Rs.250/- to Rs.300/- per square, yard \"", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-92", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "The amount ultimately paid by the Agricultural Market Committee to the HUDA was at Rs.400/- per square yard, far higher than the prevailing market price. As the alienation of land was by one public body to another public body, there appears to be no rational reason for charging such a high rate. The Agricultural Market Committee was made to pay Rs.3.50 crores for no ostensible reason. One of the relevant guidelines for determining the value by the HUDA was the price which it was required to pay to the landholder as a result of acquisition of the land under the Land Acquisition Act. By that time the award of the Land Acquisition Officer was already passed determining the land value at Rs.42,000/- per acre. The decree of the Civil Court under Section 18 of the Act was not yet passed as the matter was pending then. At best HUDA could have made sufficient provision for any foreseeable increase in the compensation amount. Even the Civil Court's decree dated 30-t-'87 enhancing the compensation to Rs.200/- per square yard was felt to be high and the matter was carried in appeal by the HUDA to the High Court in C.C.C.A. Nos. 54 and 55 of 19871 which are pending. In such circumstances, we do not find, prima facie, any rational basis from' either legal or factual points of view justifying charging Rs.400/- per square yard by the HUDA from the Agricultural Market. Committee. The statutory procedure as adverted to supra appears to have not been complied with. The owner of the land, M/s. A. S. Krishna & Co. as disclosed by the two agreements dated 8-6- 1981 and 5-1-1982 had agreed to sell the land to two Co-operative Housing Societies at the rate of Rs.90,000/-per acre and at Rs.65,000/- per acre respectively. The proposed vendee being", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-93", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "acre and at Rs.65,000/- per acre respectively. The proposed vendee being Co-operative Societies, it could not be said that the agreed price was understated in the agreements. What disturbs us, is the resulting situation from the Government Order dated 24-1-1986 (Ex. B-13) which led to the Marketing Committee being forced or induced to buy the land at a rate exceeding. Rs.15 lakhs per acre within such a short interregnum and when the price awarded by the Land Acquisition Officer was only Rs.42,000/- per acre. The relevant circumstances that ought to have been taken into consideration appeared to have been overlooked. We, therefore, prima facie, are of the view that the second respondent in an arbitrary manner compelled the Agricultural Market Committee to part with a huge amount of Rs.3.50 crores for purchasing Ac. 22-00 of land in Gaddiannaram. In transactions between one public body and another Public body for a public purpose, there should not be any room for profit motive.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-94", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "Burning of Houses of Sarnantha Tribals :\n70. With a feeling of anguish, Sri Ramachandra Rao, the learned counsel for the petitioner, has invited our attention to the averments in paragraphs E-62 to E-66 in the affidavit of the petitioner which relate to the inhuman act of burning by the police of 600 houses belonging to Samantha Tribals in Chintapaili Forest area on the alleged ground that the Tribals sheltered extremists. A photostat copy of an alleged tapped wireless message sent by the Station House Officer of Chintapaill was extracted in the affidavit which was to the effect that \"only the houses of Samantha Tribals alone should be burnt but not the houses of other tribals.' It was alleged in paragraph E-65 of the petitioner's affidavit when the Director-General of Police, Sri Ram Mohan Rao was confronted by the press-correspondents about this matter, he was of the view, \"It may have been done because they, i.e., tribals were sheltering Naxalites.'", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-95", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "71. There was no specific deni41 in the counter of the State Government about the allegations regarding the burning of the house of Samantha Tribals or the genuineness of the wireless message, asking the police to commit this atrocity. The explanation sought to be given in the Government's counter is that the houses of some of the Samantha Tribals are located away from the main village and it was suspected that those houses are providing shelter to the extremists and \"unless the dwellers of these hutments are persuaded to join the main village, it would be utterly difficult to contain the extremists' menace. In that Direction, steps were taken by the police to make them join the main villages.'", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-96", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "72. The allegation about the burning of the houses of Samantha Tribals appears to be true. The action of the police in indulging in acts of arson in order to deprive the poor and illiterate tribals. of their shelter in the guise of containing the menace of extremists, is by any standards a brutal and barbarous act shocking the conscience of any civilized man. The depths of depravity to which the law enforcing agencies should descend this -incident illustrates. However, we are not linking the first respondent either directly or indirectly with this camage perpetrated by the police.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-97", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "73. During the course of the argument Sri S. Ramachandra Rao produced before us the statement of the 1st respondent stated to have been laid before the Legislative Assembly December, 14, 1987, the day previous to the commencement of the argument in this case. The learned counsel submitted that the object of the statement was to answer the various allegations made in the writ petition. We refrain from making any comments with respect to that inasmuch as it is stated to be a .white paper placed before the Legislative Assembly and must have been with the consent of the Speaker. The learned counsel also took serious objection to practically the whole of the white paper having been published in the Government owned \"Telugu Samacharam\", a fortnightly, reproducing the whole of the statement contained in the said white paper which was produced in the Court on 18-12-1987. He took strong objection particularly to the editorial written under the signature of Sri V. Saidulu, Commissioner, Information and Public Relations Department and Special Officer, who is the Editor, Printer and Publisher, under the caption on the first page \"(*)' (everything crystal clear), \"(*)' (with the coloured Photo of the 1st respondent and putting thilakam on his f ore-head) conveying double meaning culture is being preserved or culture become sacrilege, and '(')' (end to gossip). Our attention has been drawn in particular to the following passages in the editorial : \n\"Dishonest persons are like Kouravasena. As in the case of \"Abhimanya\" who was finished in 'an unjust war they can construct or trying their army in contemptible positions to disarm the honest citizens.-", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-98", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "Our Chief Minister Sri Navidamuri Taraka Rama Rao Garu was determined to cleanse the rotten dishonesty in the administration and ill the political field and to control those Royal birds (Rabandulu) who are accustomed to eat money.' \"it is but natural that the crows of dishonest make conspiracies to wound, the leader who was ready to eliminate dishonesty with the weapon of power given by the people, with their contemptuous weapons of allegations.\" \n\"It is very painful that by false propoganda the innocent people were submerged in confusion and in them false doubts were created against their patronaged leader.\"  \nSri Ramachandra Rao, the learned counsel for the petitioner, with certain amount of emotion submitted that this editorial was written manifestly at the behest of the 1st respondent and that it undoubtedly amounted to an attempt to interfere with the due course of justice. Inasmuch as Sri Saidulu the editor, who is stated to be the author of the editorial. is not before us and we are also told that certain contempt proceedings are already pending against him in this Court, at this stage we refrain from expressing any opinion in the matter or taking any action pursuant to the plea put forward by the Petitioner's Counsel.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-99", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "74. Sri Ram Jeth malani, towards the end of his arguments raised the question about the propriety of the learned Attorney General assisting this Court as amicus curiae. According to him, the participation of the learned Attorney-General as amicus curiae vitiates the proceedings. While conceding that valuable assistance was rendered by the learned Attorney-General. it was urged by Sri Jethmalani that paradoxically its effect was vitiation of the proceedings. He ,contended that amicus curiae has extremely limited role., he is not expected to assist the Court or make comments about the factual aspects of the case. As friend of the Court, the duty of the amicus is to place, em invitation of the Court, the questions of law involved in a particular case for the Court'! consideration. The Attorney-General in India being a Constitutional functionary under Article 76, has no power to appear as a amicus in any High Court is the larger question posed by the learned counsel. The limited question on which he laid considerable stress was that the Central Government being a party to this litigation and as the petitioner has claimed relief against the Government of India. The learned Attorney-General whose duty is to aid and advise the Government of India should not have been requested to be as amicus. No partisan should be an amicus the learned Attorney-General by virtue of his office and having regard to the fact that the Central Government is a party to this litigation, cannot act in a \"non-partisan\" manner. Whatever be the truth of character of the incumbent of the office of Attorney-General to tell his to pursue any course of action in regard to legal matter be that by itself cannot be a consideration in judging the legal competence of the Attorney-General to appear as amicus in this Court in the present case. In support of his contention, the learned Counsel has drawn our attention to Ramnath Iyer's Law Lexicon, page 62, Jowitt's Law Dictionary and", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-100", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "Iyer's Law Lexicon, page 62, Jowitt's Law Dictionary and Corpus Juris Sedundum. Vol. 3. page 1046.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-101", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "75. We have considered the contention very carefully and we are of the opinion that the contention is wholly untenable. It must be placed on record that when this matter was argued prior to admission, before a Full Bench of this Court 'to which one of us the Chief Justice) was a party, Shri Palkhiwala, who appeared for the first respondent, welcomed the presence of the Attorney- General as amicus curiae and referred to his arguments as 'able'. It is the privilege of this Court to request any eminent counsel to enlighten it on matters of complex and legal issues, especially those which have no parallels. In a case of this magnitude,, this Court could not have thought of a more eminent counsel than the learned Attorney- General of India. In the United Kingdom, although the Attorney-General is a Member of the council Of Ministers, his sense of detachment and objectivity in discharging his duties was never doubted. In India, the Attorney-General enjoys a unique an independent position. Distinguished men of outstanding eminence in the legal field are requested by the Union to occupy the high office of Attorney-General. Apart from discharging duties of a total character assigned to him by the Union of India under Article '116(2) of the Constitution, his services are requested by the Supreme Court of India under Article 143 of the Constitution when the President of India seeks the opinion of the Supreme Court on any question of law or fact arising in a matter of public importance. Under Article 226, there is no letter on the power of this Court to request the Attorney General for any eminent counsel to appear as amicus curiae. The entire matter was argued by the learned Attorney-General before us only from the point of view of administrative law the question of mala fides by the alleged lapses on the partof the first respondent have not been touched by the learned Attorney-General in his erstitite submissions. Even in matters where there is a conflict of interest between", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-102", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "Attorney-General in his erstitite submissions. Even in matters where there is a conflict of interest between the Union of India and private citizens, the7 Attorney-General appeared as amicus at the request of the Supreme Court - Gramophone Company of India Limited v. Birendra Bahadur Pandey, . The fact that the Attorney- General was appointed by the Union never weighed as a constraint in requesting for his assistance as friend of the Court. The Attorney-General represents the 'interests of the public -- Bar Council of Maharashtra v. M. V. Dabholkara . Facts threw open questions of law and the latter are not decided or debated vaccue. There can never be an academic debate or argument on questions of law unrelated to any set of facts. When the leaned Attorney-General argued before us, he invited our attention to the factual situation obtaining in certain of the allegations as could be culled out from the documents filed by the State Government for the proper understanding of the legal position. We felt distressed at this unwarranted comment, that too, at the belated stage after the learned Attorney-General had concluded his submissions in the background that it was at our invitation he assisted the Court.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-103", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "76. As regards the offer made by Shri Jethmalani, on behalf of the first respondent in the course of his arguments on 29-12-1987, that the first respondent Was prepared to submit himself to a Commission of Inquiry either by the Judge or a panel of sitting Judges of this Court nominated by the Chief Justice, we have already adverted to the objections raised on behalf of the petitioner in this regard. The written memo filed by Shri Jeth malani on the succeeding day, i.e., 10-12-198\"7, in our view, does not accord with the offer he made on the previous day. The. acceptance of the memo inevitably implies the acceptance of the contentions advanced on behalf of the, first respondent, namely, that the writ petition was not maintainable on the ground of its not disclosing valid cause of action, not complying with strict rules of pleadings and absence of material averments, etc. When the very presence of the learned Attorney-General was objected to by Sri Ram Jethmalani, we find it difficult to comprehend how any \"responsible allegations supported by prima facie evidence, selected by the Attorney- General could become the subject matter of \"judicial investigation by any Judge or Judges of this. Court. That apart, ibis Court has no power to order any such judicial investigation by a sitting Judge or Judges. Even if such an investigation is instituted, it is liable to attack as being without jurisdiction ' and unconstitutional. Further, some of the allegations relate to the actions by the State,. The learned Advocate-General appearing for the State Government did not subscribe his concurrence to the appointment of such a Commission. In the 'absence of the memo being signed by the Advocate-General on behalf of the second respondent, such an investigation even if ordered, it is obvious, would be a futile exercise apart from being unconstitutional and not binding on anyone.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-104", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "77. After the bearing was over and the judgment reserved, the learned Advocate- General late in the evening on 31-12-1987 circulated a written memo, wishing \"to place on record what has been narrated therein. It is stated in this memo that Sri Ram Jethmalani appearing for the first respondent completed his arguments at about 3-15 O.M. on 30-12- t987 and dealt mainly with the legal position and on factual aspect of only one allegation regarding allotment of cordless telephone to the Chief Minister's son-in-law and waiver of security deposit, etc., were dealt; and submitted to the Court that the \"remaining allegations referred to and canvassed by the learned Attorney-General who appeared as amicus curiae will be dealt with by 'the Advocate-General as they are all executive .actions of the State Government or the instrumentalities of the State Government\". The Advocate-General complains that after Shri Jethmalani's arguments were completed, he got up to address the Court to meet the contentions of the learned Attorney-General but be discovered to his acute embarrassment that his presence and attempt to draw the attention of the Court were being ignored\"., and in spite of this he requested the Court to \"hear him but the Honourable Court stated that it will see after the arguments of the learned counsel for the petitioner are over and so saying the learned counsel for the petitioner was permitted to commence his arguments.\" The learned counsel for the petitioner completed his arguments around 1 P.M. and thereafter \"without affording opportunity to the Advocate-General, the Honourable Court reserved judgment and rose for the day., in the result, the second respondent had no opportunity to make submissions to meet the arguments of the learned Attorney-General. There was no reason why the Honourable Court could not have beard the Advocate-General after 1 P.M. on 31-12-1987 or on the next working day.'", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-105", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "78. We take serious exception to this memo, filed by the Advocate-General. When the petitioner's counsel Sri Ramachandra Rao, started arguing the matter after preliminary narration of the facts, Shri Ram Jethmalani sought permission to raise certain preliminary objections regarding maintain- ability of the writ petitions and locus standi of the petitioner. Since Shri Ram Jethmalani sought to raise jurisdictional questions, we permitted to argue. Thereafter, he sought permission to argue on legal questions and after completing the same, he sought leave of the Court to permit him to go away as he had to fulfill a social engagement. Accordingly, he took leave of the Court. Thereafter, the petitioner's counsel argued his case and replied to the questions of locus standi argued by Sri Ram Jethmalani. Then the learned Advocate-.General argued the case on merits, both on questions of law and fact on 21-12- 1987,22-12-1987 and23-12-1987. He readout Extensively the pleading and documents. Thus, a full and fair opportunity was given to the learned Advocate-General to meet the points raised by Shri S. Ramachandra Rao without any restriction of time. Despite the fact that he was heard at is regrettable that he chose to file this memo after the hearing was concluded. We, find it difficult to, discern the reasons. After the learned Attorney-General completed his submission Sri Jethmalani argued at length on 29-12- 1987 and 30-12-1987. The Advocate-General never sought our permission to make any submissions in reply to the arguments advanced by the learned Attorney-General The practice of this Court is that the counsel for the petitioner is permitted to state his case first and thereafter the counsel for the respondent advances arguments and subsequently the counsel for the petitioners permitted to address arguments in reply. 'It is not the practice of this Court to permit further arguments by the", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-106", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "address arguments in reply. 'It is not the practice of this Court to permit further arguments by the counsel for the respondent after the petitioner's counsel concluded his arguments in reply.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-107", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "79. Sri Ramachandra Rao, learned counsel for the petitioner, while summing up his arguments, fervently urged that this Court consistent with its constitutional obligation should direct the first respondent to resign from the office of the Chief Minister in view of the State Government, of which he is the head, having appointed a Commission of Enquiry to enquire into, inter alia, all allegations against public men, including himself (Vide the terms of reference in G.O. Ms. No. 578, General. Administration (SCE) Department dated November 28, 1987. According to the learned counsel, constitutional conventions in public law have taken firm roots in India and this found judied expression in State of Karnataka v. Union of India, . It is true that the Supreme Court observed: \n \"it is inconceivable that a Commission d Inquiry will be appointed by a State Government without the concurrence of the Chief Minister and if the political climate is so hostile that he is obliged to submit to an inquiry into his own conduct, he will quit rather than concur. Indeed, a Council of Ministers which considers that the conduct of its Chief Minister and some of the Ministers requires examination in a public inquiry shall have forfeited the confidence of the legislature and would ordinarily have to tender its resignation.\"  \nConstitutional conventions are not, however, enforceable rights. The-observations of the highest Court of this country are self-evident self-explanatory needing no further elucidation. \n80. Sri K. Jagannatha Rao, the learned Standing Counsel for the Central Government, wanted to argue with particular reference to Section 3 of the Commission of Inquiry Act, 1952. However, we did not call upon him to argue, inasmuch as the submissions made by the other learned counsel had fully covered the ground.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-108", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "81. The relief sought in W.P. No. 1280-5 of 1987 is the issue of a writ of mandamus directing the Central Government to take steps for penal action in proceedings in respect of the alleged violations of the provisions of the Income-tax Act, the Wealth-tax Act and the Foreign Exchange Regulation Act on the part of the 1st respondent. So far as the allegations based on the disclosure of income and wealth in respect of the 1st respondent and his family is concerned, we find no reason for giving any direction as prayed for in view of the fact that on the petitioner's own showing no penal action is warranted against the 1st respondent in terms of the provisions of Section 11 of the Voluntary Disclosure of Income and Wealth Act, 1975. The relevance, if any, of that fact has faded into insignificance after the dismissal of W.P. No. 12425 of 1987 for the issue of writ of quo warranto. inasmuch as the contention with respect to that was that the 1st respondent had forfeited his moral right to continue in office as he could not have enforced the tax laws and taken action against those who defaulted or delayed payment of tax. If there are any actions to be taken under the Wealth-tax Act or the Income-tax Act with reference to the proceedings which are new pending; it is a matter for the appropriate authorities to take action in accordance with law. We are also of the opinion that there is no justification for our issuing any direction to the Central Government for action under the F.E.R.A. From the counter-affidavit filed by the Reserve Bank of India, it is noticed that the matter is being investigated and we have no reason to believe that at the appropriate time action, if any, warranted under the provisions of the Act would not he taken by the concerned authority. In this view, we dismiss the writ petition, however, without any order as to costs.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-109", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "82. What survives is W.P.No. 12426 of 1987. In the light of the foregoing discussion. we hold that the writ petitioner has locus standi to maintain the writ petition. \n83. Although the prayer in the writ petition is for the issue of a writ of mandamus directing the Central Government to appoint a Commission under Section 3 of the Commission of Inquiry Act. 1952, to enquire into the misdeeds, corruption and abuse of authority by the 1st respondent, we are of the opinion that we would not be justified in granting the relief in the form in which the prayer is couched. At the same time, having given our careful and anxious thoughts to every aspect of the matter in order to enable the Court to mould the relief appropriately to meet the ends of justice as requested by the learned counsel for the petitioner and in the light of the submission made by the learned Attorney General we record our prima facie findings with respect to the allegations discussed herein before and issue orders as hereunder. We have chosen to adopt this course in view of the fact that the persons who are likely to he affected by final orders. it any passed by us. are not before us and the principle of Natural Justice - audi alteram partern - obligates that they should be put on notice. \n(a)In the matter of establishment of Telephone Instruments Project by Sri Naren Rajan (the 3rd son-in-law of the 1st respondent), the 1st respondent has abused his official position. \n(b)The 1st respondent has abused his official position with respect to the Kamakrishna Cine Studios in -the matter of change of use of the studio's lands, reduction Of the value of the land from Rs.40/- to Rs.15/- per square yard and reduction of compounding fee from Rs.20,000/- to Rs. 1,000/-;", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-110", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "(c)Failure on the part of the 1st respondent to take action to withdraw the exemption and resume the Nacharam lands after the Ramkrishna Cine Studios ceased to be a cine studio amounts to abuse of his official position in order to favour the members of his family; \n(d)The 1st respondent has abused his Official position in granting exemption from payment of entertainment tax in respect of the Ramakrishna 70 mm and 35 mm theatres, which are owned by the members of his family-. \n(e)In regard to the setting up of M/s. L Avenir Steels Privated Limited, Medak district the 1st respondent has abused his official position,", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-111", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "(f)The action of the -State Government in regard to the grant of whole\" . le exemption of 2,29,944 square metres (roughly equivalent to 54 acres) in ]3havanipuram, Vijayawada Urban Agglomeration under Section 20(1) of the Urban Land (Ceiling and Regulation) Act, 1976 in favour of the Vijayawada Hardware & Iron Merchants Association is arbitrary, illegal and opposed to the Directive Principles contained in Article 39(b) and (c) of the Constitution and the Provisions of Section 23(4) of the Urban Land (Ceiling and Regulation) Act; \n(g)The permission granted by the Government in Govt. Memo. No. 16854/ Mktg.11/1/83-4dated 4-1-1986 permitting the Agricultural Market Committee, Hyderabad to Purchase from H.U.D.A. an extent of 22 acres of land at a cost of Rs.3.5 crores is arbitrary, illegal and contrary to the relevant provisions of the A.P.(Agricultural Produce and Livestock) Markets Act 16 of 1966. \n84. We direct the Petitioner to implead within four weeks from today all the persons who are likely to be affected by the final orders to be passed in these proceedings. The Registrar (Judicial) will obtain the orders Of the Chief Justice, for posting of the impleading petitiom soon after they are filed.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "36741ea33019-112", "Titles": "Dhronamrajti Satyanarayana vs N.T. Rama Rao And Ors. on 2 January, 1988", "text": "85. The task before us was both difficult and delicate in view of the sensitive issues involved. We place on record our warm appreciation for the benefit we derived from the able arguments advanced by Sri S. Ramachandra Rao, the learned counsel for the petitioner, Sri Ram Jeth Malani, the learned counsel for the 1st respondent, and the learned Advocate-General who appeared on behalf of the 2nd respondent, the State Government. Unmindful of personal inconveniences and-denying to himself a good part of his vacation, Sri K. Parasaran, Attorney-General of India, rendered as amicus curiae invaluable service to us by his masterly and erudite exposition of law on the expanding contours of public interest litigation. To him we pay our tribute and express our profound sense of gratitude. Sri Gopala Subrahmanyan, the able associate of the learned Attorney-General, deserves our special encomiums. \n86. The learned Advocate-General immediately after the judgment and orders were pronounced made an oral request for leave to appeal to the Supreme Court. So far s W.P.No. 12805 of 1981 is concerned, we have dismissed it. So far as the orders in W.P. No. 12426 of 1987 are concerned, we have not passed any final orders. Accordingly, the question of granting leave does not arise. \n87. Order accordingly.", "source": "https://indiankanoon.org/doc/324253/"}
+{"id": "993b22801413-0", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "JUDGMENT Chandra Reddy, C.J. \n 1. The principal question raised in all these petitions relate to the constitutionality of the Gift Tax Act (hereinafter referred to as the Act) in so far as it seeks to levy tax on gifts of agricultural land. \n\n 2. The Act was passed by the Parliament in the beginning of 1958 and received the assent of the President on 15-5-1958. The report of the Indian Taxation Enquiry Commission, 1953-54 to the Government of India considered the introduction of gift tax in India. The commission remarked that a gift tax though appeared in theory to be an attractive proposition, required considerable experience of the opinion of Estate duty before it could be introduced in this country. A year or two later Prof. Kalder, Reader in Economics. University of Cambridge was invited by the Government of India to examine this question and he made his report to the Union Government in March 1956. \n\nHis proposal was that a single integrated tax should he imposed on sifts of all kinds (including under this term accession to property through be-quest and inheritance), which should replace the present estate duty as well as to bring into charge other gratuitous transfers of property which are not now taxable. The suggestion of Prof. Kaldor to abolish estate duty with the introduction of gift tax was evidently not accepted and today THe Estate Duty Act and the Gift Tax Act exist side by side.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-1", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "The gift tax is a well known system of tax obtaining in several countries of the world such as the United States of America, Canada, Australia, Netherlands and New Zealand, Generally the purpose of the Gift Tax Act is to prevent the avoidance of estate duty and income-tax by reaching transactions which would otherwise escape taxation. In order to evade estate duty or tax on higher incomes, the tendency of the people will be to make gifts inter vivos and thereby split up large fortunes which will result in the diminution of sur taxes etc. The gift tax has been resorted to as a safeguard against these things. \n\n 3. The charging section in the Act is Section      3. That authorises a levy of a tax on all gifts made by a person during the previous year at the rate or rates specified to the schedule annexed to the Act. 'Gift' is defined in Section      2 (xii) as\n  \"the transfer by one person to another of any existing movable or Immovable property made voluntarily and without consideration in money or moneys worth, and includes the transfer of any property deemed to be a gift under Section      4. \n \n\n \"Taxable gifts\" are defined as \"gifts chargeable to Gift Tax under the Act.\" We will refer to the definition of 'previous year' in the appropriate context. The Act exempts certain gifts under Section 5. The Act also gives power to Gift Tax Officers to call upon donors to file return of gifts for the relevant year. It has set up a machinery for the enforcement of the provisions of the Act. Section 46 of the Act has conferred rule-making power upon the Central Board of Revenue for carrying out the purposes of this Act Pursuant to this, rules were framed by the said Board. Standard rates were also prescribed in the schedule appearing at the end of the Act and forming an integral part of the Act", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-2", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "4. The validity of the Act in so far as it affects agricultural land is attacked on the Ground that it was beyond the competence of Parliament to make laws concerning agriculturul land. The contention pressed upon us is that the power to make laws with respect to any of the matters enumerated in List II is exclusively vested in State Legislatures and consequently it is not competent for the Parliament to legislate on any subject within the domain of State legislatures. \n\nIt is urged that entry 18 of list II mentions \"land, that if to say, rights in or over land, land tenures including the relation of landlord and tenant and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization\", that on the topic of and committed to the sphere of the State legislature, the power of the legislature is plenary and therefore the Indian Parliament is not empowered to pass an enactment imposing tax in respect of land. \n\nThe argument is elaborated thus. The expression 'land' is used in a generic sense and the words that follow \"that is to say etc.\" introduce a general con- cept and the following clauses 'rights in or over land etc.' are added only by way of explanation or illustration and do not introduce any limitation on the subjects included in the item. It should not he understood in a narrow nr limited sense but should be interpreted as expending to all ancillary or subsidiary matters which can reasonably be said to be comprehended in it.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-3", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "5. The learned counsel has drawn our attention to The United Provinces v. Atiqa Begum, 1941-1 Mad LJ Sup 65 at pp. 77 and 78: (AIR 1941 FO 16 at p. 25). The passage called in aid on behalf of the petitioners occurs at page 77 (of Mad LJ): (at page 25 of AIR):\n\"The subjects 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 such of them by a word of broad and general import. In the case of some of these categories, such as 'Local Government', 'Education'. 'Water', Agriculture and land, the general word is amplified and explained by a number of examples or illustrations, some of which would probably on any construction have been held to fall under the more general word, while the inclusion of others might not be so obvious.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-4", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "Thus \"Courts of Wards\" and \"treasure trove\" might not ordinarily have been regarded as included under \"Land\", if they had not been specifically mentioned in item 21. I think however that none of the items in the lists is to be read in a narrow or restricted sense and that such 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.\" \n 6. This dictum has been adopted by the Supreme Court in a number of rulings: See Atma Ram v. State of Punjab, . No exception could be taken to the proposition as such. It is now well-settled that topics of legislation contained in the legislative lists ought to be understood in a broad and general sense and should not be interpreted in a narrow or pedantic sense. It is also indisputable that the power to legislate on general subjects ex-tends to all ancillary matters which can be said to be fairly included in that power. \n\n 7. Does it mean that this extends to taxing measures; in other words, does the authority to make legislation on general subject involve the authority to make taxing laws? Is a power to enact a law for the imposition of taxes incidental or ancillary to the power to legislate on general topics? In our considered opinion, the two powers are distinct and there is no indication either in the main body of the Constitution or in any of the legislative lists that taxation is comprehended in the main subject. The Constitution has enumerated the subjects committed to the sphere of the respective legislatures, List I with reference to the topics falling under the appointed field of the Union List II with reference to those of the States and List III contains matters in regard to which both the Parliament and the State legislatures have concurrent jurisdiction.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-5", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "At the same time lists I and II, which alone confer jurisdiction on the legislatures to undertake taxing legislations, have divided the powers into two groups, namely, those relating to the main subjects of legislation and those bearing on taxation. A scrutiny of list I reveals that entries 1 to 81 mention the various subjects over which the Parliament has power to make laws while items 82 to 92 set out the taxes, which could be levied by the laws of Parliament; for instance item 30 of list I is carriage of passengers and goods by railway, sea or air or by national waterways in mechanically propelled vessels, while entry 89 empowers Parliament to make laws levying terminal taxes on goods or passengers, carried by railway, sea or air. \n\nThis entry also includes taxes on railway fares and freights while entry 22 is railways. If really entries 22 and 30 imply a power to tax in regard to those topics, item 89 is redundant and serves no useful purpose, A comparison of items 41 and 83 leads to the same result. A careful analysis of the entries or that list establishes that the Constitution has treated the two powers separately fur purposes of legislative competence.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-6", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "8. Similarly, in list II items 1 to 44 constitute one group containing topics on which the state could make laws, while entries 45 to 63 deal with taxes. The intent of the Constituent Assembly in this behalf could also be gathered from Article 248 (1) and (2) and entry 97 of list I. Thus, the distinction between the two sets of entries is a well-marked one and has been brought out lucidly, if we may say so with respect, by the Supreme Court in Sundararamier and Co. v. State of Andhra Pradesh, . A reference may also be made in this context to S. and V. Firm v. Fast Godavari Coconut and Tobacco Market Committee, . \n\n 9. Alternatively, it was argued that entry 18 read with entry 49 discloses the intendment of the Constitution to authorise the State legislatures to legislate on all subjects in regard to lands including the imposition of taxes. Item 18 mentions also trans- fer of agricultural lands and entry 49 speaks of taxes on lands and buildings. A combined operation of the two entries brings taxes on transfer of agricultural lands within the jurisdiction of State Legislatures. Each of the entries in the two lists should receive the widest possible construction and should be interpreted as extending to every form of legislation on that subject and report to the residual powers contained in entry 97 of the Union list should he had only as a last refuge, continued the learned counsel.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-7", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "10. We are unable to accede to this view. In this context we cannot ignore the facts that while the first part of the entry refers to land in general terms, the next two clauses specifically refer to only agricultural lands and have to be read with item 6 of list III. They both deal with the method of transfer or alienation of agricultural land but do not concern land itself. The alienation or transfer of agricultural land is subject to State legislation while lands other than agricultural lands lies within the sphere in which the provincial and the federal powers are concurrent. \n\nThus, transfer and alienation of lands are distri-buted in Lists II and III assigning agricultural lands to List II and non-agricultural lands to list III. It is true 'Land' is a generic term and the words that follow i.e., up to 'collection of rent' are explanatory and illustrative. But the next clause deals with a different topic. Though it is an allied subject, it to not comprised in 'land'. If the word land' was intended to include transfer or alienation of agricultural land etc. the latter becomes redundant as that expression would have served the purpose. \n\nFurther, transfer or alienation would not have been confined to agricultural lands. Again, item 6 of list III would conflict with item 18 if that interpretation were to be accented. That being so, we find it difficult to import transfer and alienation of agricultural land into 'lands' in entry 49. The latter item concerns itself with an altogether different head of legislation, that is, tax on the ownership of property.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-8", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "The object of this item is the levy of a tax on the ownership of property as such, while gift tax is a tax on a particular use of the property or the exercise of a single power subsidiary to ownership. The owner of a property may put it to several uses. A gift Inter vivos is one of the several rights a person may have in a property. This form of tax attaches itself to a transfer of property, while the tax envisaged in entry 49 is incidental to the ownership irrespective of any use to which it may be put.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-9", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "11. There is authority for this opinion of ours in Bromley v. McCaughn, (1929) 74 Law Ed 226: 280 US 124. There, the question was whether a Federal tax imposed upon transfers by gift violated constitutional provisions requiring the apportionment of direct taxes & uniformity in duties, imposts and excises throughout the United States & prohibited the taking of property without due process. This was answered in the negative by the Supreme Court of the United States of America in the view that it was not a tax upon property but it was a tax imposed on the exercise of a single one of the powers incidental to ownership, the power to give the property owned to another. In repelling the contention that such a tax was upon the essential right inherent in the property and, therefore, a direct tax, Stone J., who delivered the opinion of the Court observed:\n \"It is true that in each of these cases the tax was imposed upon the exercise of one of the numerous rights of property, but each is clearly distinguishable from a tax which falls upon the owner merely because he is the owner, regardless of the use or disposition made of his property.\" \n 12. We may also cite another decision of the Supreme Court of the United States in Graniteville Manufacturing Co. v. Query, (1931) 75 Law Ed 1126: 283 US 376, It was laid down that a stamp duty is a duty with respect to the creation of an instrument and as such is an excise tax and not a tax on property.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-10", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "13. That being the position, the pronouncement of the Federal Court in Manikkasundara v. R. S. Nayudu, AIR 1947 FC 1, that the expression 'charity' in entry 34 of list II of Schedule VII to the Government of India Act was a term of wide significance taking in charitable institutions and charitable endowments or that of the Supreme Court in Navin-chandra Mafatlal v. Commr. of Income-tax, Bombay, (S) , that tax on income in entry 54 of list I embraces within its scope tax on capital gains do not carry the petitioners very far. These pronouncements only illustrate the principle that the entries in the legislative lists are heads of legislative power and should be construed liberally and should not be read in a restricted or pedantic sense and that the widest possible construction should be put upon them.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-11", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "14. Nor does the decision in Labors Municipality v. Daulat Ram, AIR 1942 FC 14, assist the parties. One of the points that arose for consideration there was whether the statute of a Provincial Legislature permitting the levy of octroi duty on salt was ultra vires the provincial legislature. It was ruled by the Federal Court that the salt being within the exclusive jurisdiction of the Central legislature, it is only this authority that could legislate either on the general subject or on any aspect nf the taxation, that that power is not confined to imposing duties or taxes derivable under entries Nos. 44 and 45 of list I and that entry 49 in list II of schedule VII to the Government of India Act empowers provincial legislatures to make laws imposing cesses on goods other than salt. In understanding the ruling we have to bear in mind Section 140 of the Government of India Act which says:\n \"Duties on salt, Federal duties of excise and export duties, shall be levied and collected by the Federation, but, if an Act of the Federal legislature so provides, there shall be paid out of the revenues of the Federation to the provinces and to the Federated States, if any, to which the Act imposing the duty extends, sums equivalent to the whole or any part of the net proceeds of that duty and those sums shall be distributed among the Provinces and those States in accordance with such principles of distribution as may be formulated by the Act\"", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-12", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "It was because of the expressions mentioned in the Section, namely, 'duties on salt' and 'federal dutias of excise and export duties' that their Lordships thought that duties on salt were regarded as a category by themselves not comprised under the heading excise and export duties'. They also took into acr count the fact that unlike other goods, which may form the subject-matter of excise and export duties, salt was in a sense State monopoly and its manufacture, transport and sale were subject to State control.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-13", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "We do not think that their Lordships intended to lay down a broad principle that 'salt' included taxes on salt. Thus, gift tax is easily distinguishable from a tax on persons because of the ownership of property and not because Of a particular use of the property. A perusal o entries 46 to 49 of list II would clearly establish that the power of taxation committed to State legislatures was confined to taxation in regard to particular aspects of agricultural lands,\n \n\n 15. Coming to the argument bearing on the applicability of residuary article, which is relied upon by the Government in support of the offending statute, we agree that before it is called in aid, all the categories involved in the three lists should be absolutely exhausted. But, in order to avoid falling back upon the residual powers, the Court will not be justified in straining the language of any of the entries. It is a cardinal principle of interpretation of statutes that the words of a statute should be read in their natural and grammatical meaning. \n\nWhen considering the scope or amplitude of the different entries in the respective lists, the scope and amplitude of one may have to be curtailed or enlarged to give effect to other entries arid to avoid repugnancy, conflict or overlapping. See (S) . Each entry has to be understood with reference to another so that none of the entries may be so read as to make any of them meaningless or nugatory.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-14", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "16. In this regard, we have to bear in mind also some of the fundamental principles that govern the construction of statutes. There is always a presumption in favour of the constitutionality of an enactment and the onus is upon the person who challenges it to establish that there has been infringement of the constitutional principles. In order to sustain the presumption of constitutionality, the Court may take into consideration '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 the legislation. See Ramkrishna Dalmia v. S. R. Tendolkar, . \n\n 17. We may here mention that entry 97 embodies the same concept as that underlying Article 248, which recites that Parliament has exclusive power to make any law with respect to any matter not enumerated in the concurrent list or State list and that such power shall include the power of making any law imposing a tax not mentioned in either of those lists, It is plain that the Constitution makers were anxious to invest Parliament with exclusive power with regard to any subject which was not within the intend-ment of any of the lists. \n\nThe argument of the counsel for the petitioner that at the time when the Constitution was framed, gift tax would not have been within the contemplation of the Constitution makers is devoid of force. It is precisely to cover cases, which were not within the contemplation of the Constituent Assembly, that this provision, was conceived to enable Parliament to meet any contingency that might arise in future.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-15", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "18. We cannot also give effect to the argument that gift tax would come within the purview of entry 47 of list II. It was contended that the words succession to agricultural land in that entry would take in a gift of agricultural land because succession to property may be either by inheritance or by transfer inter vivos. This argument is sought to be sustained on Santhamma v. Neelamma, (S) AIR 1956 Mad 642. In that case, the validity of certain provisions of the Madras Aliyasanthana Act, 1949, was challenged on the ground of lack of legislative competence of the Madras Legislative Assembly. \n\nThe objection was that the provision, which permitted the partition of Kutumba property, was not mentioned in entry 7 of the Concurrent list of the VIIth schedule to the Government of India Act. The learned Judges thought that the constitutionality of the enactment could be upheld both on the ground that the expression 'inheritance' or 'succession' was not confined to cases of devolution in the strict sense of a passing of interest in the property from the dead to the living but it also extended to the adjustment of the rights and obligations that subsisted between the parties governed by Hindu Law, coming within the purview of entry 7 of the Concurrent list and also for the reason that partition amounted to a transfer within the meaning of entry 8. \n\nThe conclusion as to the meaning of the words 'inheritance' and 'succession' was based upon the legislative practice bearing on the Hindu Law of partition. We are not here called upon to decide whether those words in that context could bear the meaning given to them but if it was meant to lay down as a general rule that the words 'inheritance' and 'succession' always include transfers inter vivos we express our respectful dissent.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-16", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "19. Such an extended meaning is opposed to the connotation of the two expressions as also to the dictum laid down by the Federal Court in. In re Ref. Under Section 213 of Government of India Act, 1935, AIR 1944 FC 73. Chief Justice Spens observed that, even assuming that the word 'succession' is capable of wide significance, it was not capable of comprehending every kind of passing of property and that the expression succession of property was to be read in the light of other indications derivable from the lists in the VII schedule. \n\nHis Lordship pointed out that the ordinary meaning of succession is transmission by law or by the will of man to one or more persons of the property and the transmissible rights and obligations of a deceased person and that is the sense in which succession is used in the lists in schedule VII as indicated by the collocation of the words 'wills', 'intestacy' and 'succession' in entry 7 of list III.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-17", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "20. We are also unable to agree that the opinion of the Federal Court on the special reference In the matter of Hindu Women's Rights to Property Act, 1937 AIR 1941 FC 72 is helpful to the petitioners. The passage, which is relied upon is contained at page 78 :\n \"It is equally important to remember that neither in their ordinary grammatical significance nor by a lone continued use in a technical sense have the words 'devolution' and 'succession' acquired a connotation that would preclude their application to describe the operation of the rule of survivorship as above exnlained. Eminent text writers and Judges have used one or the other of these terms to include the accession of right which takes place on the death of one of the members of a Mitakshara joint family. Many enactments of Parliament and of the Indian, Legislature have used the words 'inheritance', and 'succession' in juxtaposition, justifying the inference that succession is either another category from or a wider category than 'inheritance'.\"", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-18", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "21. It appears from these remarks that it is only when accession of right takes place on the death of a person the expression 'devolution' or 'succession' would be appropriate. These words imply the passing of property to another on the death of a person and can have no application to transfers inter vivos. Thus, this dictum is in consonance with that of the Federal Court in AIR 1944 FC 73. It is also significant that the expression 'devolution' which finds a place in entry 21 of list II of the VIIth Sch. to the Government of India Act is omitted in entry 18. For these reasons, we hold that gifts do not fall within the import of entry 47. In considering whether the impugned legislation falls within one entry or other, we have to examine the pith and substance and see whether that pith and substance falls substantially within one entry or other conferring legislative power.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-19", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "22. Lastly, an attempt was made to bring tax on gift of agricultural lands under entry 63. It is argued that gift tax, which is a tax on transfer of lands, comes within the import of stamp duty in respect of documents. We cannot subscribe to this proposition. Entry 63 gives power to make a law in respect of rates of stamp duty on document? excluding those mentioned in entry 91 of list I. This entry does not limit the power of the State Legislature to documents relating to agricultural lands. It extends to all documents conveying immoveable property. \n\nThe occasion for levy of the duty is the execution of a document and is unconnected with the actual transfer of property, whereas the impugned statute seeks to impose a tax on the transfer of both moveable and immoveable properties whether by means of an instrument or not. While the one is confined to the creation of documents, the other is upon the exercise of one of the rights of ownership, namely, the transfer of property. This distinction is brought out by the Supreme Court of the United States of America in (1931) 75 Law Ed 1126 : 283 U. S. 376. Therefore, this contention also is unsubstantial and has to be rejected.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-20", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "23. The argument of the counsel for one of the petitioners that it was incompetent for the Indian Parliament to enact the statute now questioned because the field is occupied by the Madras Village Panchayats Act does not merit much of consideration. The submission made is that Section 63 of the Village Panchayats Act has empowered village panchayats to levy tax on transfers of properties and, therefore, that has deprived the Indian Parliament of authority to legislate, providing for the imposition of taxes on transfers of agricultural land. The question of occupied field is absolutely irrelevant in the context of the present enquiry since we arc concerned here with lists I and II and not with the Concurrent List", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-21", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "24. Further, we have to judge the vires of the Act with reference to the applicability of the entries in the respective lists. If it does not fall within the ambit of the State list it would be saved by the residuary entry and its validity would be unaffected notwithstanding that a State legislative measure contains a similar provision. If, on the other hand, it comes within the purview of any of the entries in list II, it would not be protected by entry 97 irres-pective of the non-existence of a State enactment for a similar purpose. Quite apart from that, Section 63 does not touch upon tax on gift of property. Sub-section (2) which is relevant, merely says that a duty shall also be levied in every village on certain transfers of property in accordance with the provisions of Section 67. Section 87 runs as follows:\n\"1. The duty on transfers of property shall be levied--\n(a) in the form of a surcharge on the duty imposed by the Indian Stamp Act, 1899, as in force for the time being in the State of Madras, on every instrument of the description specified below which relates to immoveable property situated in the area under the jurisdiction of a panthayat; and\n \n\n(b) at such rate as may be fixed by the Government, not exceeding five per centum on the amount specified below against such instrument.\"   \n\n..... it is plain that the right given to village pan-chayats is to collect additional stamp duty and not any portion of the tax on gifts of other kinds of transfer of property\n \n\n 25. We are not impressed with the argument that the tax is leviable only on transfers effected after the coming into force of the Act. This construction is contrary to the very terms of Section      46 which contemplates the imposition of a tax on all transactions made in the previous year.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-22", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "'Previous year' is defined in Section      2 (xx) thus :\n   \n\n\"Previous year\" in relation to any assessment year --\n   \n\n(a) in the case of an assessee having a source of income profits or gains in respect of which there is no previous year under the Income-tax Act, means the twelve months ending on the 31st day of March Immediately preceding the assessment year:\n \n\n(b) in the case of an assessee having different sources of income profits or gains, means that pre-previous years under the Income-tax Act for different vious year of 12 months determined as the previous year under Sub-clause (a) of Clause (ii) of Section 2 of the Income-tax Act or such period determined as the previous year under Sub-clause (b) of Clause (ii) of that Section whichever expired last :\n(c) in the case of any other assessee means the previous year as defined in Clause (ii) Section      2 of the Income-tax Act if an assessment were to be made under that Act for that year.\"  \n \n\nThus, the applicability of the Act is extended to all gifts made during the period prescribed in Section      2(xi) of the Act. It is, therefore, futile to contend that the Act comes into operation only with reference to gifts made after March 1958.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-23", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "26. It was next urged by Sri Balaparameswara Rao for one of the petitioners that courts will not countenance retrospective operation of enactments which affect vested interests. But this is an argument of desperation because it is not for the Courts) to pronounce upon the legislative policy. Surely it is open to the legislature to say whether an enactment is prospective or retrospective. It is never stale to say that a Court is concerned with the bounds of legal power and not with the bounds of wisdom in its exercise by the legislature. Hence, this submission is wholly untenable. On this discussion, it follows that the Gift Tax Act is not open to challenge on any ground and is intra vires even in so far as it affected transfer of agricultural land. \n\n 27. There remains the question whether it is permissible for the Gift Tax Officer to aggregate all the gifts made by an assessee during a relevant year for the purpose of assessment. The point sought to be made was that each individual gift should form the basis of assessment and that the value of all the gifts made by an assessee could not be added so as to increase the rate of levy specified in the schedule in the absence of any provision authorising the aggregation of the gifts made on different dates during the whole year.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-24", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "It is submitted that whenever the Parliament intended that such an aggregation should take place, it employed language conferring specifically such a power and as supporting it our attention is drawn to Section 4(1) of the Indian Income-tax Act and Section 34 of the Estate Duty Act. It is further submitted that, if aggregation should be resorted to for determining the rates, it would lead to anomalies and hardships in that even a donee of a gift of a small value has to bear the tax irrespective of whether at the time such gift was made the aggregate value of the Rifts exceed the particular limits indicated in the schedule when resort is to be had to the donee for purposes of collection. \n\n 28. We are not inclined to accept this argument. This argument is inconsistent with the scheme of the Act. The charging section itself contemplates the aggregation of the gifts made during a particular year. This notion is communicated by each one of the relevant sections. Section 5 talks of a tax to be charged in respect of gifts made. That section exempts gifts if the totality of them do not exceed the taxable limit of Rs. 10,000. Similarly, Section 13 refers to a return of all the taxable gifts. Section 15 refers to the value of the taxable gifts. \n\nAgain, Section 22, which confers a right of appeal, adverts to taxable gifts. There can be little doubt, on a study of the various sections of the Act, that in computing the rates of tax the totality of the gifts made hy an individual in the course of the relevant year should be taken into account. This idea is also emphasised in the schedule which lays stress on the value of all taxable gifts for the purpose of fixing the rates of tax. That schedule specifically indicates that each of the slabs has to be calculated on the basis of all the taxable gifts.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-25", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "Therefore, the absence of the use of the word 'aggregation' or 'aggregate' does not in any way derogate from the power of the department to include all transactions occurring within one year. The expressions employed in the material provisions of the Act as also in the schedule convey the idea of aggregation. The Act throughout proceeds on the assumption that it is the totality of the gifts that determine the rate. There is no scope for the contention that each gift by itself should form the basis of assessment. It is the total value of the gifts and during a relevant year that should enter the calculation of the percentage of tax.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-26", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "29. The hardship or the anomalies complained of also do not exist. Section 29 of the Act empowers the Revenue to collect the tax from the donee where it could not be collected from the donor. In such a case, the amount of tax to be recovered from the donee depends upon the value of the gift and the date of the gift. This is what the proviso to the section says :\n \"Provided that the amount of the tax which may be recovered from the donee shall not exceed that portion of the gift tax which is attributable to the value of the gift made to the donee by the donor as at the date of the gift.\" \nIt appears from the section that where the tax is to be paid by the donee, it is to be paid on the taxable value of the gift as on the date on which the gift is made. To illustrate: if the total value of all the gifts does not exceed Rs. 10,000 at a given time the donee will get the advantage of Section 5. But if the gift is made after that limit is exceeded but falls within Rs. 50,000 which forms the first slab, the gifts made during that period would be subject to a tax of 4 per cent and so on and so forth. Consequently, even this grievance is unfounded. In our considered judgment, it is within the power of the department to add all the gifts made by a person in the course of a year for the purpose of assessment and more they are bound to do it, as otherwise they would be violating tile mandatory provisions of the Act. This point also fails and is negatived.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "993b22801413-27", "Titles": "Jupudi Sesharatnam And Ors. vs The Gift Tax Officer, Palacole, ... on 15 September, 1959", "text": "30. In W.P. No. 458 of 1959, it is argued that neither of the two gifts is subject to gift tax for the reason that one is not a transfer but only a partition of the family properties and the other does not exceed the limit imposed by Section 5 (2), being a gift in favour of the wife of the petitioner. If so, it is open to the petitioner to raise this point before the authorities concerned. \n\n 31. In W.P. No. 459 of 1959, the complaint is that the authorities concerned have arbitrarily fixed the value of the gift. This is also a matter to be considered by the department\n \n\n 32. Any question which is foreign to this enquiry can be gone into by the Revenue. \n\n 33. In the result, all the petitions are dismissed with costs. Advocate's fee Rs. 75/- in each.", "source": "https://indiankanoon.org/doc/1593853/"}
+{"id": "566e2e368895-0", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "JUDGMENT Samasiva Rao, J. \n 1. In the three writ petitions a common question of some legal complexity arises. This complexity is deepened by seemingly different views expressed by learned Judges of this Court and some other High Courts. That was why our learned brother Jeeevan Reddy. J. referred W. P. No. 4527 of 1975 to a Division Bench and our learned brother Madhava Reddy, J. did the same with W. P. No. 3238 of 1976. In the other writ petition the same question arises.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-1", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "2. In all the three petitions the alienations of lands have been set aside by the Special Deputy Collector under the Andhra Pradesh Scheduled Areas Land Transfer Regulation of 1959 (hereinafter referred to as \"the Regulation\"). The lands are situated in Scheduled Areas. The Regulation as extended to the Telengana Area on and from 1-12-1963. Though the dates differ from case to case, there were contracts of sale in respect of lands in Scheduled areas by tribals in favour of the petitioners, who are not tribals, before 1-12-1963. Some amounts were paid under the contracts of sale and possession also was delivered to the petitioners when the contracts were executed. However, sanction of the appropriate authority was not obtained, under S. 47 of the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act, 1950 ( hereinafter referred to as the 'Hyderabad Tenancy Act\") which was on the statute book at that time. After the regulation of 1959 was extended to the Telangana Area on 1-12-1963 regular sale deeds were taken by the petitioners from their tribal vendors. No attempt was made to secure validation of the alienations under S. 50 -B of the Hyderabad Tenancy Act. The vendors challenged the validity of these sales under the provisions of the Regulation of 1959 and the Special Deputy Collector upheld the objection and held that the alienations were invalid in view of S. 3 of the Regulation and consequently directed that the lands be placed back in the possession of the vendors. In some of the cases appeals were preferred under S. 3 (a) (iii) of the Regulation of the Agency Divisional Officer but they were filed before the State Government. The petitioners came to this Court with these writ petitions for quashing the order of the Special Deputy Collector. These facts are undisputed.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-2", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "3. The Special Deputy Collector held that the transfers of the lands, which are in the Scheduled Areas, by vendors, who are members of the Scheduled Tribes, to the petitioners, who are non-tribals, were null and void in view of the provisions of S. 3 of the Regulation which were extended to the Telangana Area on 1-12-1963. Exercising his powers under Section 3 (2) (a) he directed that the lands be restored to the transferors since they were willing to take the lands. In fact the transferors initiated the proceedings and actively participated in them. The petitioners challenged the validity of this view of the Special Deputy Collector and of the Appellate Authority wherever it has been rendered, contending that the agreements in their favour were accompanied by simultaneous delivery of possession. Consequently by the time the Regulation came to be applied to the Telangana area in which the lands are situate, their right to be in possession of the lands had come to be safeguarded by the provisions of S. 53- A of the T. P. Act and so, either before 1-12-1963 or thereafter the transferor or any person claiming under him is debarred from enforcing against the petitioners and persons claiming under them any right in respect of the property. They maintained that every requirement of S. 53 -A of the T. P. Act was satisfied in these cases and therefore despite the subsequent application of the Regulation to the Telangana Area on 1-12-1963 they continue to enjoy the protection of S. 53- A.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-3", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "4. Therefore, the crucial question that falls for decision in the writ petitions is whether the petitioners, who had obtained contracts of sale accompanied by delivery of possession without obtaining the sanction under S. 47 of the Hyderabad Tenancy Act and without later securing a validation certificate under Section 50-B, can claim the protection of S. 53 -A of the T. P. Act after the Regulation came to be applied to the areas in which the lands, which they purported to have purchased, are situate. Chinnappa Reddy, J. and Gangadhara Rao, J. took the view that in such cases the safeguard of S. 53- A would not be available to the purchasers while Kuppuswamy , J. held that the protection would continue to be available to the purchasers despite the Regulation. There are other decisions of this Court also in addition to the decisions of the Supreme Court and those of the Mysore and Bombay High Courts which have bearing on this question. Our task now is to resolve this apparent conflict.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-4", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "5. Before we proceed further, it is necessary to have a look at the material provisions of the relevant sections. The Hyderabad Tenancy Act was passed in 1950, one of its objects being to regulate the alienation of agricultural lands. Section 47 as it was originally made (it may be noted here that it was subsequently amended and was later deleted) provided that notwithstanding anything contained in any other law for the time being in force or in any decree or order of a Court, no permanent alienation and no other transfer of agricultural land shall be valid unless it has been made with the previous sanction of the Tahsildar. According to sub-sec (2) applications for the sanction shall be made and disposed of in accordance with the prescribed procedure. Sections 48 and 49 stipulated certain restrictions on the grant of such sanction. The expression \"Permanent alienation\" was defined under S. 2 (o) as including \"any sale, exchange or gift and any transfer of a right of occupancy or of the patta of holding but does not include any disposition by will.\" However, the word \"transfer\" as such was not defined in the Act. It is worthy of note that even transfer of a right of occupancy is included in definition of the expression \"permanent Alienation\" for which also previous sanction of the Tahsildar was required under S. 47.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-5", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "6. By Act 6 of 1964 a new Section viz., Section 50-B was inserted in the Act for the purpose of \"validation of certain alienations and other transfers of agricultural lands\". When it was inserted, Ss. 47 and 48 were retained in the statute book. Section 50-B was only an addition. As it was originally introduced by Act 6 of 1964 it had only three sub-section. By Act 12 of 1969, which was published in the Gazette on the 18th of March, 1969, sub-s. (1) of S. 50-B was substituted and a proviso was added to sub-s. (2). By the same Act 12 of 1969 and with effect from 18th March, 1969 and with effect from 18th March, 1969 Ss. 47, 48, 49, 50 and 50-A of the Act were deleted. When it was originally enacted sub-s. (1) of S. 50 laid down that notwithstanding anything in the Chapter, where any alienation or other transfer of agricultural land took place on or after 10th June, 1950 but before the 21st of Feb., 1961 and where possession of such land was given to the alienee or transferee before the 21st Feb., 1961, he may, within one year from such date as may be prescribed, apply to the Tahsildar for a certificate declaring that such alienation or transfer is valid. The reconstituted sub-s (1) as per Act 12 of 1969 reads: \n \"(1) Notwithstanding anything in this chapter, where any alienation or other transfer of agricultural land took place ----", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-6", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "(a) on or after the 10th June, 1950 but before the date of coming into force of the Andhra Pradesh Ceiling on Agricultural Holdings Act, 1961 and where possession of such land was given to the alienee or transferee before such date of coming into force; and", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-7", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "(b) on or after the coming into force of the Andhra Pradesh Ceiling on Agricultural Holdings Act, 1961, but before the date of the commencement of the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands (Third Amendment) Act. 1969 and where possession of such land was given to the alienee or transferee before such commencement and such alienation or transfer is not inconsistent with the provisions of the Andhra Pradesh Ceiling on Agricultural Holdings Act, 1961;  \n the alienee or transferee may, within such period as may be prescribed, apply to the Tahsildar for a certificate declaring that such alienation or transfer is valid\".  \n Sub-section (2) provided for the procedure which should be adopted on receipt of an application as contemplated by sub-s. (1). It requires the Tahsildar to make such enquiry as may be prescribed and if he was satisfied that the consideration, if any, payable to the alienor or transferor has been paid or has been deposited within such time and in such manner as may be prescribed, he shall require the alienee or the transferee to deposit in the office of the Tahsildar an amount equal to the registration fees and the stamp duty that would have been payable had to alienation or transfer been effected by a registered document in accordance with the provisions of the Indian Registration Act, 1908. The said sub-section proceeds to lay down that on the deposit of such amount, the Tahsildar shall issue a certificate to the alienee or the transferee declaring that the alienation or transfer is valid and such certificate shall, notwithstanding anything in the Indian Registration Act, 1908, be conclusive evidence of such alienation or transfer as against the alienor or transferor or any person claiming interest under him. The proviso to this sub-section added under Act 12 of 1969 reads as follows:", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-8", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "\"Provided that where an alienation or transfer has been effected by a registered document, the Tahsildar shall adjust the amount paid by the alienee or transferee as registration fees and the stamp duty towards the amount required to be deposited under this sub-section; and if the amount so paid by the alienee or transferee is less than the amount required to be deposited by him, the Tahsildar shall require him to deposit the balance.\" Sub-section (3), however, stated that the validation of any alienation or transfer of land under sub-s. (2) shall not affect the right accrued to any person under S. 37-A or S. 38 of S. 38-E. \n 7. It should be noted here that Act 11 of 1965 substituted the words \"within three years from such date as may be prescribed\" for the original words \"within one year from such date as may be prescribed\". Act 12 of 12 of 1969 extended the said period for four years and Act 19 of 1969 for six years. Finally the benefit of validation conferred by S. 50-B ended with 31st of March, 1972. Thereafter there was no possibility of getting the alienations validated.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-9", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "8. From the above narration of the changes in the Hyderabad Tenancy Act in respect of S. 47 and S. 50-B, it is manifest that the two provisions coexisted from 1964 to 1969. In 1969 Section 47 along with certain other provisions was deleted and only S. 50-B was on the statute book. The benefit of validation was extended up to 31st March 1972. The purpose behind these changes is not far to seek. As we have already noticed, one of the purposes of the Hyderabad Tenancy Act is to regulate the alienation of lands. In pursuance of that purpose, Chapter V was made imposing certain restrictions on transfers of agricultural lands. Section 47 was the very first provision in that Chapter. It laid down that no permanent alienation or no other transfer of agricultural land shall be valid unless it has been made with the previous sanction of the Tahsildar. This declaration is very clear and specific. If there is any permanent alienation or transfer of agricultural land without the previous sanction of the Tahsildar , that would be invalid. However, the Legislature obviously took note of the fact that there had been very many permanent alienations or other transfers of agricultural lands which had taken place without the previous sanction of the Tahsildar. In order to obviate the confusion and injustice that might result therefrom, the Legislature introduced S. 50-B in the year 1964 for validation of certain alienations and other transfers of agricultural lands. Till 1969 until S. 47 was deleted both the sections coexisted. The position then was that the prohibition against alienations without previous sanction of the Tahsildar continued and at the same time transferees and 10th June, 1950 but before 21st Feb., 1961 who had also obtained possession, were given an opportunity to get the alienations in their favour validated within", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-10", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "who had also obtained possession, were given an opportunity to get the alienations in their favour validated within one year from the prescribed date. In 1969 S. 47 was altogether omitted; only S. 50 with the changes above mentioned was retained.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-11", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "9. The position which emerged from the amendment of S. 50-B was that alienees of agricultural lands, who had obtained possession between 10th June, 1950 and before the Ceilings Act of 1961 and also after the Ceilings Act of 1961 but before the Hyderabad Tenancy Act (Third Amendment) 1969, were enabled to secure validation of their alienations. It is important to note that the facility of validation would be available only to those transferees who had obtained possession of the land. If all the requirements of S. 50-B are satisfied, the alienee or transferee may apply to the Tahsildar for a certificate declaring that his alienation or transfer was valid. Sub-section (2) prescribed the procedure which should be followed on making of such application. The Tahsildar shall make the necessary enquiry. In the first place, he should satisfy himself that the consideration payable to the alienor has been paid or has been deposited. He should also require the alienee to deposit the registration fee and the stamp duty. If the Tahsildar is satisfied in these respects, then only he shall issue a certificate to the alienee declaring that the alienation or transfer in his favour is valid and such certificate shall be conclusive evidence of the alienation or transfer against the alienor or any person claiming under him. It must necessarily follow from this that if there is no validation certificate, the alienation or transfer, though accompanied by possession, would not be treated as valid. This facility was afforded to the alienees with the obvious intention of giving them an opportunity to get their alienations or transfers validated up to 31st March, 1972 though they were invalid for want of previous sanction by the Thasildar.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-12", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "10. Another aspect which has to be examined at this juncture is as to the nature of the alienation made under a contract of sale accompanied by delivery of possession. It is worthy of note that S. 50-B provided for validation of those alienations and transfers which had taken place between years 1950 and 1969 only which were accompanied by possession. If the alienee had not been given possession, then he could not apply for validation under S. 50-B. The petitioners before us very much emphasise so that fact that the alienations in their favour were not simply based on contracts of sale but were also accompanied by possession and therefore S. 53-A of the T. P. Act would give them protection and any subsequent law made thereafter would not defeat their right to be in possession. That is why we are emphasising this feature of S. 50-B of the Hyderabad Tenancy Act which also made obtaining of possession by the alienee one of the requirements for validation. \n 11. The three transactions which are involved in the writ petitions before us are contracts of sale. Section 54 on the T. P. Act specifically declares that contract of sale does not, of itself, create any interest in or charge on such property. A contract, in pursuance of which possession of the property has been given to the alienee, is not a contract of sale simpliciter and has a higher status, for it creates an interest in the property that is agreed to be sold under the contract. That higher interest is stated in S. 53-A according to which the transferor or any person claiming under him is debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession other than a right expressly provided by the terms of the contract.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-13", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "12. We will now go back to the Hyderabad Tenancy Act. We have already noted that S. 47, which was in force right from 1950 till 1969 and which was in force when the contracts of sale in these three cases were entered into, declared that no permanent alienation and no other transfer of agricultural land shall be unless it has been made with the previous sanction of the Tahsildar. \"Permanent alienation,\" as we have already noted, is defined in S. 2 (o) of the Act within the scope of which expression \"transfer of a right of occupancy\" is included. When a contract of sale is entered into accompanied by possession, it is clearly transfer of a right of occupancy. This conclusion is further reinforced by the provisions of S. 53-A of the T. P. Act. Therefore, the contracts of sale accompanied by possession, which are the subject-matters of the three writ petitions, were \"permanent alienations\" and still admittedly no previous sanction of the Tahsildar had been obtained. From this, it must necessarily follow that the possession given along with the contracts of sale was invalid and unlawful. It is true that the present petitioners obtained possession and continued in it and yet, their possession was only an invalid and unlawful one. Certainly, S. 53-A of the T. P. Act postulates taking possession of the property or continuing in possession of the property in part performance of the contract only in a lawful manner. It cannot be predicated that S. 53-A purports to give protection to those transferees who have taken possession of the property in a manner contrary to the law which was in force and applicable to them. In our view, S. 53-A protects only such possessions which were valid and lawful and does not safeguard possessions which are invalid and unlawful.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-14", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "13. At this juncture we should refer to S. 98 of the Hyderabad Tenancy Act which provides: \n \"Any person unauthorisedly occupying or wrongfully in possession of any land - \n (a) the transfer of which either by the act of parties or by the operation of law is invalid under the provisions of this Act. \n (b)     xx  xx  xx  xx  xx", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-15", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "(c)     xx  xx  xx  xx  xx\n\n \n\n may, if the said provision do not provide for the eviction of such person, be summarily evicted by the Collector.\"  \n\n \n\n Since the possession of the petitioners was wrongful and since the transfer of S. 47, they became liable to be summarily evicted by the Collector.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-16", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "14. We draw support to these conclusions of ours from certain Bench pronouncements of this Court. In Syed Jalal v. Targopal, , Jaganmohan Reddy, C. J. and Parthasarathi, J., held that under S. 47 there can be no bar to the maintainability of a suit for specific performance of an agreement to direct the defendant (seller) to apply for permission under S. 47 and after he obtains it to execute s sale deed. This result would follow whether or not there was a specific term in the agreement that permission would be obtained under S. 47 and that thereafter a sale deed will be executed. Having said this, and with which we are in respectful agreement, the learned Judges proceeded to lay down that what is prohibited and what is invalid according to S. 47 is transfer or alienation of legal right of interest which confers a right to possession of agricultural land if its is without the permission of the Tahsildar Agreement to enter into transactions to confer such a right, title and interest, if the provision of law are complied with, namely, after obtaining the permission of the Tahsildar are not prohibited. Nor do they by themselves confer a right to possession so that if any possession is delivered in pursuance thereto, it cannot be said that that possession has been delivered in conformity with the statute or in a manner that would be according recognition thereunder. A contract of sale followed by possession, by the general law, would subject to the fulfilment of the requirements of S. 53-A of the T. P. Act, have enabled a person in possession to use it as a shield to defend his possession. But having regard to the provisions of S. 47 read with S. 98, no right to possession capable of being upheld under the special enactment can be conferred by means of a permanent alienation or other transfer unless the prior permission of the", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-17", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "enactment can be conferred by means of a permanent alienation or other transfer unless the prior permission of the Tahsildar is obtained. The leaned Judges proceeded to lay down that if possession is wrongful or unauthorised, no suit for a permanent injunction or for delivery of possession can be brought. The leaned Judges continued to observe that when S. 47 refers to other transfers of agricultural land, it is presumed that a permanent alienation is a transfer and permanent alienation includes the several kinds of transfers referred to therein viz., sale, exchange, or gift which under the general law, namely, the T. P. Act, would come within the definition of transfer of property. Transfer of a right of occupancy or a patta of a holding in so far as the Land Revenue Act of 1317 Fasli is concerned, would equally be a transfer of all that is necessary to effectually transfer agricultural land and vest a title in the person to whom it is transferred.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-18", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "15. We will then refer to the decision of Gopal Rao Ekbote, J. (as he then was) and Sriramulu, J. in L. P. A. No. 139 of 1970, D/- 18-2-1972 : (ILR (1974) Andh Pra 119). That decision was in a Letters Patent Appeal preferred against the decision of Madhava Reddy, J. given in S. A. No. 520 of 1968 on 20th of July, 1970 : (ILR (1972) Andh Pra 1313). One of the questions decided by Madhava Reddy, J., and considered by the Division Bench in the appeal was whether the deletion of S. 47 and introduction of S. 50-B makes the previous contracts of sale legal and effective which contracts were considered illegal in view of S. 47. The Division Bench held that mere deletion of S. 47 or introduction of S. 50-B does not by itself validate all the transfers which were invalid and that such invalid and that such invalid transfers do not become legally enforceable unless a seal of approbation is put by the Tahsildar by granting a certificate validating the same. We shall refer to this aspect of the matter a little later. For the present, we are referring to this Bench decision for the purpose of showing that this Division Bench agreed with the view expressed in Syed Jalal's case (supra). In fact the learned Judges noted that the correctness of Syed Jalal's case was not challenged before them. After nothing the main points decided in Syed Jalal's case (supra) the Division Bench observed:", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-19", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "\"What follows from the said decision is that while the agreement to sell is valid the possession delivered in pursuance of the agreement is unauthorised. The vendee therefore can institute a suit for specific performance but cannot avail of the doctrine of part-performance.\" \n 16. On this point there is a recent decision of a Division Bench of this Court in C. R. P. No. 1233 of 1976, D/- 9-8-1977 rendered by out learned brothers Ramachandra Raju and Jeevan Reddy, JJ. It is short-noted at p. 28 of 1977 (2) APLJ (Chenna Reddy v. Hanumanth). In this case the Division Bench was considering the relevant scopes of Ss. 47 and 50-B of the Hyderabad Tenancy Act. The learned Judges held that on the date the transaction was entered into and the entire consideration money was paid by the respondent, possession of the lands purchased was given to the respondent by the petitioners and thus there is a transfers of the right to be in possession. Transfer of a right of occupancy can also mean transfer of a right to be in possession and enjoyment. In this view of the matter, the transaction entered into between the parties is a permanent alienation as per the definition under Section 2 (o). It is a permanent alienation, S. 47 is attracted and if S. 47 is attracted S. 50-B is attracted and the respondent would be entitled to the validation certificate. \n 17. These three pronouncements of the Division Benches of this Court support the view we have expressed above that the possession given to the three petitioners in pursuance of the contracts of sale, without obtaining previous sanction of the Tahsildar under S. 47, was unlawful and S. 53-A of the T. P. Act would not safeguard that possession.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-20", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "18. This was the position which was obtaining when the Regulation of 1959 was applied to the Scheduled areas in the Telangana Region. That is a regulation to regulate the transfers of lands in Scheduled areas and is clearly a social piece of legislation. It is essential to notice effect by including a non obstante clause therein. Despite any other law, transfers contrary to that provision are declared to be null and void. Going through the provisions of the Regulation, they would demonstrate beyond any doubt that its object is to prevent transfers of lands in the Scheduled areas in favour of persons who are not members of Scheduled Tribes or a society not composed solely of the members of the Scheduled Tribes. It is further aim is to set aside transfers of immovable property made in contravention of the law, to eject any person in possession of the property, and to restore it to the transferor or his heirs. If the transferor or his heirs are not willing, the appropriate authority may order assignment or sale of the property to any other member of the Scheduled Tribe. It is for this purpose very wide connotation is given to the word \"transfer\" in S. 2 (g), where by mortgage with or without possession, lease, sale, gift, exchange or any other dealing with immovable property, not being a testamentary disposition and a charge on such property or a contract relating to such property in respect of such mortgage, lease, sale gift, exchange or other dealing, are treated as transfers. It is true this Regulation has no retrospective effect and does not affect any valid transfers which had taken place before 1-12-1963 in the Scheduled Areas of the Telengana Region. If the transfer did not become final or if the transferee had not obtained indefeasible rights in the property by 1-12-1963, then the Regulation would certainly apply to such cases.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-21", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "19. Then we go to the problem as to whether the subsequent deletion of S. 47 of the Hyderabad Tenancy Act would have the effect of automatically validating the alienations and transfers, though they were invalid on account of lack of sanction of the Tahsildar under that Section. If there was deletion of S. 47 simpliciter without anything more, possibly two views might have been possible. On the one hand, probably it could have been one hand, probably it could have been said that what had been the cause of invalidity of an alienation or transfer has been removed by the deletion of S. 47 and therefore it must be deemed that the original defect in the alienation or transfer must be deemed to have been cured or removed. On the other hand, it could be argued that what was invalid to start with could not be validated unless there is a special proclamation by the Legislature or a provision under which such invalid alienations or transfers could be validated. However, in our view, this possibility of the existence of two views does not exist in so far as the Hyderabad Tenancy Act is concerned, particularly so in these writ petitions. Why we say that such situation does not exist in these cases particularly is that S. 47 was deleted in 1969 and the Regulation relating to the prohibition of alienations of lands in the Scheduled Areas by Tribals came to be applied to the Telengana Area on 1-12-1963 which was long before S. 47 was removed from the stature book. Even if it were to be argued that the removal of S. 47 would automatically validate the invalid alienations and transfers, the insurmountable hurdle in the way of the petitioners would arise in the form of the Regulation which came to be applied to their lands even on 1-12-1963 . By virtue of the Regulation the invalidity, which was inhibiting the alienations or transfers in their favour by", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-22", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "of the Regulation the invalidity, which was inhibiting the alienations or transfers in their favour by 1-12-1963 on account of lack of sanction under S. 47 of the Hyderbad Tenancy Act, could not be cured in respect of their rights and interests that might have existed earlier. It is true that upto 1-12-1963, that is to say, till the Regulations came to be applied to the Telengana Area, either the petitioners or their alienors could have applied to the Tahsildar for permission for the alienations or transfers thereby securing legal sanction to them. It is a moot point whether after the Regulation came into force of 1-12-1963 and before S. 47 was deleted in 1969 permission could be obtained for transfer in respect of these lands in the Scheduled Areas in view of S. 3 of the Regulation. However, we do not express any view on this point since it is not necessary to do so in these cases. The admitted fact remains that no attempt has been made either by the petitioners or their alienors for securing the required permission under S. 47 even after 1-12-1963 and before S. 47 was deleted.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-23", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "20. There is yet another formidable objection to the validity of the transfers on favour of the petitioners. In 1964 S. 50-B was introduced for validation of the earlier invalid transfers. For five years thereafter till 1969 S. 50-B was part of the statute along with S. 47. The result was that even after 1964 no permanent alienation or transfer could be effected without the necessary permission from the Tahsildar. At the same time, the earlier invalid alienations for want of that sanction could be validated by taking recourse to S.50-B proceedings. In 1969 S.47 and the allied provisions were deleted and yet, S.50-B was retained. This is a very material and significant circumstance. Though S. 47 was deleted, thereby implying that from that date no permission was necessary for alienations or transfers, the earlier invalid transfers, which had taken place from 1950 to 1969, could be validated with the aid of the proceedings under S. 50-B. It would also be very pertinent to note that by Act 12 of 1969, which deleted s. 47 and the allied provisions from the statute book, substituted sub-sec. (1) of S. 50-B where under the invalid alienations, which had taken place from 10th June , 1950 right up to the date of the commencement of the Andhra Pradesh (Telengana Area) Tenancy and Agricultural Land (Third Amendment) Act, 1969 could be validated. We have already noted that originally as S. 50-B (1) stood when it was first inserted by Act 6 of 1964, only alienations from 10th June, 1950 till 21st of Feb. 1961 could be validated under that section. While deleting S. 47 and the allied provisions in 1969, Sub-sec. (1) of", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-24", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "47 and the allied provisions in 1969, Sub-sec. (1) of S. 50-B was altered by extending the period from 21st February 1961 till the third Amendment to the Hyderabad Tenancy Act 1969 was made. That is to say, under the newly altered S. 50-B as per Act 12 of 1969, even the alienations and transfers which were invalid right up to 1969, could be validated. In other words, even those alienations and transfers, which had been made without obtaining sanction under S.47 up to 1969 in which year that section was deleted, could be cured and made lawful by invoking the provisions of S.50-B. It is thus manifest that S. 50-B was made by the Legislature with a definite purpose and that purpose was clearly declared in the marginal note as \"validation of certain alienations and other transfers of agricultural lands\". As we have pointed out, very many alientations had been made contrary to Ss. 47, 48 etc., and the Legislature thought it just and proper to validate some of them. The alienations which could be validated, the manner which could be validated, the manner in which such validation could be made and the time within which that validation could be made and the time within which that validation could be sought were all prescribed in the Section. As it stood amended by 1969 Act, transfers, which had taken place between 10th June, 1950 and 1969 when the Third Amendment to the Hyderabad Tenancy Act was made where possession had been given and which were not inconsistent with the provisions of the A. P. Ceiling on Agricultural Holdings Act, 1961, were eligible for validation under the provision.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-25", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "21. It is also very important to note that the last paragraph of sub-sec. (10 of the section enables the alienee or transferee to apply within such period as may be prescribed by the Tashildar for a certificate declaring that such alienation or transfer is valid. This sub-paragraph or sub-sec (1) makes it abundantly certain that though it is an enabling provision, in the sense that it permits the alienee or transferee under an invalid alienation or transfer, to apply for validation, the invalidity of the alienation would continue if there is no declaration under S. 50-B. This intention of the Legislature in making S. 50-B is further brought out by the last sentence of sub-sec (2) that on deposit of the amounts required, so it is provided in sub-sec (2), the Tahsildar shall issue a certificate to the alienee or transferee declaring that the alienation or transfer is valid and that such certificate shall be conclusive evidence of such alienation or transfer against the alienor or transferor or any person claiming interest under him. This part of the provision of sub-sec. (2) is practically, in the nature of enforcing the rights of an alinee or transferee under S. 53-A of the T. P. Act. The certificate under sub-sec. (2) could be granted only where possession had been delivered and where the alinee has paid the balance of consideration or deposited the same in the manner prescribed, if any unpaid purchase money was payable, and also on the deposit of the registration and stamp charges. Once that registration is given on the Tashildar reaching his satisfaction, it is declared to be conclusive evidence of the alienation or transfer as against the alienor or transferor any person claiming interest under him.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-26", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "22. The similarity between the provisions of S. 50-B of the Hyderabad Tenancy Act and those of S. 53-A of the Transfer of Property Act is self-evident. It is thus manifest that while enacting S. 50-B of the Hyderabad Tenancy Act, the Legislature kept in view the provisions of S. 53-A of the T. P. Act. Therefore, even if delivery of possession in pursuance of the contract of sale was invalid and unlawful on account of the failure to secure the permission under S. 47, such possession and transfer could be validated under S. 50-B. To our minds, it necessarily follows that if the transferee or alienee did not avail himself of this opportunity of getting his alienation and possession validated under S. 50-B, he should suffer the consequences, since the transfer and delivery of possession in his favour remained invalid and unlawful. It is unnecessary for us, as we have already pointed out, to decide whether the three petitioners before us could apply for validation under S. 50-B in view of the Regulation which came to be applied to their areas on and from 1-12-1963. It is common ground that no applications have been made by the petitioners for validation under S. 50-B.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-27", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "23. On account of the foregoing reasons we are of the view that S. 50-B was not merely an enabling provision but was also intended by the Legislature as a remedy for validating transfers and possessions which were invalid. Without such validation, the invalid transfer and delivery of possession remained invalid. This facility to get the invalid alientations declared as valid existed only up to 31st March, 1972, since the Legislature stopped further extension for such validation after that date. Those who did not apply under S. 50-B up to 31st March ,1972 would reap the result of having a invalid transfer and delivery of possession on their hands. The Legislature's refusal to extend the time beyond 31st March, 1972 does not validate the invalid transfers and delivery of possessions. If this was not the intention of the Legislature by enacting S. 50-B and amending it, then that section would be postulated that any provision of an enactment has been made without any purpose.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-28", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "24. In this view we have taken, the opinion expressed by Parthasarthi , J. in Hafeezunnisa V. Syed Arab, (1969) 2 Andh WR 317, that S. 50-B was merely an enabling provision and the omission of a party to take advantage of it does not put the validation itself in jeopardy is not correct. We also express our firm dissent from the further opinion of the learned Judge that the Legislature has, by necessary implication, made the provisions of Ss. 47 to 49, inapplicable to the cases of transfers specified in sub-sec. (1) of S. 50-B and that those transfers are exempted from the operations of Ss. 47 to 49. We are of the opinion that the learned Judge did not lay down the law correctly when he held that the absence of certificate under S. 50-B would not nullify the validation of the alienations or the exemption granted to them from the operation of the provisions of Ss. 47 to 49. We hold that this is not the correct meaning of Ss. 47 to 49 and S. 50-B and therefore it is not good law.  \n 25. Now we will consider the different view-points expressed by our learned brothers of this Court and other Courts particularly in the light of the pronouncement of the Supreme Court in Nathulal V. Poolchand, .", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-29", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "26. The decision of Madhava Reddy, J. in S. A. 520 of 1968, D/- 20-7-1970 is the first decision in chronological sequence which was cited before us. The second appeal arose out of a suit for declaration of title and recovery of possession. The suit was sought to be resisted by the 1st defendant on the basis of part performance of a contract of sale in his favour contending that his possession could not be disturbed having regard to Ss. 47 and 50-B of the Hyderabad Tenancy Act. The 1st defendant pleaded that the plaintiff had been the highest bidder at a revenue sale but entered into an agreement with him for sale of the land and requested the Tashildar to finalise the sale in his name. The Tahsildar accordingly recommended to the Collector but the District Collector refused to accept the recommendation. Earlier in accordance with the contract the plaintiff put the lst defendant in possession of the plaint schedule land in part performance of the agreement. The entire consideration was paid by 25th May, 1963. While considering the tenability of the 1st defendant's defence the learned Judge referred to the decision in Syed Jalal's case (supra), wherein it was held that the contract of sale was neither prohibited by S. 47 nor invalid in law and what was prohibited was a permanent alienation or other transfer of agricultural land. Therefore, a suit for specific performance of a contract of sale without prior permission under S. 47 could be maintained. Then dealing with the consequence of deleting S. 47 and the effect of S. 50-B the learned Judge observed that the deletion of S. 47 can operate only prospectively and if on the date of transfer or permanent alienation when S. 47 was in force, it cannot be contended that on that date the alienation was valid and the transfer of possession would also be", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-30", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "be contended that on that date the alienation was valid and the transfer of possession would also be valid. He also observed that S. 50-B could have reference only to transfers which were made at a time when Ss. 47 to 50-B were in force. The learned Judge expressed the view that S. 50-B by necessary implication, retrospectively validates the transfers of agricultural lands made when S. 47 was in force and were invalid for want of prior sanction of the Tashildar. But even otherwise, if the third Amendment Act is held to be prospective at least from 18th March, 1969 onwards, the possession under such agreements of sale cannot be deemed to be unauthorised and therefore the persons in possession would be entitled to invoke the provisions of S. 53-A to protect their possession. The possession which had been delivered to the 1st defendant might have been unauthorised at the time it was given but it cannot be deemed to be unauthorised in view of the fact that Ss. 47 and 50-A were deleted and a provision was made for obtaining a certificate declaring the transfer as valid. After the expression of this opinion there is the following significant observation by the learned Judge:", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-31", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "\"There is yet time for obtaining such a declaration.\" \n In that view of the matter, the 1st defendant was held to be entitled to successfully resist the suit for recovery of possession by invoking S. 53 of the T. P. Act. While dismissing the second appeal, the learned Judge granted leave. It is to be remembered that this decision was rendered on 20th July, 1970 by which date there was still time for the concerned party to apply for the validation under S. 50-B. In fact that was the observation made by the learned Judge which we have extracted.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-32", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "27. It is against this decision Letters Patent Appeal No.139 of 1970: (ILR (1974) Andh Pra 119), was preferred and Gopal Rao Ekbote, J. (as he then was) and Sriramulu, J. disposed of the appeal on 18th Feb. 1972. Earlier, we have had an occasion to refer to this judgement to point out that the Division Bench in this case expressed its agreement with the principles laid down in Syed Jalal's case . Then the learned Judges proceeded to consider the views expressed by Madhava Reddy, J. in his judgement. The Division Bench expressed its dissent from the view take by Madhava Reddy, J. that S. 50-B was retrospective in its operation and validated the transfers of agricultural lands made even when S. 47 was in force. It was pointed our that S. 50-B was clearly retrospective in its operation and S. 50-B would not make all such contracts valid automatically. The learned Judges proceeded to observe that mere deletion of S.47 or introduction of S.50-B would not by itself validate all the transfers which were invalid and that such invalid transfers would not be legally enforceable unless a seal of approbation is put by the Tashildar by granting a certificate validating the same. But it could be made without any prior permission as was required when S. 47 was there. But the question had still to be answered whether possession delivered in pursuance of agreement to sell prior to 18-3-1969 could be defended by invoking S. 53-A of the T. P. Act.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-33", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "28. Then reference was made to Syed Jalal's case and the view expressed therein that possession delivered in pursuance of an agreement without sanction under S. 47 was unauthorised and then the Bench pointed out that the position materially altered after S. 47 was removed. Existence of S. 98 in the view of the Division Bench, did not deprive the purchaser from invoking the principles of part performance to protect his possession after S.47 was deleted. At the same time, the learned Judges pointed out that S. 53-A of the Transfer of Property Act predicates a valid contract , a contract of a type which could be specifically enforced and the section would not apply where the contract was invalid on any ground other than that it was not completed in the manner prescribed by the law. After pointing out this, the learned Judges of the Division Bench observed that the principle laid down in Syed Jalal's case that the agreement of sale was capable of being enforced in a suit for specific performance was complied with in that case and there was no reason why the plea of part performance should not be available to the defence. When once S. 47 was deleted, the possession given earlier would be considered as validly given. In such a case, the doctrine of part performance would validly be invoked. Having made all these observations, the Division Bench agreed with the final conclusion of Madhava Reddy, J. in the second appeal and dismissed the Letters Patent Appeal.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-34", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "29. Two features are worthy of note in this decision of the Division Bench. One is that it expressed concurrence with the decision of the earlier Division Bench in Syed Jalal's case . The second feature is that by deletion of S. 47 the possession, which was unauthorised until then, ceased to be unauthorised. This view was probably expressed in view of the fact that there was still time for validation of the contract of sale and the delivery of possession. We venture to make this inference because the decision of the Division Bench was rendered on 18th Feb. 1972 and the time of validation under S. 50-B was in force till 31st of March, 1972. Though the Division Bench did not specifically mention this, this inference is possible by the view expressed by the Division Bench that S. 50-B was not retrospective, and that until and unless the invalid transfers are validated, they (the invalid transfers) continue to be invalid. Therefore, we do not consider that this Bench Decision in Letters Patent Appeal No. 139 of 1970; (ILR (1974) Andh Pra 119), is in any way contrary to the view, we have expressed. Moreover this case was not concerned with the effect of S. 3 of the Regulation. Further the recent decision of a Division Bench in (1977) 2 APLJ (Notes) page 28 on the subject to which we have already made a reference has taken the same view which we have done.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-35", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "30. Then the Supreme Court rendered decision in Nathulal V. Phoolchand (supra). Under S. 70 (4) of the Madhya Bharat Land Revenue and Tenancy Act of 1950, land could not be sold to an alienee not being an agriculturist without the sanction of the State Government. In that case transfer was made without such sanction but possession was delivered. Since the purchase had failed to pay on the due date of balance of the price, the vendor rescinded the contract and commenced an action for a decree for possession of land and the factory standing thereon with mesne profits. The transferee invoked the provisions of S. 53-A to his aid. There was no condition in the contract that the sanction required under S. 70 (4) would be obtained. The Supreme Court held that a condition to secure such a sanction after paying the appropriate fee must be implied and that it was well settled that where by a statute property was not transferable without the permission of the authority, an agreement to transfer the property must be deemed subject to implied condition that the transferor will obtain the sanction of the authority concerned. Then the learned Judges of the Supreme Court held that all the conditions necessary for making out the defence of part performance were fulfilled in the case. Once these essential requirements of S. 53-A of the T. P. Act were satisfied, there was no bar to the defence of part performance and the transferee could protect his possession under that provision. Sect 70 of the Madhya Bharat Land Revenue and Tenancy Act had a provision in sub-sect, (8) that no sale should be deemed to be valid unless the sale deed effecting such a sale had been registered in accordance with law of registration in force for the time being. Since there was no sale in that case and the purchaser was not relying upon any sale, there was no impediment in the way of safeguarding his", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-36", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "purchaser was not relying upon any sale, there was no impediment in the way of safeguarding his possession under S. 53-A. This decision, in our opinion, does not in any way detract from what we have expressed above. Under sub-sec. (4) of S.70 of the Madhya Bharat Act, land is not transferable without the permission of the appropriate authority to a non-agriculturist. The Supreme Court held the even if the contract did not contain the securing of such permission as one of the conditions, it implied in any contract of sale. This is what we also have held and that was the view, expressed in Syed Jalal's case . Therefore, when all the requirements of S. 53-A were satisfied certainly the transferee was entitled to protect his possession under that provision of law.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-37", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "31. We must also notice in this connection certain vital differences between the Madhya Bharat Law and the relevant laws that obtained in the State of Andhra Pradesh. Sec. 47 of the Hyderabad Tenancy Act unlike S. 70 (4) of the Madhya Bharat Act clearly declared that no permanent alienation or other transfer of an agricultural land shall be valid unless it has been made with the previous sanction of the Tashildar. The corresponding provision did not exist in the Madhya Bharat Law. Though the alienee could seek specific performance of a contract calling upon the vendor to obtain the sanction of the Tashildar and then execute a sale deed, once the transaction was finalised and completed without obtaining the sanction of the Tashildar, the alienation or transfer become invalid. Further, there is no provision in the Madhya Bharat Law which correspondents to S. 50-B of the Hyderabad Tenancy Act, under which validation of transfers could be effected even later, once again emphasising that validation of the transfer was essential. As the learned Judges pointed out in the decision of the Supreme Court,, the condition to secure the permission of the Appropriate authority for the alienation was implied and it could be secured at anytime in future. Since there was possibility in that case for securing the permission and thus complying with S. 70 (4) of the Madhya Bharat Law, S. 53-A was presumably held to safeguard the possession of the transferee. But in the instant cases that possibility of securing the sanction came to an end on 31st of March, 1972. Afterwards there was no possibility of validating the sale transactions.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-38", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "32. What is more, the lands which are purported to have been transferred in these three cases, are situate in Schedule Areas, the transfer of which by tribals to non-tribals was prohibited on and from 1-12-1963 in the Telegana Region. This circumstance also did not exist in the Supreme Court's case. Therefore, while following the principle laid down by the Supreme Court in Nathulal's case , we find nothing in that decision which goes contrary to the view we have expressed.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-39", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "33. Then there is a decision of Madhava Reddy, J, D/- 21-9-1972 in S. A. No. 450 of 1970 (Andh Pra). In that case a question arose whether a contract of sale dated 30th June, 1956 could be deemed to be authorised at least from 18th March, 1969 i.e., the date of the Third Amendment to the Hyderabad Tenancy Act and whether the possession of the 1st defendant could be protected under the provisions of S. 53-A of the Transfer of Property Act. The learned Judge referred to Syed Jalal's case , his own decision in S. A. No.520 of 1968 and that in the Letters Patent Appeal 139 of 1970; (ILR (1974( Andh Pra 119) and concluded that the view he had taken in S. A. 520 of 1968 had found favour with the Division Bench. These cases we have already considered and expressed our opinions. Then the learned Judge referred to Nathulal's case , and also that of a Full Bench of this Court in K.Parvathamma V. Excise Commr., ., which dealt with a case of revenue sale and held that the defendants were entitled in invoke the aid of S. 53-A of the T.P. Act. The decision of Kondaiah , J. in the Commercial & Industrial Finance Ltd, v. Smt. Jeelani Begum, (1971) 2 APLJ 450 was also noted by the learned Judge and pointed out that the decision therein would not help the case of the appellants therein. To the extent that this decision is contrary to the view we have stated above, we express our respectful disagreement from our learned brother.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-40", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "34. Then there are two decisions of the Mysore High Court in Eramma v. Parvatamma, AIR 1972 Mys 121 and Mohd. Tahair v. S. K. Ali, AIR 1973 Mys 307. The former was of a single Judge's and the latter was that of a Division Bench following and approving the Single Judge's view. The single Judge, in the former case followed the decision of the Supreme Court in Nathulal's case (supra). Eramma v. Parvathamma, AIR 1972 Mys 121, is a case which directly arose under S. 47 of the Hyderabad Tenancy Act. In that case also there was no sanction obtained from Tashildar as required under that section. The learned Judge following the Supreme Court's decision Nathulal's case held that the fact that there was no express condition in the agreement of sale that the vendor would undertake to obtain the sanction of the collector for the transaction makes no difference to the application of the principles of Sec. 53-A, because such an undertaking on the part of the vendor must be taken as an implied condition of the contract of sale. As held by us and also by a Division Bench of this Court in Syed Jalal's case , a contract of this nature could be specifically performed calling upon the vendor to execute a sale deed after obtaining the necessary sanction under S.47. By the time the decision was rendered in the Second Appeal by the learned Single Judge on the 9th March, 1971, there was time for the parties to obtain sanction under that section. It does not appear from the decision that, as was done in Andhra Pradesh, S. 47 was deleted and S. 50-B was enacted in the State of Karnataka. that makes a vital difference. Quite apart from that, it is patent from the decision that the transferee could support his possession under", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-41", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "Quite apart from that, it is patent from the decision that the transferee could support his possession under S. 53-A of T.P. Act and he could call upon the transferor to give him specific performance of the contract after obtaining the necessary sanction under S. 47.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-42", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "35. The Bench decision in Mohd. Tahir v. S. K. Ali (AIR 1973 Mys 307) (supra) merely followed the single Judge's decision and the same reasoning, which was pointed our in respect of the single Judge's decision, would apply to this decision as well. \n 36. The Full Bench decision in K. Parvathamma v. Excise Commr. (supra) dealt with a case of revenue sale. The Full Bench held that even for revenue sales sanction under S. 47 before the amendment of 1959 was required before confirmation of such sales. We see nothing in this decision which is different from what we have held. It is noteworthy that in the above decision, the further question of the validity of the transfer and possession as per the Regulation did not arise.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-43", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "37. In W. P. Nos. 1509 and 1510 of 1973 (AP) the validity of alienation of lands in Scheduled Areas was challenged. Chinnappa Reddy, J. by his order dated 10th June 1975 held that the two writ petitions should fail for the reason that the petitioners did not choose to avail themselves of their right of appeal provided by para 3 (iii) of the Regulation. The learned Judge also upheld the view of the Assistant Agent that since the permission of the Tashildar under S. 47 of the Hyderabad Tenancy Act had not been obtained, their possession could not be held to be lawful. Though the decision of Parthasarthi, J. in Hafeezunnisa Begum v. Syed Arab, (1969- 2 Andh WR 317) (supra), was cited before him , Chinnappa Reddy, J. pointed out that S. 3 of the Regulation prevails over any provision contained in any enactment, rule or law in force. Therefore, he held that neither S. 50-B of the Hyderabad Tenancy Act nor S. 53-A of the T.P. Act can be a valid answer to a proceeding for eviction under the Scheduled Areas Land Transfer Regulation.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-44", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "38. In W. P. No. 131 of 1975 (Andh Pra) and batch the validity of alienations by not-tribals under agreements of sale before 1-12-1963 for which sale deeds were taken after 1-12-1963 came up for consideration. Our learned brother Ganagadhara Rao., J. by his decision dated 26th Feb., 1976 dismissed the writ petitions holding that S. 3 of the Regulation declared all alienations invalid. The sale deed was executed after the Regulation. Since the sale deed which was executed after 1-12-1963 was bad, the agreement of sale taken before that date would not stand. Even assuming that the agreement of sale was valid on the date it was taken, it would have no effect and S.53-A of the Transfer of Property Act would not apply in view of the non obstante clause contained in S. 3 of the Regulation and its overriding effect, The Learned Judge also referred to the decision of Chinnappa Reddy, J. in the aforesaid case and agreed with that view.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-45", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "39. Munju V. P. Raju, (1976) 2 APLJ 103, is a case decided by Kuppuswamy, J. In that case a tribal entered into an agreement with the petitioner on 15-2-1963, where under he agreed to sell a piece of land for a sum of Rs. 1,000/-. The amount was paid on that day itself and possession was taken. Thereafter a regular sale deed was executed on 2-3-1969. The Special Deputy Collector held that the document of 15-2-1963 was not registered and so it was not admissible in evidence. Since the regular sale deed which was registered was subsequent to the Regulation, it was invalid and the petitioner was liable to be ejected. On the facts of the case, the learned Judge held that there was no express finding to the effect that there was an agreement on sale on 15-2-1963. In the opinion of the learned Judge this lack of finding amounted to saying in effect that the Special Deputy Collector was not prepared to hold that the agreement of sale was true. It was also pointed out that the petitioner was not in possession of the land. Therefore, the learned Judge concluded that there was no agreement before the Regulation was applied to the Telengana Area and also there was no possession delivered. Consequently, the learned Judge held that on the facts of the case the writ petition should fail.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-46", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "40. At the same time, the learned Judge was not inclined to agree with the views expressed by Chinnappa Reddy, J. and Gangadhara Rao, J. in the cases referred to above. Relying on the Supreme Court's decision in Nathulal's case (supra), the two Mysore decisions and the decisions of Madhava Reddy, J. in S.A.No. 450 of 1970, D/- 21-9-1972 and S. A. No. 520 of 1968, D/-20-7-1970; (ILR (1972) Andh Pra 1313) , the conclusion in which was upheld by the Division Bench in L. P. A. No. 139 of 1970: (ILR (1974) Andh Pra 119), Kuppuswamy, J. held that after the deletion of S. 47 and introduction of S. 50-B the possession was unlawful and the doctrine of part performance could be relied on. The learned Judge opined that if there was a transfer even prior to the coming into force of the Regulation, the Regulation will not have any effect on such transfer and S. 3 being one of the provisions of the Regulation will equally have no application. The definition in S. 2 (g) in the Regulation of the expression \"transfer\" which includes a contract was then noticed and then the learned Judge observed that a contract of sale would amount to a sale. We have already considered at length all the decisions referred by our learned brother Kuppuswamy, J. in Munja's case (1976-2 APLJ 103) (supra), and for those reasons, we cannot agree with the legal propositions which the learned Judge laid down in his decision.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-47", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "41. Before we conclude, we must take note two decisions cite by the learned Counsel for the petitioners viz., Nanasaheb v. Appa and Mohinuddin v. Gulam Ghouse, ILR (1962) Bom 641. These decisions were cited in support of the contention that even if the transfer had not been completed in the manner prescribed, still the transferee would be entitled to the protection of S. 53-A of the T. P. Act , But there is nothing in these two decisions which is contrary to what we have held. In the present cases the delivery of possession itself was illegal and unlawful since it was contrary to law. Therefore the ratio of the two Bombay cases does not apply to the cases before us.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-48", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "42. The foregoing discussion shows that there was no indefeasible title or right created in the petitioners before 1-12-1963 on which date the Regulation came to be applied to the Telengana Region. After 1-12-1963 the overriding provision of S. 3 of the Regulation have come into force. Sec. 3 of the Regulation had on and from 1-12-1963, overriding effect despite any other enactment, rule or law in force in agency tracks in respect of transfer of immovable property situate in scheduled areas by a tribal in favour of non-tribal. As we have held, these provisions had no retrospective effect. But then there was no indefeasible right in the petitioners by 1-12-1963. What all they had by that date was a contract of sale and unauthorised and illegal possession of the land. By virtue of S. 3 of the Regulation, they and the subsequent sale deeds, which the petitioners obtained , were null and void. The result is that the decisions of the Special Deputy Collector, as upheld by the appellate authority, which is sought to be quashed, is in accordance with law. \n 43. Consequently, the writ petitions are untenable and are accordingly dismissed.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "566e2e368895-49", "Titles": "Meram Pocham And Anr. vs The Agent To The State Government, ... on 25 October, 1977", "text": "43. Consequently, the writ petitions are untenable and are accordingly dismissed. \n 44. Now W. A. 355/77 remains. The Writ petition No. 21115/77 against which this appeal arises was dismissed in limine by our learned brother Raghuvir, J. The Special Deputy Collector held that the alienation in favour of the appellant was invalid in view of the provisions of the Regulation and an appeal was preferred to the appellate authority, Pending the appeal stay of eviction was sought. Since that was refused the writ petition was filed. Raguhvir, J, held that the appellant could have carried the matter in revision before the Government and since there was an alternative remedy, the writ petition could not be entertained. We, however, find that it is not necessary in this case to go into the controversy whether the revision under S. 6 is an alternative remedy which stands in the way of this Court entertaining a writ petition. As we have pointed out, the impugned order is one refusing to grant stay of eviction pending the appeal before the appellate authority. We direct the appellate authority to dispose of the appeal as expeditiously as possible and in the meanwhile, that is to say, until the appellate authority disposes of the appeal, we grant stay of the eviction of the appellant from the lands in question. \n 45. With this direction the writ appeal is dismissed. Having regard to the circumstances of the case, we direct the parties to bear their own costs in the writ petitions as well as in the writ appeal, Advocate's fees Rs. 150/- in each case. \n 46. Writ petitions and writ appeal dismissed.", "source": "https://indiankanoon.org/doc/1069955/"}
+{"id": "f06d78e533eb-0", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "JUDGMENT B.P. Jeevan Reddy, J.  \n1. Two questions are referred under Section 2 56( 1) of the Income-tax Act, 1961, one at the instance of the assessee and the other at the instance of the Revenue. The question referred at the instance of the assessee is : \n \"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the initiation of reassessment proceedings was valid on the ground that the finding given in its order dated September 9, 1974, in I.T.A. No. 1229/ Hyd/1972 was a finding necessary for the disposal of that appeal ? \" \n2. At the instance of the Revenue, the following question is referred: \n \"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessment for 1966-67 made under Section 147 read with Section 150(1) is liable to be quashed ? \" \n3. The assessee, as the karta of a joint family, was a partner in a firm, M/s. Gotturi Veeranna & Sons. Disputes arose between the partners which led to the institution of a civil suit. Under the decree passed in the suit, the assessee was held entitled to a sum of Rs. 1,10,949 with interest at 6% per annum from the date of the decree. This decree was made in the accounting year relevant to the assessment year 1966-67. The break-up of the said amount is : \n(i) Rs. 48,949--Capital;", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-1", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "(i) Rs. 48,949--Capital; \n(ii) Rs. 62,000--Interest at the rate of 12% from 5-8-1954 to 25-2-1965.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-2", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "4. The assessee claimed that the said amount of interest should be spread over and divided between the relevant years. On that basis, he returned an amount of Rs. 5,138 for the said assessment year. The Income-tax Officer, however, did not agree. He adopted a different procedure altogether. He found that during the accounting year relevant to the said assessment year, the assessee has realised a sum of Rs. 48,929. He divided the said amount into principal and interest in the same proportion as they represented in the total decretal amount. On that basis, he allocated a sum of Rs. 27,342 towards interest and included the same in the income of the said assessment year. On appeal, the Appellate Assistant Commissioner confirmed the same. He made a slight modification, in that he directed the costs to be deleted from the total amount, on which basis the interest amount includible came to Rs. 25,700. The assessee carried the matter in further appeal to the Income-tax Appellate Tribunal. His contention before the Tribunal again was that the interest amount of Rs. 62,000 should be spread over and divided between the relevant years and that only the proportionate amount should be included in the income of the concerned assessment year. The Tribunal rejected the said argument. It held that the principle of the decision of this court in CIT v. Sankari Manickyamma applies to this case and on that basis the entire; interest amount of Rs. 62,000 must be held to have accrued to the assessee during the previous year relevant to the assessment year 1966-67 and ought to have been assessed accordingly. However, there was no appeal by the Department before the Tribunal. In the circumstances, the Tribunal merely dismissed the appeal preferred by the assessee, confirming the order of the Appellate Assistant Commissioner.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-3", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "5. In view of the finding recorded by the Tribunal in its order aforesaid (dated September 9, 1974), the Income-tax Officer reopened the assessment under Section 147 of the Act, with a view to include the balance of the interest amount in the income of the said assessment year. The assessee objected to the reopening of the assessment unsuccessfully. His appeal to the Appellate Assistant Commissioner was also unsuccessful. The matter was then carried to the Appellate Tribunal. Two questions were urged before, and considered by, the Tribunal, viz., (i) that the finding recorded by the Tribunal in its order dated September 9, 1974, that the entire interest amount of Rs. 62,000 accrued to the assessee during the accounting year relevant to the assessment year 1966-67 and that it ought to have been assessed as such, was a finding which was not necessary for an effective disposal of the appeal before it, and (ii) that the reassessment proceedings initiated under Section 147 are barred by virtue of Sub-section (2) of Section 150. The Tribunal held on the first question that \"the finding is irretrievably linked up with the contention raised by the assessee. It is, therefore, evident that what the Tribunal decided is a necessary finding for the purpose of the effective disposal of the appeal before it. To our mind, therefore, the case clearly comes within the purview of Section 150(1).\" On the second question, it found that the reassessment proceedings in this case are barred by Sub-section (2) of Section 150. Accordingly, it allowed the appeal and set aside the reassessment proceedings. Thereupon, both the Revenue and the assessee asked for referring a question each, which has been done by the Tribunal.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-4", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "6. For the sake of convenience, we shall dispose of the question referred at the instance of the assessee, first. We agree with the Tribunal that the finding recorded in the order of the Tribunal dated September 9, 1974, was necessary for a proper and effective disposal of the appeal before it. The main question urged before it by the assessee was that the interest amount of Rs. 62,000 cannot be included in the income of the year in which the decree was passed, i.e., in the year of accrual, but that it must be spread over and divided between all the years for which it has been awarded. This contention was dealt with by the Tribunal and was rejected holding that on the principle of the decision of this court in Sankari Manickyamma's case , the entire interest amount is liable to be assessed in the year in which it has accrued. We, therefore, answer the question referred at the instance of the assessee in the affirmative, i.e., in favour of the Revenue and against the assessee. \n7. The more important question, however, is the one referred at the instance of the Revenue. The question is whether the reassessment proceedings were barred by virtue of Sub-section (2) of Section 150. The Tribunal has observed in its judgment--and it is also stated by counsel for both the parties before us--that there is no authority of any court on this aspect, It is necessary, therefore, to examine the said question with reference to the relevant provisions of law.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-5", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "8. Section 147 provides for assessing or reassessing the income which has escaped assessment in any of the two situations mentioned in Clauses (a) and (b). The reassessment is, however, subject to the provisions contained in Sections 148 to 153. Section 148 provides that before making an assessment, reassessment or recomputation under Section 147, the Income-tax Officer shall serve on the assessee a notice containing the relevant particulars. Section 149 provides the time limit for issuance of notice, i.e., for initiation of the proceedings under Section 147. In cases falling under Clause (a) of Section 147, it is either eight years or sixteen years, as the case may be, while in a case falling under Clause (b), it is four years. According to it, in a case falling under Clause (b) of Section 147, \" no notice under Section 148 shall be issued......at any time after the expiry of four years from the end of the relevant assessment year\". Section 151 provides for obtaining the prior sanction of the Board or the Commissioner, as the case may be, in certain cases. Section 150 is in the nature of a proviso to Section 149. It reads thus : \n\"150. (1) Notwithstanding anything contained in Section 149, the notice under Section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-6", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "(2) The provisions of Sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken.\"  \n9. A reading of Sub-section (1) of Section 150 shows that where the reassessment proceedings are initiated \"in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision\", the time limits prescribed in Section 149 shall not apply and that notice under Section 148 can be issued at any time. Sub-section (2), however, is again in the nature of a proviso to Sub-section (1). It says that the provisions of Sub-section (1) shall not apply where, by virtue of any other provision limiting the time within which action for assessment, reassessment or recomputation may be taken, such assessment, reassessment or recomputation is barred on the date of the order which is the subject-matter of the appeal, reference or revision in which the finding or direction is contained.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-7", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "10. Section 153 provides the time limits for completion of assessments and reassessments. Sub-section (I) says that an order of assessment under Section 143 or Section 144 shall not be made after the expiry of certain periods prescribed therein (at present, it is two years). Sub-section (2) similarly provides that no order of assessment, reassessment or recomputation shall be made beyond the periods prescribed therein. In the case of proceedings under Clause (a) of Section 147, they must be completed within-four years from the end of the assessment year in which notice under Section 148 was served. In the case of proceedings under Clause (b) of Section 147, the proceedings must be concluded either within four years from the end of the assessment year in which the income was first assessable, or within one year from the date of service of the notice under Section 148, whichever is later. Sub-section (3) is in the nature of a proviso to Sub-sections (1) and (2). It says that the provisions contained in Sub-sections (1) and (2) of Section 153 shall not apply in certain cases. Clause (ii) of Sub-section (3) provides one such situation, viz., \"where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under Section 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act.\" In other words, according to Sub-section (3), where proceedings are taken under Section 147 in consequence of or to give effect to any finding recorded by any appellate or revisional authority, or by any court in any proceeding, the time limit prescribed in Sub-section (2) shall not apply. Explanation 1 in this section provides for exclusion", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-8", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "prescribed in Sub-section (2) shall not apply. Explanation 1 in this section provides for exclusion of certain periods in computing the period of limitation prescribed therein. It is not necessary to notice this Explanation for our purpose. Explanations 2 and 3, however, must be referred to since they are strongly relied upon by the Revenue. Explanations 2 and 3 read as follows :", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-9", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "\"Explanation 2.--Where, by an order referred to in Clause (ii) of Sub-section (3), any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of Section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order. \nExplanation 3.--Where, by an order referred to in Clause (ii) of Sub-section (3), any income is excluded from the total income of one person and held to be the income of another person, then, an assessment of such income on such other person shall, for the purposes of Section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order, provided such other person was given an opportunity of being heard before the said order was passed.\"", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-10", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "11. A reading of these Explanations clearly shows that they merely illustrate and clarify the meaning of the words \"in consequence of or to give effect to any finding or direction\" contained in an appellate, revisional or any other order. Explanation 2 says that where an appellate, revisional or other order excludes any income from the total income of the assessee for an assessment year, the assessment of such income for another assessment year shall, for the purposes of both Section 150 and Section 153, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the order. Similarly, Explanation 3 says that where by an appellate, revisional or other order any income is excluded from the total income of one person and held to be the income of another person, the assessment of income of such other person shall, both for the purposes of Section 150 and Section 153, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the order, provided, of course, such other person was given an opportunity of being heard before the said order was made. What is, however, clear is that Explanations 2 and 3 do not purport to obliterate or remove the restriction contained in Sub-section (2) of Section 150. They, no doubt, refer to Section 150, but for a limited purpose, mentioned above.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-11", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "12. A review of the above provisions makes it clear that the Act provides certain time limits both for initiation of proceedings under Section 147 as well as for completion of such proceedings. The time limits for initiation of such proceedings are contained in Sections 149 and 150, while the time limits for completion of such proceedings are mentioned in Sub-sections (2) and (3) of Section 153. Just as Section 150 is a proviso to Section 149, Sub-section (3) of Section 153 is a proviso to Sub-section (2) thereof. Explanations 2 and 3, no doubt, are relevant both for Section 150 and Section 153(3), but their purpose is merely to illustrate certain words occurring therein, and not to remove or obliterate the time limits prescribed in the several provisions referred to above.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-12", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "13. Learned standing counsel for the Revenue brought to our notice certain decisions, all of which appear to have been rendered with reference to Explanation 2 in Section 153. In B.A.R. Abdul Rahman Saheb v. ITO , a Bench of this court held that the effect of Section 150 and Sub-section (3) of Section 153 read with Explanation 2 is that, if any income is deleted from assessment by the order of a higher authority, on the ground that it is not the income of that year, steps may be taken under Section 147 to assess it as the income of another year, without any limitation prescribed under Section 149 as regards the issue of notice under Section 148 or as to the completion of the assessment or reassessment prescribed by Section 153. The Bench read Sub-section (2)of Section 150 as providing that the provisions of Sub-section (1) thereof will not apply to a case of assessment, reassessment or recomputation of income, if it related to an assessment year in respect of which assessment, reassessment, etc., could not have been made at the time when the order, which was the subject-matter of appeal, reference or revision, was made, by reason of the time limits fixed under Section 153 for making the assessment, reassessment, etc. (vide paragraph 2 at page 545). It would immediately be seen that Sub-section (2) of Section 150 does not refer to Section 153. It only refers to \"any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken\". The word \"taken\" refers only to initiation of proceedings and not to completion. Similarly, at page 547, the Bench observed: \"the effect of Section 150 and this Sub-section (Section 153(3)) read with Explanation 2 is that if any income is deleted from assessment in a higher proceeding on the ground that it is not", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-13", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "is that if any income is deleted from assessment in a higher proceeding on the ground that it is not the income of that year, steps may be taken under Section 147 to assess it as the income of another year, without any limitation applying to the issue of notice under Section 148 or to the completion of the assessment or reassessment...\" With great respect, we think that this observation overlooks the provisions contained in Sub-section (2) of Section 150. However, inasmuch as the case before us is not one falling under Explanation 2 to Section 153, we do not think it necessary to refer the matter to a larger Bench.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-14", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "14. In Ambaji Traders P. Ltd. v. ITO , the Bombay High Court held that the effect of Explanation 2 in Section 153 is, where the income of an assessee has been excluded from assessment for one assessment year, its inclusion in another assessment year has been treated as having been made in consequence of or to give effect to a finding or direction, covered by Clause (ii) of Sub-section (3) of Section 153, and that for such a purpose, the bar of limitation contained in Section 153(2) will not apply. They approved the view taken by this court in B.A.R. Abdul Rahman Saheb v. ITO with respect to the legal position resulting from a reading together of Section 150, Section 153(3) and Explanation 2 thereto. On a reading of the decision, we find that the Bench has not paid due attention to the language of Section 150(2) which deals with initiation of proceedings under Section 148.  \n15. In ITO v. Eastern Coal Company ltd. , the Calcutta High Court considered the effect of Sub-section (2) of Section 150, among other provisions. This is what the court said (p. 487):", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-15", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "\"The next question that was urged in this case was that even if Section 150(1) of the 1961 Act applied, the notice had become barred. It was contended that a notice would become barred even under Section 150(1) if on the date of the appellate order the time for taking action for assessment for that year had become barred by the other provisions of the Act. The correct date in this connection would be the date when the order, which is the subject-matter of the appeal, was passed. If on that date the reassessment proceedings could have been validly taken, then because of subsequent lapse of time, the said reassessment proceedings do not become barred by time. In this case, on 29th December, 1960, the original order of assessment was passed and, therefore, on that date action could have been taken for reassessment for the assessment year 1958-59. That was the date when the order which was the subject-matter of appeal was passed. In that view of the matter, in our opinion, the provisions of Section 150(1) of the Income-tax Act, 1961, would apply on the facts of this case...\"", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-16", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "16. It may be mentioned that December 29, 1960, is the date on which the assessment for the assessment year 1956-57 was completed and certain income was included therein. In the second appeal before the Tribunal, it was held by the Tribunal (in the year 1965) that the said income could not have been included in the assessment year 1956-57, It was held that the income must be deemed to have accrued when the sale deed was executed on September 28, 1957, which fell in the accounting year relevant to the assessment year 1958-59. Pursuant to the order of the Tribunal, the Income-tax Officer issued a notice under Section 148 on December 7, 1965, proposing to reopen the assessment for the assessment year 1958-59 and to include the said income in the income of that year. This was objected to by the assessee, inter alia, on the ground that the notice was barred by virtue of Sub-section (2) of Section 150. It is relevant to mention that the expression \"the order which was the subject-matter of the appeal, reference or revision, as the case may be\" was understood as the original order from which the appeal, reference or revision arises, and not the order which was the immediate subject-matter of the appeal or reference, as the case may be. In other words, the said expression was not understood as referring to the order of the Appellate Assistant Commissioner against which the appeal before the Tribunal was preferred, but to the original order of assessment. This decision, in fact, supports our proposition rather than militate against it. We must also point out that Explanation 2 to Section 153 was also referred to and relied upon for the purpose of rejecting the argument of the assessee relating to the bar of limitation.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-17", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "17. The next decision relied upon by learned standing counsel for the Revenue is of the Gujarat High Court in Addl. CIT v. New Jehangir Vakil Mills Co. Ltd. . On a perusal of the decision, we find that the main question that arose for consideration in the said decision, is: in which year is the compensation (for the land acquired) to be included? It was answered that it should be included in the year in which possession is taken, i.e., when the transfer takes place. In that connection, Sub-section (7A) of Section 155 and Section 48 were referred to. Only towards the end of the judgment, a reference was made to Sub-sections (2) and (3) of Section 153, and it was observed that where the assessment, reassessment, etc., is made in consequence of or to give effect to any finding or direction contained in an order...or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, the limitation provided in Sub-section (2) of Section 153 does not apply. We must, therefore, say that this decision is not relevant to the question in issue before us. \n18. The next decision cited by learned standing counsel is of the Karnataka High Court in Mysore Tobacco Company Ltd. v. CIT . That was again a case arising under Explanation 2 to Section 153. A perusal of the judgment shows that there is no reference to Sub-section (2) of Section 150, nor was its effect considered. It does not even appear that it was relied upon for the assessee. The learned judges referred to Explanation 2 in Section 153 and held that the bar of limitation does not apply. It cannot, therefore, be said that this decision is a relevant authority on the question before us.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-18", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "19. On the other hand, a passage from Sampath Iyengar's Commentary on the Law of Income Tax, Vol. IV, at p. 3584, which has been relied upon by the Tribunal in its judgment, lends support to our view. (Of course, the Tribunal took the extract from the Sixth Edition, i.e., from Vol. II). The learned author has expressed the view that Sub-section (2) of Section 150 is intended to preserve the finality of the orders made in earlier assessment years and that the bar contained therein has to be given effect to.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-19", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "20. Now, coming to the facts of the case before us, the finding in consequence of which notice under Section 148 has been given, was recorded by the Appellate Tribunal at the stage of the second appeal. In this case, it is relevant to notice that the assessee did not file a return within the prescribed period. It was filed only on February 5, 1971. Inasmuch as this return was invalid in the eye of law, a notice under Section 148 was issued by the Income-tax Officer on March 1, 1971, and the assessment was completed on March 29, 1972. Against the said order of assessment, the assessee filed an appeal, which was disposed of by the Appellate Assistant Commissioner on October 6, 1972. The judgment of the Tribunal in the second appeal is dated September 9, 1974. Now, according to Sub-section (2) of Section 150, the initiation of reassessment proceedings would be bad, even when they are initiated in consequence of or to give effect to any finding or direction contained in the appellate order, if such initiation of reassessment proceedings is barred by any other provision of the Act on the date of the order which was the subject-matter of appeal. In this case, the second appeal in which the finding was recorded arose from the order of the Appellate Assistant Commissioner dated October 6, 1972. The question is, whether on that date the initiation of reassessment proceedings is barred by any provision of law ? According to Section 149(1)(b), reassessment proceedings cannot be initiated after the expiry of four years from the end of the relevant assessment year. The relevant assessment year in this case is 1966-67. Four years therefrom would expire on March 31, 1971. Thus, the impugned initiation of proceedings under Section 147 by a notice issued on a date subsequent to", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-20", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "the impugned initiation of proceedings under Section 147 by a notice issued on a date subsequent to September 9, 1974, would be clearly barred. Even if we construe the expression \"the order which was the subject-matter of the appeal, reference or revision, as the case may be\" occurring in Sub-section (2) of Section 150 as referring to the original order of assessment, as has been understood by the Calcutta High Court in ITO v. Eastern Coal Company Ltd. , even then the result would not be different, because the order of assessment in this case was made on March 29, 1972, which too is beyond March 31, 1971.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "f06d78e533eb-21", "Titles": "Commissioner Of Income-Tax vs G. Viswanatham on 27 November, 1987", "text": "21. For the above reasons, we answer the question referred at the instance of the Revenue in the affirmative, though for reasons different from those assigned by the Tribunal. Our answer shall be in favour of the assessee and against the Revenue on this question. \n22. Reference is answered accordingly.    No costs.", "source": "https://indiankanoon.org/doc/7002/"}
+{"id": "33cf9f0714cc-0", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "JUDGMENT Anjaneyulu, J.  \n 1. Dronamraju Satyanarayana of Visakhapatnam is the petitioner herein. In the affidavit filed supporting the writ petition the petitioner states that his occupation is agriculture and he is also the Organizing Secretary, Coastal District of Andhra Pradesh Congress Committee (1). He describes himself as an active public worker and states that he is deeply interested, both personally and politically, in the subject matter of the writ petition. The prayer in the writ petition is somewhat involved. It is good to extract the same below :  \n\"For the reasons and in the circumstances mentioned in the writ petition and in the affidavit filed in support thereof it is just and necessary that this Honourable Court may be pleased to issue a writ of mandamus directing the Central Government to invoke and exercise its constitutional power and discharge its constitutional duties by exercising its constitutional function under Articles 355,356, and 357 of the Constitution of India,. and decide whether conditions enumerated in the said provisions of the Constitution are existing in State of Andhra Pradesh and if so satisfied to initiate constitutional action by taking into consideration, the breakdown of the constitutional machinery in Andhra Pradesh and to invoke and exercise its power by imposing Presidential Rule forthwith under the above constitutional provisions, in Andhra Pradesh or pass such other appropriate order and orders as this Honourable Court may deem fit in the circumstances of the case.\"", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-1", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "Sri Ramachandra Rao. learned Counsel appearing for the petitioner, explaining the scope of the prayer in the writ petition hastened to state that he is not seeking any mandamus to the constitutional authorities for imposing Presidential rule in the State of Andhra Pradesh. He fairly admitted such a direction could not possibly be given by this Court. According to him the constitutional machinery in the State of Andhra Pradesh broke down and a situation has arisen in which the governance of the State cannot be carried out in accordance with the provisions of the Constitution. According to him, the Central Government is fully aware of the situation and even so, no action is being taken in terms of Art. 356 of the Constitution of India to impose Presidential rule as the Centre does not want to displease the non-Congress (1) Government and for various other extraneous considerations. In the alternative, Sri Ramachandra Rao claims that the Centre is indifferent and is not demonstrating any anxiety to enquire into the existing situation for the same reasons as above mentioned. In either event, contends the learned Counsel. the Central Government has disregarded so far its constitutional obligations and refused to exercise the functions under Arts. 355, 356 and 357 of the Constitution. Learned Counsel, therefore, prays that a mandamus be given inthe Central Government to enquire into and decide whether the conditions enumerated in Art. 3-56 of the Constitution are existing in the State of Andhra Pradesh, and if so satisfied, the Central Government should irnpo.4e Presidential rule. This briefly is the relief sought for by the petitioner in the present writ petition.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-2", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "2. For the sake of completeness of facts it may be mentioned that the petitioner filed four separate writ petitions and a combined affidavit for all the four writ petitions. The present writ petition is one of them. The three other writ petitions bear Nos. WP 12425/87, 12805/87 and 12426187. Writ Petition No. 12425/87 is a Writ for Quo Warranto against Sri N. T. Rama Rao, Chief Minister of the State. Writ Petition. No. 12805/87 seeks a mandamus to the authorities concerned to take penal action, including prosecution against Sri N. T. Rama Rao, for violations under the Income-tax Act, Wealth-tax Act, Prevention of Corruption Act and Foreign Exchange Regulations Act. Finally, Writ Petition. No. 12426/87 is for a mandamus for appointing a Commission of Enquiry under S. 3 of the Commissions of Enquiry Act, to enquire into various charges against Sri N. T. Rama Rao, Chief Minister of the State. \n3. In the combined affidavit filed running about 180 pages, the petitioner had set out in detail a number of matters. These are not chronologically arranged for the purpose of identification with each one of the writ petitions. In most cases, there are overlappings. If one may say so, it is a mixed- bag from which each item has to be taken out and examined. \n4. When these writ petitions came up for normal admission it was felt by a Division Bench of this Court that Rule Nisi should not \" issued by applying the ordinary rule of a triable issue or an 'arguable point', but that .Rule Nisi should be issued only if the petitioner made out a substantial prima facie case.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-3", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "5. Notice of motion was accordingly issued to all the respondents to show cause why the writ petitions should not be admitted and the matters were placed before a Full Bench for consideration. Notice was issued to the learned Attorney-General of India to assist this Court in view of the very peculiar nature of these writ petitions and matters of grave importance involved. Learned Attorney-General Sri K. Parasaran, appeared in response to this notice and spent considerable time in the Court dealing with the various issues and explained the implications thereof. Eminent jurist. Sri Nani Palkhiyala entered appearance on behalf of the Chief Minister, respondent No. 1 and we have heard him at length. Learned Advocate- General of the State appeared for the State Government and made his submissions which we have taken note. We have also heard the Counsel on behalf of some interveners. namely, Sri K. Rama Krishna Reddy, Sri M. Narasaiah and Sri K. R. K. Vara Prasad etc. As the four writ petitions dealt with different aspects of the matters, the question concerning the directions if any to be given to the Central Government relating to the alleged breakdown of the constitutional machinery warranting imposition of Presidential rule in the State under Art. 356 of the Constitution, shall be considered in this writ petition. \n6. Obviously because of the preliminary nature of the bearing, none of the respondents in the writ petition filed any counter except Sri N. T. Rama Rao, respondent 1. The counter filed is short. Basically the contention is that the petitioner has no locus standi to file this writ petition and it is, not. therefore. maintainable. Referring to the various contentions it was stated that \"the- factual aspect is not being dealt with at this stage. Suffice it to state that they are all frivolous. -scandalous and ill-merited.\" It is worthwhile extracting below para 4 of the counter :", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-4", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "\"4. 1 state that the petitioner on his own showing belongs to Congress-1 Political Party. In all the elections conducted in the State. the candidates belonging to this party were successively defeated by the candidates set up by the Telugu Desam Party of which 1 am the President. The petitioner belongs to the political, pressure group of the Congress-1 Party which having failed in its attempts to destabilise the party in power through democratic process is in abuse of the process of the court trying to further its aims which it could not do so otherwise. I submit that in filing the writ petitions the petitioner has not acted bona fide, but was actuated by political motives. It is relevant to state that the petitioner was set up by the Congress-1 party, as a candidate for the Mayorship of the Visakhapatnarn Municipal Corporation in the recently conducted elections and he defeated by a large margin by the candidate belonging to the Telugu Desarn Party and his writ petition filed for setting aside the election was dismissed on 8-7-87. I state that the issues raised in the writ petitions are not justiciable as they are all political questions which are not within the ambit of the jurisdiction of the courts. The petitioner does not have judicially enforceable legal right and he cannot he satin to be a person aggrieved and hence he has with locus standi to maintain the writ petitions. For these reasons all the writ petitions are liable to he rejected in limine\"  \n7. Taking up the present writ petition, No. 12427/87 in particular the petitioner (respondent'?), states :\n \"In this writ petition, the petitioner is seeking for the issuance of a Writ of Mandamus for the imposition of President's Rule in Andhra Pradesh State.The petitioner has no locus standi to seek such a relief nor this Honourable Court has any power or jurisdiction to issue such a writ.\"", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-5", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "8. Basically, the contention of Sri. Nani Paikhivala appearing for respondent 1 is that the petitioner has no locus standi to file this writ petition and is a busy body. It is pointed out that he is an important Member of she Congress-I Party in the State which is the principal ritual of the ruling Telugu Desam Party. It is said that the petitioner is a disgruntled and frustrated politician and in a state of despondency filed this writ petition along with others to settle political with respondent 1. Inviting attention to what is popularly known as \"the Judge's case\" in S. P. Gupta v. President of India , learned Counsel reminded us that this Court has to he careful to see that the member of the public who approaches the Court is acting bona fide and not for personal gain or profit or political motivation or other oblique consideration. Learned Counsel urged that this Court must not allow its process to be abused by politicians and others to delay legitimate administrative action or to gain a political objective. Even though the frontiers of public law are expanding far and wide and new concepts and doctrines which will change the complexion of the law are beginning to be Horn, courts mug ensure that in the guise of public interest litigation politicians are not allowed to enter Courts to settle individual political scores. inviting attention to the affidavit filed, learned Counsel pointed out that the petitioner himself does not consider this as public interest litigational all and does not Say so in the affidavit. Sri Palkhivala contends that the writ petition avowedly does not constitute public interest litigation but surely political interest litigation.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-6", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "9. Sri Palkhivala further urges that in a public interest litigation there is no adversarial rule see Bandhua Mukti Morcha v. Union of India, . There is no political motivation (see the Judges' case) public interest litigation cannot he permitted to d-five out good litigation from the Court (see Sachinandand Pandey v. State of W. B., AIR 1987 SC 1109 at p. 1134). It is further urged that the Court shall not admit a petition which required the Court to perform an administrative or executive function - (see Sachidanand Pandey's case (supra)). It is finally urged by Sri Paikhivala that public interest litigation is entertainable covering one or two specific instances. A petition like the present one containing several hundreds of charges is unprecedented in public interest litigation. It is submitted that for obvious reasons this Court cannot go into the several hundreds of questions which are raised by the petitioner, and the petitioner should, therefore, he asked to seek relief elsewhere.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-7", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "10. Learned counsel further pointed out that in order to grant the relief prayed for by the petitioner this court will have to encroach upon the spheres reserved for the legislature and the Executive. Learned Counsel pointed out that it is the function of the President of India to impose Presidential Rule under Art. 356 of the Constitution. Appointment of an Enquiry Commission is a function of the appropriate Government under S. 3 of the Commissions of Enquiry Act. Prosecuting a person for violations of laws is a matter within the purview of the authorities administering the relevant Acts. A writ for Quo Warranto is not maintainable unless the person holding the office is shown to have incurred any disqualification to continue to hold the office. In order to grant these reliefs to the petitioner this Court has to necessarily encroach upon the spheres reserved for others and this Court cannot compel or issue a direction to adopt a particular course howsoever desirable. \n11. Sri S. Ramachandra Rao, learned Counsel for the petitioner invited our attention to a catena of cases in support of 6is contention that the traditional approach towards public interest litigation has undergone enormous changes in Eighties and the frontiers of public interest litigation are now so enlarged that if a matter concerning any definite public importance is brought to the notice of the Court, the Court is bound to act.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-8", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "12. We have also had the benefit of the learned Attorney General explaining how the public interest litigation has come to stay in this country and the salutary results flowing from out of the Courts considering public interest litigation. Learned Attorney General agreed with Sri Palkhivala that enlarging the scope of the public interest litigation would open up the floodgates of litigation. Learned Attorney General pointed out that on grounds of inconvenience and hardship courts cannot refuse to open floodgates of public interest litigation and halt the progress of public good. Learned Attorney General characteristically relied on the observations of Sri Palkhivala himself in his book, \"We, The People\". Our attention has been invited to the following remarks of Sri Palkhivala at page 224 concerning this aspect : \n\"The argument that such a liberal extension of the doctrine of Locus Standi would open up the floodgates of litigation was nailed by Prof. K. E. Scott in words which were approved by the Australian law Reforms Committee : \n\"The idle and whimsical plaintiff, a dilettante who litigates for a lark, is a spectre which haunts the legal literature, not the court room.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-9", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "As Krishna Iyer, J., in Fertilizer Corporation Kamgar Union's case AIR 1981 SC 344 had observed, \n \n\n\"if a citizen is no more than a wayfarer or officious intervener without any interest or, concern beyond what belongs to any one of the 660 million people of this country, the door of the Court will not be ajar for him. But if he belongs to an organization which has special interest in the subject-matter, if he has some concern deeper than that of a busybody, he cannot he told off the gates, although whether the issue raised by him is justiciable  may      still   remain     to     be considered.\"  \n \n\nLearned Attorney General has also invited our attention to a number of cases bearing on the point. We do not consider it necessary to catalogue all these cases in the view that we are taking.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-10", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "13. There is no doubt that the petitioner belongs to a rival political party. There may also perhaps be no doubt that the writ petition is filed out of political considerations. The question for consideration is whether the petitioner can be thrown off the portals of this Court for the above reasons. If the allegations contained in the writ petition are vague, unsubstantial, political in character and roving in nature, it might lend sufficient justification for the Court not to entertain the petition. We have, therefore, critically looked into the various contentions raised in the writ petition. Whether or not true, several of the allegations are grave. It is alleged that the first respondent secured exemptions under the Urban Ceiling Regulation Act contrary to the provisions of that Act by using his official position as Chief Minister. Several documents in support of these allegations were filed. Allegations were made that the first respondent secured for himself and his relations exemptions from the levy of entertainment tax on wholly untenable grounds, clearly violating the provisions of the Entertainment Tax Act. There are allegations that enormous public funds were spent on properties belonging to the first respondent and his relations. A large number of Government Orders were filed to fortify this plea. It is further alleged that on the official residence of the first respondent. which does not belong to him, but to one of is sons, several lakhs of Rupees were spent n renovation and remodelling contrary to ales governing the matter. Copies of orders passed by the Government from time to time were filed. There are also allegations of burning of villages with the connivance and under instructions from the Police Department killing of various persons in false encounters and annihilation of several villages consisting of Scheduled Tribes and Scheduled by the people belonging to the community of the first respondent. There is a further allegation that in making appointments to high offices, persons belonging to the community of the first respondent were elected. A detailed account of such appointments was given in the affidavit. It is alleged that these appointments violate Arts. 14", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-11", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "of such appointments was given in the affidavit. It is alleged that these appointments violate Arts. 14 and 16 of the Constitution. Various other acts of the Executive were questioned with supporting details on the ground that all hose acts were performed by the Government at the behest of the first respondent.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-12", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "14. The above allegations which are merely illustrative and not exhaustive, give in account of some, of the serious allegations made against the first respondent. It is not possible to know at this stage whether these Allegations are true or not, because the first respondent in the affidavit filed by him did not choose to deny the allegations. He only Characterized them as \"frivolous, scandalous and ill-merited.\" The counter-affidavit must cave been drafted by expert legal advisers of he first respondent and it is not as if the first respondent omitted to deny these allegations by accident. As matters stand, we have to take it that the first respondent did not advisedly choose to deny the allegations made against him. May be if a counter is filed by him after the admission of the writ petition something may be said about these allegations, but just now we are not in a position to throw but the allegations contained in the affidavit as of no consequence. In our opinion, a writ petition containing serious allegations touching upon matters of great public importance cannot be thrown out on the short ground that it is filed by a political rival and for political considerations. The best course as suggested by the learned Attorney General, is to look into the allegations critically and if this Court is impressed that the allegations are serious in character and stand uncontroverted at the present time, the locus standi of the petitioner may not be open to question at this stage. Having loocked into the allegations we are prima facie satisfied that this writ petition is not liable to be thrown off on the ground of locus standi. We need not, however, pronounce upon this issue finally inasmuch as we feel the writ petition could be disposed of on other grounds as we shall presently indicate below.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-13", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "15. We have already referred to the allegation of the petitioner that a situation has arisen in the State of Andhra Pradesh in which the Government of the State cannot be carried on in accordance with the provisions of the Constitution. According to the petitioner there is a breakdown of the constitutional machinery. In support of this plea the petitioner refers to the following events : \n (a)Persons who show hostility to the ruling party are locked up in police custody on one pretext or the other and as many as 25 persons (details furnished) died in police custody while in lock-up between January, 1985 and August, 1986. No investigation worth the name was ordered into these lock-up deaths. \n (b) In fake encounters as many as 27 persons (details furnished) were killed between January, 1985 and June, 1986. According to the petitioner, these people were ruthlessly killed by the police in the guise of 'political encounters', and no enquiry, worth the name, was ordered.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-14", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "(c) Tribal villages were en masse, burnt on suspicion that extremists and Naxalites were being harboured in these villages, rendering people homeless, Several hamlets in Visakhapatnam, East Godavari and Adilabad Districts, were burnt. Representations made by the Andhra Pradesh Civil liberties Committee and other voluntary Organizations received no attention. \n (d) The State is endeavouring to extern the tribal population in Adilabad District on the ground that they illegally crossed into the border District of Adilabad from the State of Maharashtra. \n (e) In July 1987, thousands of villages in Chintapalli area were burnt down and the Samanta tribals were being hunted down and their villages were being burnt. The petitioner refers to a police Radio Message flashed to the combing party stating: \n \"......... this is to inform you that under the directions of the Chintapaili DSP villages where Bagata and Gadaba are living should not be disturbed and you are allowed to burn only the villages where the Kodu tribals (Samantas) are living. These directions were given by the DSP .......\" \n(a)The petitioner refers to a statement reportedly made by the State Director General of Police on 2-7-87 and published in the Indian Express admitting the correctness of the above Radio Message, adding that: \n \"it may have been done because tribals were sheltering Naxalites.\"  \n(b)In Padiri Kuppam village of Chittoor District, the entire Harijan colony was razed to the ground and people were killed for their failure to support the ruling party. No action, worth the name. is taken till now.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-15", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "(c)In July 1985, several hundreds of Harijans were massacred in Karamehedu village of Prakasam District by the rich landlords belonging to the cornnnunity of the first respondent. No action, worth the name, is taken so far to book the offenders. \n(d)In Neerukonda village, rich landlords.. belonging to the community of the first respondent, killed the Harijans and injured several other Harijans. They attacked the harijans with axes, spades, sticks and mercilessly beat them. No action whatsoever is taken so far. \n(e) Closely following the above incident, the entire Harijanwada of Neerukonda village was reduced to ashes by fire on 25-7-87. Complaints made by various persons that the houses were set on fire had not received attention. \n(f) In Dechavaram village of Guntur District persons belonging to Reddy community were attacked and several persons were killed. \n(g) In Dontaili village of Nellore District rich landlords belonging to the community of the first respondent axed to death a Backward Class labour leader vide report in the Indian Express dt. 29-8-87. The situation grew tense and in the scuffles that followed, the legs of another Harijan leader were chopped off in broad day-light. \n(a)In Rayachoti village of Cuddapah District the Muslim population are being harassed on the alleged ground that they supported the Congress-I in the Mandal and other elections. \n(b)Persons belonging to weaker sections in Krishnapuram village in Gorantia Assembly Constituency, Anantapur District, were attacked by the Telugu Desam Party workers. About 1 5 houses, including 4 pucca buildings, food grains and currency notes were burnt in the attack. Bombs were freely used.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-16", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "(c)Confrontation threatens between the Legislature and the High Court on account of a resolution passed by a majority of the legislators at the instance of the first respondent to disobey the High Court's orders. There is a threat to the cordial relations till now existing between the High Court and the State Legislature.  \n16. Apart from the above allegations the petitioner has referred to in his affidavit the alleged acts of misrule by the Government and the acts of alleged dishonesty and corruption by the first respondent and his relations. It is alleged that public funds are being diverted for the benefit of the first respondent and his relations. It is also urged that at the instance of the first respondent exemptions under the Urban Ceiling Regulation Act were being granted tb the relations of the first respondent and others. It is further urged that appointments to high offices in the State were made or are being made from among the persons belonging to the community of the first respondent and persons belonging to other communities are ignored.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-17", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "17. Sri Palkhivala appearing for respondent 1, urged that the petitioner has no right to ask for the imposition of President Rule in the State and much less could this Court exercise jurisdiction to give any directions to the Central Government in this regard. Inviting attention to the decision of the Supreme Court in State of Rajasthan v. Union of India, Sri Palkhivala urged that Art.356(1) of the Constitution calls for an assessment of a situation. As Art. 356(1) embraces matters if political and executive policy and Expediency courts cannot interfere with these unless and until it is shown what constitutional provision the President has contravened on admitted grounds of action under Art. 356(1) if the Constitution. It is pointed out that the satisfaction of the President under Art. 356(1) ; a subjective one and cannot be tested by reference to any objective test. In such an vent, the decision must necessarily be left to he executive branch of the Government. It cannot, by its very nature, be a fit subject- matter for judicial determination. Sri Palkhivala has also invited our attention to another decision of the Supreme Court in Bhut Nath v. State of West Bengal, . One of the questions raised in this case was whether the continuance of Emergency proclamation issued by the President of India is valid and he citizen's fundamental right could remain suspended. It was claimed that actually no circumstances existed justifying the reclamation of Emergency and consequently the fundamental rights of a citizen cannot be suspended in the guise of Emergency. Dealing with this contention, the Supreme Court observed :", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-18", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "\"We have to reject summarily the last submission as failing outside the orbit of judicial control and wandering into the para- political sector. It was argued that there was o real emergency and yet the proclamation remained unretracted with consequential peril fundamental rights. In our view, this is a political, not justiciable issue and the appeal could be to the polls and not to the Courts ..... True, an emergency puts a broad blanket blindfolding of the seven liberties of Art. 19 and its baseless prolongation may devalue democracy. That is a political matter dehors our ken. for the validity of the reclamation turns on the subjective satisfaction of the President that a grave emergency, of the kind mentioned in Part XVIII. or its imminent danger exists.\"  \nRelying on the aforesaid observations. Sri Palkhivaia submitted that this Court cannot go into the question whether a situation exists in the State justifying the imposition of the President Rule.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-19", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "18. Learned Attorney General of India, assisting this Court, pointed out that the exercise of power under Art. 356 is largely coloured by political considerations and it is not open to this Court to give any mandamus in the terms prayed for by the petitioner. Learned Attorney General invited our attention to a decision of this Court in In Re A. Sreeramulu,. . Dealing with the question of satisfaction for the purpose of Art. 356(1), Chinnappa Reddy J., (as he then was) observed that the issue of President's satisfaction under Art. 356 is basically a political issue and consequently the Court cannot go into the question whether circumstances exist justifying the imposition of President's Rule. Learned Attorney General agreed with Sri Paikhivala that the 'satisfaction' required for the purpose of Art. 356(1) of the Constitution should be that of the President and it would be impermissible for this Court to go into the merits of the various matters urged by the petitioner and to record its opinion thereon. \n19. Having given our careful consideration to the matter in issue, we must uphold the objections raised by Sri Palkhivala and the learned Attorney General of India to the issuance of a mandamus. While we have set out in some detail the events referred to by the petitioner as justifying the imposition of the President Rule, it is not for us to express any opinion on the same. For the purpose of Art. 356(1) of the Constitution, the 'satisfaction' regarding the existence of a 1situation'in.the State is that of the President of India, and this Court cannot encroach upon the constitutional functions of the President of India.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-20", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "20. We have already referred to the petitioner's allegation that the Union Government remained grossly indifferent about the alleged happenings in the. State and took no action whatsoever under Am. 355, 356 and 357 of the Constitution. We have also referred to the petitioner's plea that even if the alleged happenings are within the knowledge of the Union Government, still the Union Government has failed to exercise its constitutional power for fear that it would antogonise the non-Congress (1) Government in the State. We have, therefore, asked the learned Counsel for the petitioner to state if the petitioner, belonging as he does to the Party-in-power at the Centre, had occasion to bring to the notice of the Union Government and other constitutional authorities the alleged situation prevailing in the State of Andhra Pradesh and sought any action to be taken. We were told that on 19-8- 87 the petitioner submitted a representation to the Honourable Prime Minister of India, inviting the Prime Minister's attention to the various happenings in the State and prayed for imposition of President Rule. Along with the representation the petitioner filed a copy of the consolidated affidavit filed in the four writ petitions. It may be pointed out that while the aforesaid representation was filed before the Hon'ble Prime Minister on 19-8- 87, this writ petition was filed on 24-8-87. If the Union Government did not take any action on the representation filed by the petitioner, it is entirely understandable as the matter is pending consideration by this Court.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-21", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "21. Learned Counsel for the petitioner, Sri S. Ramachandra Rao, however, contends that this Court can issue a mandarnus directing the Union Government to exercise its constitutional power and to discharge its constitutional obligations by making appropriate enquiry into the various matters bearing upon the imposition of the President's Rule. We do not think so. The question concerning the imposition of the President's Rule is a matter entirely within the jurisdiction of the President of India who may act upon the advice tendered to him by the Union Government. There are no ground to think that the Union Government is unaware of what has been happening in the State of Andhra Pradesh or that the Union Government failed to take any action even though it is satisfied that condition exist in the State justifying the imposition of the President's Rule. Having made a representation to the Union Government on 19-8-1987, the petitioner should have given sufficient time to the Union Government to examine the representation and come to an appropriate decision in the matter. Without doing so, the petitioner rushed to file this writ petition in this Court within four days after, giving a representation to the Union Government. While we refuse to give any direction to the Central Government in the terms prayed for by the petitioner, we have no doubt that the representation filed by the petitioner as well as the details set out in this judgment will receive consideration of the Central Government and an appropriate decision will be taken. \n22. The writ petition is accordingly dismissed with the aforesaid observations. There shall be no order as to costs.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-22", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "23. We have beard all the four writ petitions together, upon a notice of motion, to make up our minds whether a rule nisi should be issued or declined. in each one of the four cases. As pointed out by Sri Palkhivala these writs have no parallel in the country. Substantial time was spent in unravelling intricate problems that have cropped up and innumerable judicial precedents had to be considered. We had to go through this exercise at considerable personal inconvenience because we are conscious that rules should not be issued in these writ petitions unless a strong prima facie case is made out. Upon notice of motion, the learned Attorney General, Sri K. Parasaran, assisted this Court sitting through the proceedings for considerably long time. We are benefited by his wise counsel. We express our sincere gratitude to the learned Attorney General of India for the assistance given. Deeply exercised by the feeling that the reflections .of these writ petitions may be experienced elsewhere in the country, eminent jurist Shri Nani Palkhivala, appearing for respondent 1, took considerable pains in inviting the attention of this Court to the relevant aspects of the matter. We convey our high appreciation to Sri Palkhivaia for the assistance given to this Court. The learned Advocate General, appearing for respondent 2, has also ably assisted us in the matter. It was a pleasure watching Shri D. Gopala Subrahmanyam assisting so ably the learned Attorney General of India. We are very impressed by his thoroughness on facts and law and we place on record our appreciation of the assistance given by him.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-23", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "Sri S. Ramachandra Rao the learned counsel for the petitioner, presented the petitioner's case with his usual thoroughness, fairness and ability. We appreciate his services. We are greatly benefited by the arguments of the learned counsel for the interveners, Sarvasri K. Ramakrishna Reddy, M. Narsaiah and K. R. K. Vara Prasad, who enthusiastically . participated      in     the deliberations.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "33cf9f0714cc-24", "Titles": "Dhronamraju Satyanarayana vs N.T. Rama Rao And Ors. on 2 November, 1987", "text": "Immediately after the judgment was  pronounced, the learned counsel for the Petitioner made an oral submission that leave to appeal to the Supreme Court might be granted. We have adverted to the relevant Provisions of the Constitution, which are clear. We find no substantial question of general importance which requires to be settled by the Supreme Court involved in this case; Hence leave declined. \n \n\n24. Petition dismissed.", "source": "https://indiankanoon.org/doc/290785/"}
+{"id": "e06a55f963b8-0", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "JUDGMENT Seetharama Reddy, J.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-1", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "1. The question of law raised at the instance of the Revenue, in this consolidated reference, pertaining to the common assessee in respect of the assessment years 1966-67 to 1971-72 is :  \n \"Whether, on the facts and in the circumstances of the case, the assessment in the status of 'body of individuals' in respect of the share income from the firm, T.L. Jagannadham Son, is valid ?\"", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-2", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "2. The format of the case, as set out in the statement of case, is that Shankaraiah is the karta of the HUF consisting of himself, his major son, Rajanna alias Raja Veeraiah and his two minor sons, Samba Murthy and Ravinder and his wife. He was a partner in a firm known as M/s. Thota Lingaiah Gari Jagannadham Son, having 30% share. Admittedly, the share income belonged to the HUF, as he was representing the family being the karta of it. The share income from the firm was being assessed in the hands of the HUF up to and including the assessment year 1964-65. On October 26, 1963, there was a partial partition in the family, which was reduced to writing by a memorandum. This partial partition was only in respect of the interest of the family in the aforesaid firm. The division was effected by allotting 12% to Shankaraiah and 6% to each of his sons. The capital standing in the name of Shankaraiah in the firm, which admittedly belonged to the joint family, was divided into four equal shares and necessary entries were also made in the books of the firm as an October 26, 1963. Respective accounts were opened in the books of the firm crediting the amounts divided. It was further agreed that Shankaraiah should continue to remain as a partner vis-a-vis the partnership firm and the profit derived by him will be divided between himself (12%) and the three sons at 6% each. Some movables as well as immovable assets were not divided. On October 26, 1963, another agreement was brought into existence. This agreement, having recognised the partial partition between Shankaraiah and his sons, further mentioned that Shankaraiah will continue as a partner but he will receive shares of profit not only for", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-3", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "mentioned that Shankaraiah will continue as a partner but he will receive shares of profit not only for himself but for his sons who have acquired their rights at 6% each by virtue of the partial partition. It was made clear in the agreement that the sons have no rights in the assets of the firm. They have only right to claim for the profits of 6% each from Shankaraiah. It was further mentioned that the sons had agreed to keep Rs. 12,000 either with their father or with the firm towards the share of 6% already held by each of the parties. Shankaraiah's major son, Veeraiah, was taken as a partner in the firm of M/s. T. L. Jagannadham Son and by virtue of his right he was receiving his share income at 6%.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-4", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "3. Assessments were made for the assessment years 1966-67, 1967-68, 1968-69 and 1969-70 on Sankaraiah on the basis of partial partition and 12% share income received by him from the firm was included. The share income of the minor sons which they were entitled to as per the partial partition and the agreement dated October 26, 1963, was not included in there was a \"body of individuals\" consisting of Shankaraiah and his two minor sons, which had to be assessed in respect of 24% shares of profit from M/s. T. L. Jagannadham Son. Consequently, he issued a notice under s. 148 on the alleged \"body of individuals\" represented by Shankaraiah for the assessment years 1966-67, 1967-68, 1968-69 and 1969-70. For the assessment years 1970-71 and 1971-72 notices under s. 139(2) were issued on the said \"body of individuals\". The assessee filed disposed of on November 7, 1972. The assessee, being unsuccessful, preferred writ appeals which were also dismissed on July 3, 1974. The learned singled judge, while dismissing the writ petitions, observed :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-5", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"Prima facie they are a 'body of individuals' a explained by this court in Deccan Wine and General Stores, Hyderabad v. CIT (R. C. No. 101/1970- [1977] 106 ITR 111). We are of the view that the expression 'body of individuals' should receive a wide interpretation, perhaps not wide enough to include a combination of individuals who merely receive income jointly without anything further as in the case of co-heirs inheriting shares or securities, but certainly wide enough to include a combination of individuals who have a unity of interest but who are not actuated by a common design, and one or more of whose members produces produce or help to produce income for the benefit of all.\" \n4. In the appeal filed by the assessee, there was no reference to this aspect as the only question argued was with regard to the legality of the notice issued under s. 148. Thereafter, the ITO passed the assessment orders for those years on the ground that the share income held in the name of any one of the undivided family members is to be assessed in the hands of \"body of individuals\". Thus he brought to tax 24% share of the profit from the firm of M/s. T. L. Jagannadham Son in the hands of \"body of individuals\". He, however, had not taken into account the share income of the major son, Veeraiah, which he received by virtue of his independent right as a partner of the said firm. On second appeal, the Appellate Tribunal placing reliance on a decision in CIT v. Harivadan Tribhovandas , held :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-6", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"The Tribunal in extenso quoted some of the observations of the Gujarat High Court and applied the test laid down therein. Applying those tests, the Tribunal held that there was no 'body of individuals' in the case before it. It was found that there was no activity carried on by the 'body of individuals'. All that happened was that there was a partial partition effected in the family and by virtue of that each member was allotted a share. If an asset is incapable of division one of the modes is to dispose of that asset and share the proceeds thereof among the persons entitled to share. Another method may be to keep the property as joint property and the income derived therefrom is only divided. Yet another method may be to allot that particular property in favour of one coparcener who would be asked to compensate the other coparceners. There are no limitations as regards the method of dividing the common property. In this case the family thought fit to divide it in the manner in which they did. The family represented by its karta was admittedly having interest in the partnership firm. The share in the partnership firm is an asset of the family which is the subject-matter of the partial partition. That share can be divided in any manner in which the parties choose to divide. In this case the mode of division is that the karta continues to be the partner via-a-vis the firm but is accountable to the divided members so far as the shares from the partnership firm are concerned. Qua the firm only the karta is the partner and the divided members only appeared as creditors in the books of the firm as the capital has been divided in equal shares and separate accounts are maintained so far as divided members other than the karta.......... Merely because a division has taken place in the manner done by the parties in this case it does not mean that the parties can be held to constitute 'a body of individuals' in regard to the share income from the firm which has been the subject matter of", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-7", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "body of individuals' in regard to the share income from the firm which has been the subject matter of the partial partition. Each of the divided members are only tenants-in-common in respect of the share income from the partnership firm.\"", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-8", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "5. While distinguishing the case of Deccan Wine and General Stores v. CIT , it was observed by the Tribunal :  \n \"... that was the case where the business had been carried on by the legal representatives after the death of the individual.\" \n6. Adverting to the observations made by the learned single judge in the writ petitions, the Tribunal held that those observations were only tentative observations and were not final pronouncements. The Tribunal rejecting the argument of the Revenue that the arrangement, which was entered into, brought about a \"body of individuals\", as one of the body of the individuals earned money by being a partner and sharing the profits thereof among the members of the body, held that for a division of the share of the partnership there was no need for any agreement for passing of the share to the divided members. In this case it was by mutual agreement that Shankaraiah alone has continued as partner but at the same time the interest of shankaraiah was that of the family and that interest having been divided all the members were entitled to a share in that interest. The Tribunal, therefore, found that this sort of division is one of the accepted modes of division of interest of the properties of a joint family and there can be no objection to the same\". It was also observed by the Appellate Tribunal :  \n \"The Tribunal also stated that even though a specific agreement entered into by the parties, Shankaraiah would be under an obligation to pass on the share income to the divided members as per the partial partition.\" \n7. The above conclusion of the Tribunal was reached on the basis of the decision of the Gujarat High Court in the case of Additional CIT v. Chandulal C. Shah [1977] 107 ITR 91 (Guj). Thus the Tribunal held that there was no \"body of individuals\" to be assessed as a unit of assessment.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-9", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "8. Revenue's case : The contentions of Sri M. Suryanarayanamurthy. learned counsel for the Revenue, are :  \n (1) The definition of \"person\" for the first time is brought in the concept of \"body of individuals\" as a unit of assessment by virtue of the I.T. Act, 1961, under s. 2(31). It should be contrasted with the concept of \"association of persons\". The agreement entered into by Shankaraiah with his two minor sons represented by their mother brought about a \"body of individuals\" with a common purpose of producing income.  \n (2) Even in a case where a superior title is said to arise out of the transactions, the \"body of individuals\" nevertheless emerges and that being a unit of assessment it has to be assessed as such.  \n9. Strong reliance was placed on the observations made by the learned single judge in the writ petitions and also on the decision of this court in Deccan Wine and General Stores v. CIT , and a lot of case law cited in support of the above contentions.  \n10. Case of the assessee : The counter-contentions of Sri Anjaneyulu, learned counsel for the assessee, are :  \n (1) that Shankaraiah was holding the 24% share in the partnership firm on behalf of himself and his two minor sons in agreed proportions as per the agreement dated October 26, 1963. Out of the profits realised by him against the 24% share, Shankaraiah was holding in trust under s. 90 of the Indian Trusts Act on behalf of each of his two minor sons the profits corresponding to their 6% shares and those profits right form the inception belonged to each of the two minor sons and not to any alleged association consisting of Shankaraiah and his two minor sons :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-10", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "(2) that by agreement dated October 26, 1963, Shankaraiah agreed to hold the share of 24% in the partnership firm in his individual name subject to the obligation that the income corresponding to the share of 6% pertaining to each of his two minor sons shall be paid to them. The agreement, therefore, created a superior title in favour of the two minor children and the income corresponding to their 6% share each in the firm was diverted in their favour by an overriding obligation enforceable against Shankaraiah and constituted their income right from the inception. It is was their income although it cannot at the same time be the income of a \"body of individuals\" allegedly consisting of the father and the two minor sons to be assessed as separate unit of assessment, and (3) that is any event the father and two sons did not constitute a \"body of individuals\" for the purpose of assessment under the I.T. Act.  \n11. Relevant material : Before adverting and analysing the arguments and the counter-arguments of the parties, the relevant statutory provision and also the materials contained in the memorandum of partition and the agreement to share may be noticed.  \n12. Section 2(3) of the I.T. Act, 1961, reads as under :  \n \"'person' includes -  \n (i) an individual,", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-11", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "(ii) a Hindu undivided family,  \n \n\n (iii) a company,  \n \n\n (iv) a firm,  \n \n\n (v) an association of persons or a body of individuals, whether incorporated or not,  \n \n\n (vi) a local authority, and  \n \n\n (vii) every artificial juridicial person, not falling within any of the preceding sub-clauses;\"  \n13. MEMORANDUM OF PAST PARTITION \"This Memorandum of Past Partition is executed this 26th day of Octomber, 1963, between :  \n 1. Pabbati Shankaraiah, son of Veeraiah aged about 47 years, resident of Warangal, hereinafter called 'the first party';  \n 2. Pabbati Rajanna alias Raja Veeraiah, son of Shankaraiah, aged about 22 years, resident of Warangal, hereinafter called 'the second party';  \n 3. Pabbati Samba Murthy, son of Shankaraiah, aged about 15 years, resident of Warangal, hereinafter called 'the third party';  \n 4. Pabbati Ravinder, son of Shankaraiah, aged about 9 years, resident of Warangal, hereinafter called 'the fourth party';  \n14. (The parties 3 and 4 being minors are represented by their mother and nearest relative, Pabbati Agamma, wife of Shankaraiah, acting as guardian for them for the limited purpose of partition......)", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-12", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "15. Whereas the joint family having movable and immovable properties and a share through the karta in the business run in partnership with other in the name and style of M/s. Thota Lingaiah Gari Jagannadham Son, I and General Merchants, Warangal\" : Whereas the family is enjoying the said properties as joint family properties and whereas the first party decided to effect partial partition of business assets and the share Re. 0-4-9 (equivalent to 30Ps. out of one rupee held in his name in the said firm of \"M/s. Thota Lingaiah Gari Jagannadham Son\" by metes and bounds and accordingly he has divided the capital of Rs. 58,126 26 belonging to the joint family and standing to the credit of the first party in the said firm's books as on October 26, 1963, in four equal shares and credited the share of capital falling to the share of each of the parties 1 to 4 hereto their respective accounts in the said firm's books as on October 26, 1963, and Whereas he has also partitioned Re. 0-4-9 (equivalent to 30Ps.) share held by him between himself and his sons two, three and four named above as on October 28, 1963, and according to the said partition each of the parties 2, 3 and 4 named above have held one anna (equal to 6Ps.) share out of Rs. 0-4-9 (equal to 30Ps.) in a rupee share held by the first party in his name in the said firm and Whereas the said first party has agreed to pay one anna share of profits (equal to 6Ps.) to each of the parties 2, 3 and 4 from our of Rs. 0-4-9 share of profits", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-13", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "3 and 4 from our of Rs. 0-4-9 share of profits (equivalent to 30 Ps.) excluding interest that may be earned by him in the said firm in his personal capacity from October 26, 1963, and agreed to execute a separate agreement to that effect......", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-14", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "16. AND WHEREAS the share, the capital, the share in reserve and insurance policies shown in schedule \"C\" hereto were allotted to party No. 1 in the said partition on October 26, 1963, and continued to be separate and personal properties of the said first party Pabbati Shankariah, and Veeraiah......  \n SCHEDULE \"C\"  \n17. Movable assets provided to Sri P. Shankaraiah (1) Amount of Rs. 14,531.56Ps., being 1/4th share of capital in the firm of M/s. T. L. Jagannadham Son, Warangal.  \n (2) Insurance policy No. 12625961 Dt. 28-12-1957 for Rs. 2,000 to be matured on 28-12-1972. Annual Premium Rs. 147.  \n (3) Insurance policy No. 12673032 Dt. 28-11-1959 for Rs. 2,000 to be matured on 28-11-1969. Annual premium Rs. 220.88.  \n (4) Re. 0-4-9 share in the firm of M/s. T. L. Jagannadham Son. \n (5) Share in reserve of the said firm.  \n AGREEMENT", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-15", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "18. This agreement is executed this 26th day of October, 1963, Between : -  \n (1) Pabbati Shankaraiah, son of Veeraiah, aged about 47 years, resident of Warangal, hereinafter called \"the first party\"  \n (2) Pabbati Raja Veeraiah, son of Shankaraiah, aged about 22 years resident of Warangal, hereinafter called \"the second party\".  \n (3) Pabbati Samba Murthy, son of Shankaraiah, aged about 15 years, resident of Warangal, hereinafter called \"the third party\".  \n (4) Pabbati Ravinder, son of Shankaraiah, aged about 9 years, resident of Warangal, hereinafter called \"the fourth party\".  \n19. (The parties 3 and 4 being minors are represented by their mother and nearest relative, Pabbati Agamma, wife of Sankaraiah, acting as guardian for them for the limited purpose of partition.)", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-16", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "20. Whereas the parties one to four named above constituted a Hindu joint family and whereas by mutual agreement the have divided the business assets, namely, the capital and the share, in the partnership business run in the name and style of \"Thota Lingaiah Gari Jagannadham Son\" at Main Road, Warangal, and whereas according to the said partition the share Re. 0-4-9 (equivalent to 30Ps.) held by the first party continued in the name of the first party, and one anna share (equivalent to 6 Ps.) out of Re. 0-4-9 share was to allotted each of the parties 2, 3 and 4 named above and the balance of Re. 0-1-9 or (12Ps.) share allotted to party No. 1 and whereas the first party has thus agreed to hold the share in his name for the benefit and enjoyment of himself to the extent of Re. 0-1-9 (equivalent of 12Ps.) and to the share to the benefit of parties 2, 3 and 4 and Whereas the parties 2, 3 and 4 wanted an agreement for the said agreement to be reduced to a writing, misunderstandings lest there might be, among them.  \n THIS AGREEMENT WITNESSETH AS FOLLOWS", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-17", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "21. The share of Re. 0-4-9 (equivalent of about 30Ps.) is allotted to the first party, out of the profits fallen to the share of the first party, he shall pay one anna share of profits to the parties 2, 3 and 4.  \n 2. The parties 2, 3 and 4 are entitled to claim from the first party only one anna share of profits out of the share of profits falling to the share of Re. 0-4-9 (equivalent to 30Ps.) share held by the first party in the firm of \"M/s. Thota Lingaiah Gari Jagannadham Son\" Main Road, Warangal.  \n 3. The parties 2, 3 and 4 shall have no right in the assets of the firm of M/s. Thota Lingaiah Gari Jagannadham Son either by reason of this agreement oar by reason of the partition among the parties 1 to 4 hereto except to claim for the profits of one anna share by each of them from the profits falling to the share of the first party.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-18", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "4. The party No. 2 and the guardian and mother for the parties 3 and 4 have agreed to bear out of the losses falling to the share of the first party in proportion to which the parties 2, 3 and 4 are entitled to the profits in that share. In case the parties 2, 3 and 4 wanted to join in the partnership in the said firm of \"Mrs. Thota Lingaiah Gari Jagannadham Son\", the first party shall surrender out of Re. 0-4-9 (equivalent to 6Ps.) to each one of them who claims to join as a partner with the consent of all the partners in the said firm. Anyone out of parties 2, 3 and 4 that may be admitted in partnership shall be entitled to a share in the reserve of the said firm provided he or they undertakes to adopt the assets and liabilities of the said firm at book values. As and when any of the parties 2, 3 and 4 becomes partners in the said firm of \"M/s. Thota Lingaiah Gari Jagannadham Son\" the first party is not liable to pay the profits to said persons as per this agreement.  \n 5. Party No. 2 and the guardian and mother for each of the parties 3 and 4 have agreed to keep Rs. 12,000 (Twelve thousand) either with the first party or with the firm of M/s. Thota Lingaiah Gari Jagannadham Son, Warrangal, towards the share of 6 Ps. held by each of the parties and each of the parties are entitled to interest on the capital in addition to the share either from the firm or for the first party.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-19", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "6. The parties 2, 3 and 4 shall not be entitled to any share in the profits from the first party from the date the capital is withdrawn from the firm or from the first party.  \n 7. The parties 2,3 and 4 shall not be entitled to interest on the capital and interest on the accumulated profits standing to the credit of the first party retained in the said firm, but entitled to the profits as provided heretoabove.  \n 8. In the case the first party retains the profits due to parties 2, 3 and 4 hereto such amount retained by him must be treated as a loan by the parties whose profits are retained to the first party and the first party shall pay such profits with interest.  \n 9. The parties 2, 3 and 4 shall not be entitled to a share in goodwill or share in the reserves of the partnership except in case they are admitted into partnership.  \n22. In witness whereof the parties hereto set their hands this day this month and this year above written.  \n  Signature of witnesses                 Signature of partners\n1. Sd./ Chidara Chandrasekharam     1. Sd./ Pabbati Sankaraiah\n2. Sd./ Rayabarapu Venkateshwarlu   2. Sd./ Pabbati Rajaveeraiah\n                                       3. Sd./ Agamma\n                                       4. Sd./ Agamma", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-20", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "(The parties 3 and 4 being minors are represented by their mother and nearest relative, Pabbati Agamma, wife of Shankaraiah, acting as guardian for them for the limited purpose of partition.\"  \n \n\n23. The case-law cited may also be referred to.  \n \n\n24. Concept of \"Body of individuals\"", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-21", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "25. In Deccan wine & General Stores v. CIT , one late Pannalal, apart from owning immovable properties, ran certain business known as \"Deccan Wine and General Stores\", \"Moti Wine and General Stores\" and \"Tinus Bar and Hotel\". He died in 1959 and his heirs, his widow and two minor children succeeded to the three businesses. For the assessment years 1961-62 and 1963-64, assessments were made as if the assessee's status was a \"Hindu undivided family\". For the assessment years 1964-65 and 1965-66 the assessee claimed the status of an \"association of persons\" and assessment were made on that basis. For the assessment year 1966-67 also the assessee submitted a return claiming the status of an \"association of persons\". However, by a subsequent letter dated March 27, 1967, it was claimed that each of the three individuals, i.e., the mother and the two minor children (the children continued to be minors) should be separately assessed in their \"individual\" status on their respective one-third share of the income from the business. It was pointed out in the letter that in the course of the year of account there was a partition of the businesses in the sense that the capital of the businesses was divided in equal shares between the three individuals. The ITO held that the three persons constituted a \"body of individuals\" and should be assessed as such and not as an \"association of persons\" either. The order of assessment made by the ITO was confirmed by the AAC and the Income-tax Appellate Tribunal. On a reference the question that was answered by the High Court was \"whether, on the facts and the circumstances of the case, the assessment for the assessment year 1966-67 has been validly made in the status of a \"body of individuals\" ?", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-22", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "HELD (p. 117 of 106 ITR) :  \n \"We are of the view that the expression 'body of individuals' should receive a wide interpretation, perhaps not wide enough to include a combination of individuals who merely receive income jointly without any thing further as in the case of co-heirs inheriting shares or securities, but certainly wide enough to include a combination of individuals who have a unity of interest but who are not actuated by a common design, and one or more of whose members produce or help to produce income for the benefit of all.\" \n26. It was further held (p. 118 of 106 ITR) :  \n \"In the present case, the three individuals have a common interest in businesses. The businesses ar carried on for the benefit of all of them. They cannot constitute an association of persons because two of them are minors and their guardian is herself the third person of the combination and there is, therefore, none who can agree on behalf with the third person. But though the businesses are not carried on pursuant to a common design, they are carried on for their common benefit by one of them representing all of them. The three individuals, in our opinion, clearly constitute a body of individuals. The question referred to us is, therefore, answered in favour of the Department.\" \n27. Ultimately it was held (p. 115 of 106 ITR) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-23", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "27. Ultimately it was held (p. 115 of 106 ITR) :  \n \"In the light shed by section 86(v), it becomes clear that the 'body of individuals' mentioned by section 2(31)(v) must also include bodies whose members are entitled to receive part of the income of such bodies. Again, it may be noted here that under the present Act there is an express provision (section 168) which prescribes that executors should be assessed as 'an association of persons'. Even under the 1922 Act the law was well-settled that co-trustees and co-executors could be assessed as \"an association of persons\"....... There was hardly any need to introduce the expression \"body of individuals\" merely to cover cases already held to be covered by another expression.\" \n28. In CIT v. Harivadan Tribhovandas , it was held (headnote) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-24", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"The assessee and his two brothers received certain properties on a partition in 1958. The property covered by survey No. 170-I continued to be held by the assessee and his brothers jointly even after partition. In 1961, this property was divided among the assessee and his brothers. The assessee was given a sum of Rs. 36,630 in lieu of lands. At the stage of partition one-third portion of the land was mentioned as being worth Rs. 18,400. In the assessment proceedings for the assessment year 1962-63, the Income-tax officer sought to assess the amount of Rs. 18,230 as capital gains. On appeal, the assessee contended that the land comprised in survey No. 170-I were agricultural lands and, alternatively, that the assessee and his brother were a body of individuals. The Tribunal, on the view that a 'body of individuals' is any group of individuals whatsoever irrespective of the object which brought them together and irrespective of the activities which they carry on, held that the assessee and his brothers, in so far as they were joint owners of the property, constituted a body of individuals and so fell within the exemption under section 47(ii).\" \n29. While refusing to answer the question, the High Court observed that the Tribunal had failed to consider and decide the two questions : (i) Whether the assessee and his brothers constituted a \"body of individuals\" in the sense that they were a combination of persons who carried on some activity with the object of deriving income therefrom, and (ii) whether the particular lands were agricultural lands ? It was further held (head note) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-25", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"The words \"body of individuals\" in occurring in the Income-tax Act in the definition of the word 'person' in section 2(31) means a conglomeration of individuals who carry on some activity with the object of earning income. The body of individuals must be carrying on an activity with a view to earn income because it is only with such a body of individuals that the Income-tax Act is concerned and again the words 'body of individuals' derive colour from the context in which they occur, namely, an association of persons.\" \n30. In Meera & Co. v. CIT , an individual carried on business and was assessed under the trade name \"M/s. Meera & Co.\". He died and after his death the business was carried on by his widow on her behalf and on behalf of her three children.  \n \"Held (headnote) that, in the instant case, the business came to be owned by the widow and her three minor children on the death of their predecessor-in-interest. In this situation the widow being the only adult member in the group of legal heirs of the deceased continued the business for the benefit of all...... The income had accrued or should be deemed to have accrued to the body of individuals consisting of P's widow and her three minor children.\" \n31. Further held (headnote) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-26", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "31. Further held (headnote) :  \n \"The expression 'body of individuals' must have a distinct meaning of its own irrespective of the fact that it may have some characteristics common with an 'association of persons.' It could not be the same thing as, or a mere species of, an \"association of persons\". An 'association of persons' does not mean any and every combination of persons. It is only when they associate themselves in an income producing activity that they become an 'association of persons'. The expression 'body of individuals' should receive a wider interpretation, perhaps not wide enough to include a combination of individuals who merely receive income jointly without anything further as in the case of co-heirs inheriting shares or securities, but certainly wide enough to include a combination of individuals who have a unity of interest but who are not actuated by a common design and one or more of whose members produce or help to produce income for the benefit of all. A 'body of individuals' need not necessarily be the result of an agreement, arrangement or design. It might arise out of a certain situation.\" \n32. In CIT v. Deghamwala Estates , it was held that mere execution of a document of sale by two or more persons owning the property jointly cannot bring the co-owners together as a body of individuals. There must be something more than joining together and executing the document. It was further held (headnote) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-27", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"In order to constitute an association of persons, there must be joining together in a common purpose or in a common action, the object of which is to produce income, profits and gains. Though a body of individuals is not identical with an association of persons, they have some similarities. An association of persons may consist of non-individuals also but a body of individuals has to consist only of individuals or human beings. The word 'body' would require an association for some common purpose or for a common cause or there must be unity under some common tie or occupation. A mere collection of individuals without a common tie or common aim cannot be taken to be a body of individuals falling within s. 2(31) of the I.T. Act, 1961.... Section 47(2) of the I.T. Act, 1961, appears to give a clue to the interpretation of the body of individuals when it contemplates that the body of individuals whether incorporated or not must be capable of holding properties as an entity and of distributing them at the time when it dissolves. A common purpose, a common tie, actual or potential capacity to hold properties or disposable income would be the minimum requirement of a body of individuals. The purpose or aim in the context of the I.T. Act should be to produce income or hold income producing assets.\"", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-28", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "33. In Deccan Wine and General Stores v. CIT , the ratio of the Supreme Court in CGT v. R. Valsala Amma , was distinguished on the ground that case arose under the G.T. Act and that the meaning of the same expression under the two different Acts may vary; but, however, the manner of distinction of the Supreme Court's decision has been dissented from in the judgment of the Gujarat High Court in CIT v. Harivadan Tribhovandas observing that - \"We do not agree with the conclusion of the learned judges of the Andhra Pradesh High Court regarding this distinction between the provisions of the G.T. Act the I.T. Act.\"  \n34. In CIT v. T. V. Suresh Chandran [1980] 121 ITR 985 (Ker), immovable property was transferred by a deed executed by the transferors in favour of four transfers. The competent authority initiated proceedings for acquisition of the property covered by the transfers, and the entire property was acquired under one proceeding on the ground that the transfers constituted an association of persons or at least a body of individuals because - (i) the four transfers were brothers; (ii) though the transfer was of distinct plots to the four transfers there was only one agreement preceding the transfer; (iii) one of the brothers alone paid the advance; (iv) only one deed of sale was executed; (v) after the purchase the entire property was levelled up and pile driving commenced before the purchase was completed; and (vi) such pile driving was only for the construction of one building.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-29", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"Held (headnote) that each one of the four transfers has absolute right to the property transferred to him and, in the property transferred to one, the other transfers had no right...... In this case the question was whether the purchase was by an association of persons and not whether an association of persons came into existence after the purchase to run a joint venture. When four persons take sale deeds for different plots of land from the same vendor and when each one of the transfers gets absolute title to the property transferred to him there is no joining in the purchase by the transfers. The fact that they may make or put to common use the property purchased by them is a factor which would have no bearing on the purchase itself. Had the sales been effected by four different instruments the case urged by the Revenue may not have arisen. It would make no difference merely because the four sales were covered by one instruments. The transfer in this case was not by the transferors in favour of the four transferees of the entire property and s. 269C could not be applied on this basis.\" \n35. In CGT v. R. Valsalamma , the assessee and her sister received under the will of their mother, inter alia, a cinema theatre building with machinery and another building called \"police quarters\". Each one of them had a half share in the properties. They gifted these building to their brother by means of a single gift deed and the question was whether the assessee and her sister should be assessed in respect of the gift as individuals or as an association or body of individuals :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-30", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"Held, (headnote) that in law each one of them had half the right in the properties that they gifted to their brother. They were holding the property and made the gift as tenants-in-common. Each one must be held to have made a gift of her share of the property though the gift was made through one single document. The question whether they divided the property or not was not material. The assessee and her sister could not be assessed as an association or as a body of individuals. They could only be assessed in the status of individuals.\"", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-31", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "36. In CIT v. R. S. Desale [1982] 137 ITR 117 (Bom), the agriculturists of a taluka in Maharashtra decided to form a co-operative society to manufacture sugar. A body of 54 members was formed to take the necessary steps and this body was known as the working committee. Seven out of 54 persons were elected to the executive body and out of these 7 persons, 3 persons were appointed as promoters. There was considerable delay in the actual formation of the society as the necessary licence to erect a sugar factory could not be obtained from the Government. The promoters had already collected a large amount towards the share capital of the persons who were to become members of the co-operative society and the amount was deposited with banks which earned interest. Under s. 146 of the Maharashtra Co-operative Societies Act, the promoters were required to invest the amounts in banks as failure to do so would expose them to prosecution. Differing from the ITO as well as the AAC, the Tribunal held that the persons who intended to form a society formed a body of individuals, but with regard to the three promoters, it held that they were not the owners of the contributions but merely received the contributions and held the same for and on behalf of the contributors without claiming any interest therein and that, therefore, the interest received by the promoters could not be assessed in their hands in the status of a body of individuals. The Tribunal further held that a constructive trust had resulted under ss. 81, 90 and 94 of the Indian Trusts Act, 1882, in favour of the individual contributors for whose benefit they held it, that whether the promoters or the body of individuals represented by the promoters were agents of the members or were constructive trustees for the members, the interest income was diverted from them by an overriding title and legal obligation before its accrual and did not reach them and that though the correct status was that of a", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-32", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "obligation before its accrual and did not reach them and that though the correct status was that of a body of individuals, it was not assessable on the interest income as the interest income never reached it as its income. On a reference at the instance of the Revenue, it was held by the Bombay High Court (headnote) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-33", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"(i) that the first requirement required to be satisfied before a group of persons could be treated as an association of persons is that they must have joined with a common purpose or in a common action and the second requirement is that the association must have the object of producing income. The promoters owed their status not to express any agreement among themselves, but they have become promoters as such by virtue of being nominated by the executive committee which was intended to look after the affairs of the co-operative society. Further, the object of appointing the three persons as promoters was was not to carry any business or earn any income, in the form interest from the deposits which were made out of the funds collected by way of contribution of share capital of the co-operative society, but they were to function as promoters for the limited purpose of doing everything that was necessary for the purpose of registration of the society and, once the society was registered, its affairs would be regulated by the provisions of Maharashtra Co-operative Societies Act. Therefore the promoters could not be called an association of persons for the purpose of assessability to tax. \n (ii) A 'body of individuals' contemplated by the definition of 'person' in s. 2(31) of the Act must be a body which has the object of undertaking an income-producing activity. The promoters were merely fulfilling the statutory obligation when they deposited the moneys in the banks as required by law and the obligation did not amount to an income-producing activity. Therefore the promoters could not be assessed as an association of persons or body of individuals in respect of the interest earned on the contribution of share capital of the members deposited by the promoters in the banks.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-34", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "(iii) When income is received by an agent, he receives it for and on behalf of the principal and there is no question of any overriding title. Since the promoters received the income as agents of the shareholders within the meaning of s. 182 of the Indian Contract Act, 1872, and the promoters did not have any title to the income, which really vested in the shareholders, there was no question of any overriding title to the shareholders because, even initially, the title to the income proportionate to the contribution of share capital vested in the shareholders themselves and the promoters were merely acting as agent.\"  \n37. In our view, the factors that emerge, inter alia, out of the combined reading of the memorandum of the past partition and the agreement dated October 26, 1963, are :  \n (1) Partial partition has been effected in respect of the business assets and the share 0-4-9 (equivalent to 30 Ps) held in the name of Shankaraiah in the firm M/s. Thota Lingaiah Gari Jagannadham Son by dividing the capital belonging to the joint family and standing to his credit in the said firm's book in four equal shares and giving credit to the share capital falling to the share of each of the parties to their respective accounts in books.  \n (2) Partition of 0-4-9 (equivalent to 30 Ps) was effected between Shankariah and his three sons in the ratio of 12%, 6%, 6%, 6% each though the properties of the joint family remained joint.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-35", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "(3) The share of 0-4-9 in the reserve held by Shankaraiah, the 1st party, though continued to be in his name but held it for the benefit and enjoyment of himself and also for the benefit and enjoyment of parties 2, 3 and 4. Though the share of 0-4-9 is held by Shankaraiah out of the profits that fall to the said share, he will pay 0-1-0 share to each of the parties 2, 3 and 4.  \n38. In our view, therefore, the vital aspect that emerges out of the above two documents is that on partial partition being effected, there is disruption of the joint family and each of the coparceners is holding his respective share in the assets of the firm separately and so too the profits that flow from out of the said share.  \n38. If this be the arrangement, the question that arises is whether the share income arising out of 0-4-9 share could be said to be the income of a 'body of individuals' for the purpose of levy and assessment of the tax under the Act.  \n39. There is no strait jacket formula as to what constitutes a \"body of individuals\" and any attempt may defy the solution.  \n40. In the light shed by the case law, the expression 'body of individuals' cannot be said to include a combination of individuals who merely receive income jointly without anything further as in the case of co-heirs inheriting shares or securities. But, it could be said to include a \"combination of individuals, who have a unity of interest but who are not actuated by a common design and one or more of such individuals produce income for the benefit of all\".", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-36", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "41. The word \"person\" in s. 2(31) includes a conglomeration of individuals who carry on some activity with the object of earning income. The words \"body of individuals\" derive colour from the context in which they occur.  \n42. A \"body of individuals\" need not necessarily be the result of an agreement, arrangement or design; it might arise out of a certain situation. Though a body of individuals is not identical with an association of persons they have some similarities. An association of persons may consist of non-individuals but not a body of individuals has to consist only of individuals or human beings. A mere collection of individuals without a common tie or common aim, cannot be taken to be a \"body of individuals\".  \n43. Now, the disruption of the family caused owing to partial partition in the assets of the firm resulted in the property being held by them as tenants-in-common. Each one has a distinct right in respect of his share. The mere fact that Shankaraiah held the entire share in his name and thereby distributed the profits in turn to the other coparceners would not, in any way, militate against the share of the assets of the firm being held by them as tenants-in-common.  \n44. Barring this, there is no provision either in the memorandum of past partition or in the agreement which would constitute \"unity of interest\" : nor one of them (Shankaraiah) would be acting in the firm for the benefit of the two minors producing income for all of them, so that these ingredients could be said to contribute towards the formation of a \"body of individuals\". Even inferentially there is no room to conclude that the arrangement would give rise to a \"combination of individuals who have a unity of interest but who are not actuated by a common design and one or more of whose members produce or help to produce income for the benefit of all\".", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-37", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "45. The decision in Deccan Wines & General Stores v. CIT , which was treated as a sheet anchor to the case of the Revenue, makes a wide departure both in colour as well as content, from the case on hand. In the above case one Pannalal died and his heirs, his widow and two minor children succeeded to the three businesses wherein no stranger was either a participant or sharer. In fact, for a couple of years the assessee claimed the status of an \"association of persons\" However, thereafter, it was claimed that the mother and the two minor children should be separately assessed in their \"individuals\" status on their respective one-third share of the income from the businesses since there was a partition of the businesses. In this state of affairs, this court held that the three individuals had common interest in the business carried on for the benefit of all of them, though the businesses were no carried on by one of them representing all and that, therefore, the three individual constitute a \"body of individuals\".", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-38", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "46. Whereas, herein, Shankaraiah, on partition of the assets of the firm, held Rs. 0-4-9 share in his name, but they are distinct and separate shares held for and on behalf of the other members. There in nothing explicit or implicit to spell out from the two documents that there is a unity of interest and one of them is producing income for all. Firstly, the mother, who is the guardian of the two minor children, who are not connected with the business activity, does not participate in the firm's activity, and, secondly, it is not only Shankaraiah but there are other partners too, who carry on the business of the firm. So, there is no arrangement made in those documents showing that Shankaraiah as well as the other partners of the firm are carrying on business for the common benefit of all of them. In this format of the case, it is scarcely possible to that there is \"unity of interest\" and that one of them is carrying on business of the common benefit of all of them so as to constitute a \"body of individuals\". The only consequence, in our judgment, that flows out of this arrangement is that Shankaraiah makes over the profits in favour of the minors in respect of their distinct and separate shares. Thus, at best, this could be postulated as a \"combination of individuals\", who receive income jointly without anything further; and if that be so, it cannot bear the insignia of \"body of individuals\" within the meaning of s. 2(31)(v) of the Act.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-39", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "47. Further, in our undoubted view, Shankaraiah will be holding the income received by him as a constructive trustee under ss. 81, 90 and 94 of the Indian Trusts Act in favour of the two minors for whose benefit he holds it. Looking from this angle also, it cannot be held that Shankaraiah and two minors constitute a \"body of individuals\".  \n48. Preliminary objection - regarding diversion of income by overriding title :  \n The learned counsel for the Revenue raised a preliminary objection with regard to the argument advanced by Sri Anjaneyulu, learned counsel for the assessee, on the aspect of \"diversion of income by overriding title\" stating that this is a different and fresh aspect, which is not open to the assessees to raise in this reference. He further submitted that even if a point was raised, but left unconsidered, the same cannot be allowed to be raised in reference. \n49. Reliance was placed on the following case law. The Kerala High Court in C. V. Mathukutty v. CIT [1977] 108 ITR 1, held (headnote) :  \n \"If it was unnecessary to consider the contention raised, as the case could be disposed of on other material, and was in fact disposed of on other material, the fact that the assessee had raised a contention, the consideration of which was unnecessary for disposing of the appeal and the fact that that contention had not been considered, would not give rise to a question of law which could be said to arise from the order of the Tribunal. A question of law could be said to arise from an order of the Tribunal when a consideration of that question was necessary for disposing of the appeal before the Tribunal.\"", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-40", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "50. In CIT v. Burmah - Shell Oil Storage and Distribution Co. of India Ltd. , the assessee-company was a distributor of petroleum products including gas for cooking. The gas was supplied to the company by a refinery and the company had purchased many specially made cylinders for the purpose of distributing gas to the customers. The customers returned the cylinders to the company after the gas was exhausted and they were refilled again and supplied to the customers. No revenue expenditure or depreciation on the cylinders was claimed or allowed in the past years' assessments. The company sold the cylinders to the refinery in the accounting year for Rs. 82,19,947 against their original cost of Rs. 1,09,63,754. The refinery continued to supply gas in those very cylinders to the company and the company, in its turn, distributed them to the consumers. The company claimed before the ITO that those cylinders were \"returnable packages\" within the meaning of that expression used in Item M(2)(2)(d)(1) of Part I of the Depreciation Schedule, App. 1 of r. 5 of the I.T. Rules, 1962. It also claimed that it had incurred a loss of Rs. 27,43,807 on the sale of those cylinders and that this loss should be allowed as a deduction either under the aforesaid item or under s. 32(1)(iii) of the I.T. Act, 1961 (the Act). The ITO did not allow the claim.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-41", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "51. The company lost its appeal to the AAC. On further appeal, the Tribunal held that the cylinders were \"returnable packages\" and the loss of Rs. 27,43,807 \"incurred by the company in the disposal of the cylinders is a loss allowable as a revenue expenditure within the meaning of\" r. 5 of the I.T. Rules, 1962. The Tribunal did not deal with the company's claim under s. 32(1)(iii) of the Act, for, in its opinion, the company's arguments on that question did not survive. The Tribunal also allowed the full amount of the development rebate claimed by the company.  \n52. After considering the questions proposed by the Commissioner and those formulated by the assessee in reply, the Tribunal referred two questions of law framed by it : (i) \"Whether... the loss of Rs. 27,43,807 arising on the sale of gas cylinders was allowable as a revenue expenditure...... under the classification 'Mineral oil concerns in Item M(2)(2)(d)(1) under the heading '(iii) Special rates to be applied to other machinery and plant' in Part I of App. I to r. 5 of the I.T. Rules, 1962, or under s. 32(1)(iii) of the Act\" (headnote) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-42", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"Held : As the Tribunal did not deal with the company's claim under s. 32(1)(iii), the Tribunal must be deemed to have decided the question of law against the company. The contention for the company that the real controversy before the Tribunal was whether the loss of Rs. 27,43,807 was deductible in the computation of the business income of the company either under r. 5 read with item M(2)(2)(d)(1) or under s. 32(1)(iii), that these two provisions of law were two aspects of the same question whether the amount was deductible as a loss, and that the company was, therefore, entitled to rely on s. 32(1)(iii) on the question of the admissibility of this loss could not be accepted.\" \n53. For the converse proposition, the learned counsel for the assessee relied on the following decisions :  \n54. CIT v. Scindia Steam Navigation Co. Ltd. .", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-43", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "55. In this case the respondent company's steamship which was requisitioned by the Government was lost by enemy action on March 16, 1944. So it received compensation which exceeded the cost price of the steamship and the difference between the cost price and written down value was Rs. 9,26,532. In the assessment of the company for the assessment year 1946-47, the Department sought to charge this amount under the fourth proviso of s. 10(2)(vii) of the Indian I.T. Act, 1922, inserted by the I.T.(Amend.) Act, 1946, which came into force on May 4, 1946. But the company contended that the amount should be deemed to have been received on April 16, 1944, as was done for the purpose of the Excess Profits Tax Act, in which case it could not fall within the accounting period July 1, 1944, to June 30, 1945, relevant to the assessment year 1946-47. The Appellate Tribunal held against the company. On the application of the company the Appellate Tribunal referred the following question of law of the High Court : \"Whether, the sum of Rs. 9,26,532, was properly included in the assessee-company's total income computed for the assessment year 1946-47 ?\" Before the High Court the company for the first time raised the contention that the fourth proviso to s. 10(2)(vii) did not apply to the assessment as it was not in force on April 1, 1946. On behalf of the Commissioner of Income-tax, a preliminary objection was raised that this question did not arise out of the order of the Tribunal within the meaning of s. 66 as it was neither raised before the Tribunal and dealt with by it nor referred to the court. The", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-44", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "as it was neither raised before the Tribunal and dealt with by it nor referred to the court. The High Court overruled the objection on the ground that the form in which the question was framed was sufficiently wide to take in the new contention and the company was entitled to raise it even if that aspect of the question had not been argued before the Tribunal. On appeal to the Supreme Court (headnote) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-45", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"Held, (i) that the High Court had jurisdiction to entertain the company's contention raised for the first time before it that the fourth proviso to section 10(2)(vii) did not apply to the assessment : (per Das, Kapur, Hidayatullah and verkatarama Aiyar, JJ) as the contention was within the scope of the question as framed by the Appellate Tribunal and was really implicit therein; (per SHAH, J.) as the question whether the fourth proviso to section 10(2)(vii) of the Act was applicable to the amount sought to be assessed as the company's income was a question arising out of the order of the Tribunal, and the High Court had jurisdiction to decide the question even if it was not raised and argued before the Tribunal.\" \n56. It was further held that \"under s. 66(2), the court cannot direct the Tribunal to refer a question unless it is one which arises out of the order of the Tribunal and was specified by the applicant in his application under s. 66(1).  \n (1) When a question is raised before the Tribunal and is dealt with by it, it is clearly one arising out of its order.  \n (2) When a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it, and is, therefore, one arising out of its order.  \n (3) When a question is not raised before the Tribunal but the Tribunal deals with it, that will also be a question arising out of its order.  \n (4) When a question of law is neither raised before the Tribunal nor considered by it, it will not be a question arising out of its order notwithstanding that it may arise on the findings given by it.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-46", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "57. A question of law might be a simple one, having its impact at one point, or it may be a complex one, trenching over an area with approaches leading to different points therein. Such a question might involve more than one aspect, requiring to be tackled from different standpoints. All that s. 66(1) requires is that the question of law which is referred to the court for decision and which the court is to decide must be the question which was in issue before the Tribunal. Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal, and it will be an over-refinement of the position to hold that each aspect of a question is itself a distinct for the purpose of s. 66(1) of the Act.  \n58. Sometimes the questions are framed in such general terms that, construed literally, they might take in questions which were never in issue. In such cases, the true scope of the reference will have to be ascertained and limited by what appears on the statement of the case.\"  \n58. In Harish Chandra Golecha (HUF) v. CIT , the Rajasthan High Court held (headnote) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-47", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"(i) if a point of law is implicit in or covered by the question referred to by the Tribunal and no additional facts are necessary to support that point, it may be raised for the first time before the High Court in a reference notwithstanding that it was not raised before or considered by the Tribunal. The expression 'question of law arising out of such order' in s. 66 of the Indian I.T. Act, 1922, cannot be restricted only to those questions which have been argued and decided by the Tribunal. Sometimes, a question of law is raised before the Tribunal but an aspect of that question is neither raised nor decided. In such circumstances, other aspects of the same question can be allowed to be urged before the High Court. Therefore, the question whether the loans were advanced to a registered shareholder or not, which was only one aspect of the applicability of s. 2(6A)(e) of the Act, could be entertained and dealt with by the High Court in the reference even though it was not urged before the Tribunal.\"", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-48", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "59. In CIT v. V. Damodaran , the respondent, the managing director of a private company, withdrew from the company during the period January to March, 1959, amounts totaling Rs. 25,107. The balance-sheet of the company as at March 31, 1958, showed a net profit of Rs. 18,950. The respondent claimed that against the profit of Rs. 18,950 provision for taxation of Rs. 11,000 and provision for dividend of Rs. 6,900 had to be deducted and only the balance of Rs. 1,050 could be considered as deemed dividend under s. 2(6A)(e) of the I.T. Act of 1922. Rejecting his contention the ITO assessed the whole amount of Rs. 25,107 as deemed dividend under s. 2(6A)(e) by taking into consideration also the current profits of the year ending March 31, 1959. The Tribunal held that the current profits could not be taken into consideration, and, rejecting the contention of the respondent, also held that the two sums of Rs. 11,000 and Rs. 6,900 had to be taken into account as accumulated profits of the company for the purpose of s. 2(6A)(e). On the Department's application for a reference, the Tribunal referred the question whether the Tribunal was right in holding that the accumulated profits will not include the current profits for the purpose of s. 2(6A)(e). At the assessee's request the Tribunal included in the same reference the further question whether the Tribunal was right in holding that Rs. 18,950 constituted accumulated profits for the purposes of s. 2(6A)(e). The High Court answered both the questions in favour of the respondent. On appeal, the Supreme Court held (headnote) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-49", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"(i) that the accumulated profit for the purposes of s. 2(6A)(e) did not include the current profits for the period ending March 31, 1959; (ii) that the Tribunal was not competent to refer the second question at the instance of the respondent on an application filed by the Department and the reference of that question must be considered to be void. The question raised by the respondent, viz., whether the provision of Rs. 11,000 for tax and Rs. 6,900 for dividend could be taken into account while determining the accumulated profit as at March 31, 1958, was not related to the question raised by the Department, viz., whether accumulated profits could take in current profits. The two questions involved the grant of separate and distinct reliefs and the decision of one did not affect the decision of the other.\" \n60. On the above conspectus, we are inclined to hold that when a question is raised before the Tribunal, and is either dealt with or failed to be dealt with, or considered but abandoned as unnecessary, must be deemed to have been dealt with by it, and is, therefore, one arising out of its order. Secondly, where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal. It is, therefore, manifest that the aspect of \"diversion of income by overriding title\" can be canvassed by the assessee before this court as its is fairly implicit in the question referred to by the Tribunal, nay, it is one of the facets of the same question, and since in particular, it requires no additional facts for due adjudication, the same can be allowed to be raised. In fact, this aspect has been referred to in paragraph 5 of the statement of the case wherein it is stated :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-50", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"It was further argued that the agreement entered into by Shankaraiah with his two minor sons represented by their mother brought about a 'body of individuals' with a common purpose of producing income. He further urged that if in cases of superior title arising out of the transactions the 'body of individuals' emerges and that being a unit of assessment it has to be assessed as such.\" \n61. Again, in the order of the Tribunal it was specifically adverted to as under :  \n \"It is true, as argued by Mr. Anjaneyulu, that by virtue of the agreement entered into between the parties there was an overriding obligation on Shankaraiah and a superior title in favour of the two minors in respect of their share of profit. But as Mr. Joshi argued even in such circumstances there could be a 'body of individuals' emerging out and they should be treated as a separate assessable entity, we feel that the matter that has to be decided is whether on the facts and in the circumstances of the case, there is a 'body of individuals' liable to be assessed as an assessable entity.\" \n62. The Tribunal further observed :  \n \"That apart, even without the specific agreement entered into by the parties Shankaraiah would be under an obligation to pass on the share income to the divided members as per the partial partition\". \n63. Eventually, it was held by the Tribunal that it was unnecessary to decide the appeal on the basis of the first contention raised by Mr. Anjaneyulu, viz., that there was a superior title or overriding obligation, inasmuch as it was found that the unit of assessment as a \"body of individuals\" does not exist in this case.  \n64. Hence we unhesitatingly hold that this point must be deemed to have been dealt with by the Tribunal and consequently it arises out of its order, which forms part of this reference.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-51", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "65. Diversion of income of overriding title :  \n66. After adjudicating the preliminary objection raised by the Revenue, we are now faced with the proposition, whether by agreement dated October 26, 1963, Shankaraiah agreed to hold the share of 24% in the firm in his individual name subject to the obligation that the income corresponding to the share of 6% pertaining to each of his two minor sons shall be paid to them.  \n67. Before answering, the case-law cited may be adverted to.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-52", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "67. Before answering, the case-law cited may be adverted to.  \n68. In Charandas Haridas v. CIT , C was the karta of a Hindu undivided family consisting of his wife, S, his three minor sons and himself. He was a partner in six managing agency firms and the share of the managing agency commission received by him as such partner was being assessed as the income of the family. On December 31, 1945, C, acting for himself and his minor sons, and his wife, S, entered into an oral agreement of a partial partition, by which the gave his daughter a one pie share on the commission from each of two of the managing agencies and the balance in those agencies and the commission in the other four managing agencies were divided into five equal share between C, his wife and his sons. This agreement was to come into effect on January 1, 1946. On September 11, 1946, C, acting for himself and his sons, and his executed a memorandum of partial partition recording the oral agreement of partition and the particulars of the division. The memorandum recited that the parties had decided that commission which accrued from January 1, 1946, ceased to be joint family property and that each became absolute owner of his share. The Appellate Tribunal held that by the document in question, the division, if any, was of the income and not of the assets from which the income was derived, inasmuch as \"the agreements of the managing agency with the managed companies did not undergo change whatever as a result of the alleged partition\", the assets remained joint and the income remained the income of the joint family. The Bombay High Court affirmed that finding.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-53", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "69. On appeal : (headnote) \"Held, that the fact of a partition in Hindu law might have no effect upon the position of the partner, in so far as the law of partnership was concerned, but it had full effect upon the family in so far as the Hindu law was concerned. Just as the fact of a karta becoming a partner did not introduce the members of the undivided family into the partnership, the division of the family did not change the position of the partner vis-a-vis the other partner or partners. The income-tax law before the partition took note, factually, of the position of the karta, and assessed him not as partner but as representing the Hindu undivided family. In doing so, the income-tax law looked not to the provisions of the Partnership Act, but to the provisions of Hindu law. When once the family had disrupted, the position under the partnership continued as before, but the position under the Hindu law changed. There was then no Hindu undivided family as a unit of assessment in point of fact, and the income which accrued could not be said to be that of a Hindu undivided family. There was nothing in the Indian Income-tax law or the law of partnership which prevented the members of a Hindu joint family from dividing any asset. Such division must, of course, be effective so as to bind the members; but Hindu law did not further require that the property must in every case be partitioned by metes and bounds, if separate enjoyment could otherwise be secured according to the shares of the members. For an asset of the kind in this case there was no other mode of partition open to the parties if they wished to retain the property and yet hold it not jointly but in severally, and the law did not contemplate that a person should do the impossible. The family took the fullest measure possible for dividing the joint interest into separate interests. The document, not being a pretense and being genuine,", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-54", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "dividing the joint interest into separate interests. The document, not being a pretense and being genuine, was fully effective between the members and there was partially no Hindu undivided family in respect of those assets. The document effectively divided the income. There was, therefore, no material to justify the finding that the income in the share of the managing agency commission was the income of the Hindu undivided family.\"", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-55", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "70. In AddI. CIT v. Chandulal C. Shah [1977] 107 ITR 91 (Guj), three brothers, C, N and R, were partners in a firm, each of them as representing his HUF. On January 10, 1961, there was a partial partition as regards the investment made by the respective families of each of the assessees in the firm as well as regards the business which was carried on by the firm. The family of C had to its credit the total amount of Rs. 92,978.41 as deposit in the firm. This amount stood distributed to the credit of different members of the family. As a result of this partition, it was agreed that the assessee, C, his wife, his major son and his three minor sons would each have 1/6th share in the business share of 0-3-3 in the firm which had belonged to C's family. It was found that it was not possible to partition this share of 0-3-3 in the business of the firm and, therefore, the parties to the partition agreed that the assessee, C, should continue to represent them (i.e. the wife and sons) in the firm. It was further agreed that the assessee should receive the share of 0-3-3 from the income of the firm as a representative of the other members of the family and, should, thereafter, distribute the respective shares of the members of the family to each of them as stipulated in the deed of partition It was also stated in the document that C agreed to receive the said share of profits of the firm as an agent of the members of his family and agreed to distribute and hand over their respective share profits as stipulated. The facts relating to the other two brothers were similar. While making the assessment for the assessment year 1963-64, the ITO thought that there was a", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-56", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "the assessment for the assessment year 1963-64, the ITO thought that there was a sub-partnership between C and his family members by virtue of the abovesaid stipulations and that, therefore, the provisions contained in s. 64(i) and (ii) of the I.T. Act, 1961, were attracted and, accordingly, brought the 5/6ths share of C's wife and sons also to tax in the hands of C. On appeal, the AAC held that by an overriding title, 5/6ths share of profits from the firm was, by virtue of the deed of partition, diverted to others and, as such, the assessee, C, should have been taxed only on 1/6th share of the said profit. The majority of the Appellate Tribunal agreed with the ACC. On a reference, the Revenue contended for the view taken by the Income-tax officer (headnote) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-57", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"Held, that the stipulations in the deed of partition did not contain anything which was suggestive of the relationship of partnership between the members of the family. If the document of the partition is taken to be also an agreement creating a sub-partnership between the members of the family, then the minors who were the parties to the document would become full-fledged partners in the so-called sub-partnership, a situation which is patently illegal, because no minor can legally enter into a partnership agreement. In fact, the relevant portion of the document does not speak of any partnership at all. In fact, it had been found that the minors had actually shared the losses. There could be cases where both the elements, namely, (1) sharing of profits, and (2) creation of agency, are in existence with regard to some persons who are parties to the arrangement and yet intention to create partnership is found to be lacking because of the fact that the remaining persons are not legally capable of entering into a partnership agreement. The present is such a case.\"", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-58", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "71. In CWT v. J.K.K. Angappa Chettiar as a result of a partition on March 31, 1961, between the assessee and his two minor sons, the capital account of the HUF, of which the assessee was the karta, in various partnership firms are equally divided between the assessee and hi two sons. This partition was accepted and an order under s. 25A of the Indian I.T. Act, 1922, was also placed by the ITO. The claim of the assessee in his wealth-tax assessments that as two-thirds of the capital in the various partnerships belonged to the minor sons, two-thirds of the share of profits from the various firms also belonged to them was negatived by the WTO who held that after partition according to the terms of the partition deed the sons had no further interest in the partnership business and hence the entire share of the profits belonged exclusively to the assessee. This view was confirmed by the ACC. The Tribunal, however, held that the profits, assets, accretion and investments made out of the profits from the partnership firms attributable to the minor's share cannot be considered as the wealth of the assessee and consequently upheld the assessee's claim. On a reference to the High Court at the instance of the Department (headnote) :", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-59", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "\"Held, that the assessee had been receiving his share of profits on behalf of the HUF and when partition took place the HUF ceased to exist and the parties held the investment as tenants-in-common and were entitled to the profits arising therefrom in accordance with their shares. On and from the date of the partition the karta becomes liable to render an account of the profits and the liability to such account is that of a trustee or agent. The provision of the partition deed relied on by the Revenue dealt only with the liability of the assessee for anything he does after the partition and not with the profit arising from the investment of the family funds already made. Therefore, on and from the date of the partition, the assessee was not entitled to the profits in its entirety but was entitled to only that portion of the profit referable to his share in the capital investment and the minors were entitled to the profits referable to their shares. Accordingly, the share of future profits from the vested in the assessee wholly and exclusively and hence the profits attributable to the interest of the minor sons in the various partnerships cannot be treated as the wealth of the assessee but will have to be treated as the wealth of the minors.\" \n72. In CIT v. Ram Narain it was held that it is fundamental principle of the law of partnership that the relation of partnership arises from contract and not from status. It was held further (headnote) :  \n \"It is clear in law that as a consequence of partition between the members of an HUF, each member of the HUF gets the share in his own right.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-60", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "The assessee who was the karta of HUF consisting of himself, his wife and three sons, became a partner in a firm having 1/4th share in his capacity as karta. On November 15, 1965, there was a partial partition in the family as a result of which the 1/4th share in the firm was divided equally between the five members of the family, each taking an 1/5th share. A memorandum of partition was drawn up on November 8, 1966, according to which the capital standing to the credit of the family in the books of the firm was also divided into five shares and thenceforward the amounts which fell to the shares of the four members other than the assessee were treated as loans from them.\"", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-61", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "73. Conclusion : Just as the fact of a karta becoming a partner did not introduce the members of the undivided family family in the partnership, the division of the family did not change the position of the partner vis-a-vis the other partner or partners. The income-tax law before the partition took note, factually, of the position of the karta and assessed him not as a partner but as representing the HUF. When once the family had disrupted, the position under the partnership remained as before, but the position under the Hindu law changed. Then there was no HUF as a unit of assessment. For an asset of the kind in this case, there was no other mode of partition open to the parties if they wished to retain the property and yet hold it not jointly but severalty. The documents being genuine, the family took the fullest measure possible for dividing the joint interest into separate interest. So, there was practically no HUF in respect of the assets of the firm. The documents effectively divided the income. In fact, the agreement created an overriding obligation on Shankaraiah to make over the income in favour of the minors and, therefore, the income corresponding to the share of each minor right from inception accrued to each minor creating thereby superior title in favour of the minors.  \n74. Even in the light of this aspect, is cannot be said that the arrangement so made would bring about any common interest of income-producing activity, one of them acting for the benefit of all, so as to constitute a \"body of individuals\".  \n75. Summing up : (1) There is no strait-jacket formula as to what constitutes a \"body of individuals\" and any attempt may defy solution.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-62", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "(a) The expression \"body of individuals\" cannot be said to include a combination of individuals who merely receive income jointly without anything further as in the case of co-heirs inheriting shares or securities. But, it could be said to include a \"combination of individuals who have a unity of interest but who are not actuated by a common design and one or more of such individuals produce or help to produce income for the benefit of all\".  \n (b) The word \"person\" in s. 2(31) includes a conglomeration of individuals who carry on some activity with the object of earning income. The words \"body of individuals\" derive colour from the context in which they occur.  \n (c) A \"body of individuals\" need not necessarily be the result of an agreement, arrangement or design; it might arise out of a certain situation. Though a body of individuals is not identical with an association of persons, they have some similarities. An association of persons may consist of non-individuals but a body of individuals has to consist only of individuals or human being. A mere collection of individuals without a common tie or common aim, cannot be taken to be a \"body of individuals\".  \n (2) In our undoubted view Shankaraiah will be holding the income received by him as a constructive trustee under ss. 81, 90 and 94 of the Indian Trusts Act, in favour of the two minors for whose benefit he holds it. Looking from this angle also, it cannot be held that Shankaraiah and the two minors constitute a \"body of individuals\".", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "e06a55f963b8-63", "Titles": "Commissioner Of Income-Tax, ... vs Pabbati Shankaraiah And Ors. on 22 April, 1983", "text": "(3) We are inclined to hold that when a question is raised before the Tribunal, and is either dealt with or failed to be dealt with, or considered but abandoned as unnecessary-must be deemed to have been dealt with by it, and is, therefore, one arising out of its order. Secondly, where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal. It is, therefore, manifest that the aspect of \"diversion of income by overriding title\" can be canvassed by the assessee before this Court and it is fairly implicit in the question referred to by the Tribunal, nay it is one of the facets of the same question and so, can be allowed to be raised.  \n (4) We have no hesitation in holding that the agreement created an overriding obligation on Shankaraiah to make over the income in favour of the minors and, therefore, the income corresponding to the share of each minor right from the inception accrued to each minor creating thereby superior title in favour of the minors.  \n76. In the result, the question under reference in answered in the negative and in the favour of assessee.", "source": "https://indiankanoon.org/doc/1887311/"}
+{"id": "4a3da48668a4-0", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "JUDGMENT Basi Reddy, J. \n 1. In this Criminal Revision case, which has been referred to a Division Bench by our learned brother Jaganmohan Reddy. J. as \" if involves a question of law which is of general application\", the question that falls for determination is whether in n preliminary Register case, that is to say, in a case triable exclusively by a Court of Session, the police can first file what is called a \"preliminary charge sheet\" before a Magistrate, who is to hold an inquiry under Section 207-A, Cr. P. C., then continue the investigation and eventually file a \"final charge-sheet\", deleting the names of some of the persons who had been included in the list of accused in the preliminary charge-sheet: and when such a final charge-sheet is filed, whether the Magistrate can accept it as a police report under Section 173 (1). Criminal Procedure Code and proceed with the preliminary inquiry only against the persons named in the final charge-sheel. In other words, In such a case, does not Magistrate take cognizance of the offence upon the preliminary charge-sheet or upon the final charge-sheet ? \n (2A) In the present case the above question arises in the following way. On 18-5-1964 the Sub-Inspector of Police, Nandigama, filed before the Judicial Second Class Magistrate, Nandi-gama, what was described as a preliminary charge-sheet in Crime No. 40 of 1964 in respect of offences under Sections 147. 148, 323, 324, 325, 307, and 302 I. P C., against 18 persons named therein who were shown as accused Nos. 1 to 18. The last paragraph of that preliminary charge-shed reads thus :", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-1", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "\" Investigation is not yet completed. Final charge-sheet with complete list of P. Ws will be submitted after completing the investigation", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-2", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "2. The learned Magistrate took the case on file, numbered it as P R. C. No. 1 of 1964, remanded to custody such of the accused (including accused No. 18) as had been arrested, and issued non-bailable warranls against the other accused (including Accused Nos. 16 and 17) He, however, made endorsements on the docket of the case-file adjourning the inquiry from time to time, in order to enable the police to complete their invesligalion and file a final charge-sheet.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-3", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "3. The police continued their investigation, examined fresh witnesses and held two identification parades As a result of this investigation, the police were apparently satisfied that Accused Nos. 16, 17 and 18 had been falsely implicated. Ultimatelv after completing the investigation, the police filed a final charge-sheet on 24-8-1964 againsl Accused Nos. 1 to 15 only, omitting Accused Nos. 16, 17 and 18 from the list of the accused. Thereupon the learned Magistrate released Accused 18 from custody, withdrew the non-bailable warrants which had been issued For the arrest of Accused Nos 16 and 17 and fixed a date for the inquiry. Thereupon one Bandi Kotayya, who had been cited in the charge-sheet as a prosecution witness, filed a petition before the Judicial Second Class Magistrate (Cri. M. P. 280/64). In P. R. C. No. 1 of 1964) contend ing that the police had acted illegally in delet-ing the names of Accused Nos. 16 to 18 in the final charge-sheet; that the Magistrate had also acted illegally in deciding not to proceed against those three accused after having taken cognizance of the case against all the 18 accused named in the preliminary charge-sheet; and that the only course open to the Magistrate was to have discharged those three accused under Section 207-A (6), Criminal Procedure Code, if he was of opinion that upon the material placed before him, there were no grounds for com-miling them for trial. The learned Magistrate dismissed the petition, holding that the Court had not taken cognizance of the case at all on 18-5-1964 when the preliminary charge-sheet was filed but that it had taken cognizance of it only on 24-8-19(54 when the final charge-sheet was filed, and", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-4", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "it only on 24-8-19(54 when the final charge-sheet was filed, and so the preliminary enquiry could lawfully be proceeded with in respect of the amised impleaded in the final charge-sheet. The present revision petition has been preferred by Bandi Kotayya, challenging the correctness of the order of the learned Magistrate.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-5", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "4. Before us, the following contentions were raised on behalf of the petitioner : \n (1) The Magistrate had taken cognizance of the offence on the preliminary charge-sheet. Once a Magistrate takes cognizance of an offence, the police go out of the picture; no further investigation by them is permissible. The Magistrate alone can discharge the accused under Section 207-A (6) Criminal Procedure Code, or the Public Prosecutor may, with the consent of the Court, withdraw the prosecution of any of the accused. It is not open to the police to continue the investigation and file a final charge-sheet, deleting the names of one or more of the accused mentioned in the preliminary charge-sheet. In the present case the Magistrate had acted illegally in accepting the final charge-sheet and deciding not to hold an inquiry against Accused Nos. 16 to 18. \n (2) In the instant ease the preliminary charge-sheet was in fact the police report contemplated by Section 173 (1), Criminal Procedure Code inasmuch as it had been filed by the police after completing the investigation. After forwarding such a report to the concerned Magistrate, the police had no power to continue the investigation and file another charge-sheet calling it a final charge-sheet, striking off the names of three of the accused included in the preliminary charge-sheet.  \n 5. So that, the two questions that fall for decision are first, whether in a Preliminary Register Case the Magistrate takes cognizance of the offence upon the filing of a preliminary charge-sheet, or whether he takes cognizance only after the filing of the final charge-sheet; and secondly, in the present case, whether in point of fact, the preliminary charge sheet was a police report as envisaged by Section 173 (1), Criminal Procedure Code and whether the Magistrate had taken cognizance on it.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-6", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "6. What then is the meaning of the expression \"taking cognizance\"? This expression has not been defined in the Criminal Procedure Code and till the Supreme Court explained it in 1951, there was a good deal of uncertainly as to its precise import. However, in R. R. Chari v. State of U. P., , the Supreme Court laid down a simple test and that has to be applied in each case to determine whether or not cognizance has been taken. In that case their Lordships approved and adopled the test formulated by Das Gupta, J. of the Calcutta High Court in the case of Superintendent and Remembrancer of Legal Affairs, West Bengal v. Abani Kumar, . which was as follows : \n \"What is taking cognizance has nut been defined in the Criminal Procedure Code and I have no desire to attempt to define it. It seems to me clear however, that before it can be said that any Magistrate has taken cognizance of any offence under Section 190 (1) (a), Criminal Procedure Code, he must not only have applied his mind to the contents of the petition but he must have done so for the purpose of proceedings, in a particular way as indicated in the subsequent provisions of this Chapter, proceeding under Section 200, and thereafter sending it for inquiry and report under Section 202. When the Magistrate applies his mind not for the purpose of proceeding under the subsequent sections of this Chapter, but for taking action of some other kind, e.g., ordering investigation under Section 156 (3), or issuing a search warrant for the purpose of the Investigation, he cannot be said to have taken cognizance of the offence \".", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-7", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "7. The above observations were with reference to taking cognizance of an offence upon receiving a complaint of facts which constitute such an offence as contemplated by Clause (a) of Sub-section (1) of Section 190, Criminal Procedure Code but the same principle would apply to taking cognizance of an offence upon a report in writing of facts which constitute such an offence made by any police officer, that is to say, upon a police report as contemplated by Clause (b) of Sub-section (1) of Section 190 Criminal Procedure Code, and in determining the question raised in the instant case, the provisions of Section 207-A, Criminal Procedure Code have to he fully borne in mind. Section 207-(A) (1), Criminal Procedure Code lays down : \n \" When, in any proceeding instituted on a police report, the Magistrate receives the report forwarded under Section 173, he shall for the purpose of holding an inquiry under this section, fix a date which shall be a date not later than fourteen days from the date of the receipt of the reporl unless the Magistrate, for reasons to be recorded, fixes any later date.\" \n The sub-sections that follow provide for issuing process to compel the attendance of any witness or the production of any document or thing; for taking the evidence of eye-witnesses produced by the proseculion and the evidence of such other witnesses as the Magistrate deems fit in the interests of justice; and upon a consideration of the evidence of the witnesses and the documents referred to in Section 173, for discharging the accused or framing a charge and committing him for trial before the Court of Session. \n 8. It will be observed that Sub-section (1) of Section 207-A, Criminal Procedure Code postu-", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-8", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "lates the receipt by the Magistrate of a police-report forwarded under Section 173, Criminal Procedure Code as a pre-requisite for commencing the inquiry againsl the accused and taking the first step in that direction, namely, fixing a date for the purpose of holding the inquiry. Therefore, unless and until a police reporl as contemplated by Section 173 is received by the concerned Magistrate, he cannot proceed with the inquiry, and. applying the test formulaled by Das Gupta, J., the Magistrate cannot obviously apply his mind to the contents of the police report for the purpose of proceeding in a particular way, as indicated in the subsequent provisions of Section 207-A, Criminal Procedure Code. It would follow as a necessary consequence that until the Magistrate has before him a police report as envisaged by Section 173 Criminal Procedure Code, he cannot take cognizance of the offence in respect of which he is to hold an inquiry. This would be the true position notwithstanding that, as in the instant case, a preliminary charge-sheet had been presented to him earlier and he had taken the case on file and given it a number for statistical purposes; remanded the accused produced before him, and issued non-bailable war-ranis in respect of the absconding accused. All these steps should be regarded as having been taken not upon taking cognizance of the offence with a view to conduct a preliminary inquiry against the accused named in the preliminary charge-sheet, but only with a view lo facilitate the completion of the investigation and the laying of the final charge-sheet, which would be the report contemplated by Section 173, Criminal Procedure Code. At this stage, it is necessary lo read Section 173, Criminal Procedure Code, so far as it is material for our purpose : \n \" (1) Every investigation under this chapter shall be completed without unnecessary delay and, as soon as it is completed, the officer-in-charge of the police station shall. . . .", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-9", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "(a) forward lo a Magistrate empowered to take cognizance of the offence on a police report, a report in the form prescribed by the State Government, setting forth the names of the parties, the nature of the information and the names of the persons who appear to be acquainted with tbe circumstances of the case, and stating whether the accused fif arrested) has been forwarded in custody or has been released on his bond, and. if so. whether with or without sureties, and", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-10", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "(b) communicate, in such manner as may be prescribed by the State Government, the action taken by him to the person, if any, by whom the information relating to the commission of the offence was first given.  \n (2) Where a superior officer of police has been appointed under Section 158 the report shall, in any cases in which the State Government by general or special order so directs, he submitted through that officer, and he may, pending the orders of the Magistrate, direcl the officer in charge of the police station to make further investigation.\"", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-11", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "9. It is clear from the terms of Sub-section (1) that the report under Section 178 Criminal Procedure Code, is submitted by the police only after the investigation is completed and not before. Where in a given case, before the completion of the investigation, a report, which is styled a preliminary charge-sheet, is forwarded to a Magistrate, that report cannot be regarded as a report under Section 173, Criminal Procedure Code, upon the receipt of which alone a Magistrate, acting under Section 207-A, Criminal Procedure Code., can proceed to hold a preliminary inquiry Viewed thus, it is plain that in the present case the Magistrate had not taken cognizance of the offence when the preliminary charge-sheet was filed before him. On the contrary, he passed orders giving the police sufficient time to complete their investigation and file a final charge-sheet. The police accordingly continued the investigation by examining additional witnesses and holding test identifications, and after ascertaining the truth from all the available material, excluded Accused Nos. 16 to 18 from the list of accused and submitted a final charge-sheet. The Magistrate thereafter took cognizance of the offence and proceeded to hold an inquiry against Accused Nos. 1 to 15 only.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-12", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "10. It may now be taken as settled by a recent decision of the Supreme Court in Pravin Chandra Modi v. The State of Andhra Pradesh Criminal Appeal No. 49 of 1964 : . that a police report need not necessarily be one under Section 178, Criminal Procedure Code and Section 190 (1) (b) takes in reports other than those contemplated by Section 173. In other words, all reports under Section 173 are police-reports, but all police-reports need not be reports under Section 173. That being the position, a preliminary charge-sheet is no doubt a police report, but the Magistrate holding an inquiry under Section 207-A Criminal Procedure Code, does not, indeed cannot, take cognizance of the offence mentioned in that report and proceed with the inquiry upon receipt of such a report. He must wait for the report under Section 173. which would he forwarded to him by the police after completing their investigation Only then, can he commence the inquiry as is apparent from the provisions of Sub-section (1) of Section 207-A Criminal Procedure Code.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-13", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "11. In this connection another judgment of the Supreme Court in the case of Narayandas Rhagwandas Madhavdas v. State of West Bengal. . which throws considerable light on the question we are considering, may he usefully referred to The facts in that case were, that on 7-9-1952 one Narayan-das Bhagwaudas Madhvadas (who will be referred to as \"the accused\") was caught at the Dum Dum Airport with a sum of Rs. 25,000/- in Indian currency notes on his person. when he was about to board an aeroplane bound for Hong Kong. Under the Foreign Exchange Regulation Act, 1947 (which will be referred to as \"the Act\") it is an offence to take currency notes out of the country without the permission of the Reserve Bank of India.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-14", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "Under Section 19(3) of the Act. a District Magistrate or a Magistrate of the First Class, on a representation in writing made by a per-son duly authorized by the Central Government or the Reserve Bank and having reason to believe that there has been a contravention of any of the provisions of the Act, may issue a search warrant. On 11-6-1952 the Reserve Bank authorised an Inspector of the Special Police Establishment, Calcutta, to make a representation to the Additional District Magistrate, 24 Paraganas, for permission to proceed against the accused. Then on 16-9-1952 the Inspector applied to the Additional District Magistrate for a search warrant and that was issued by the Magistrate. On the same date the Inspector further applied to the Magistrate for the issue of a warrant of arrest against the accused and the Magistrate did that also. Thereafter the accused was arrested by the police and let on bail by them with a direction to appear before the Additional District Magistrate on 19-9-1952. On that date, on an application made by the accused, he was released on bail by the Magistrate by making the following order: \n \"He is to give bail of Rs. 50,000/- with ten sureties of Rs. 5,000/- each. Seen police report. Time allowed till 19-11-1952 for completing investigation\".", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-15", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "12. On 19-11-1952, on a perusal of the police-report, the Magistrate allowed further time for investigation until 2-1-1953 and on that date, time was further extended to 2-2-1953. Meanwhile on 27-1-1953 the Reserve Bank, acting under Section 23(3) of the Act, authorised the Inspector to file a complaint against the accused. Accordingly on 2-2-1953 a complaint was filed before the Additional District Magistrate, alleging that the accused had committed an offence under Section 8(2) of the Act read with Section 19 of the Sea Customs Act. (It may be noticed here that Sub-section (1) of Section 23 of the Act is the penal provision and prescribes the punishment for the contravention of any of the provisions of the Act. Sub-section 3 lays down that no court shall take cognizance of any offence punishable under the section except upon complaint in writing made by a person duly authorized by the Central Government or the Reserve Bank by a general or special order). \n 13. On 2-2-1953 the Additional District Magistrate took note of the complaint and made over the case to one Mr. Sinha, a First Class Magistrate, for trial and hound over the accused lo appear before that Magistrate. \n 14. Accordingly the accused appeared before Mr. Sinha and the latter tried the case and acquitted the accused. Against the order of acquittal, the State of West Bengal preferred an appeal to the High court and the High court allowed the appeal, convicted the accused of the offence with he was charged and sentenced him to pany a fine of Rs. 1000/- and the order of the Magistrate directing the release of the currency notes, wns set aside.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-16", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "15. The accused preferred an appeal to the Supreme Court on a certificate of fitness grant-\ned by the Calcutta High court. Before the Supreme Court, one of the contentions raised ed was that on 16-9-1952. when the Magistrate issued a search warrant and a warrant of arrest, he, could not have done so without having previously taken cognizance of the offence. Since, however, the authorization required under Section 23 (3) of the Act was not obtained till 27-1-1953, the cognizance taken by the Magistrate on 16-9-1952, was without jurisdiction. If the initiation of the proceedings was without jurisdiction, the conviction could not stand. \n 16. In repelling that contention, Imam J., speaking for the Court, observed as follows (at page 1121):", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-17", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "\"The main submission on behalf of the appellant was directed towards establishing that the entire proceedings before the Additional District Magistrate and the trying Magistrate were without jurisdiction as cognizance of the offence had been taken on 16-9-1952. in contravention of the provisions of Section 23 (3) of the Foreign Exchange Regulation Act, there being on that date no complaint in writing made by an officer authorised in that behalf by the Central Government or the Reserve Bank of India by a general or a special order. It is, therefore, necessary to see, in the circumstances of the present case, on what date cognizance of the offence was taken. In order to ascertain this, certain provisions of the Foreign Exchange Regulation Act and the Code of Criminal Procedure will require consideration. Under Section 19 (3) of the Foreign Exchange Regulation Act a District Magistrate or Magistrate of the First Class may on a representation in writing made by a person authorized in this behalf by the reasons to believe that there had been a contravention of any of the provisions of that Act, issue a search warrant. Inspector Mitra was so authorized by the Reserve Bank on 11-9-1952, and in pursuance of that authorization applied to the Additional District Magistrate for the issue of a search warrant. Under this section the search warrant is issued for the purposes of conducting investigation under that Act. On September 16, Mitra applied for a warrant of arrest against the appellant. This application was obviously made under the Criminal Procedure Code The offence which the appellant is alleged to have committed was a non-cognizable offence. Under Section 155(2) of the Code of Criminal Procedure, no police officer shall investigate a non-cognizable offence without the order of a Magistrate of the First or Second Class having power to try such a case or commit the same for trial, or of a Presidency Magistrate Inspector Mitra's application definitely slates that he is asking", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-18", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "trial, or of a Presidency Magistrate Inspector Mitra's application definitely slates that he is asking for permission to investigate a non-cognizable offence under Section 155, Criminal Procedure Code. The order of the Additional District Magistrate directing the issue of a search warrant and the word \"permitted\" contained therein we consider, in the context of the application, to mean that he granted the sanction for investigation as asked for. Under Section 155 (3) of the Code a police officer being permitted to investigate a non-cognizable offence mav exercise the same powers in respect of an investigation as an officer in charge of a police station mav exercise in a cognizable case, except that he has not the power to arrest without a warrant. It was necessary therefore for Inspector Mitra to obtain from the Additional District Magistrate a warrant of arrest. It is clear, therefore, that up to 16-9-1952. the Additional District Magistrate had not taken cognizance of any offence.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-19", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "\"On 19-9-1952 the appellant appeared before the Additional District Magistrate who recorded the following order: \n \"He is to give bail of Rs. 50,000/- with ten sureties of Rs. 5,000/- each. Seen police report. Time allowed till 19-11-1952 for completing investigation.\"  \n On 19-11-1952, on perusal of the police report, the Magistrate allowed further time for investigation until 2-1-1953, and on that date time was further extended to 2-2-1953. In the meantime, on 27-1-1953. Inspector Mitra had been authorized under Section 23 (3) (b) of the Foreign Exchange Regulation Act to file a complaint. Accordingly, a complaint was filed on 2-2-1953. The Additional District Magistrate thereon recorded the following order : \n \"Seen the complaint filed today against the accused Narayandas Bhagwandas Madhav-das under Section 8(2) of the Foreign Exchange Regulation Act read with Section 23 B thereof read with Section 19 of the Sea Customs Act and Notification No. F. E. R. A. 105/51 dated 27-2-1951, as amended, issued by the Reserve Bank of India under Section 8(2) of the Foreign Exchange Regulation Act. Seen the letter of authority. To Sri M. H. Sinha, S.D.M. (Sadar). Magistrate 1st Class (Spl. Empowered) for favour of disposal according to law Accused to appear before him\". \n Accordingly, on the same date. Mr. Sinha then recorded the following order: \n \"Accused present Petition filed for reduction of bail Considering all facts, bail granted for Rs. 25,000/- with 5 sureties.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-20", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "To 20-3-1952 and '27-3-52 for evidence\" It is clear from these orders that on 19-9-1952 the Additional District Magistrate had not taken cognizance of the offence because he had allow ed the police time fill 19-11-1952. for completing the investigation. By his subsequent order time for investigation was further extended until 2-2-1953. On that date the complaint was filed and the order of the Additional District Magistrate cleary indcated that he took cognizance of the offence and sent the case for trial to Mr Sinha. II would also appear from the order of Mr. Sinha that if the Additional District Magistrate did not take cognizance, he certainly did because he considered whether the bail should be reduced and fixed the 26th and 27th of March for evidence.\"  \n 17. Again at page 1128 the learned Judge said : \n \" As to when cognizance is taken of an offence will depend upon the facts and circum-stances of each case and it is impossible to at-\ntempt to define what is meant by taking cognizance. Issuing of a search warrant for the purpose of an investigation or a warrant of arresl for that purpose, cannot by themselves be regarded as acts bv which cognizance was taken of an offence.\" \n 18. The principle deducible from this decision is that where a Magistrate allows the police time for completing their investigation, he cannot he said to have taken cognizance of the offence notwithstanding that he had issued a search warrant or a warrant of arrest at the instance of the police Such warrants should be taken to have been issued bv the Magistrate in order to facilitate effective investigation by the police.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-21", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "19. That is precisely the position in the instant case After the receipt of the preliminary charge-sheet, the Magistrate had passed orders from time to time, remanding the accused who were in custody and issuing non-bailable warrants for the arrest of the absconding accused, only with a view to facilitate the completion of the investigation by the police. During that period the Magistrate did not take cognizance of the offence. Only when the final charge-sheet was filed by the police, did he take cognizance and commence the preliminary inquiry only against such of the persons as were shown as accused in that charge-sheet, which was in fact and in law a report under Section 173 (1). Cr. P C. \n 20. This view of ours, would give a free hand to the police to make a thorough investigation before putting up a case against any person. This process would subserve the cause of justice and would ensure that guilty persons are brought to book while innocent persons are saved the trouble, expense and anxiety involved in a criminal prosecution. Any false step at that stage might do irreparable harm to an accused person and it may be difficult to undo a mistake committed in the initial stage. Such a possibility should he avoided in all cases and more so in faction cases, where it is not an uncommon feature for the innocent to be lugged in along with the guilty By conducting a full and fair investigation on the spot. unhampered and uninhibited by rules of evidence and procedure the police would he able to discover the truth, and even if upon a cur-sory investigation, they had included one or more innocent persons in the preliminary charge-sheet, they could drop such persons in the final charge sheet and prevent unnecessary hardship and harassment.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-22", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "21. The learned Advocate for the petitioner, however cited the decision of the Supreme Court in fara Singh v. The State. as supporting his proposition that even upon a preliminary charge sheet, a Magistrate can take cognizance of the offence, in respect of which that charge sheet is filed. But, in our opinion, that decision, far from lending support to such a proposition runs counter to it.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-23", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "22. In that case the accused was one Para Singh. He had been convicted of murder and sentenced to death by the Sessions Court and on appeal the High Court had upheld the con-viction and sentence. He appealed to the Supreme Court after obtaining special leave. Several points were raised and their Lordships ordered a retrial of the case on the ground that the provisions of sections 342 and 288, Cra. P. C., had not been complied with by the trial Court. They, however, overruled the conten-tion based on section 190 (1) (b) read with Section 173 (1), Cr. P. C. This is how (sic) question arose : The case against the accu(sic) was that in the early hours of the morning of (sic) 30-9-1949 he had committed the murders of his father and uncle. The accused was arrested (sic) the afternoon of the same day and was produced before a Magistrate on the next day, i. e,, 1-10-1849. The police asked for a remand to police custody till the 2nd as their invest(sic) tion was not complete. The remand (sic) granted and the accused was produced (sic) another Magistrate on the 3rd. On that day the police handed over to the Magistrate what they called an incomplete challan dated 2-10-49 and also produced certain prosecution witnesic) es. Among the witnesses so produced we(sic) three, who were said to have witnessed the (sic) currence. They were the accused's (sic) mother and sister The Magistrate examination them straightway and recorded their eviden.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-24", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "23.    On  5-10-1949  the  police  submitted not\nthe Magistrate    what they   called    a complete\nchallan and on  the  19th,  they put in a supple\nmentary challan.    The    Magistrate   committed\nthe accused for trial on 12-11-1949.  \n \n\n 24.    At the Sessions trial, all the three eye-witnesses resiled  from  their statements in  the committal Court and the Sessions Judge brought their depositions on  record under Section 288 Cr.   P.  C.  and  relied  on  those depositions  to convict  the accused. \n \n\n 25. The point taken before the Supreme Court was that the committing Magistrate bad acted illegally in taking cognizance of the offence upon an incomplete challan filed by the police, and the depositions recorded thereafter of the three eye-witnesses, could not be rereiv-in evidence. \n 26. The argument advanced on behalf of the accused and the way in which it was dealt with by Bose, J., speaking for the Court, may be gathered from the following excerpt from the judgment in .", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-25", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "\" The first objection  taken to the trial  is\nthat the Magistrate had no power to take cog\nnizance of the case on 3rd October.    According\ningly, the depositions of the three so-called eye- \nwitnesses  which he  recorded  on the 3rd can- \nnot  be  received  in  evidence, and  if  they  are\nexcluded,  then, for  reasons  which  I shall set-\nout hereafter  the whole ease against the appel\nlant collapses because, accord ing to the learned,,\ncounsel, there is  no other evidence on which \nthe conviction can properly he based. (sic) \n \n\n This  part   of   the  argument   is  based   on Section   190, Cr.   P. C.     It  is contended  that cogni(sic) zance of an offence can only be taken in of\n\nof the ways set out in that section. We are concerned here with the method set nut in Clause (b) of Sub-section (1), namely, \"upon a (sic) report in writing of such facts made by any\npolice officer. \"", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-26", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "It is contended that the police\n(sic)  not   permitted   to   send   in   an   incomplete\n(sic)report because of the provisions of Section 173\n(sic) which runs as follows :\n(sic) Every   investigation   under   this  Chapter\n(sic)  be completed  without  unnecessary  delay,\n(sic)soon as it  is completed,  the officer-in-\n(sic) of the police    station shall  --\n(sic) forward  to it   Magistrate    empowered  to\n(sic) cognizance of the offence on a  police  re-\n(sic),    a    report, in    the    form    prescribed    etc", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-27", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "I need not express any opinion about this\n(sic)cause, in my opinion, the challan which the\n(sic) referred    to as an    incomplete challan,\n(sic) the one of 2-10-1949,  was in  fact   a\ncomplete  report  within  the  meaning of Section   190\n(1)   (b). Cr. P. C..  read with Section  173  (sic)\n(sic)   When   the   police  drew up their challan   of\n(sic)1949   and   submitted   it   to   the   Court   on\n3rd. they had in fact completed their inves-\ntion except  for  the  report  of the   Imperial\n(sic)   and   the   drawing   of   a   sketch   map\nthe  occurrence.    It   is   always  permissible\nthe  Magistrate   to  take  additional  evidence\nset   out     in     the challan.     Therefore.   the\n(sic) fact that a second challan was put in on 5th October would not necessarily vitiate the first. All that Section 173 (1) (a) requires is that as soon as the police investigation under chapter 14 of the Code is complete, there should be forwarded to the Magistrate a report in the prescribed form : \n \" Setting forth the names of the parties, the nature of the information and the names of the persons who appear to be acquainted with the circumstances of the case.\"", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-28", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "All that appears to have been done in the report of 2nd October which the police called their incomplete challan. The witnesses named in the second challan of 5th October were not witnesses who were \" acquainted with the circumstances of the case \" They were merely formal witnesses on other matters. So also in the supplementary challan on the 19th The witnesses named are the 1st Class Magistrate, Amritsar, who recorded the dying declaration, and the Assistant Civil Surgeon. They are not witnesses who were '' acquainted with the circumstances of the case \" Accordingly, the challan which the police culled an incomplete challan was in fact a completed report of the (sic) which Section 173 (1) (a) of the Code contemplates There is no force in this argument, and we hold that the Magistrate look (sic) cognizance of the matter.\"", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-29", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "27.    It  will be observed  that the contention\non behalf of the accused  was that  the Magistrate had  no power  to  take cognizance upon in  incomplete charge-sheet.    What  was decid-(sic) the Supreme Court was that oil the facts circuimstances of  that particular   case,  the chargc-sheet  filed   by   the   police   was   in", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-30", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "truth and substance a completed charge-sheet as contemplated by Section 173 (1) (a) and the subsequent charge-sheets were merely of a formal character. It is difficult to see how the above reasoning would support the contention on behalf of the petitioner that even upon a preliminary charge-sheet a Magistrate is competent to take cognizance of an offence and proceed with the inquiry. Another distinguishing feature in Tara Singh's case, was that upon receipt of the first challan, the committing Magistrate look cognizance of the offence, commenced the inquiry, examined the eye-witnesses and even passed an order of commitment In the present case, however nothing like that has happened: on the contrary, the Magistrate was postponing the inquiry from lime to lime and was awaiting the submission of the final charge-sheet by the police. \n 28. It was then contended on behalf of the petitioner that as in Tara Singh's case. in the present rase also, the first charge-sheet filed bv the police on 18-5-1964, though described as a preliminary charge-sheet was in truth a final charge-sheet and therefore the police had no power to continue their investigation and file a second charge-sheet calling it a final charge-sheet, committing the names of three of the accused which had found place in the preliminary charge-sheet. This contention is devoid of substance, because on the facts of this ease, il is abundantly clear lhat when the police filed the preliminary charge-sheet on 18-5-1964, the investigation had not been completed and it was explicitly staled so in the preliminary charge-sheet itself. Further more between the filing of the preliminary charge-sheet and the final charge-sheet, the police continued their investigation, examined material witnesses and held identification parades and all this cannot be regarded as investigation of a merely formal nature.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-31", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "29. It was next argued on behalf of the petitioner that after the filing of a preliminary charge-sheet, the police may have the power to continue investigation and gather evidence against an accused person. but they have no power to rolled evidence in favour of an accused person, which would result in a withdrawal of the prosecution against him. In support of this submission, the learned advocate sought to rely on certain observations of Panchapa-kesa Ayym. J. in Rajagopala Ayyar v. State, 1955 Mad WN 249 at p 250 This is what the learned Judge said :", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-32", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "\" Mr. Ethiraj, pressed (sic) the first conlcnlion viz.. that the notice, after after having laid a final charge-sheet under Section 173. Cr. P C. had no power to investigation further into the offence and lay a supplemental charge-shed, and add some more accuse. He relied on ruling of Jai Lal, J. in Emperor v. All, AIR 1932 Lah 611 for Ibis position. But that ruling will not help him for this case. There, the learned Judge held that when the investigation had been completed and a final charge-sheet laid under Section 173, Cr. P. C., against certain persons as accused, the police had no power to resume the investigation in favour of the accused. That is a perfectly understandable proposition and with respect. I wholly agree with it. Once the police have completed their investigation and laid their final charge-shed against some persons, as persons guilty of the offnce named in the charge-sheet, il will be ridiculous to allow them to go hack on that report and resume the investigation to prove that the persons they had named in their charge-sheet I as the persons who had commit-ted the offence, had really not committed the offence When the Court has taken cognizance of an offence under a final charge-sheet and registered a case against the accused named in that charge-sheet, the Court has taken full seizin of the case regarding those accused and it is its duty after trial to hold whether the accused named by the police as the persons guilty of the offence are guilty or not The police cannot be allowed to blow hot and cold, approbate and reprobate, charge-sheet a man and then resume the investigation to show that he had been wrongly charge-sheeted by them.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "4a3da48668a4-33", "Titles": "Bandi Kotayya vs State (S.H.O. Nandigama) And Ors. on 10 August, 1965", "text": "30. It will be seen that the above observa-tions were made by the learned Judge in res-pect of an investigation which was conducted after the laying of a final charge-sheet under Section 173 on which the Magistrate had taken cognizance of the offence and decided to pro-ceed against the accused named therein Obvi-ously the above reasoning does not support the argument advance by the learned advocate for the petitioner that even where a preliminary charge-sheet is filed before the completion of investigation, the police have no power to continue the investigation and submit a final charge sheet, dropping one or more of the accused, where they are satisfied as a result of the subsequent investigation, that those accused had been unjustly implicated In our opinion, there is no warrant in law or in logic for the suggested distinction between an investigation in favour of and an investigation against a person or persons accused of a crime By definition, investigation denotes nothing more and nothing less than the collection of evidence by a police officer or by a person duly authorized by a Magistrate. \n 31. It follows that the action taken by the police and the Magistrate in the present case, is neither illegal nor improper. The revision case, therefore, fails and is dismissed.", "source": "https://indiankanoon.org/doc/227285/"}
+{"id": "d7fcbb4b9e79-0", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "JUDGMENT Ramachandra Raju, J. \n 1. Writ Petition No. 3308/75 was dismissed in limine at the admission stage. The present writ appeal is filed against it. When the writ appeal came up for final hearing before our learned brothers, Justice Alladi Kuppuswami and Justice K. Jayachandra Reddy, one of us, the Bench referred the matter to a Full Bench. This is how the Writ Appeal is before us.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-1", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "2. The writ petition is directed against the order dated 19-6-1975 passed by the District Co-operative Officer, the lst respondent herein, in his capacity as the Election Officer of the West Godavari Co-operative Sugars Limited, Surappagudem (Bhimadole), West Godavari District (hereinafter referred to as 'the Society'). The Society was registered in the year 1957 under the Andhra Pradesh (Andhra Area) Co-operative Societies Act, 1932 (hereinafter referred to as the 'Old Act'), which was subsequently repealed and re-enacted by the Andhra Pradesh Co-operative Societies Act, 1964 (hereinafter referred to as the 'New Act') which came into force on 25th February 1964. Sri Kommareddy Suryanarayana the lst petitioner in the writ petition (the parties will be referred to as per their description in the writ petition) was appointed by the Registrar of Co-operative Societies as one of the members of the nominated committee of the Society which is to mange the affairs of the Society and was continued upto 30-12-1962. It appears that the Society was not functioning from 31-12-1962 to 2-11-1968 without there being any Committee or persons-in-charge to manage its affairs. Thereafter persons-in-charge were being appointed from time to time upto 1-7-1972 on which date the committee elected for a term of three years to manage the affairs of the Society came into being. During most of the period, from 2-11-1968 upto the date of the election of the Committee, the lst petitioner was also being appointed as person-in-charge either singly or along with others. The lst petitioner was also one of the members of the elected committee which came into being on 1-7-1972 for a term of three years.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-2", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "committee which came into being on 1-7-1972 for a term of three years. According to the provisions of the Act, executive management of the affairs of the Society shall vest in a Board of Directors which shall consist of 19 directors as mentioned in bye-law No. 19 of the Bye-laws of the Society and as mentioned in by-law No. 20 the members of the Board shall elect from among themselves a President and Vice President. The lst petitioner was also elected as President of the Board of Directors of the elected Committee which functioned during the period from 1-7-1972 to 30-6-1975.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-3", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "3. As the term of the elected Committee was to expire by 30-6-1975 and a new Committee had to be elected by the General Body of the Society, the lst respondent was appointed as Election Officer to conduct the elections of the members of the Committee of the Society. The lst respondent called for nominations the last date for filing the same being 18-6-1975. The date 19-6-1975 was fixed for scrutiny of the nominations. The last date for withdrawal of the nominations was 20-6-1975. The election was fixed to take place, if necessary, on 26-6-1975. The lst petitioner filed his nomination for the election of a member of the committee. On 19-6-1975 during the scrutiny of the nominations, the 3rd respondent raised objections to the lst petitioner's nomination alleging that he was appointed by the Registrar of Co-operative Societies as one of the members of the nominated Committee which continued till 30-12-1962. Subsequently he was also nominated by the Registrar as person-in-charge of the Society in October, 1968 and continued in that capacity till 30-6-1971 either singly or along with others. He was thereafter elected as one of the members of the first elected Committee and held office fro 1-7-72 to 30-6-1975 and he became the President of that Committee also. Section 21-C of the Act prescribes a condition that a person who has held office as a member of the Committee for two consecutive terms shall not be eligible for being chosen as a member of the Committee for a third term in continuation. Therefore, the lst petitioner is not eligible to be elected as it would be a third consecutive term for him.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-4", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "4. To these objections filed by the 3rd respondent, the 2nd petitioner, who was proposer of the lst petitioner, filed counter objection. On considering the objections and counter objections the lst respondent the Election Officer, passed the impugned order by holding that the lst petitioner was a member of the Committee for two terms, viz., as a member of the nominated Committee from 5-1-1958 to 24-11-1961 and as a member of the elected committee from 1-7-1972 to 30-6-1975 and as provided under Section 21-C of the New Act the two terms should be considered as consecutive to each other as there was no elected committee during the intervening period of those two terms and therefore as provided under that section the lst petitioner is not eligible for being chosen as a member of the Committee for a third term in continuation and therefore he is not eligible to stand for the election it is this view taken by the Election Officer which is assailed in the writ petition.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-5", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "5. Taking that view, the Election Officer rejected the nomination of the lst petitioner. The Writ petition is filed to quash the order of the lst respondent in rejecting the nomination of the lst petitioner and to direct him to include his name in the list of valid nominations filed for the election and allow him to contest the election to the committee. Along with the writ petition a petition was also filed to stay the election of the committee pending disposal of the writ petition. A similar petition for stay was filed along with the Writ Appeal. In the orders passed on the stay petition file din the Writ Appeal, this Court did not grant stay of the election but allowed the election to take place on 26-6-1975, the date given by the Election Officer for the holding of the elections to elect the members of the Committee, on the condition that the election would be subject to the result in the writ appeal. It appears that the elections to the committee was thereafter held on 26-6-1975.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-6", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "6. The term 'committee' is defined under Section 2 (b) of the New Act as meaning the governing body of a society by whatever name called, to which the management of the affairs of the Society is entrusted. The restriction on consecutive membership of the Committee for a third time is, for the first time, introduced by enacting Section 21-C in the year 1970 by the Amendment Act, 10 of 1970. Prior to the introduction of that provision in the New Act there does not appear to be any restriction on the eligibility for being chosen as a member of the Committee consecutively for any number of terms. It is convenient now to read Section 21-C in full:\n \"Section 21-c. Restriction on consecutive membership in committee: A person who held office as a member of the committee for two consecutive terms shall not be eligible for being chosen as a member of the committee for a third term in continuation.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-7", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "Explanation : For purpose of this section :\n (i) Where a period, during which there is no elected committee, intervenes between two terms of office of the committee or of any of its members, those two terms shall be regarded as being consecutive to each other :\n (ii) a member shall be deemed to hold office for a term, notwithstanding that he has not held the office for a full term.\"  \n 7. The main controversy between the parties is with regard to the interpretation to be given to this section ad the applicability of it to the lst petitioner to make him ineligible for the election in question. Admittedly the lst petitioner was a member of the Committee which was nominated by the Registrar in the year 1957 for two years and extended from time to time upto 31-12-1962 and also of the Committee elected on 1-7-1972 for a term of three years upto 30-6-1975, on the expiry of which the present election was sought to beheld and nominations were called for, and in between these two committees here was no committee functioning much less an elected Committee and only person or persons-in-charge were functioning appointed by the Registrar. If the Committee mentioned in the main body of the section can either be an elected or a nominated one, the two terms of the lst petitioner, one of the nominated and the other of the elected committee, would be consecutive as clarified in the Explanation because in between the terms of the two committees there was no elected committee.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-8", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "8. But it is the case of the petitioners, appellants, as revealed in the Writ petition, that for the application of section 21-C one must have been a member of the elected committee twice, whose terms are consecutive and as the lst petitioner was a member of only one elected committee, the ineligibility mentioned in Section 21-C has no application to him. It is their further case that apart from it, the terms mentioned in Section 21-C must be those which have come into existence subsequent to the Introduction of Section 21-C which means subsequent to the year 70 or at least under the present New Act. The lst petitioner became a member of the committee only once after Section 21-C came into force. Also Section 21-C is unconstitutional and therefore invalid as it offends the fundamental right of freedom of association guaranteed under Article 19 (1) (c) of the Constitution of India.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-9", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "9. During the course of the arguments Sri P.A. Chowdary , learned counsel for the petitioners-appellants, has also argued that in the old Act there was no provision of law authorising the Registrar of Co-operative Societies as now provided under the third proviso to Section 31 (1) of the New Act enabling him, to nominate a committee and therefore the first committee to which the lst petitioner was nominated was not a validly nominated committee. Therefore, being an invalid Committee, that committee cannot be taken into consideration for purposes of Section 21-C of the New Act in which case the lst petitioner must be deemed to have been a member of the Committee for only one term for the purposes of the Section 21-C. \n\n 10. Therefore, the following points arise for consideration: \n 1. Whether the Committee in which the lst petitioner was a member during the period from the year 1957 to 1962 was validly nominated by the Registrar? \n\n 2. Whether the term \"committee\" mentioned in the main body of Section 21-C and in the second part of the Explanation (i) means only an elected committee and it does not mean a nominated committee? \n 3. Whether it means only a committee coming into existence subsequent to the introduction of Section 21-C or at least under the present New Act.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-10", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "4. Whether Section 21-C is opposed to Article 19 (1) (c) of the Constitution and therefore invalid? \n 11. Point No. 1 :-- Though this point was, for the first time, raised during the course of the arguments by Sri P.A.Chowdary we allowed it to be argued. It is the argument of Sri P.A. Chowdary that while in the New Act there is provision empowering the Registrar to nominate a committee, there is no such provision in the Old Act and therefore the committee which was nominated by the Registrar before the New Act came into force was not a validly nominated one and therefore it cannot be taken into account. Another argument of Sri Chowdary is that it is not known whether the General Body of the Society constituted any Committee at all before the Registrar nominated its members and from this point of view also it must be held that the committee nominated by the Registrar was not a properly constituted one. It is true that there is no provision in the Act itself of the Old Act for the Registrar of Co-operative Societies to nominate a Committee. Under the New Act there is provision in the Act itself with regard to it under the third proviso to Section 31 (1). Section 31 (1) so far as it is relevant for our purposes may be extracted thus:\n :Section 31. Constitution of Committees.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-11", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "(1) The General Body of a society shall constitute a committee in accordance with the bye-laws and entrust the management of the affairs of the society to such committee. \n Provided ................................. \n Provided further that in the case of a society registered after the commencement of this Act the persons who have signed the application for the registration of the society may appoint a committee to conduct the affairs of the society for a period of three months from the date of registration or for such further period ordinarily not exceeding six months as the Registrar may consider necessary, but the committee appointed under this proviso shall cease to function as soon as a committee has been constituted in accordance with bye-laws. \n\n Provided also that where the bye-laws so provide, the Government or the Registrar may nominate all or any of the members of the committee for such period as may be specified therein. \n\n (2) (a) The term of office of the committee or of any of its members shall be for such period, not exceeding three years, as may be specified in the bye-laws. \n\n (b) Notwithstanding anything in clause (a) if for any reason the election of the members of the committee is not held by the time of the expiration of the existing committee the Registrar may for reasons to be recorded in writing direct that the term of office of that committee shall extend up to such time as such election is held, which extension shall not ordinarily exceed one year? \n\n (3) .........................", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-12", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "(4) For the purpose of electing members of a committee, the general body :\n (i) shall divide the number of members into constituencies and allot seats therefor, where the bye-laws so provide;\n (ii) may, in the absence of such bye-laws elect from among all the members of the society.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-13", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "12. According to the third proviso to Section 31 (1) as extracted above, it is clear that the Government or the Registrar may nominate all or any of the members of the Committee where the bye-laws of the Society so provide. Therefore, even under the New Act the source of power of the Registrar to nominate a committee with regard to a society is the bye-laws of the society. Bye-laws of a co-operative society are regulations governing the functioning of the Society. Of course they have to be made subject to the provisions of the Co-operative Societies Act under which it is formed and the rules made thereunder. Both under the Old Act and the New Act, rules were framed under the rule-making power given in the Acts, Section 65 of the old Act and Section 130 of the New Act. Some of the subjects on which rules can be made were mentioned in particular in Section 63 of the Old Act. It is provided under Section 65 (3) (d) of the Old Act that the State Government may make rules prescribing the matters in respect of which a society shall make bye-laws and for the procedure to be followed in making, altering and abrogating the bye-laws. It was provided under rule 1 of the Rules framed as provided under Section 65 of the Old Act that any body of persons desired to apply for registration as a co-operative society under the Act shall apply to the Registrar of Co-operative Societies in the form prescribed in the schedule. It is further provided under rule II that with every application for registration, the applicant shall submit a draft of the bye-laws agreed upon by them. The bye-laws shall be consistent with the Act and the Rules made by the Government thereunder and they shall deal with matters specified in clauses (a) to (z) mentioned therein and may deal with such matters incidental to the organisation of the society and the management of its business as may be deemed necessary.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-14", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "matters incidental to the organisation of the society and the management of its business as may be deemed necessary. The subject matters on which bye-laws may be made are mentioned in clauses (a) to (z) of rule II. The subject matter (u) relates to mode of appointment and removal of the committee and of other officers and the duties and powers of the committee and of such officers. Therefore, a society registered under the Old Act was entitled to make bye-laws for the appointment and removal of the committee. There is a similar provision made in rule 5 of the Rules framed under the New Act. Some of the matters on which bye-laws of a society may be made have been enumerated in rule 5 of the Rules. Matter No. 23 deals with the constitution of the Committee.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-15", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "13. In accordance with the provisions of the Old Act and the Rules framed thereunder, bye-laws were framed by the Society. These bye-laws are made available to the court at the time of arguments. It is provided under bye-law No. 18 that subject to such resolutions as the General Body may from time to time pass, the executive management of the affairs of the Society shall vest in a Board of Directors which shall consist of nor more than 17 members of whom not more than one shall be from among non-cane grower members. There shall be the nominees of the State Government and two shall be the nominees of the Industrial Finance Corporation. Bye-law No. 19 provides as to how the members of the Board of Directors other than the nominees of the State Government and the Industrial Finance Corporation shall be elected by the General Body for a period of three years from among the members holding not less than 30 shares. A transitory provision was made under bye-law No. 19 which is as follows :\n :Notwithstanding anything contained in bye-law Nos. 18 and 19 the Registrar shall in the first instance nominate a Board of Directors not exceeding nine members. They shall hold office for a period of one year or any such further period as the Registrar may consider necessary. The question for a meeting of this Board of Directors shall be five. It shall be competent to the Registrar of this Board of Directors shall be five. It shall be competent to the Registrar to terminate the nomination of any of the members of the Board and nominate another in his place. Any vacancy on the Board of Directors shall be filled by the Registrar by nomination for the unexpired period.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-16", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "14. These bye-laws were approved by the Registrar as provided under the Old Act in the year 1957. Therefore, it is clear from the above that there is a provision in the bye-laws of the Society made under the Old Act authorising the Registrar to nominate all the members of the Committee in the first instance. It is under this provision the Registrar nominated the Committee in question of which the lst petitioner was a member. Though there is no provision in the Old Act itself, as in the New Act, for the Registrar to nominate any or all members of the Committee, that provision was made in the bye-laws made by the Society in accordance with the Act and the Rules framed thereunder. Sri Chowdary has argued that the source of power of the Registrar to nominate a committee must find a place in the Act itself and without that he could not have validly exercised that power. We are unable to appreciate this argument of the learned counsel. Even under the New Act there is no power granted to the Registrar by the Act itself to nominate a committee. Even as per the third proviso to Section 31 (1) of the New act that power has to be granted only by the bye-laws. Specific provisions is only made in the New Act for the society to made bye-laws, if it so desires, authorizing the Registrar to nominate any or all members of the committee. Even without any specific provision like that in the Old Act, as provided under the Old Act and the Rules framed thereunder power was given to the society to make bye-laws on matters incidental to the organisation and the management of its business on subject matters specifically enumerated for making bye-laws. The subject relating to mode of appointment and removal of the committee was also mentioned. It is under the power given under this rule, the Society framed bye-laws for its organisation and management of its business and in so framing the bye-laws authorised the Registrar to nominate the managing committee", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-17", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "management of its business and in so framing the bye-laws authorised the Registrar to nominate the managing committee in the first instance. If such a bye-law was passed by the Society, it is understandable how a Committee nominated in accordance with the bye-laws. Nos. 18 and 19 and the transitory provision made under bye-law No. 19 it is clear that the General Body of the Society both constituted the Committee and also authorised the Registrar to nominate the members of the Committee in the first instance fixing its strength as nine members. Under these circumstances, we do not find any substance in the contention of the learned counsel that the nominated Committee of which the lst petitioner was a member was not a properly constituted or nominated committee.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-18", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "15. Sri P.A. Chowdary has also argued that the bye-laws of the Society have no statutory force and therefore the power given to the Registrar under the statutory provision to bye-law No. 19 to nominate the members of the first Committee could not clothe him with the power to nominate the Committee validly. It is true that the bye-laws of a society have no statutory force. That means they cannot override any provision of law. It only means that a co-operative society cannot make bye-laws contrary to the provisions of the Act or the Rules framed thereunder or any law. So long as the transitory provision to bye-law No. 19 under which provision the Registrar of Co-operative Societies nominated the Committee was not against any law, that would clothe the Registrar with the power, being the one conferred on him by the General Body of the Society to nominate the Committee validly. In this connections, Sri Chowdary has also placed reliance on the decision Co-operative Central Bank Ltd., v. Addl. Industrial Tribunal, A.P. . There, the question amounting to altering the conditions of service contained in the bye-laws dealing with the conditions of service of the employees of the Banks. In that connection, the Supreme Court said that the bye-laws of the Banks have no statutory force and therefore they cannot override the provision of the Industrial Disputes Act. Therefore, there is no substance in this argument of the learned counsel also.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-19", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "16. Points 2 and 3:-- It is provided under Section 21-C that a person who holds or has held office as a member of the committee for two consecutive terms shall not be eligible for being chosen as a member of the Committee for a third term in continuation. The expression \"committee\" will take in both an elected committee and a nominated committee. If the legislature intended by the expression \"committee\" used there as meaning only an elected committee, they would have said so clearly. When they intended it to be an elected committee, when they said that in between two terms of office of the committee if a period intervenes during which there was no elected committee those two terms should be regarded as being consecutive terms mentioned in the main section. Even in the Explanation when reference is made to the two terms of office there also they said only 'committee' and not 'elected committee' as mentioned in the earlier portion of then for the committee during the intervening period. Therefore, a plain reading of the main section and the explanation together makes it abundantly clear as to what the Legislature meant when they used only the expression 'committee' both in the main section and in the Explanation without using the expression 'elected committee'. They must have meant it to be both an elected committee and a nominated committee. The reason also is obvious when we got the objects and reasons for enacting this provision to disqualify a person to hold office as a member of the committee continuously for three (terms). In the Amendment Act by which S. 21-C was introduced, it was mentioned that at the conference of Chief Ministers and Ministers of the States in charge of co-operation held at Madras on 12th June, 1968, certain recommendations were made for amending the Co-operative Societies Act in force in the States so as to make a provision among other matters for curbing the growth of vested interests in co-operative societies ad to impose a restriction on holding membership in the", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-20", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "the growth of vested interests in co-operative societies ad to impose a restriction on holding membership in the committee of co-operative societies consecutively for more than two terms. Therefore, the intention of the Legislature in enacting the restriction in Section 21-C of the New Act is to prevent the growth of vested interests in co-operative societies by imposing a break in continuity in office for more than two terms. If that was the object in enacting Section 21-C of the New Act, it is clear that the Legislature would not have intended the holding of office as a member of the committee only with regard to an elected committee and not a nominated committee and that too for the two consecutive terms to take place only subsequent to the introduction of Section 21-C without any reference to the holding of office as a member of the committee prior to the enactment of that section. For the restriction to operate that the Legislature intended both the subsequent and the previous holding of office as a member of the committee is clear from the language used in the Section when it said \"a person who holds or has held office\". This expression used in the section clearly indicates that though the restriction is only for being chosen as a member of the committee for a third term after coming into force of Section 21-C the holding of office as a member of the Committee both at the time the section came into force and also the office held earlier have to be taken into account for the purpose of the two consecutive terms mentioned therein.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-21", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "17. Whether a particular provision of law is retrospective or prospective in its operation has to be gathered from language used in the enactment and the object and the intent of the Legislature in enacting it. When the language used is capable of only one interpretation giving only one meaning, that meaning should be given irrespective of other considerations. But, if the language used is capable of more than one interpretation without used in the any violence to the language used in the enactment, it ought to be construed, to be consistent with the other provisions of the enactment and to be in accordance with the objects and the Legislature intent in enacting the provision. In the decision Carew & Co Ltd., v. Union of India AIR 1975 S 2280 the Supreme Court said that when two interpretations are feasible that which advances the remedy with the court. From this point of view also, having regard to the Legislative intent in enacting the provision, Section 21-C of the Act, it must be taken that for the purpose of consecutive membership of the Committee, the Committees appointed both before and subsequent to Section 21-C must be taken into consideration. As we have already discussed above on a fair reading of Section 21-C it is capable of only one interpretation viz. that it takes in the committees appointed both subsequent and earlier to the coming into force of that section.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-22", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "18. Sri Chowdary has also argued that the expression \"the committee\" used in Section 21-C can only denote an elected committee. According to the learned counsel, the expression \"the committee\" there means a committee constituted by the General Body of the society and to which the management of the affairs of the society was entrusted by the General Body as mentioned in Section 31 of the New Act wherein it is provided that General Body of the Society shall constitute a committee and entrust the management of the Society to such committee and therefore when the expression \"the committee\" is used in Section 21-C it means only a committee, to be elected by the General Body and it cannot be nominated committee. It may be as provided under Section 31 of the New Act, the General Body of a society has to constitute a committee in accordance with the bye-laws and entrust the management of the affairs of the society to such committee. But how the members of that committee are to be appointed, either by means of an election by the General Body or by means of nomination by the Registrar, is a different matter. According to the learned counsel, when it is mentioned in S. 31 (1) of the New Act that the General Body of a society shall entrust the management of the Society to the committee constituted by it, it only means the general body electing it. In the definition itself of the term 'committee' it is mentioned that it is the governing body to which the management of the affairs of the society is entrusted. That means once a committee comes into being even by means of nomination of its members by the Registrar, it gets the entrustment of the affairs of the society automatically. There need not be a separate overt act for entrustment as such either on the part of the general body or on the part of the Registrar, as the case may be. It is only as provided under Section 31 the committee has to be constituted by the General", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-23", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "be. It is only as provided under Section 31 the committee has to be constituted by the General Body in accordance with the bye-laws. Provision has to be made in the bye-laws with regard to the composition and structure of the committee. If there is a provision in the bye-laws made by the General Body of the society about it, it amounts to constitution of the committee by the General Body. The appointment of its members, either by the General Body by means of election or by the Registrar by means of nomination as provided under the bye-laws of the society, is a different matter.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-24", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "19. The records of the Society placed before us reveal that by means of old bye-laws Nos. 18 and 19 and by the new bye-law No. 19, as amended after the New Act came into force, provision was made as to how the executive management of the affairs of the Society shall vest in the Board of Directors consisting of 17 members before and 19 members after the amendment of the bye-laws determining their composition and how they are to be appointed. Therefore by means of those bye-laws the General Body of the Society constituted the committee both under the Old Act and the New Act. The General Body by means of a transitory provision to bye-law No. 19 provided that notwithstanding anything contained in bye-laws Nos. 18 and 19 the Registrar shall in the first instance nominate a Board of Directors not exceeding nine members. Therefore, there is nothing special about the General Body constituting the committee and entrusting to it the management of the affairs of the society to think that the 'committee' mentioned in Section 21-C of the New Act can only be a committee elected by the General Body and it cannot be nominated committee as argued by the learned counsel.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-25", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "20. Another argument submitted by the learned counsel is that when the Old Act was repealed any committee which functioned under the repealed Act (in the present case the nominated committee to which the lst petitioner was appointed by the Registrar) cannot be taken into consideration under the New Act and when it is mentioned in Section 21-C that \"where a person holds or who has held office as a member of the committee\" it means only \"holding or held\" under the New Act and the office held under the Old Act cannot be taken into consideration this contention goes against the express provision contained in Section 132 of the New Act containing the provision for repealing and savings. By means of that provision, (1) the Old Act, viz. the Andhra Pradesh (Andhra Area) Co-operative Societies Act 1932 and (2) the Andhra Pradesh (Andhra Area) Co-operative Land Mortgage Bank Act, 1934 and (3) the Andhra Pradesh (Telengana Area ) Co-operative Societies Act, 1952 were repealed. In the first proviso to the Section it is mentioned that any society existing at the commencement of the New Act which has been registered or deemed to have been registered under the relevant repealed Act shall be deemed to have been registered under the New Act and the bye-laws of such society shall so far as they are not inconsistent with the provisions or the new Act or the Rules made thereunder continue to be in force until altered or rescinded in accordance with the provisions of the new Act and the rules made thereunder. Therefore under this provision the continuity of a society registered under the Old Act is maintained. In the second proviso to that section it is also said that Section 6 of the Andhra Pradesh General Clauses Act, 1891, shall be applicable in respect of repeal of the said enactments and Sections 8 and 18 of the said Act shall be applicable as if the said enactments had been repealed", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-26", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "and 18 of the said Act shall be applicable as if the said enactments had been repealed and re-enacted by the Andhra Pradesh Act. Section 8 of the Andhra Pradesh General Clauses Act appears in Chapter II, the Provisions of which are made applicable to future Acts whereas Section 18 occurs in Chapter III, the provisions of which are made applicable to all the Acts. By means of the second proviso to Section 132, Section 8 and 18 are specifically made applicable to the repealed Acts. It is provided under Section 18 of the Andhra Pradesh General Clauses Act that where an Act repeals and reenacts with or without modification all or any of the provisions of a former Act all offices established and appointments made shall be deemed to have been established and made under the petitions so reenacted. From this provision it is clear that the committee constituted under the Old Act and the appointment of the lst petitioner to that Committee by means of nomination by the Registrar must be deemed to have been done under the provisions of the New Act as they are not inconsistent with those provisions. Therefore, holding of office by the lst petitioner as a member of the nominated committee which was constituted under the old Act has to be taken as holing of office under the provisions of the New Act. Therefore, that term of office of the lst petitioner can also be counted for the purpose of Section 21-C of the New Act. If that is so, there is no substance in this argument of the learned counsel also. Therefore, we see no substance in Points 2 and 3 raised on behalf of the petitioner-appellants.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-27", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "21. Coming to the fourth point, the argument of Sri Chowdary is that it is the fundamental right of the General Body to choose as to who should manage the affairs of the society and that right is being taken away by means of Section 21-C of the New Act by restricting the membership of the Committee for a person to two consecutive terms and that restriction enacted in Section 21-C would amount to an abridgment of the right to form an Association guaranteed under Article 19 (1) (c) of the Constitution, the only restriction to that right being the one mentioned in the relevant limitation clause (4) of Article 19 and the restrictions imposed on a perform from being a member of the Committee for a third consecutive term, not having anything to do with any one of the limitations contained in clause 4 of Article 19, Section 21-C is unconstitutional. The limitation imposed under Clause (4) of Article 19 to otherwise complete freedom to form an association guaranteed under Article 19 (1) (c) is the right given to the State for making any laws imposing, to the interest of sovereignty and integrity of India or public order or morality, reasonable restrictions. If the restriction imposed under Section 21-C of the New Act attracts Article 19 (1)(c) it is true that that restriction is not one of those restrictions mentioned in clause (4) of Article 19 for imposing which the State can make a law. But the point is whether Article 19 (1) (c) of the Constitution has any application to the question before us and the restriction imposed under Section 21-C from becoming a member of the committee for a third consecutive term can be said to the violative of the fundamental rights to form Associations guaranteed under it.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-28", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "22. We do not think that the right to form a society under the Co-operative Societies Act has anything to do with the fundamental rights guaranteed under Article 19 (1) (c) of the Constitution. The Society in question is a creature of the stature formed under the provisions of the Andhra Pradesh Co-operative Societies Act, which we are referring to in this judgment as the Act. It is under the provisions of the Act, the Rules framed thereunder an the bye-laws made in accordance with them by the Society, the Committee is constituted and the appointment of its members are made. According to these provisions the embers of the Committee are to be appointed either by nomination or election. The right of the lst petitioner to contest the election for membership of the committee emanated only out of the provisions of the Act the rules and the bye-laws. That right he cannot claim otherwise than under those provisions. His right to become a member of the Society or a member of the committee is not the common law or a general right given t him to form an association and which is guaranteed under Art. 19 (1) (c) of the Constitution. The Act under which the Society is formed confers certain rights and privileges on the societies that is in effect of their members and also impose certain obligations and restrictions on the societies and their members. A person claiming rights under those provisions is also bound by any restrictions imposed thereunder. There is no compulsion to form or become a member of a society under the Act. One is free to form or become a member of a society under the Act or not. A society can also be formed as a right guaranteed under Article 19 (1) (c) without registering it under the Act. But the only disability for such a society which does not get itself registered under the Act is that it will not get the special benefits and the special privileges which have been granted by the provisions of the Act. The restriction on the", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-29", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "benefits and the special privileges which have been granted by the provisions of the Act. The restriction on the consecutive membership in the committee in question applies only to societies registered under the Act. It has no application to societies formed and not registered under the provisions of the Act. If a Society is formed and is registered under the Act and its members claim special privileges and advantages conferred by the Act and the Rules famed thereunder, they cannot turn round and say that they are not bound by any restrictions imposed by some provision of the Act or the Rules in the interests of good and fair administration and working of the society on the ground that they are violative of the fundamental right to form Associations guaranteed under Art. 19 (1) (c) of the Constitution and the restrictions imposed are not those contemplated under clause (4) of Article 19 and therefore they are not bound by them.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-30", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "23. Provision is made under Section 3 of the Act for the appointment of Registrar and other persons for the purposes of the Act. Under the Act and the Rules framed thereunder powers are given to the Registrar and other officers of general supervision over the societies and to hold enquiries into the constitution, working and financial condition of the societies. As provided under Section 4 of the Act a society which has as its main object, the promotion of economic interests of its members in accordance with the co-operative principles can be registered under the Act. As provided under Section 6, an application for the registration of a Society shall be made to the Registrar in such form and with such particulars as may, from time to time, be specified by the Registrar. The application shall be accompanied by four copies of the proposed bye-laws of the society. As provided under Section 7, the Registrar can register the society and its bye-laws if he is satisfied that the application conforms to the requirements laid down by the Act and the Rules; the objects of the society seeking registration are in accordance with Section 4; such society s likely to be economically sound and that its registration may not have an adverse effect on the development of the co-operative movement and the proposed bye-laws are not contrary to the provisions of the Act and the Rules. As provided under Section 19 there are certain restrictions for eligibility for membership of a society. Section 21 deals with disqualification for membership of society for instance, a person shall not be qualified for being admitted as a member if he is an applicant to be adjudicated as insolvent or an undischarged insolvent or if he has been sentenced for any offence involving moral turpitude etc. Under Section 21-A some disqualification are imposed for being chosen as and for being a member of the committee. Under Section 21-C as already noticed, restriction on consecutive membership in a committee for a third term is imposed. Section 26 of the Act also imposes", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-31", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "consecutive membership in a committee for a third term is imposed. Section 26 of the Act also imposes some restrictions on holding of shares in the society. Under Section 43 provision is made for the Government to give loans or advance moneys to a society; subscribe to the share capital of the society; guarantee the repayment of principal and payment of interest on debentures issued by the society; guarantee repayment of share capital of the society and dividends thereon guarantee the repayment of principal and payment of interest on loans and advance of moneys to a society; guarantee the repayment of deposits received by the society and give financial aid in any other form including subsidies to any society. It is provided under Section 33 what where the Government have subscribed to the share capital of a society or have assisted indirectly in the formation or augmentation of the share capital of the society or have guaranteed the repayment of principal and payment of interest on debentures issued by the society or have guaranteed repayment of principal and payment of interest to loans and advances to the society, the Government have the right to nominate to the committee not more than three persons as members or one-third of the total number of members of the committee, whichever is less. As per Section 129 of the Act the societies formed under the Act are granted immunity from the provisions of the Companies Act, 1956, the Andhra Pradesh (Andhra Area) Shops and Establishments Act 1948 and the Andhra Pradesh (Telengana Area) Shops and Establishments Act, 1951. Thus, under the Act while certain special privileges are granted to the societies formed under it, that is to their members, certain restrictions and obligations are also imposed by the Legislature regarding the formation and working of the societies for the purpose of advancing the proper working of the societies. Therefore, the right to form a co-operative society under a Co-operative Societies Act is not a fundamental right. It is a right given under the Act subject to its provisions and the", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-32", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "is not a fundamental right. It is a right given under the Act subject to its provisions and the Rules framed thereunder.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-33", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "24. A similar view was expressed by a Bench of the Court in Writ petition Nos. 4066 of 1970 etc. D/- 18-11-1970 (Andh Pra). The Bench said that the right to vote and stand for election for the committee is entirely governed by the statute and a right which has been given by a statute can also be restricted or controlled by a statute. Sections 21-A (2) and 21-C do not go any further than restricting the rights of members to be members of the committee of the society. These sections do not in any manner affect the fundamental right of a citizen to form an association guaranteed under Article 19 (1) (c) of the Constitution.. \n 25. In the decision Bidhu Bhusan v. State of West Bengal AIR 1962 Cal 901 the Calcutta High Court has held that Art. 19 (1) (c) which speaks of the right of a citizen to form Associations or Unions refers to the ordinary right which is enjoyed by all citizens. It has no reference to a right which is conferred by a particular statute to act as members of a body which is the creation of the statute itself.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-34", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "26. Apart from the Committee being a committee of the co-operative society registered under the Act, we do not think the restriction in question imposed on becoming a member of the Committee for more than two consecutive terms violates the fundamental right to form Association guaranteed under Article 19 (1) (c) of the Constitution. It is not the case of the petitioners that they are restricted from forming a co-operative society under the Act, or there was any compulsion on them to form a society under the Act or to become members of a society registered under the Act. Simply for the reason that some restrictions are imposed in connection with the working of the Society, that does not amount to curtailing the freedom of forming a society unless the restriction goes to the very root of the matter, which amounts to taking away the freedom to form an Association. In the present case the restriction is only to become a member of the Committee for a consecutive third term. That means one cannot become a member of the Committee for more than two terms continuously. There is no restriction on becoming member of the Committee once again there after for two ore terms. With an interval of one term in between one can become a member of the Committee consecutively for two terms any number of times. This restriction the Legislature in their wisdom thought to be necessary in order to prevent vested rights being established in the Societies which is not very healthy for proper working of the Societies. Therefore, this is not a matter which touches the very right to form a society. We are unable to agree with the argument of Sri P.A. Chowdary that if such restriction is imposed that would be abridging or taking away the right to form a society or an Association. In this connection Sri Chowdary placed strong reliance on two decisions of the Supreme Court. Smt. Damyanti Naranga v. Union of India and O.K.Ghosh v. E.X. Joseph . In the first decision referred to above,", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-35", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "O.K.Ghosh v. E.X. Joseph . In the first decision referred to above, the validity of the Hindi Sahiya Samelan Act (1962) was in question. Under Section 4 (4) of the Act apart from persons who are members of the Society, some more members have been added without any option being available to the existing members of the Society to elect or refuse to elect them as members which was the right they possessed under construction of the Society itself. The Supreme Court said that the Act does not merely regulate the administration of the affairs of the society; what it does is to alter the composition of the Society itself. The result of this change in the composition is that the members, who voluntarily formed the Association, are now compelled to act in that Association with other members who have been imposed as members by the Act and in whose admission to membership they had no say. Such alternation in the composition of the Association itself clearly interferes with the right to continue to function as members of the Association which was voluntarily formed by the original founders. The right to form an Association implies that the persons forming the Association have also the right to continue to be associated with only those whom they voluntarily admit in the Association. Any law, by which members are introduced in the voluntary Association without any option being given to the members to keep them out, or any law which takes away the membership of those who have voluntarily joined it, will be a law violating the right to form an Association. Therefore, the Supreme Court said on the fact of that case, that the provision of law by which committee members have been added to the Society without any opinion being available to the existing members of the Society to elect or refuse to elect them as members is violative of Art. 19 (1) (c) of the Constitution. Thus, the facts of that case are clearly distinguishable from the facts before us. In the present case, the only restriction imposed under Section 21-C of", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-36", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "the facts before us. In the present case, the only restriction imposed under Section 21-C of the Act is to be a member of the Committee continuously for a third term. This is not a provision which restricts the right to continue the Association with its composition as voluntarily agreed upon by the persons forming the Association. In this case, the Supreme Court referred to their earlier case, which is the second case mentioned above.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-37", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "27. In the decision O.K. Ghosh v. E.X. Joseph, rule 4 of the Central Civil Services (Conduct) Rules 1955 prohibiting any form of demonstration by Government servants was considered. The Supreme Court said that it is violative of the Government Servants rights under Article 19 (1) (a) and (b) of the Constitution. But at the same time the Supreme Court said 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 strike. The Supreme Court said that though the 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, there is no direct or proximate 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. 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 Supreme Court said that it is not disputed that the fundamental rights guaranteed by Article 19 can be claimed by Government servants. The validity of the impugned rule has to be judged on the basis that the 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 the membership of the Service Association of Government servants as soon as recognition accorded to the said Association is withdrawn or if,", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-38", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "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 the 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. This restriction cannot be said to be in the interest of Public Order or can it be said to be a reasonable restriction. That is how the Supreme Court has observed. Here also it is a case where the impugned rule in effect amounts to taking away the right guaranteed under Al 19(1) (c) of the Constitution to form association.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-39", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "28. These two cases are clear cases of restricting the right to form an Association guaranteed under Art. 19 (1) (c) of the Constitution. These cases do not help the petitioners to contend that the restriction with which we are concerned in the present case amounts to restricting the right to form an Association guaranteed under Article 19 (1) (c) of the Constitution. \n 29. Now, we will refer to some of the cases relied upon by the respondents to show that a restriction, like the one imposed under Section 21-C of the Act, by itself would not amount to imposing any restriction on the fundamental rights guaranteed under Article 19(1) (c) of the Constitution to form an Association.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-40", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "30. In the decision Tika Ramji v. State of Uttar Pradesh, under the U.P Sugarcane (Regulation of Supply and Purchase) Act power was given to the Cane Commissioner under Section 15 for declaring reserved and assigned areas. In pursuance of that power the Cane Commissioner issued a notification ordering that where not less than 3/4th is of the cane growers of the area of operation of a Cane Growers Co-operative Society are members of the Society the occupier of the Sugar Factory for which the area is assigned shall not purchase or enter into agreement to purchase cane grown by a cane grower except through such Cane Growers' Co-operative Society. In this case the provisions of the Act and the notification issued under it were questioned by a cane grower, who did not join the Cane Growers Co-operative Society, as infringing his fundamental rights guaranteed under Article 19 (1) (c) of the Constitution. The Supreme Court said that there is no compulsion at all on any cane grower to become a member of the Cane Grower's Co-operative Society. Similarly no cane grower is prevented from resigning his membership of a Cane Growers' Co-operative Society. These are voluntary organisations which a cane grower is entitled to join or not at his choice. The cane grower, moreover, is not prevented absolutely from selling his sugarcane. The only person to whom he cannot sell the sugarcane is the owner of the factory, but that does not prevent him from selling his sugarcane to any other person or for any other purpose, viz., the manufacture or production of gur etc. Other than sugar. Therefore, it cannot be urged that the provisions of the U.P. Sugarcane (Regulation of Supply and Purchase) Act and the notification are violative of Article 19 (1) (c) of the Constitution.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-41", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "31. In the decision All India Bank Employees' Association v. National Industrial Tribunal, the question arose whether Section 34-A of the Banking Companies Act, according to which a banking company cannot be compelled to disclose either the quantum of its secret reserves or their nature or the provision made for \"bad and doubtful debts and for other reasonable and necessary provision\" in the proceedings under the Industrial Disputes Act, 1947, when the banking company claims that such information is of confidential nature contravenes Article 19 (1) (c) of the Constitution. The argument advances on behalf of the employees in the industrial dispute is that when Art. 19 (1) (c) guarantees the rights to form an Association, the guarantee also implies the fulfilment of every object of an Association so formed and therefore there is a constitutional guarantee for every association for effectively achieving the purpose for which it is formed without interference by law except on grounds relevant to the preservation of public order or morality set out in clause (4) of Article 19. The Supreme Court said that they are clearly of opinion that this has to be answered in the negative. As affirmative answer would be contradictory of the scheme underlying the text and the frame of the several fundamental rights which are guaranteed by Part III and particularly by the scheme of seven freedoms guaranteed by sub-clause (a) to (g) of clause (1) of Article 19. With regard to the right guaranteed under Article 19 (1) (c) the Supreme Court said that if an association was formed for the purpose of carrying on business, the right to form it would be governed by sub-clause (c) of clause (1) of Article 19. As regards its business activities however, and the achievement of the object for which it was brought into existence, its rights would be those guaranteed by sub-clause (g) of clause (1) of Article 19; while the property which the association acquires or possesses", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-42", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "of clause (1) of Article 19; while the property which the association acquires or possesses would be protected by sub-clause (f) of claue (1) of Article 19 subject to legislation within the limits laid down by clause (5) of Article 19. The Supreme Court has also further said that the right guaranteed under Article 19 (1) (c) does not extent to concomitant right to effective collective bargaining or to strike. Therefore, the provision exempting the banking company from disclosing secret reserves or the provision made for bad and doubtful debts in proceedings under the Industrial Disputes Act cannot be said to be a contravention of Article 19 (1) (c) of the Constitution.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-43", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "32. In the decision D.A.V. College v. State of Punjab, by a notification issued under Section 5 (i) of the Guru Nanak University, Amritsar Act certain colleges were compulsorily affiliated to the Guru Nanak University. It was contended that the compulsory affiliation of the college to the University affects their fundamental right of freedom of association as guaranteed under Article 19 (1) (c) and therefore the notification issued under Section 5 (1) compulsorily affiliating them to the University is bad. The Supreme Court observed like this :\n \"The right to form an association implies that several individuals get together and form voluntarily an association with a common aim, legitimate purpose and having a community of interest. It was sought to be suggested that the compulsory affiliation with the University affects the aims and objects of the Association, as such its freedom is infringed. There is in our view a fallacy in this argument which an earlier occasions had also been repelled. In the All India Bank Employees' Association v. National Industrial Tribunal, it was observed that the right guaranteed under Article 19 (1) (c) does not carry with it a concomitant right that the Associations shall achieve their object such that any interference in such achievement by any law would be unconstitutional unless it could be justified under Article 19 (4) as being in the interests of public order or morality. The right under Article 19 (1) (c) extends inter alia to the formation of an Association or Union.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-44", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "33. In the decision, H. Bhagat v. Asst. Registrar,. Co-operative Societies, Barh, under the rule-making power conferred by Section 66 of the Bihar and Orissa Co-operative Societies Act (6 of 1935) the Government of Bihar made Rules 37, 38 and 39. Rule 37 provided for division of a Co-operative Society if the members of the Registered Co-operative Society resolve to divide themselves into two or more registered Societies. Rule 38 provided for voluntary amalgamation of Societies. Rule 39 however, conferred power on the Registrar of Co-operative Societies to compulsorily amalgamate registered Societies under the Act if he is satisfied that it would be in the interest of those Societies. On the question whether Rule 39 infringes, the fundamental right guaranteed under Article 19 (1) (c) of the Constitution, the Patna High Court said :\n \"The power of individual members to form association and unions as provided in Article 19 (a) (c) is not taken away. No one is compelled to become a member of the Co-operative Society or to continue as a member of the amalgamated Society if he wishes to resign from such a new Society. Rule 39 deals with the power of the Registrar over the incorporated body, namely, the registered co-operative society, which has a separate legal existence from that of its members as provided in Chapter III of the Act. If a legal corporation is brought into existence by virtue of an Act, any provision in the Act regulating the functions of the Corporation including the power conferred on appropriate authorities to supervise the functions of the corporation, cannot be said to invade the fundamental right of the members of the corporation.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-45", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "34. Therefore, so long as there is no impediment to form an Association or to become a member or having become a member to continue or not as a member of Association, no provision of law can be said to infringe the fundamental rights guaranteed under Article 19 (1) (c) of the Constitution merely because such a provision seeks to regulate the functioning and administration of the Association in the day to day working and in the process imposes some restrictions, more so when they are conceived in the best interests of the Association. It is only in cases where a provision of law actually amounts to curtailing the right to form an association in the sense mentioned above, that can be said to be violative of the fundamental rights guaranteed under Article 19 (1) (c) of the Constitution. As we have already discussed above, the restriction imposed under Section 21-C on any person from becoming a member of the Committee of the Society for more than two consecutive terms cannot be said to amount to curtailing the right or freedom of a person to form an Association. As mentioned above, the Legislature in their wisdom thought that such a restriction is necessary in order to prevent any person from acquiring any vested interest in the Society, which is not a healthy sign for proper and efficient working of the society in the best interests of all its members. Therefore, Section 21-C of the Act is not violative of the fundamental right guaranteed under Article 19 (1) (c) of the Constitution not only for the reason that the right to form a Co-operative Society under a Co-operative Societies Act is not a fundamental right and it is only a right given under the Act subject to its provisions and the Rules framed thereunder, but also on the ground that the restriction like the one imposed under Section 21-C prohibiting a person from becoming a member of a Managing Committee of a Society consecutively for more than two terms cannot be said to be the one which either in reality or in", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-46", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "for more than two terms cannot be said to be the one which either in reality or in substance amounts to restricting the right to form an Association guaranteed under it.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-47", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "35. The appellants fail on al the points. Therefore, there are no merits in the writ petition. Accordingly the writ appeal is dismissed with costs. Advocate's fee Rs. 250/-. \n\n Lakshmaiah, J. \n36. I agree with the conclusion of my learned brother, Ramachandra Raju, J, that there are no merits in the Writ petition and that the Writ Appeal should be dismissed with costs. \n 37. In view of the representations made by the learned counsel appearing on either side that there is no direct authority on the question raised herein as regards the effect and validity of Section 21-C of the Andhra Pradesh Co-operative Societies Act, 1964 (hereinafter referred to merely as 'the Act'), I propose giving my own reasons with respect to that aspect of the matter. \n\n 38. The relevant facts are given in a succinct form in the judgment of my learned brother, as not to need a detailed reiteration\n\n \n\n 39. The extraordinary jurisdiction of this court under Article 226 of the Constitution is involved by the lst petitioner seeking the issuance of a writ of certiorari for quashing the order dated June 19, 1975 of the District Co-operative Officer-cum-Election Officer. The West Godavari Co-operative Sugars Limited Surappagudem, West Godavari District the lst respondent, rejecting his nomination.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-48", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "40-41. The lst respondent as the Election Officer issued a notice to all the members calling for a general body meeting of the West Godavari Co-operative Sugars Limited, Surappagudem, registered under the Co-operative Societies Act to elect the Managing Committee members on June 26, 1975. Pursuant to the said notice, the lst petitioner filed his nomination to the post of the member of the committee to be elected from among the members. On an objection taken by the 3rd respondent, the petitioner's nomination was rejected by the lst respondent, the Election Officer on 19-3-1975. The Election Officer found that the petitioner held office as a member of the nominated committee of the Society from 5-1-1958 to 24-11-1961 and as a member of the elected committee of the said Society from 1-7-1972 to 30-6-1975 and considering those two terms as consecutive to each other held that the petitioner is ineligible for being chosen as a member of the Committee for a third term in continuation under Section 21C of the Act. Seeking the quashing of that decision, the petitioner filed W.P. No. 3308 of 1975 which was dismissed in limine by my learned brother Chinnappa Reddi, J, on the ground that the lst petitioner has another remedy to question the election including the rejection of the nomination paper by way of an election petition. Aggrieved by that decision the petitioner preferred an appeal W.A. No 483/75 and a Division Bench before which the matter came up for disposal directed the appeal to be posted before a Full Bench. That is how this matter has come up before us.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-49", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "42. Sri P.A. Chowdary, learned counsel appearing for the appellants contended before the Division Bench as well as before us that on a proper interpretation of Section 21-C of the Act, it is only the person who has held office as a member of the elected member for two consecutive terms that is rendered ineligible for being chosen as a member of the Committee for the third term and the petitioner was not a member of an elected committee at any time prior to 1972. Therefore, the inhibition embodied in Section 21-C does not apply to a case where a person is a member of a nominated committee. The learned counsel appearing on the other side placing reliance upon a decision of the Division Bench of this court dated 18-11-1970 in W.P. No. 4066 of 1970 and batch contended that Section 21-C applies both to elected and nominated members of the Committee. The Division Bench seemed to have inclined to doubt the correctness of that decision and directed the matter to posted before the Full Bench. \n 43. The point that arises for determination is whether the expression \"committee\" occurring in Section 21-C of the Andhra Pradesh Co-operative Societies Act, 1964 refers to an elected committee as contended by the appellants or as nominated committee also as contended for by the respondents. \n\n 44. As the controversy is centered around the effect and the meaning of the aforesaid section we shall read the same in so far as it is material:\n \"21-C. Restriction on consecutive membership in committee :\n A person who holds or who had held office as a member o the committee for two consecutive terms shall not be eligible for being chosen as a member of the committee for a third term in continuation.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-50", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "Explanation : For purposes of this section: \n (i) Where a period, during which there is no elected committee, intervenes between two terms of office of the committee or of any of its members, those two terms shall be regarded as being consecutive to each other. \n\n (ii) A member shall be deemed to hold office for a term, notwithstanding that he has not held the office for a full term.\" \n 45. The expression \"committee\" as occurring in Section 21-C and as defined in Section 2 (1) of the Act do not throwaway light upon the question raised in this case viz., whether that expression in Section 21-C refers to an elected committee only or whether it refers to a nominated committee also. The expression therefore is susceptible of bearing more than one construction. The dubiety or ambiguity of that expression necessitates finding out the intention or the object or policy of the framers of the enactment or the reasons for the enactment. \n\n 46. Section 21-C was inserted by way or an amendment by Section 5 of the Act 10 of 1970. The Statement of Objects and Reasons in so far as it is material for the bill which became law may be read now:\n \"At the Conference of Chief Ministers and Ministers of the States in charge of co-operation held at Madras on 12th June, 1968, certain recommendations were made for amending the Co-operative Societies Act in force in the States so as to make provision for the following, among other matters, namely for curbing the growth of vested interest in Co-operative Societies, imposing restriction on holding membership in the Committees of Co-operative Societies consecutively for more than two terms.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-51", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "It is this that is reflected in Section 5 of the Act 10 of 1970. Therefore, if the Objets and Reasons for the introduction of this Bill which became law namely that a view to curb the growth of vested interests in co-operative societies, it is enough to impose restrictions on holding membership in the committee of Co-operative Societies consecutively for more than two terms, is to be borne in mind while interpreting Section 21-C as reflecting the intention of the Legislature, there is no difficulty in construing the expression \"committee\" as referring not merely to an elected committee but also to a nominated one as well. \n\n 47. Article 2245 and 246 read with Entry 32 in List II State List of the Seventh Schedule appended to the Constitution empower the State Legislature to make law with respect to the subject matter of \"Co-operative Societies\". The executive power of the State is vested in the Governor under Article 154 and rendered exercisable by him either directly or through officers subordinate to him in accordance with the Constitution. The executive power of the State under Article 162 extends to the matter with respect to which the Legislature of the State has power to make laws. The Council of Ministers with the Chief Minister at the head shall have to aid and advise the Governor in the exercise of his functions. (Article 163). The same pattern obtains in the se of Union also. A parliamentary system of Government with a cabinet is thus introduced in India through the aforesaid provisions.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-52", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "48. The crux of the cabinet Government was graphically described by Bhagihot as early as the year 1967 in his book. \"The English Constitution\" thus :\n \"The efficient secret of the English Constitution may be described as the close upon, the nearly complete fusion of the executive and legislative powers. ........ A cabinet is a combining committee of hyphen, the legislative part of the State to the executive part of the state. In its origin it belongs to the one in its functions it belongs to the other.\" \n 49. Mukherjea, C.J, in Ram Jawaya v. State of Punjab, observed thus :\n \"Our Constitution, though federal in its structure, is modelled on the British Parliamentary system where the executive is deemed to have the primary responsibility for the formulation of governmental policy and its transmission into law though the condition precedent to the exercise of this responsibility is its retaining the confidence of the legislative branch of the State. The executive function comprises both the determination of the policy as well as carrying it into execution,. This evidently includes the initiation of legislation, the maintenance of order, the promotion of social and economic welfare, the direction of foreign policy, in fat the carrying on or supervision of the general administration of the State.\" \n\nAt page 237 :\n \"................ The Cabinet enjoying, as it does, a majority in the legislature concentrates in itself the virtual control of both legislative and executive functions; and as the Ministers constituting the Cabinet are presumably agreed on fundamentals and act on the principle of collective responsibility, the most important questions of policy are all formulated by them.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-53", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "50. What is therefore manifest is that the responsibility for the formulation of governmental policy and its transmission into law including the initiation of legislation are squarely placed upon the executive under our Constitution and the Cabinet concentrates in itself the virtual control of both legislative and executive functions. The initiation of legislation takes in within its fold the introducing of bills into the legislature by the executive. Therefore, the Statement of Objects and Reasons for the introduction of the bill furnishes the court with reliable extrinsic evidence as regards the purpose of object or reason for an Act. \n\n 51. In Kochuni v. State of Madras and Karen, Justice Subba Rao (as he then was) resorted to the Object and Reasons of the Constitution (Fourth Amendment) Bill to conclude that the object of the insertion of Article 21-A was to secure agrarian reform and that expression used in that Article should be interpreted with his object in view. The learned Judge, after referring to the holding of the Supreme Court in Aswani Kumar Ghose v. Arbinda Bose, held:\n \"That the Statement of Objects and Reasons is not admissible as an aid to the construction of a statute. But we are referring to it only for the limited purpose of ascertaining the conditions prevailing at the time the bill was introduced and the purpose for which the amendment was made.\" \n\nTherefore, the Objects and Reasons of a bill can be looked into for the purpose of ascertaining the purpose for which an amendment was made. \n\n 51-A. In Express Newspaper Ltd., v. Union of India, it was observed by Justice Bhagwati with regard to the Statement of Objects and Reasons attached to a bill thus :\n \"It is only when the terms of the statute are ambiguous or vague that resort may be had to them for the purpose of arriving at the true intention of the Legislature.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-54", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "52. In Shiv Narayan v. State of Madras, Justice Ramaswami speaking for the Supreme Court observed with respect to a rule of interpretation thus :--\n \"It is a sound rule of interpretation that a statute should be so construed as to prevent the mischief and to advance remedy according to the true intention of the makers of the statute. In construing therefore, Section 2 (c) of the Act and in determining its true scope it is permissible to have regard to all such factors as can legitimately be taken into account in ascertaining the intention of the legislature, such as the history of the statute, the reason which led to its being passed, the mischief which it intended to suppress and the remedy provided by the statute for curing the mischief. That was the rule laid down in Heydon's case (1584) 3 WR 16 = (76 ER 637), which was accepted by this court in Bengal Immunity Co. Ltd., v. State of Bihar .\" \n\n 53. In Commissioner of Income-tax v. Sodra Devi, , Justice Bhagwati referring to the ambiguity of the term 'individual' in Section 16 (3) (a) of the Income-tax Act, 1922 observed thus :\n \"In order to resolve this ambiguity therefore we must by necessity have resort to the state of the law before the enactment of the provisions; the mischief and defect for which the law did not provide the remedy which the legislature resolved and appointed to cure the defect and the true reason of the remedy within the meaning of the authorities referred to above.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-55", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "54. Referring to the recommendations of the Enquiry Committee His Lordship proceeded to observe at page 839:\n \"These recommendations were duly considered by the Government and as result thereof Act IV of 1937 was enacted introducing Section 16 (3) of the Act. What was intended to be done by the legislature in enacting this amendment may be gleaned to a certain extent from the Statement of Objects and Reasons appended to the Bill which eventually became the amending Act. Though it is not legitimate to refer to the Statement of Objects and Reasons as an aid to the construction or for ascertaining the meaning of any particular word used in the Act or Statute (See Aswani Kuar Ghose v. Arabinda Bose, ); nevertheless this Court in State of West Bengal v. Subodh Gopal Bose, referred to the same for the limited purpose of ascertaining the conditions prevailing at the time which actuated the sponsor of the Bill to introduce the same and the extent and urgency of even which he sought to remedy.\" \n\n 55. Chief Justice Gajedragadkar, observed in Sheik Gulfan v. Sant Kumar, thus :\n \"If two constructions are reasonably possible, the Court would be justified in preferring that construction which helps to carry out the beneficial purpose of the Act.\" \n 56. Blackstone in his Commentaries on the Laws of England in Volume I at page 61 had thus to say :\n \"The most universal and effectual way of discovering the true meaning of a law, when the words are dubious, is by considering the reason and spirit of it, or the cause which moved the legislator to enact it.\" \n\n 57. Francis J. Mc. Caffray in his \"Statutory Construction\" said at page 18:  \n \"There is little difference, if any between spirit and reason and the purpose of the law.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-56", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "58. Maxwell on \"The Interpretation of Statutes\" (Twelfth (1969) Edition) at page 86 is of the view that the object or policy of the legislation often affords the answer to problems arising from ambiguities which it contains. \n\n 59. In American Jurisprudence (Volume 50) at page 279 Paragraph 298 deals with the subject-matter of 'Policy' thus:\n \"In construing a law of doubtful meaning or application, the policy which induced its enactment, or which was designed to be promoted thereby, is a proper subject for consideration where such policy is clearly apparent or can be legitimately ascertained. Indeed, the proper course in all cases is to adopt that sense of the words which promotes in the fullest manner the policy of the legislature in the enactment of the law, and to avoid a construction which would alter or defeat that policy, where the construction in harmony with the policy reasonably consistent with the language used. Even the literal meaning of the terms employed should not be suffered to defeat the manifest policy intended to be promoted.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-57", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "60. When the intention of the framers of the Act is not discernible through the ascertainment of the meaning of the words employed by them through interpretative process, resort is to be had to the process of construction. The distinction between the construction and interpretation is explained by Earl T. Crawford in the book \"Construction of Statutes\" at page 240 thus :---\n \"Strictly speaking, construction and interpretation are not the same, although the two terms are often used interchangeably. Construction, however, to be technically correct, is the drawing of conclusions with respect to subjects that are beyond the direct expression of the text, from elements known and given in the text, while interpretation is the process of discovering the true meaning of the language used. Thus the Court will resort to interpretation when it endeavours to ascertain the meaning of a word found in a statute, which when considered with the other words in the Statute, may reveal a meaning different from that apparent when the word is considered abstractly or when given its usual meaning. But when the court goes beyond the language of the statute and seeks the assistance of extrinsic aids in order to determine whether a given case falls within the statute. It resorts to construction. The process to be used in any given case will depend upon the nature of the problem presented. And, as is apparent, both processes may be used in seeking the legislative intent in a given statute.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-58", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "If the legislative intent is not clear after the completion of interpretation, then the court will proceed to subject the statute to construction.\" \nAt page 291 of the same volume under heading \"The spirit and reason of the law\" the learned author observed thus :\n \"Closely related to the rule which permits the court to consider the effect of the statute, is the rule which allows consideration of the spirit and reason of the law. The effect of a suggested construction indicates, as we shall see later, whether it is in accord with the actual intent of the legislature. Actually, there seems to be but little distinction between the spirit and reason of the law and the law's purpose, or scope. While the purpose of a statute is the reason for its enactment, the spirit or reason of the law is, perhaps strictly speaking more closely connected to the legislative intention. \n\n Since the intention of the legislature constitutes the law of its enactments, it is the intention rather than the literal meaning of the statue which controls or as is generally said the spirit of the statute will prevail over strict letter. Consequently, cases which do not come within the strict letter of the statute, if within the spirit, will fall within the scope of the statute, and cases within the letter of the statute, if without its spirit, will not come within its operation. But this principle is not applicable if the statute is clear and unambiguous, so that there is no doubt concerning the legislative intent.\" \n Travaux Preparatories -- The Preparatory Material of an Act.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-59", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "61-62. The rigor of an exclusively literal interpretation of a statute is sought to be mellowed down by having resort to the objects of statute in the light of the surrounding circumstances in which it was enacted through the application of what has come to be known as the \"Mischief Rule\" propounded in 1584 in Heydon's case, (3 Co. Rep. 7-A) in the following words :\n \"............... That for the sure and true interpretation of all statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered. \n\n (1st) What was the common law before the making of the Act. \n\n (2nd) What was the mischief and defect for which the common law did not provide. \n\n (3rd) What remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth, and;\n (4th)  The true reason of the remedy; and then the office of all the Judge is always to make such construction as shall suppress the mischief, and advance the remedy  ...........    according to the true intent of the makers,  pro bono publico.\" \n\n \n\nThis approach clearly contemplate a wide enquiry into the policy and purpose behind the statute. \n\n \n\n 63. Lord Denning, M.R.,  in Engineering Industry Training Board v. Samuel Talbot (Engineers) Ltd., (1969-1 All ER 480) said :\n\n  \"We no longer construe acts of Parliament according to their literal meaning. We construe them according to their object  and intent.\"\n\n \n\nThe proposition in Heydon's case might have been adequate to deal with the limited kind of legislation that then existed. They need to be broadened and adapted to meet the conditions of today as our Supreme Court did in cases mentioned above.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-60", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "64. The judicial committee of the Privy Council referred to extraneous matter in British Coal Corporation v. R., 1935 AC 500 = (AIR 1935 PC 158) when they examined the resolution of the Commonwealth Conference in order to interpret the Statute of Westminister, 1931. In Edward v. A.G. for Canada, (1969) 2 AC 413 a report  in Hansard of a Parliamentary debate was consulted.  In Dullewe v. Dullewe, (1930 AC 123) a report of the Commission on the mischief to be remedied was consulted.\n\n \n\n 65. The observations of  Lord Blackstone in Riverwear Commissioners v. Adamson, (1877) 2 AC 743 are very instructive.\n\n  \"In all cases, the object is to see what is the intention expressed by the words used. But from the imperfection of language, it is impossible to know what that intention is without inquiring further and seeing what the circumstances were with reference to which the words were used and what was the object appearing from those circumstances which the person using them had in view for the meaning of words  varies, according to the circumstances with respect to which they were used.\"\n\n \n\n 66. Justice Venkatarama Iyer, said in R.M.D.C. v. Union of India, :", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-61", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "\"Now, when the question arises as to the interpretation to be put on an enactment, what the court has to do so is to ascertain 'the intent of them tat make it' and that must of course be gathered from the words actually used in the statute. That, however, does not mean that the decision should rest on a literal interpretation of the words used in disregard of all other materials. The literal construction ........... has .............. but prima facie preference. To arrive at the real meaning, it is always necessary to get an exact conception of the aid, scope and object of the whole Act .............. to decide the true scope of the present Act, therefore, we must have regard to all such facts as can legitimately be taken into account in ascertaining the intention of the legislature such as the history of the legislation and the purpose thereof, the mischief which it intended to suppress .................. \" \n\n 67. The deep-rooted common law tradition of judicial hostility to legislative innovation resulting in the literal interpretation of a statute has been admirably brought out by Dean Roscoe Pound in a brilliant article \"Common Law and Legislation\" published in XXI Harvard Law Review at page 383. The following passage at page 384 is very instructive.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-62", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "\"It may be well, however, for judges and lawyers to remember that there is coming to be a science of legislation and that modern statutes are not to be disposed of lightly as off-hand products of a crude desire to do something, but represent long and patient study by experts, careful consideration by conferences or congresses or associations, press discussions in which public opinions focused upon all important details, and hearings before legislative committees. It may be well to remember also that while bench and bar are near weary of pointing out the deficiencies of legislation, to others the deficiencies of judge-made law are no less apparent. To economists and sociologists, judicial attempts to force Benthamite conceptions of freedom of contract and common law conceptions of individualism upon the public of today are no less amusing or even irritating than legislative attempts to do away with or get away from these conceptions are to bench and bar.\" \n\n 68. Julius Stone in his \"Legal System and Lawyers\" Reasonings at page 351 said :\n \"In principle, the court should be free to inform itself concerning the social context of the problems involved from all reliable sources. Such sources could be of various kinds; but whatever the limits of the range, it is difficult to see in principle why British Courts should exclude rigidly and a wholesale all reference whatsoever to the legislative travaux preparatories. Moreover, this is the last thing that would be expected from a theory of interpretation which claims to be centered on the intention of the legislator. Yet we see confronted by the rigid British canon (not followed in the United States) or on the Continent, that travaux preparatories however clear and decisive on the point at issue, are never to be consulted in aid of interpretation, a canon which the Australian High Court has applied on constitutional issues of major importance.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-63", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "The learned author in his classic work \"The Province and Function of Law\" at page 200 said:\n \"But the common lawyers, despite the growing importance of legislation, has not acquired the technique of handling legislative materials in a similarly creative manner to that in which he handles case law. Our Judges do not yet argue by analogy from statutes as they do from cases.\" \n\nThe \"Inarticulate Major Premise\". \n\n 69. Holmes was of the view that social policy is the \"Inarticulate Major Premise\" for Judicial decision. \n \"Sociological jurisprudence insists, as a matter of value that the social advantage of the rule is its major test, since the welfare of society is the general aid of the law. The judge applying this test depends not only upon his impression of public opinion or the \"felt necessities of the time\", but also upon the widest possible fund of experience.\" \n\n (From \"The Judicial Process and Social Change\" by Davis and Foster at page 129). \n\nSociological Briefs ----- Brandeis Brief :\n \"In the United States, the \"Brandeis brief\" has had great vogue coming into prominence after being used in Muller v. Oregon, (1908) 208 US 412. The Brandeis technique of marshaling social and economic data in the brief presented to the Court in argument to support the constitutionality of a statute was addressed to \"Judicial notice\" Brewe, J., who spoke for the Court in that case, referring to the brief filed by Brandeis stated that we take judicial cognizance of all matters of general knowledge.\"", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-64", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "This Brandeis brief compilation of data is designed to indicate the actual or probable social effects of legislation and it was recognised as a valid aid to judicial review of legislation. The principle underlying in that though propounded in the context of interpretation of a constitution can as well be extended to the interpretation of a statute. \n 70. The propositions deducible from the foregoing discussion may now be recapitulated. \n\n (1) The Common Law canons of interpretation in the back-ground of traditional judicial hostility towards legislative innovations with their emphasis on individualism resulting in literal interpretation of statutes are hardly sufficient without a corresponding broadening of their basis to meet the needs and challenges of modern legislation which registers a shift in emphasis away from individualism especially when it is utilised as an instrument of social control. \n\n (2) Despite the growing importance of legislation as an instrument of social control, the common lawyer has not acquired, (not to seek of not having perfected) the art and technique of handling legislative materials in the same creative manner as he does with case law. We have yet to learn to argue by analogy from statutes as we do from cases. \n\n (3) It is the intention of the legislature that constitutes law of the enactment. When that intention is not capable of being ascertained through intrinsic evidence by the ascertainment of the meaning of the expressions employed in the statute, through the interpretative process, resort should necessarily be had to extrinsic evidence through the process of construction. That necessitates a reference to Travaux Preparatories -- the preparatory material of an Act, including \"Objects and Reasons\".", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-65", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "(4) The responsibility for the formulation of Governmental policy and its transmission into law including the initiation of legislation is squarely placed upon the executive in our Constitution and that initiation of Legislation consists in introducing bills in the Legislation by the Executive, with a statement of objects and reasons. No source is more authentic or authoritative for the ascertainment of the intention of Legislature than that.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-66", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "(5) The State has been utilizing the devise and framework of Co-operative Societies for ushering in some of the welfare functions. Even without the assistance of \"objects and reasons\" I could have come to the conclusion that the intention of the Legislature in this amendatory legislation underlying Section 21-C of the Act is only to curb the growth of vested interests in Co-operative Societies. That intention of the Legislature can be given effect to by the judiciary only by construing the expression \"Committee\" in Section 21-C of the Act as referring to not only an elected committee but also to a nominated committee of the Co-operative Society. Sociological approach towards legislative problems emphasises the need to secure the implementation of the social policy through the type of construction of statutes. \n 71. I may at this stage dispose of a point raised by Sri P.A. Chowdary that the committee of which the lst petitioner was a member during the period from the year 1957 to 1962 was not a validly nominated one by the Registrar.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-67", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "72. The Election Officer by the impugned order found under point No. 1 after perusal of the minute book of the Society that the petitioner was one of the members of the nominated committee of the society from 5-1-1958 to 24-1101961. There is a remedy by way of an election petition available to the petitioner as against the impugned order rejecting the nomination. That is the proper forum to canvas about the existence or the non-existence of the Committee during that period. There is no material before me to express any opinion on that aspect and the Election Officer based his conclusion on the basis of the contents of the minutes book of the society. Moreover the question of interpreting and applying Section 21-C for which purpose this Full Bench was constituted is predicated on the assumption that there was a nominated committee of the Society in existence between 5-1-1958 to 24-11-1961 as found by the Election Officer and, as such, I do not consider it to be proper to go behind that finding of the Election Officer.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "d7fcbb4b9e79-68", "Titles": "Kaamareddy Suryanarayana And ... vs The District Co-Operative ... on 31 December, 1975", "text": "73. Appeal dismissed.", "source": "https://indiankanoon.org/doc/913850/"}
+{"id": "238b2db93dc8-0", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "JUDGMENT ORDER OF SINGLE JUDGE Narasimhan, J.   \n 1. In Company Application No. 79 of 1965 the Chittoor District Co-operative Marketing Society Ltd., Chittoor, is the applicant and has preferred the same against the order of the official liquidator allowing the Society's claim for Rs. 38,070.98 as that of an ordinary creditor. The grievance of the Society is that it should be deemed as a secured creditor and not an ordinary creditor and that is the matter which arises for consideration on merits in C. A. No. 79 of 1965. \n 2. Company Application No. 83 of 1965 was filed by the official liquidator under sections 468, 477 and 536 of the Companies Act, 1956, read with rule 9 of the Companies (Court) Rules, 1959. Inter alia, the official liquidator alleged that as per the account books of the company in liquidation (the Vegetols Ltd.) it was found that sums aggregating Rs. 62,231.25 were paid to the Society from the company's assets during the period from June 10, 1957, to March 31, 1960. The sums were set out in a schedule appended to the application. As these payments were made after April 11, 1957, the date of commencement of the winding up of the company, he claimed a refund of these amounts under Section 536 of the Companies Act. He stated in the application that the receipt of the said amounts was also admitted by the society in the proof affidavit filed before him, and that he had also required the society to pay the amounts by notice which was not complied with. He also claimed to summon and examine a representative of the society under Section 477 of the Companies Act.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-1", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "3. It is said that no counter has been filed for this application. The respondent in this petition is the society. \n 4. C. A. No. 122 of 1965 is a petition under Section 536(2) of the Companies Act in which the petitioner is the society and the respondents are the company in liquidation (R-1), C. P. Sarathy Mudaliar, partner of the managing agency of the company, Khalsar & Co. (R-2) and the official liquidator (R-3). In that application the petitioner prayed to validate Rs. 62,231.25 received subsequent to the filing of the petition for liquidation, that is to say, the commencement of the liquidation. \n 5. The official liquidator has filed a counter opposing the petition stating that the payments cannot be validated.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-2", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "6. Shri P. Ramachandra Reddy, the learned counsel for the society, a creditor of the company in liquidation, raised a legal point that the provisions of the Companies Act, 1956, do not apply to the society and referred to section 61 of the Madras Co-operative Societies Act, 1932 (Madras Act VI of 1932) and Section 129 of the Andhra Pradesh Co-operative Societies Act, 1964 (Act No. VII of 1964). The latter enactment repealed the earlier enactment and had come into force on the 1st of August, 1964. He invoked section 61 of the Madras Co-operative Societies Act, 1932, with reference to C. A. No. 79 of 1965 as the claim was filed by the society before the official liquidator on October 17, 1960, i.e., prior to the coming into force of the Act of 1964. He invoked Section 129 of the Andhra Pradesh Co-operative Societies Act, 1964, with reference to C. A. No. 122 of 1965 filed after coming into force of the Act of 1964. Relying on these provisions the learned counsel has argued that the company court has no jurisdiction to go into these matters and that as it is a jurisdictional matter, he could raise that question here and is not estopped by reason of his having invoked certain reliefs under the Companies Act, before the official liquidator and before this court. It is in the said circumstances that the question has arisen as to what is the scope of the said provisions. The said provisions may be reproduced here for convenience.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-3", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "7. Section 61 of the Madras Co-operative Societies Act, 1932 (Madras Act VI of 1932) adopted by the Andhra Pradesh Co-operative Societies Act, 1964, reads as follows : \n \"The provisions of the Indian Companies Act, 1913 (VII of 1913) shall not apply to registered societies.\" \n 8. Section 129 of the Andhra Pradesh Co-operative Societies Act, 1964 (Act No. VII of 1964) reads as follows : \n \" Certain Acts not to apply.--The provisions of the Companies Act, 1956 .........shall not apply to societies.\" \n 9. By reason of Section 18 of the Andhra Pradesh General Clauses Act, 1891 (1 of 1891), it is submitted that a reference in Section 61 of the Madras Co-operative Societies Act, 1932, to the Indian Companies Act, VII of 1913, must be understood as a reference to the Companies Act, 1956. \n 10. The learned counsel urged that by reason of these provisions, the applications made by the Society for the reliefs mentioned and the application made by the official liquidator do not lie.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-4", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "11. The learned official liquidator has contended that the provisions relied on have to be understood in a limited sense in that the provisions of the Companies Act shall not apply to Societies to the extent to which express provisions are made under the Co-operative Societies Act with regard to registration, management, winding up of societies, etc., and secondly he contended that if a wider meaning is canvassed, viz., that the provisions of the Companies Act are entirely excluded, the sections are invalid as trenching on the law enacted by the Central Legislature or the Parliament. The learned official liquidator also submitted that if the provisions of the Companies Act are entirely excluded, the material provisions of the Companies Act about the collection and distribution of assets would be contravened. As an instance, he recalls that under Section 456(2) of the Companies Act, all the property and effects of the company shall be deemed to be in the custody of the court as from the date of the order for the winding-up of the company and under Section 537 of the Companies Act where any company is being wound up, any attachment, distress or execution put in force against the estate or effects of the company, after the commencement of the winding-up, or any sale held of any of the properties or effects of the company after such commencement shall be void. If, as is urged for the Society, the Co-operative Societies Act pushed through any attachment, distress or execution for recovery of debts by sale of properties without reference to the company court and obtained its loan, that would be directly conflicting with this provision. He also submits that if the Society as its creditor seeks its own remedies de hors the provisions of the Companies Act, that would be directly in conflict with the principle of pari passu distribution among the creditors. He also instanced several other provisions which would be contravened by excluding the provisions of the Companies Act altogether. He would, therefore, say that the provision has to be understood in", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-5", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "of the Companies Act altogether. He would, therefore, say that the provision has to be understood in a restricted sense; and if it is construed otherwise it has to be invalid as offending the provisions of a Central enactment.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-6", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "12. My attention is invited to a ruling of the Privy Council, Prafulla Kumar Mukherjee v. Bank of Commerce Ltd, A.I.R. 1947 P. C. 60.., which considered the question of the validity of the Bengal Money-Lenders Act, 1940. That Act provided certain limits for the recovery of the amount by a money-lender on his loans for principal and interest due on promissory notes. A contention was raised that the money-lenders who were engaged in banking and were holders of promissory notes, matters which were solely within the federal jursidiction, could not be affected by an Act of the provincial legislature and so the Act was void so far as it concerned promissory notes or banking. The questions which were posed for consideration, were : \n 1. Does the Act in question deal in pith and substance with money-lending ? \n 2. If it does, is it valid though it incidentally trenches upon matters reserved for the federal legislature ? \n 3. Once it is determined whether the pith and substance is money-lending, is the extent to which the federal fields is invaded a material matter ?  \n 13. The Judicial Committee held that the pith and substance of the Act being money-lending it was within the competence of the provincial legislature and it was not rendered invalid because it incidentally trenches upon matters reserved to the federal legislature.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-7", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "14. The Supreme Court has also adopted the reasoning of the Privy Council in A.S. Krishna v. State of Madras, ., where the validity of Sections 4(2) and 28 to 32 of the Madras Prohibition Act No. X of 1937 arose for decision. It was contended that those provisions were repugnant to the provisions of the existing Indian laws respecting the same matters, viz., Indian Evidence Act (I of 1872) and Criminal Procedure Code (No. V of 1898). In paragraph 12 of the judgment (at page 303) the Supreme Court in the light of the decisions expressed itself thus : \n \" The position, then, might thus be summed up: When a law is impugned on the ground that it is ultra vires the powers of the legislature which enacted it, what has to be ascertained is the true character of the legislation. To do that, one must have regard to the enactment as a whole to its objects and to the scope and effect of its provisions. If on such examination it is found that the legislation is in substance one on a matter assigned to the legislature, then it must be held to be valid in its entirety, even though it might incidentally trench on matters which are beyond its competence. It would be quite an erroneous approach to the question to view such a statute not as an organic whole, but as a mere collection of sections, then disintegrate it into parts, examine under what heads of legislation those parts would severally fall, and by that process determine what portions thereof are intra vires, and what are not. \" \n 15. Having stated so the learned judges considered the provisions and upheld the validity.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-8", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "15. Having stated so the learned judges considered the provisions and upheld the validity. \n 16. In the present case also, the question raised is one of importance and Has far-reaching consequences. The matter does not appear to be covered by any authority. The learned counsel have expressed their desire that the matter deserves the attention of a Division Bench. I agree with them. I, therefore, refer the questions of law raised before me to a Division Bench. \n 17. The questions of law raised are--firstly, what is the true scope of Section 61 of the Madras Co-operative Societies Act, 1932 (Madras Act VI of 1932) and Section 129 of the Andhra Pradesh Co-operative Societies Act, 1964 (Act No. VII of 1964); and secondly, whether those provisions conflicting with the express provisions of the Indian Companies Act, 1913, formerly and the Companies Act, 1956, as now enacted are invalid. \n 18. The matter may be placed before the Honourable Chief Justice for orders to constitute a Bench for hearing the matter. \n 19. The disposal of these applications will await the decision of the Bench. \n 20. In pursuance of the above said order these applications came up for hearing on February 12, 1968, before a Bench consisting of the Honourable P. Jaganmohan Reddy, Chief Justice and the Honourable Mr. Justice A.D.V. Reddy and the Court made the following order on 13-2-1968. \nORDER OF DIVISION BENCH CONSISTING OF P. Jaganmohan Reddy C.J. and A. D. V. Reddy J. \n P. Jaganmohan Reddy, C.J.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-9", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "P. Jaganmohan Reddy, C.J.   \n 21. Our learned brother, Narasimhan J., has referred the following questions of law for our decision, namely : \n \" 1. What is the true scope of Section 61 of the Madras Co-operative Societies Act, 1932 (Madras Act VI of 1932), and Section 129 of the Andhra Pradesh Co-operative Societies Act, 1964 (Act No. VII of 1964) and", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-10", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "2. Whether those provisions conflicting with the express provisions of the Indian Companies Act, 1913 formerly, and the Companies Act, 1956, as now enacted, are invalid ?\"", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-11", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "22. These questions arose out of the following facts, namely, that the Chittoor District Co-operative Marketing Society Ltd., Chittoor, hereinafter referred to as the Society, had advanced certain amounts to the Vegetols Ltd., Chittoor, hereinafter referred to as the company. The managing director of the company appears to have executed a personal bond undertaking to pay the sums so advanced in the event of failure of the company to repay the amounts. It may be stated that the company was also a member of the Society. The Society demanded repayment of the monies advanced by it to the company, and on a dispute being raised, the matter was heard under Section 51 of the Madras Co-operative Societies Act, 1932 (Madras Act VI of 1932), hereinafter called the Societies Act, by the Registrar who ultimately passed an award. A compromise was effected before the Registrar, who passed a decree on August 10, 1955, for payment of Rs. 97,000 with interest at the rate of five per cent. per annum till the full amount is discharged in favour of the Society by the company. The above decree was an instalment decree payable at the rate of Rs. 3,000 per month with a default clause that, if any three consecutive instalments were not paid, the entire decree was capable of being executed either by the Deputy Registrar or the civil court. After this decree certain amounts appear to have been paid by the company when ultimately it went into liquidation on a creditor's petition in O.P. No. 4/57 filed on April 11, 1957. A winding-up order in relation to the company was passed by a company judge of this court on February 23, 1958.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-12", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "23. Against this an appeal, being O.S. Appeal No. 3 of 1958, was filed and stay was obtained. After the stay order was passed and during the pendency of the appeal, it appears--and these facts are not denied by either party--the managing director, pursuant to the bond executed by him in favour of the Society undertaking to pay the amounts in default of the company repaying the sums, paid certain amounts from time to time amounting to Rs. 62,231.25 p. Ultimately, the said appeal when it came up for hearing was dismissed on March 22, I960. \n 24. The official liquidator thereafter took out a petition being C.A. No. 83/65 under Sections 468, 477 and 536 of the Indian Companies Act, 1956, hereinafter called the Companies Act, read with Rule 9 of the Companies (Court) Rules, 1959, for recovery of the; amounts paid to the Society after April 11, 1957. i.e., after the commencement of the winding-up proceedings. It is also not disputed that though the order was made subsequently on February 23, 1958. the winding-up order under the law by virtue of Section 41(2) of the Companies Act, will be deemed to have commenced from the date of the application, and in this case from April 11, 1957. The payments made to the Society were from June 10, 1957 to March 31, 1960, i.e., after April 11, 1957.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-13", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "25. On the application of the official liquidator the court directed notice to the Society and proceedings were taken for the recovery of the amounts. The persons concerned were examined under Section 477 of the Companies Act. It may be stated that the Society filed an application C.A. No. 79/65 before the official liquidator asking him to pay Rs. 38,070.98 nP. being the balance of the amount due after adjustment of Rs. 69,000. This amount was claimed as a secured creditor. The official liquidator allowed the Society's claim as an ordinary creditor and not as a secured creditor. It may be stated that immediately after the official liquidator took out proceedings to recover the amounts, the society took out C.A. No. 122/65 which was under Section 536(2) of the Companies Act for the validation of the amounts received subsequent to the filing of the application for liquidation. \n 26. It appears that when the matter came up before our learned brother Narasimham J., an objection was taken by the Society that having regard to the provisions of Section 61 of the Societies Act which made the Companies Act inapplicable to societies registered under the Societies Act, the company court has no jurisdiction to adjudicate upon these applications filed by the official liquidator. It was then contended by the official liquidator that, if the provisions of the Companies Act were inapplicable in a manner as to deprive the company court of its jurisdiction over the assets and liabilities of the company registered under the Companies Act, such a provision would be ultra vires the State Legislature which has no legislative competence in respect of matters exclusively within List I of the Seventh Schedule to the Constitution of India.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-14", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "27. Before we consider this last question, it would be necessary first to examine the scope and ambit of Section 61 of the Societies Act and if we agree with the contention of the Society that the legislature had, by incorporating Section 61, intended to and did exclude the jurisdiction of the company courts, then it would be necessary to consider the second question. But, if that is not the legal position, it will be unnecessary for us to determine the constitutional validity of Section 61 of the Societies Act, 1932, or Section 129 of the Co-operative Societies Act, 1964. Section 61 is in the following terms: \n \" The provisions of the Indian Companies Act VII of 3913 (now 1956) shall not apply to registered societies.\" \n 28. Section 129 also says that the provisions of the Companies Act, 1956, shall not apply to societies. This provision was inserted because till the first Co-operative Credit Societies Act was passed in this country in 1904 the co-operative societies were being registered under the Companies Act, 1882, under Section 6 of which : \n \" Any seven or more persons associated for any lawful purpose may be subscribing their names to a memorandum of association (i) and otherwise complying with the requisition of this Act in respect of registration form an incorporated company (ii) with or without limited liability.\"", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-15", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "29. Once a society or a body of persons get themselves registered under the Companies Act either of 1882 or subsequent Acts containing similar provisions in respect of the incorporation and registration of companies, the provisions of the Companies Act will apply to it. The Companies Act relates to formation, incorporation, regulation and winding up of a company registered under the Act. All these provisions were considered cumbersome and discouraging to co-operative societies, which were necessary to reduce rural indebtedness and encourage thrift. The history of the introduction of the co-operative movement in the country can be found in the Madras Cooperative Manual, volume I, but it is not necessary to deal with it at any length except to cite a few observations at pages 4 and 5 which are:", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-16", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "\" Various countries have adopted co-operation as a solution of various economic problems. Thus Great Britain adopted co-operation for establishing co-operative stores to promote the economic interest of consumers ... In Madras, as in the rest of India, co-operation was introduced as a remedy for rural indebtedness. Rural indebtedness is a common feature of all countries depending largely on agriculture . . . The earliest attempt in this direction was made by the Government of Madras in 1892.........After making a detailed study of the systems of ' popular ' and mortgage credit prevalent in Europe, Sir Frederick Nicholson submitted a valuable and comprehensive report, the main recommendation in which was the starting of rural co-operative societies more or less on the lines of the Reiffesen Societies of Germany for the provision of credit on reasonable terms and for the development of thrift among the rural population. While this report was under the consideration of the Government of India a volume entitled Peoples Banks for Northern India was published by Mr. H. Dupernex, I.C.S., an Officer of the United Provinces. In the meantime, a few small experimental societies were also instituted by Mr. Dupernex and other officers in different parts of India. They were registered under the Indian Companies Act. But as long as they were governed by the complicated provisions of this Act, it was impossible to expect much progress. A committee was therefore appointed in 1901 by Lord Curzon, the then Viceroy of India.........The committee recommended the introduction and promotion of co-operative credit societies and for this purpose suggested a separate legal enactment to regulate and to confer on them certain special privileges. A bill was accordingly introduced in the Legislative Council and was subsequently passed as the Co-operative Credit Societies Act (Act X of 1904, India).\"", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-17", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "30. Section 28 of this Act, it may be stated, contained a provision that the Indian Companies Act, 1882, shall not apply to societies registered under this Act. The object and intendment of the Legislature in incorporating this provision is clear, namely, that the provisions of the Companies Act relating to incorporation, regulation and winding up were not to apply to societies registered under the Co-operative Societies Act, 1904. We think these words were added by way of abundant caution having regard to the practice that was prevalent immeditately prior to the passing of the first Cooperative Societies Act. Subsequent Acts also contained similar provisions. Co-operative Societies Act, 1912 (Act II of 1912) which repealed the Co-operative Societies Act, 1904, provided for this exclusion in Section 48, and similarly Section 61 of the Co-operative Societies Act, 1932, excluded the application of the provisions of the Companies Act. The Co-operative Societies Act of 1932 was repealed by the Andhra Pradesh Co-operative Societies Act, 1964 (Act No. VII of 1964) which contains similar provision in Section 129. We may also at this stage mention that in every State in India, Co-operative Societies Acts contain similar provisions excepting in Gujarat and Maharashtra where the Legislatures presumed that the Indian Companies Act does not apply to Co-operative Societies but none-the-less proceeded to clarify that position for purposes of removing doubts. Section 170 of the Gujarat Act and Section 167 of the Maharashtra Act are in the following terms : \n \" For the removal of doubts, it is hereby declared that the provisions of the Companies Act, 1956, shall not apply to societies, registered, or deemed to be registered, under this Act. \"", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-18", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "31. These provisions support the view which we have taken, namely, that the object of excluding the provisions of the Companies Act in their application to societies registered under the Co-operative Societies Act was by way of abundant caution and to ensure that the provisions of the Companies Act will not apply to the Co-operative Societies Act either with respect to formation, regulation or winding up of society. Even under Section 2(7) of the Companies Act, 1956, the definition of \" body corporate\" specifically excludes a co-operative society registered under the Co-operative Societies Act and it reads thus : \n \" ' Body  corporate' or    ' corporation '  includes  a   company  incorporated outside India but does not include-", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-19", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "(a) a corporation sole ;  \n \n\n (b) a co-operative society registered under any law relating to co-operative societies; and  \n \n\n (c) any other body corporate (not being a company as defined in this Act) which the Central Government may, by notification in the official gazette, specify in this behalf. \"    \n \n\n 32. The definition, it may be noted, was amended in order to exclude the co-operative societies from its application. The original definition of the terms \" body corporate \" under the previous Companies Act was, it may be", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-20", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "noted, amended to exclude co-operative societies from its purview.    Broadly speaking,  the  terms,  while  not  including  any  of  the  bodies specifically excluded by the definition, may include any aggregate of persons which has been  or  is incorporated  under  some statute of this or any foreign country and which exists as a legal entity distinct from the members constituting it, and  having  perpetual succession and common seal.    For this reason, it was found necessary to specifically exclude the said   \" body  corporate \"  and   it may be stated that a co-operative society registered under the Co-operative Societies  Act  is  a  body corporate.    There are  certain  provisions  in the Companies Act which relate to \" body corporate \" and for that reason   the co-operative  societies  were excluded from its purview.    We are, therefore, clear  in  our  minds that  Section  61   by excluding  the  provisions  of the Indian Companies Act, 1913, or Section 129 of the new Act by excluding the provisions of  the   Indian  Companies  Act,   1956, does nothing more than exclude the provisions relating to incorporation, regulation and winding-up. This view also  is  supported by a reference to the legislative powers under items 43 and 32 under Lists I and II to Seventh Schedule of the  Constitution of India dealing  with the legislative  powers  of the Parliament  and the States respectively.    Item 43 of List I relates to incorporation, regulation and winding up of trading corporations, including  banking, insurance and  financial  corporations  but not including co-operative societies.    Item 32 of List II relates to incorporation, regulation and winding-up of corporations, other than those specified in List I, and Universities;", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-21", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "incorporation, regulation and winding-up of corporations, other than those specified in List I, and Universities; unincorporated trading, literary, scientific, religious and other  societies  and  associations, co-operative  societies.    It  is obvious from a perusal of the above items, in Lists I and II that while Parliament has no power to legislate in respect of co-operative societies, the  State  Legislatures  have  no  power  to  legislate in respect of regulation or winding-up of trading corporations, etc.    Specific exclusion from   the  legislative   power  of  the   Parliament of co-operative societies and its specific  mention in  item 32  that the State Legislature has all powers except those specified in List I in  respect  of incorporation, regulation and winding-up of trading corporations leads to the only conclusion that neither a State nor Parliament intended to  legislate  in respect of matters which did not  pertain to it.    The exclusion of the application of the provisions of the  Companies Act to the co-operative societies  registered under the Co-operative  Societies Act is not inconsistent with the exercise of the legislative power vested in the State. Nor does the question whether the provisions of the Companies  Act pertaining to liquidation being made applicable to  the society arise in this case since the society has not gone into liquidation.    Also there is no  application even  to liquidate the society so that any objection can be taken that the provisions of the  Act cannot  be made applicable to a society registered under the said Act.    This is  our", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-22", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "answer to the first question.    Having regard to the answer of  ours  to  the first question it is not necessary to consider the second  question. \n \n\n 33. With the above answer the case is remitted to the learned company judge. \n \n\n 34. [In pursuance of the above orders of the Division Bench the case was again heard by Narasimham J. who made the following order on March 28, 1968.] \n \n\n  Narasimham, J.   \n \n\n 35. These two applications are connected and are therefore heard together.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-23", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "36. C.A. No. 83 of 1965 is taken out by the official liquidator seeking a direction for the refund of a sum of Rs. 62,231.25 with interest being the aggregate of the sums received from time to time by the respondent herein, The Chittoor District Co-operative Marketing Society Ltd., Chittoor, towards the debts due from the company in liquidation. The official liquidator has claimed the refund as, according to Section 536(2) of the Companies Act, 1956, any disposition of the property of the company made after the commencement of the winding-up, shall, unless the court otherwise orders, be void. \n 37. The application is opposed by the respondent Society pleading, inter alia, that the Society received the amount in execution of a valid decree and as such it ceased to be the property of the company. The Society also took the plea that if the payments were void for any reason the official liquidator had to file suits. A further objection was that the application filed by the official liquidator was barred by time. Apart from the said pleas, it was said that the provisions of the Indian Companies Act were not made applicable to the co-operative societies formed under the Andhra Pradesh Cooperative Societies Act. It was also brought to the notice of this court that the society had filed an application for the validation of the payments by way of abundant caution. \n 38. The points, which arise on these allegations in the petition and the counter, are : \n \"1. Whether the payments made by the company in liquidation after the commencement of the winding-up are refundable to the official liquidator under Section 536(2) of the Companies Act ?  \n 2. Whether the official liquidator's application for the refund of the said amount is barred by time ?", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-24", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "3. Whether the official liquidator should have filed suits to recover the payments made and not have made this application ?  \n 4. Whether the relevant provisions of the Indian Companies Act are not made applicable to the co-operative societies, the respondent being one such ?\"  \n 39. Company Application No. 122 of 1965 is an application under Section 536(2) of the Companies Act, 1956, seeking validation of the payments amounting to Rs. 62,231.25 received by the Society from the company in liquidation. It was stated that the company in liquidation was a member of the Chittoor District Co-operative Marketing Society Ltd., Chittoor, and that the Society advanced two sums of Rs. 50,000 each to the company. The Society filed an arbitration reference under Section 51 of the Madras Co-operative Societies Act on May 16, 1953, for the recovery of a sum of Rs. 99,450-15-8, being the balance of the amount due to the society from the 1 st respondent-company. Eventually, the Deputy Registrar, exercising powers under Section 51 of the Madras Co-operative Societies Act, passed the decree in terms of the compromise for an amount of Rs. 97,000 with interest at 5% per annum till the amount is fully discharged. In pursuance of the said compromise decree dated August 10, 1955, the Society received Rs. 62,231.25. The Society was never intimated of the riling of the winding-up application. Nor was it made a party to the said proceedings. The Society cannot be treated as having been fraudulently preferred to the other creditors under any circumstances. On the said allegations validation of payments was prayed for.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-25", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "40. The application was opposed by the official liquidator pleading, inter alia, that there was no valid ground disclosed for the validation of the payments, and that the transactions such as could be validated could only be those entered into for the benefit of the company and for preserving the business of the company in order to enable it to carry on its business and to avoid its business being paralysed. The payments made to the Society were subsequent to the commencement of the winding-up in discharge of a debt incurred prior to such commencement and as such could not be validated. The official liquidator also stated that the business manager of the applicant society stated before him during the investigation of the claim of the society that he knew that the winding-up order of the company was passed on February 28, 1958, and that he was aware of the date on which the winding-up petition was presented. It was also made clear that the winding-up order was published in the official gazette under Section 445 of the Act and it could not be said that the Society had no notice of the presentation of the winding-up petition as well as the winding-up order. \n 41. The point which arises on the said allegations is whether the petitioner (society) has made out a case under Section 536(2) of the Companies Act, for validation of the payments made after the commencement of the winding-up proceedings. \n 42. I will now consider the points raised in the first petition. \n 43. There is no controversy with regard to the sums received by the Chittoor District Co-operative Marketing Society Ltd., Chittoor, aggregating to Rs. 62,231.25. The winding-up petition was presented on April 31, 1957. The winding-up order was passed on February 28, 1958, in O. P. No. 4 of 1957.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-26", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "44. Under Section 441(2) of the Companies Act, the winding-up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding-up. The payments were unquestionably towards a debt under a decree passed on August 10, 1955, i.e., prior to the commencement of the winding-up. Under Section 536(2) of the Companies Act, any disposition of the property of the company, made after the commencement of the winding-up, shall, unless the court otherwise orders, be void. \n 45. In similar applications, Company Applications Nos. 89 and 133 of 1965 in the same petition, I went into the question of validation of payments which was argued elaborately and gave a decision that transactions that would be validated by the court were transactions which were bona fide entered into and completed in the ordinary course of the company's current trade and I stated that that was the principle underlying the decisions in Official Liquidator, Gorakpur Electric Supply Co. Ltd. v. Siemens (India) Ltd, [1941] 11 Comp. Cas. 17., Tuhidas Jasraj Parekh v. Industrial Bank of Western India, A.I.R. 1931 Bom. 2., R. K. Sundaram Asari v. T. R. Abdul Haleem Saheb, A.I.R. 1956 Mad. 692. and Syed Haidar Sahib v. M. Jayaram Pillai, [1956] 26 Comp. Cas. 164; [1957] 1 M.L.J. 141. . I also referred to the passage in Buckley on the Companies Act, 13th edition, page 494--commentary under section 227, English Companies Act, 1948, which may be extracted here for convenient reference :", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-27", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "\" But payment by the company after petition presented, and after the creditor must be taken to have notice of the petition, of even a perfectly bona fide debt of the company, is not a transaction to which the court will give validity : Re Civil Service and General Stores, [1887] 57 L.J. (Ch.) 119.. To do so would be against a cardinal principle of the Act, viz., pan passu distribution.\" \n 46. I do not consider the payments in discharge of debts incurred prior to the winding-up could be validated. In the said decision given by me, I also held that the application of the official liquidator was not barred by time and that the official liquidator's application was maintainable. \n 47. I may state herein that I referred the plea raised in Company Application No. 83 of 1965 by the Society, that the provisions of the Companies Act did not apply to the co-operative societies formed under the Andhra Pradesh Co-operative Societies Act, to a Bench and the Bench, consisting of the Honourable the Chief Justice and the Honourable Sri Justice A. D. V. Reddyt answered rejecting that plea. The Bench observed : \n \" Nor does the question whether the provisions of the Companies Act pertaining to liquidation being made applicable to the society, arise in this case since the society has not gone into liquidation.\" \n 48. 1 would, therefore, answer the points arising for consideration in C.A. No. 83 of 1965 and C.A. No. 122 of 1965 thus: \n. \n49. C.A. No. 83 of 1965: \n Point No. 1.--The payments made by the company in liquidation after the commencement of the winding-up are refundable to the official liquidator under Section 536(2) of the Companies Act.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "238b2db93dc8-28", "Titles": "Chittoor District Co-Operative ... vs Vegetols Ltd. (In Liquidation) ... on 28 March, 1968", "text": "Point No. 2.--The official liquidator's application for the refund of the amount is not barred by time. \n Point No. 3.--The official liquidator's application is maintainable. \n Point No. 4.--The question whether the provisions of the Indian Companies Act pertaining to liquidation are made applicable to the Society does not arise in this case since the Society has not gone into liquidation.  \n 50. C.A. No. 122 of 1965 : \n The Society (petitioner) has not made out a case under Section 536(2) of the Companies Act for validation of the payments made after the commencement of the winding-up proceedings. \n 51. In the result, C.A. No. 83 of 1965 is allowed, and the Chittoor District Co-operative Marketing Society Ltd., Chittoor, will refund the amount of Rs. 62,231.25 with interest at 6% per annum from the date of the application till date of payment to the official liquidator with costs of this application. \n 52. C.A. No. 122 of 1965 is dismissed, but I award no costs as the matters were heard together and costs are awarded in C. A. No. 83 of 1965.", "source": "https://indiankanoon.org/doc/175423/"}
+{"id": "e779339f4f23-0", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "JUDGMENT Ramachandra Rao, J. \n\n1. In this batch of writ petitions, the petitioners challenge the validity of Section 5-A of the Andhra Pradesh General Sales Tax Act (6 of 1957) (hereinafter called the Act). As the challenge to the said section is mainly on legal grounds, it is sufficient, to refer to the facts of one typical case.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-1", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "2. The facts in Writ Petition No. 748 of 1967 are briefly as follows:-\nThe petitioner is a firm and a dealer in paddy and rice. For the year 1964-65, the Commercial Tax Officer, Palakole, by an assessment order dated 30th November, 1965, assessed the petitioner on a net turnover of Rs. 21,19,609.14 p. and levied a tax of Rs. 5,299.20 p. at \u00bc per cent. under Section 5-A of the Act, in addition to the tax at 3 per cent. on a turnover of Rs. 14,63,021.86 p. and 1 per cent. on a turnover of Rs. 6,56,647.16 p. The total tax levied was Rs. 55,756.33 p. and after deducting the same from the advance tax paid, the refund of the excess of Rs. 2,257.33 p. was directed by the assessing authority. An objection was raised before the assessing authority as to the vires of Section 5-A of the Act, but the said authority negatived the objection observing that such an objection was of no avail before an authority constituted under the Act, and that, therefore, he was unable to give any relief in that regard. The same objection was raised on appeal before the Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal, but with the same result. The petitioner has, thereupon, filed the above writ petition for a writ of certiorari for quashing the assessment order in so far as it relates to the levy of the \u00bc per cent. of additional tax under Section 5-A of the Act. The challenge to its validity is made mainly on two grounds :", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-2", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "(1) that Section 5-A of the Act is beyond the legislative competence of the State Legislature as the said provision does not fall within entry 54 of List II of the Seventh Schedule of the Constitution; and (2) that Section 5-A is discriminatory in its scope and effect, and that it violates Article 14 of the Constitution of India.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-3", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "3. Sri Venkatappayya Sastri contends that the unit of taxation under entry 54 of List II, is the transaction or the event of sale and not the actual trade or the goods sold and that as Section 5-A of the Act authorises the levy of an additional tax of one-fourth per cent. on the turnover when the turnover is Rs. 3 lakhs or more, it amounts to a tax on the totality of the turnover and it is the turnover that is taken as the unit of taxation and consequently it amounts to taxing the trade itself. His contention is that such a provision falls under entry 60 of List II of the Seventh Schedule and that it cannot exceed the limit of Rs. 250 per annum by virtue of Article 276 of the Constitution. Relying upon entry 84 of List I and entry 51 of List II which relate to duties of excise and entry 83 of List I which deals with duties of customs and entry 59 of List II which refers to tolls and entry 52 of List II which refers to taxes on the entry of goods into a local area for consumption, use or sale therein and entry 54 of List II and entry 92-A of List I which refer to taxes on the sale or purchase of goods, Sri Sastri argues that the taxable event in each of these cases is the manufacture or production or the movement or sale or purchase of goods and that the goods themselves are not the subject of taxation. His submission is that under a law made under entry 54 of List II, a tax can be levied only on the transaction or event of sale or purchase and that no other unit of taxation can be adopted. Mr. Sastri's further argument is that if the turnover of a dealer is taken as the basis for imposition of a tax, it amounts to levying a tax on the status of the dealer on account of the volume of his trade and that it amounts", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-4", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "a tax on the status of the dealer on account of the volume of his trade and that it amounts to a tax on the dealer himself and it is not a tax on the activity of sale or purchase of the dealer and that it consequently falls outside entry 54 of List II.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-5", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "4. Sri Anantha Babu raises a further contention that the nature of the tax imposed under Section 5-A is different from that imposed under Section 5 of the Act, that there is a difference between the yardstick employed for imposing a tax and that employed for collection of the tax, that the method of computation or mode of assessment does not determine the nature of the tax and that Section 5-A is a charging section by itself and the nature of the tax imposed should be determined only with reference to the provisions of Section 5-A of the Act. His submission is that the taxable entity or event under Section 5-A is not the individual sale or purchase but the turnover of a dealer reaching rupees three lakhs or more. \n\n5. Before we deal with the aforesaid contentions, it is appropriate that we should read the relevant provisions of the Act for a proper appreciation of the points raised. The definition of \"sale\" omitting the portions not relevant for the purpose of this case, is as follows :\n2. (n) 'sale' with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business, for cash, or for deferred payment, or for any other valuable consideration, and includes a transfer of property in goods involved in the execution of a works contract or in the supply or distribution of goods by a society (including a co-operative society), club, firm or association to its members, but does not include a mortgage, hypothecation or pledge of, or a charge on goods. \n\n        *                    *                  *\n \n\nTotal turnover\" and \"turnover\" are defined in Section 2(r) and (s) as follows :", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-6", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "(r)total turnover' means the aggregate turnover in all goods of a dealer at all places of business in the State, whether or not the whole or any portion of such turnover, is liable to tax ;\n \n\n(s) 'turnover' means the total amount set out in the bill of sale (or if there is no bill of sale, the total amount charged) as the consideration for the sale or purchase of goods (whether such consideration be cash, deferred payment or any other thing of value) including any sums charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer, whatever be the description, name or object thereof. \n\n6. The proviso to this definition is omitted, as it is not relevant for this case. \n\n7. Section 5 which is the charging section is in the following terms:\n5. Levy of tax on sales or purchases of goods.-(1) Every dealer (other than a casual trader and an agent of a non-resident dealer) whose total turnover for a year is not less than Rs. 10,000 and every casual trader or agent of a non-resident dealer, whatever be his turnover for the year, shall pay a tax for each year, at the rate of two naye paise on every rupee of his turnover:\nProvided that if and to the extent to which, such turnover relates to articles of food or drink or both sold in a hotel, boarding-house, restaurant, stall or any other place, the tax shall be calculated at the rate of three naye paise in the rupee, if the total turnover relating to those articles is not less than Rs. 25,000.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-7", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "(2) On the first sale of any of the goods mentioned in the First Schedule by a dealer who is liable to tax under Sub-section (1), a tax at the rate specified as applicable thereto shall be paid by the dealer on his turnover in each year relating to such goods, and the said tax shall be in addition to the tax to which such dealer is liable under Sub-section (1). \n\n(3) Notwithstanding anything contained in Sub-section (1), the tax under this Act shall be levied-\n(a) in the case of the goods mentioned in the Second Schedule, at the rates and only at the point of the sale specified as applicable thereto effected in the State by the dealer selling them, on his turnover of sales in each year relating to such goods irrespective of the quantum of turnover;\n(b) in the case of the goods mentioned in the Third Schedule, at the rates and only at the point of the purchase specified as applicable thereto, effected in the State by the dealer purchasing them, on his turnover of purchase in each year relating to such goods irrespective of the quantum of turnover. \n(4) For the purpose of this section and the other provisions of this Act, the turnover on which a dealer shall be liable to pay tax shall be determined after making such deductions from his total turnover, and in such manner as may be prescribed. \n\n(5) The taxes under this section shall be assessed, levied and collected in such manner, as may be prescribed :\nProvided that-\n(i) in respect of the same transaction, the buyer or the seller, but not both, as determined by such rules as may be prescribed, shall be taxed ;\n(ii) where a dealer has been taxed in respect of the purchase of any goods, in accordance with the rules referred to in Clause (i) of this proviso, he shall not be taxed again in respect of any sale of such goods effected by him.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-8", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "8. Section 5-A which is impugned in these petitions, is as follows :\n 5-A Levy of additional tax on turnover.--Every dealer who is liable to pay tax under Section 5 shall, in addition to the tax payable under that section pay for each year a tax at the rate of one-fourth naya paisa on every rupee of his turnover liable to tax, if his total turnover for that year is rupees three lakhs or more. \n\n9. The legislative power to make laws for imposing taxes on sale or purchase of goods is conferred by entry 92-A of List I and entry 54 of List II of the Seventh Schedule of the Constitution. The word \"sale\" in the said entries is used in the sense in which it occurs in Section 4 of the Sale of Goods Act. It is not disputed that what are taxable under Section 5 of the Act are the transactions of sales or purchases, and that Section 5 has been validly enacted in exercise of the power under entry 54 of List II of the Seventh Schedule of the Constitution. But what is contended for the petitioners is that the unit of taxation fixed under Section 5-A is different from that prescribed under Section 5. We have therefore to see whether on the plain language of the provisions of Section 5-A, the nature of the tax that is sought to be levied under Section 5-A is in any way different from that leviable under Section 5 of the Act, for it is not disputed before us that what is taxable under Section 5 is the transaction or event of sale.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-9", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "10. Under Section 5 it is prescribed that every dealer whose total turnover for a year is not less than Rs. 10,000 and every non-resident dealer whatever be his turnover for the year, shall pay a tax for each year at the rate of 0.02 naye paise (now 0.03 paise) on every rupee of his turnover. The \"turnover\" as defined in Section 2(s) is only the total amount set out in the bill of sale (or if there is no bill of sale, the total amount charged) as the consideration for the sale or purchase of goods. The tax is therefore levied on the total amount of consideration in respect of each sale. But an exemption is granted in respect of a dealer, whose total turnover is less than Rs. 10,000 per year. The taxable event under Section 5 is only the sale transaction under Section 5. Section 5-A similarly provides for an additional tax at the rate of one-fourth naya paisa (now paisa) on every rupee of the turnover of a dealer liable to be taxed under Section 5 provided the total turnover is rupees three lakhs or more. What is taxed under Section 5-A is also the event or transaction of sale but a higher rate by way of an additional tax of one-fourth naya paisa (now paisa) on every rupee of the turnover is prescribed in respect of dealers having a total turnover of rupees three lakhs or more. The mere fact that the additional tax of one-fourth naya paisa is provided in an independent section of the Act, does not make it any the less a tax on the sale transaction. Just as dealers having a total turnover of less than Rs. 10,000 are exempt from paying any sales tax, dealers having a total turnover of less than rupees three lakhs are exempt from paying the additional tax leviable under Section", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-10", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "turnover of less than rupees three lakhs are exempt from paying the additional tax leviable under Section 5-A. An argument has been raised upon the language of the marginal notes of the two Sections 5 and 5-A. It is contended that the marginal note of Section 5 is \"levy of tax on sales or purchases of goods\", while the marginal note for Section 5-A is \"levy of additional tax on turnover\". It is submitted that the taxable event is the sale or purchase of goods under Section 5 while that under Section 5-A it is the turnover. It is an established principle of interpretation of statutes that when the words used in the sections of the Act are clear and unambiguous the marginal notes cannot control the construction of the section. Even otherwise we are not persuaded that the marginal note of the two sections, Sections 5 and 5-A, are in any way materially different. As already mentioned the \"turnover\" as defined in the Act is the total amount of consideration for the sale or purchase of goods. Therefore the levy, even according to the marginal note, under Section 5-A refers only to the levy of additional tax on the sale or purchase of goods. The plain language of the section does not therefore support the contention of the learned counsel that the unit of taxation under Section 5-A is not the transaction of sale and that it falls outside entry 54 of List II of the Seventh Schedule of the Constitution.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-11", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "11. Sri Venkatappayya Sastri next contended that the additional tax levied under Section 5-A is a tax on the status of the dealer or on the trade itself. In support of his contention, he relies upon certain decisions. In re Sea Customs Act, Section 20(2) A.I.R. 1963 S.C. 1760 and State of Bombay v. R.M.D. Chamarbaugwala A.I.R. 1957 S.C. 699. What is laid down in the decision first cited is that the taxable event is either a sale or purchase of goods or production or manufacture or the movement of the goods and that the duties of excise or customs or sales tax are not taxes on the goods themselves. Similarly in the second case referred to above, their Lordships held that what is taxed under the Bombay Lotteries and Prize Competitions Control and Tax Act is the activity of betting and gambling, and that it is not a tax on the trade itself. We do not think that the said two decisions lend any assistance to Mr. Sastri's contention. \n\n12. The next case cited by Mr. Sastri is State of Jammu and Kashmir v. Caltex (India) Ltd. [1966] 17 S.T.C. 612. But this case does not lend any support to the argument advanced by the learned counsel. It is observed by their Lordships at page 623 :\n that the sales tax is imposed, in ultimate analysis, on receipts from individual sales or purchases of goods effected during the entire period. \n\n13. These observations do not in any way militate against the construction which we have placed upon Section 5-A.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-12", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "14. The next contention of Mr. Sastri is that the additional tax levied under Section 5-A is on the status of the dealer, because the additional tax is imposed on the basis of the volume of the trade. In other words, his contention is that the additional tax is referable to the point at which the turnover reaches rupees three lakhs or more of a particular dealer. Therefore it is the volume of the trade that is taken as the criterion for imposing this additional tax and not the individual sale or purchase. We have already held that the said contention cannot be supported on the basis of the plain language of the section itself. Mr. Sastri tries to support his contention on the basis of a decision of the Patna High Court reported in Bihar Bolts, Rivets & Engineering Works Ltd., In re [1959] 10 S.T.C. 578, where Sahai, J., referred to the important points of difference between the Bihar Sales Tax Act and the Income-tax Act and observed as follows:\n Firstly, income-tax for one year called the assessment year, is assessed on the income of the previous year, called the accounting year. Sales tax, on the other hand, becomes liable to be paid immediately after each sale is effected though, for the facility of computation and payment of tax, provision has been made for the filing of returns at the expiry of each quarter. Secondly, rates of income-tax vary in accordance with the amount of income whereas the amount of sales tax does not vary on the amount of taxable turnover. The result is that no one can be certain of what income-tax he has to pay at least until the accounting year expires. But a dealer can always be certain of what sales tax he has to pay as soon as he effects the sale.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-13", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "15. We do not think that these observations with reference to the difference between the income-tax and the sales tax lend us any assistance in the matter of interpretation of the provisions of Section 5-A.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-14", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "16. We shall next deal with the contentions raised by Sri T. Anantha Babu that the nature of tax imposed under Section 5-A is different from that imposed under Section 5. His contention is that Section 5-A is an independent charging section unconnected with the provisions of Section 5 and that the nature of tax imposed by Section 5-A should be determined solely on an interpretation of its provisions. He submits that the tax is imposed on a thing or an activity or an event and that the nature of the tax does not depend upon the procedure employed for collection of the tax. His contention in short is that Section 5-A imposes a tax upon the turnover while Section 5 imposes a tax on the individual sale or purchase and that therefore Section 5-A is not a tax on a sale falling within entry 54 of List II. He seeks to draw support for his contention from the marginal notes of the two sections. He also refers to the averments in para. 4 of the counter-affidavit filed on behalf of the State wherein it has been stated by the Government as follows:-\"I submit that Section 5-A contemplates levy of additional tax on the turnover liable to tax under Section 5.\" We have already held that the marginal notes, even assuming that they can be looked into for construing the sections, do not lend any support to the argument that the unit of taxation under Section 5-A is the turnover and not the individual sale. The averment in para. 4 of the Government's counter-affidavit does not also lend support to the contention of the learned counsel. What is stated there is that the turnover, which is liable to tax under Section 5, is liable to the levy of an additional tax under Section 5-A when the total turnover reaches rupees three lakhs or more. He also relies upon a certain passage in the decision of the Federal Court, In re C.P. Motor Spirit Taxation", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-15", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "a certain passage in the decision of the Federal Court, In re C.P. Motor Spirit Taxation Act [1938] 1 S.T.C. 1. At page 40 of the said report, the learned Chief Justice Gwyer observed as follows :", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-16", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "Strictly, a turnover tax appears to be the correct description of a tax, usually calculated in the form of a percentage, on the gross receipts of wholesalers or of retailers or of both, and in some countries also on receipts in respect of services. It is however sometimes included under the more general name of sales tax, and it is evident from the various modern writers who have dealt with the subject and to whose works we were referred [Findlay Shirras, Science of Public Finance (3rd Edition 1936), Vol. II, Ch. 25 ; Comstock, Taxation in the Modern State, Ch. 8], that the latter expression is often used as a convenient name for a number of taxes ranging from turnover taxes to taxes on the retail sale of specified classes of goods ; the so-called sales taxes which have been imposed by a large number of the State Legislatures in the United States seem to be often of the latter variety.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-17", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "17. Sri Anantha Babu also invited our attention to the observations occurring at the bottom of page 73 where his Lordship Sulaiman, J., observed as follows :\n It is thus obvious that a turnover tax or a sales tax is not by any means co-extensive with 'tax on the sale of goods'. The first certainly includes services, fees, commissions etc. which the third cannot. The second may be a mere producers' or manufacturers' tax and may also possibly cover services and enterprises, which the third cannot. The third must necessarily be a tax imposed at the time of the sale of goods and must exclude other forms of transfer like mortgages, leases, etc. \n\n \n\n18. Mr. Anantha Babu relies upon a passage at page 669 of Volume 2 of Willoughby on the Constitution of the United States which reads as follows :\n The Courts have firmly fixed the proposition that, for the determination of the amounts of taxes to be assessed upon individual persons, corporations, or places of property, any reasonable standard of measurement may be selected, and that the intrinsic character of the tax is not determined by the mode of measurement thus selected.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-18", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "19. He elaborates his contention that for the purpose of Section 5-A the assessable unit is the turnover of rupees three lakhs or more and that the Legislature expressly designated it as a tax on turnover, that the concept of turnover comes in only at the stage of computation of the tax and has no reference to the incidence of the tax, that though the taxable event, viz., the transaction of sale has taken place, for the purpose of attracting the additional tax under Section 5-A, the event of turnover reaching rupees three lakhs or more is taken as the taxable event, and that therefore the taxable event in Sections 5 and 5-A are wholly different and that in so far as Section 5-A makes the taxable event the turnover and not the transaction of sale or purchase, it falls outside the scope and ambit of entry 54 of List II. \n\n20. In re A Reference under the Government of Ireland Act, 1920, and Section 3 of the Finance Act (Northern Ireland), 1934 [1936] A.C. 352, Lord Thankerton observed at page 358 as follows:\n But, in the opinion of their Lordships, it is the essential character of the particular tax charged that is to be regarded, and the nature of the machinery-often complicated-by which the tax is to be assessed is not of assistance except in so far as it may throw light on the general character of the tax. \n\n21. At page 359, his Lordship referred to an observation in London County Council v. Attorney-General [1901] A.C. 26, where Lord Macnaghten described the character of income tax as :\n Income tax, if I may be pardoned for saying so, is a tax on income. It is not meant to be a tax on anything else. It is one tax, not a collection of taxes essentially distinct.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-19", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "22. In Ralla Ram v. Province of East Punjab A.I.R. 1949 F.C. 81, Fazli Ali, J., who spoke for the Court, observed at page 87 in para. 17, as follows:\n In the first place, we have to look into the charging section of the statute, because as was pointed out in Provincial Treasurer of Alberta and Anr. v. C.E. Kerr and Anr. [1933] A.C. 710, the identification of the subject-matter of the tax is only to be found in that section. \n\n23. Sri Anantha Babu relying on the passages mentioned above, contends that in judging the nature of the tax imposed under Section 5-A it is only the provisions of that section that have to be looked into, as according to him, it is the charging section with regard to additional levy where the turnover of a dealer is rupees three lakhs or more.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-20", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "24. The learned Government Pleader submits that Section 5-A was introduced by the Amendment Act 16 of 1963 and that Section 5-A is merely an ancillary provision and not an independent charging section. The section does not bring about any change in the subject-matter of the taxation but that it only provides for an additional rate in respect of the very same transactions which are chargeable to tax under Section 5, in cases where the total turnover is rupees three lakhs or more. He also contends that the tax is levied in respect of the transactions of sales or purchases of goods and it is not a tax on goods as such. We feel that the submissions made by the learned Government Pleader are well-founded. Under both Sections 5 and 5-A, the tax is levied only on each sale or purchase. It is only the activity of sale or purchase that is made the taxable event. The tax is imposed on the receipts of the individual sales or purchases in one accountable year. In the case of Section 5, the tax is levied only on each sale or purchase when the aggregate amount of the sales or purchases in one year exceeds Rs. 10,000; while under Section 5-A an additional tax of one-fourth naya paisa (now paisa) per rupee is levied on each sale or purchase where the aggregate amount of the sales or purchases exceeds rupees three lakhs or more. In both the sections the emphasis is only on the sale or purchase for the purpose of taxation. The liability to tax is attracted to the transaction of sale or purchase and not to the turnover. The fixation of a rate in Section 5 or the fixation of an additional rate under Section 5-A cannot, in our opinion, alter the character or nature of the tax that is imposed under either of the sections. Section 5-A itself makes it clear that the additional tax is imposed only on every dealer who is liable to", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-21", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "itself makes it clear that the additional tax is imposed only on every dealer who is liable to pay the tax under Section 5. It is not disputed before us that under Section 5, a dealer has to pay tax only on the sales or purchases in one year and it is the very same sales or purchases that are sought to be taxed with the additional rate under Section 5-A. Though the additional tax on turnovers of rupees three lakhs or more is imposed under a separate provision under Section 5-A, it is merely a supplemental or ancillary provision to the main charging Section 5. In ascertaining the true nature and character of the additional tax under Section 5-A it is legitimate as well as necessary that both the sections should be read together in order to ascertain the true character of the tax sought to be imposed. We are satisfied that the tax sought to be imposed under Section 5 as well as the additional tax sought to be imposed under Section 5-A partake of the same character, viz., a tax on sale of goods or purchase falling within entry 54 of List II. The learned Government Pleader contends that the limited question that falls for consideration here is as to the true and correct interpretation of Section 5-A and once it is established that it is a tax on sale or purchase of goods which squarely falls within entry 54 of List II there is no want of legislative competence in enacting Section 5-A. The learned Government Pleader further contends that the use of the expression \"turnover\" or the imposition of varying rates of tax in respect of different turnovers does not alter the character or the nature of the tax. In this context, he relies upon a decision reported in Corporation of Calcutta v. Liberty Cinema A.I.R. 1965 S.C. 1107 In that case, Sarkar, J., as he then was, speaking for the majority, observed at page 1117 as follows :", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-22", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "The contention of the Corporation that fixation of rates is not an essential part of legislation would seem to be supported by several judgments of this Court to some of which we now proceed to refer.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-23", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "25. He further submits that the imposition of different rates of tax based upon turnover does not alter the nature of tax, and this proposition is supported by certain observations of their Lordships of the Federal Court in Province of Madras v. Boddu Paidanna [1942] 1 S.T.C. 104, where the learned Chief Justice Gwyer observed at page 119, as follows:\n We may here refer to a contention raised by counsel on behalf of the appellants that a turnover tax such as is imposed by the Madras Act is not a tax on specific goods and that therefore the expression 'duty of excise' could never in any circumstance be appropriate to it. It may be conceded that a duty of excise is a duty leviable with respect to specific goods; but where a turnover tax is leviable at a specified rate on the aggregate sum produced by the sale of a number of different articles or commodities, then it seems to us that it is a tax levied at the specified rate on each sale of those goods or commodities. A system of turnover taxation is conceivable where it may not be easy, or even possible, to identify the tax on a particular sale; but no such difficulty arises in a case under the Madras Act, at least if the turnover exceeds Rs. 20,000 per annum, as that of the respondents does. We do not think therefore that there is any substance in the appellants' contention.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-24", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "26. We think that these observations are apposite in the context of determining the nature of the tax leviable under Section 5-A. Again their Lordships of the Privy Council had to determine the validity of the Madras General Sales Tax Act (9 of 1939) in so far as it imposed a tax on the first sales in Madras of certain goods manufactured or produced in it. In that context their Lordships referred in detail to the various provisions of the Madras Act and observed at page 139 as follows :\n Their Lordships have thought it desirable to refer to the provisions of the Madras Act in this detail in order to emphasise its essential character. Its real nature, its 'pith and substance', is that it imposes a tax on the sale of goods. No other succinct description could be given of it except that it is a 'tax on the sale of goods'. It is in fact a tax which according to the ordinary canons of interpretation appears to fall precisely within entry No. 48 of the Provincial Legislative List. \n\n27. Entry 48 in List II of the Seventh Schedule of the Government of India Act also used the expression \"taxes on the sale of goods\" though entry 54 of List II of the Seventh Schedule of the Constitution used the expression \"taxes on sale or purchase of goods\". The material provision which their Lordships had to consider in the aforesaid case is similar to the expression used in entry 54 and the observations made therein apply with full force in construing the provisions of Section 5-A.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-25", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "28. In State of Bombay v. United Motors (India) Ltd. [1953] 4 S.T.C. 133 dealing with the question of the validity of the Bombay Sales Tax Act of 1952, Patanjali Sastri, C.J., who spoke for the Court observed at page 156 as follows :\n That in the present case the tax is imposed, in ultimate analysis, on receipts from individual sales or purchases of goods effected during the accounting period, and it is therefore possible to separate at the assessment the receipts derived from exempted sales or purchases and allow the State to enforce the statute with respect to the constitutionally taxable subjects, it being assumed that the State intends naturally to keep what it could lawfully tax, even where it purports to authorise the taxation of what is constitutionally exempt. \n\n29. In Government of Andhra v. Nagendrappa [1956] 7 S.T.C. 568, it has been stated at page 571, that sales tax as observed in Province of Madras v. Boddu Paidanna [1942] 1 S.T.C. 104., is a tax levied on the occasion of the sale of goods and is a tax on the proceeds thereof, whether taken individually or collectively.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-26", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "30. Again at pages 573 and 574 their Lordships stated as follows :\n In other words, the tax is levied on the purchaser or at the purchase point.... The single point is selected by making the last purchaser in the series of sales liable for the tax and it is only when the stage of export is reached in the series of sales by successive dealers, that the tax becomes exigible. But it is not the transaction of export sale on which the tax is levied. The tax is levied on the purchase which precedes the export sale. The taxable event is really the purchase and this is shown by fixing the quantum of the turnover at the price paid by the dealer for the purchase and not the price realised by him on the export sale. \n\n31. Again, their Lordships stated that, The export by the dealer merely marks the final stage of series of purchases by one licensed dealer from another and it is at that stage that the taxable event, namely, the last purchase, and the person who is liable to pay the tax, namely, the last purchaser, are both determined. In other words, the tax is really one on the transaction of purchase anterior to the sale for export or export sale. The turnover which is taxable under the Act may be the sale or purchase turnover and the State has the option to collect the tax from the dealer on his purchase turnover. There is nothing illegal therefore in making the purchase turnover taxable under the rules.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-27", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "32. In Konduri Buchirajalingam v. State of Hyderabad [1958] 9 S.T.C. 397, dealing with the question whether purchase of groundnuts by a dealer from an agriculturist is exempt from the liability to sales tax under the Hyderabad General Sales Tax Act of 1950, at page 402, Sarkar, J., as he then was, for the majority observed :\n We are however unable to agree that Sections 3 and 4 do not impose a tax on a purchase by a dealer from an agriculturist. Under these sections the tax is on the turnover, that, is to say, the aggregate amount for which the goods are either bought or sold. \n\n33. In George Oakes (Private) Ltd. v. State of Madras [1961] 12 S.T.C. 476, their Lordships considered the validity of the provisions of Section 8-B of the Madras General Sales Tax Act in so far as it authorised sales tax to be levied on the total amount of the sale price and the tax collected by the registered dealer, in cases where the seller passes on the tax to the registered buyer. Referring to the expression \"turnover\" their Lordships stated at page 483 :\n The expression 'turnover' means the aggregate amount for which goods are bought or sold, whether for cash or for deferred payment or other valuable consideration, and when a sale attracts purchase tax and the tax is passed on to the consumer, what the buyer has to pay for the goods includes the tax as well and the aggregate amount so paid would fall within the definition of turnover. \n34. Their Lordships further stated at page 487 in the last para, as follows :\n What is taxable is not each transaction of sale but the total turnover of the dealer, computed in accordance with the provisions of the Act and the Rules.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-28", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "35. These observations fully support the contention of the learned Principal Government Pleader that the taxable event under Section 5-A is not the total turnover of rupees three lakhs and more and that the taxable event is only a sale or purchase of goods. We are therefore satisfied that the argument of the learned counsel for the petitioners that the tax levied under Section 5-A is a tax on the status or on the volume of trade of the dealer is devoid of merit. \n\n36. The next contention of the learned counsel that the tax levied under Section 5-A is a tax on trade and that it cannot exceed the constitutional limit prescribed by Article 276 of the Constitution, is not also acceptable. \n\n37. In Rangaswami Chettiar & Co. v. Government of Madras [1957] 8 S.T.C. 222, their Lordships of the Madras High Court, Rajagopalan and Rajagopala Ayyangar, JJ., held at page 229 as follows:\n The Legislature has specifically conferred on it a right to levy a tax on the sale of goods, and it is not disputed that the tax in the present case is a tax on the sale, that is on the transaction of sale. It is not a tax on trade, not a tax for the privilege of trading. It is a tax on a transaction, and that is its pith and substance, and that is not in controversy. The incidence of the tax is wholly irrelevant for considering its substance or nature. A tax on a transaction such as was provided for by entry 48 of the Provincial List has necessarily to be laid upon some person concerned in the transaction and this feature cannot therefore render it other than a tax upon a transaction.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-29", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "38. Their Lordships rejected the contention that the tax imposed under the Madras General Sales Tax Act on the purchase of groundnut was in contravention of the provisions of Article 276(2) of the Constitution of India. \n\n39. In S. Ramanatha Shenoy & Co. v. Sales Tax Officer, Tellicherry [1963] 14 S.T.C. 231, the validity of Section 3(2) of the Kerala Surcharge on Taxes Act (11 of 1957) fell to be considered. A challenge was made to the said Section on the ground that inasmuch as the dealer himself was made to bear the entire increased tax on surcharge, it really amounted to a levy of a tax on the exercise of a profession or trade by the dealer concerned and therefore it was violative of the provisions of Article 276 of the Constitution. His Lordship Vaidialingam, J. (as he then was), held at page 236, that it is really a tax on the sale or purchase of goods, and not on the exercise of a profession, trade, calling or employment. \n40. His Lordship upheld the contention that the said provision for levying surcharge fell under entry 54 of List II and not under entry 60 of the said List. In that view, his Lordship held that the said provision did not offend the provisions of Article 276 of the Constitution.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-30", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "41. In Kondayya v. Kurnool Municipality (1963) 1 An. W.R. 267, a Bench of this Court took the view that the surcharge on property tax on certain buildings leviable under the Andhra Pradesh Urban Areas Surcharge on Property Tax Act (13 of 1958) only provided for increasing the property tax and that the subject-matter of the tax was the building itself and that it could not be regarded as a tax on tax and that the Legislature derived competence to enact the said Act under the same entry 49 of List II which related to buildings. Applying the same principle to the instant case, we are of the view that the additional tax leviable under Section 5-A is merely an addition to the tax on sale or purchase of goods falling under entry 54 of List II and is within the legislative competence of the State Legislature. As a result of the foregoing discussion we hold that the provisions of Section 5-A fall within the scope and ambit of entry 54 of List II of the Seventh Schedule of the Constitution and are validly enacted.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-31", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "42. The next attack on Section 5-A is made on the ground that it violates Article 14 of the Constitution. Sri K. Ranganathachari and Sri T. Anantha Babu contend that the tax is imposed on sales or purchases of goods and that in so far as different rates are prescribed under Section 5 and Section 5-A in respect of the same class of dealers and in respect of similar transactions solely on the basis of the volume of the business it makes an invidious distinction between dealers whose turnover is rupees three lakhs or more and those whose turnover is less than three lakhs. On a plain reading of both the sections; we are satisfied that this contention cannot be accepted. Even under Section 5, only dealers having a total turnover of over Rs. 10,000 are liable to pay sales tax while dealers having a turnover of less than Rs. 10,000 are totally exempt from payment of tax. The legislative policy under Section 5 is based on the principle that the small traders should be relieved of the burden of taxation while traders having higher turnover should be subjected to this levy. Similarly, the principle underlying Section 5-A is to impose a higher tax on traders having a bigger volume of trade with a turnover of rupees three lakhs or more in one year and those having a turnover of less than rupees three lakhs should be taxed at a lower rate. The principle of gradation of rates of tax with respect to the capacity to pay, is well recognized and such a provision is made in the larger interests of augmentation of the public revenue and is in the interests of the public. Section 5-A therefore is based upon a reasonable classification having relation to the objects of the Act and there is no violation of the provisions of Article 14 of the Constitution.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-32", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "43. A similar contention with regard to the proviso to Section 3(1)(b) of the Madras General Sales Tax Act (9 of 1939) which prescribes a higher rate of tax in respect of a dealer selling articles of food and drink in a hotel, boarding house, or a restaurant with a turnover of not less than Rs. 25,000 was repelled in Kadiyala Chandrayya v. State of Andhra [1957] S.T.C. 33. Subba Rao, C.J. (as he then was), delivering the judgment observed at page 37 as follows :\n In the present case, the object to provide for the levy of a general tax and to apportion the burden equitably between different categories of persons has a reasonable nexus with the classification adopted by the Legislature. The question can be considered from the standpoint of the citizen as well as from the standpoint of the State. From the standpoint of the State, the classification can be justified on the ground of equitable apportionment of the burden and easy realisation of the tax. Articles of food and drink are more in demand than other articles. Even in the case of the former, there will be a larger demand in restaurants, boarding houses and hotels than in other places like way-side shops. There may be small or big dealers even in such commodities, who run hotels or keep boarding houses. The State also can reasonably recover taxes at higher rates from prosperous dealers than from impecunious ones. From the standpoint of the dealer also, there is justification for the varied rates. The articles sold, the place where the business is carried on and the expectation of large profits are the characteristics of dealers who are distinct from dealers not covered by the proviso.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-33", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "44. In Guntur District Co-operative Marketing Society Ltd. v. State of Andhra Pradesh [1967] 20 S.T.C. 476 and Balusu Anandu v. Special Commercial Tax Officer [1968] 21 S.T.C. 424, Gopal Rao Ekbote, J., following the principle laid down in Kadiyala Chandrayya v. State of Andhra [1957] 8 S.T.C. 33 held that Section 5-A was not violative of the provisions of Article 14 of the Constitution. With respect, we agree with the view taken by their Lordships in Kadiyala Chandrayya v. State of Andhra [1957] 8 S.T.C. 33 and the said principles have to be applied in determining the question whether Section 5-A is violative of Article 14 of the Constitution. The same principle has been applied by the Orissa High Court in K.S. Vasudevan v. State of Orissa [1963] 14 S.T.C. 220. In S. Ramanatha Shenoy & Co. v. Sales Tax Officer [1963] 14 S.T.C. 231, Vaidialingam, J. (as he then was) took the same view with regard to the provisions of Section 3(2) of the Kerala Surcharge on Taxes Act which imposes on a dealer whose turnover exceeds a particular sum, a surcharge on sales tax. His Lordship held at page 236 as follows :", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-34", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "All dealers, having a turnover exceeding Rs. 30,000 are treated alike, and there is no discrimination as between one dealer having a turnover exceeding Rs. 30,000 and Anr. dealer having a turnover exceeding Rs. 30,000. If such a distinction has been made, probably there may be some scope for an argument that the provisions of Sub-section (1) of Section 3 are discriminator. Sub-section (2) of Section 3 does not make any such distinction, and it is of universal application in respect of all dealers, whose turnover exceeds Rs. 30,000 and who are made liable for the payment of surcharge under Sub-section (1) of Section 3 of the Act. The position only comes to this, viz., that a part of the sales tax, representing surcharge, is made to be borne by dealers having a total turnover exceeding Rs. 30,000.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-35", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "45. It is unnecessary to refer to all the other cases cited at the Bar as we are clearly of the opinion that Section 5-A does not make any invidious distinction so as to offend the provisions of Article 14 of the Constitution. \n\n46. Mr. Ranganathachari however strongly relied upon the case reported in Stewart Dry Goods Co. v. Lewis 79 L.Ed. 1054, where Roberts, J., delivering the judgment of the majority, held that:\n A gross sales tax which classifies vendors for the imposition of a varying rate of taxation solely by reference to the volume of their transactions denies the equal protection of the laws in violation of the Fourteenth Amendment.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-36", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "47. Caradozo, J., dissented from the majority view and upheld the principle that a tax upon gross sales, if laid upon a graduated basis, does not result in denial of the equal protection of the laws and that the rate of tax varying progressively with the amount of gross sales, was based upon a classification reasonably related to the capacity to pay. The learned Government Pleader contends that the majority opinion in Stewart Dry Goods Co. v. Lewis 79 L.Ed. 1054, was not followed by Courts in India and the principle on which the opinion of Caradozo, J., is based, has been uniformly accepted and followed by the Courts in India. He relies upon cases in Kadiyala Chandrayya v. State of Andhra [1957] 8 S.T.C. 33, K.S. Vasudevan v. State of Orissa [1963] 14 S.T.C. 220 and S. Ramanatha Shenoy & Co. v. Sales Tax Officer [1963] 14 S.T.C. 231 which have been referred to earlier. He also cited a ruling of the Supreme Court in Jagannath Baksh Singh v. State of U.P. A.I.R. 1962 S.C. 1563. At page 1571, Gajendra-gadkar, J. (as he then was), who delivered the judgment of the Court, rejected the contention that a grading scale of rates of tax based upon the annual value of the land-holdings would offend the provisions of Article 14 of the Constitution. Further the said decision in Stewart Dry Goods Co. v. Lewis 79 L.Ed. 1054 was itself distinguished in a later decision in New York Rapid Transit Corporation v. City of New York 82 L.Ed. 1024. We are therefore of the view that the provisions of Section 5-A do not offend the provisions of Article 14 of", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-37", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "the view that the provisions of Section 5-A do not offend the provisions of Article 14 of the Constitution.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-38", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "48. Sri Anantha Babu raised a further contention that Section 5-Aof the Act is repugnant to the provisions of Section 15 of the Central Sales Tax Act and is ultra vires the provisions of Article 286(3) of the Constitution of India. His contention is that Section 15 of the Central Sales Tax Act, which is a law made by the Parliament in exercise of the powers conferred by Article 286(3) of the Constitution, imposes a restriction with regard to the rate of tax payable under a State law, in respect of any sale or purchase of goods inside the State. Section 15(a) as originally enacted fixed a ceiling on the rate of tax at 2 per cent, on the sale or purchase price. The said provision has since been amended on 1st July, 1966, and the ceiling rate has been fixed at 3 per cent. But the learned Government Pleader contends that the provisions of Section 5-A are not applicable to declared goods mentioned in Section 14 of the Central Sales Tax Act and that there is no conflict between Section 5-A of the said Act and Section 15 of the Central Sales Tax Act. Section 6 of the Act is in the following terms :\n6. Tax in respect of declared goods.-Notwithstanding anything contained in Section 5, the sales or purchases of declared goods by a dealer shall be liable to tax at the rate, and only at the point of sale or purchase specified against each in the Third Schedule on his turnover of such sales or purchases for each year irrespective of the quantum of his turnover in such goods ; and the tax shall be assessed, levied and collected in such manner as may be prescribed :", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-39", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "Provided that where any such goods on which a tax has been so levied are sold in the course of inter-State trade or commerce, the tax so levied shall be refunded to such person in such manner and subject to such conditions as may be prescribed.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-40", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "49. The non obstante clause makes it clear that the provisions of Section 5 of the said Act are not attracted to sales or purchases of declared goods. The omission to mention Section 5-ft in Section 6 does not lead to any inference that Section 5-A is intended to be made applicable to declared goods. Section 5-A says that it applies only to those dealers who are taxable under Section 5 by the expression \"every dealer who is liable to pay tax under Section 5.\" The dealers who are liable to pay tax under Section 5 are only dealers in goods other than declared goods as Section 6 excludes such dealers from its purview. \n\n50. The further submission of the learned counsel that Section 5-A does not fix any stage for a levy of sales tax and that it violates the provisions of Section 15 of the Central Sales Tax Act cannot also be upheld in the view we have taken that Section 5-A is not applicable to declared goods. The contention of the learned counsel that Section 5-A is repugnant to the provisions of Section 15 of the Central Sales Tax Act has to be negatived. \n\n51. Though it was feebly suggested by the learned counsel that the imposition of additional tax under Section 5-A offends Article 19(1)(g) of the Constitution, this argument has not been elaborated further. It is now well established that sales tax is a tax imposed for the purpose of public revenue and that there is no fundamental right to claim immunity from taxation. It has not been shown that the levy of additional tax under Section 5-A is either excessive or imposes a heavy burden on the petitioner's right to carry on business. There is therefore no substance in the contention of the learned counsel that the provisions of Section 5-A violate Article 19(1)(g) of the Constitution.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "e779339f4f23-41", "Titles": "Addepalli Surya Ramachandra Rao ... vs The State Of Andhra Pradesh And ... on 26 September, 1968", "text": "52. Sri P. Rama Rao appearing for some of the petitioners raised the contention, that Section 5-A violates Article 301 of the Constitution. He submits that dealers who have a turnover of three lakhs or more necessarily pass on the tax to the purchasers and that purchasers are likely to choose dealers with a turnover of less than three lakhs in order to avoid payment of higher price and that therefore the business of dealers having a turnover of three lakhs and over is adversely affected and that Section 5-A constitutes a fetter on the right to carry on trade and offends Article 301 of the Constitution. It is now fairly well established that only a tax law which directly and immediately restricts flow of trade that would fall within the purview of Article 301 and sales tax not being a law which directly impinges upon the movement of goods from place to place, falls outside the purview of Article 301 of the Constitution: see Atiabari Tea Co. Ltd. v. \n\nState of Assam A.I.R. 1961 S.C. 232 and Automobile Transport Ltd. v. State of Rajasthan A.I.R. 1962 S.C. 1406. Even otherwise, we are not satisfied that the mere imposition of additional tax under Section 5-A imposes any restriction on the freedom of trade or commerce. In this view, the challenge to the provisions of Section 5-A that it constitutes a fetter on the freedom of trade and commerce and is violative of the provisions of Part XIII of the Constitution, cannot be sustained. For the reasons which we have given above, all the contentions raised by the learned counsel having failed, these writ petitions are liable to be dismissed and are accordingly dismissed with costs. Advocate's fee Rs. 50 in each writ petition.", "source": "https://indiankanoon.org/doc/331446/"}
+{"id": "59dd6b8f4ce3-0", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "JUDGMENT A. Lakshmana Rao, J. \n\n1. The following question came up for consideration in this writ appeal before a Division Bench of this Court:\n \"Whether a Labour Court constituted under Section 7 of the Industrial Disputes Act and designated as a second appellate authority under the Andhra Pradesh Shops and Establishments Act is entitled to condone the delay in filing Second Appeal by virtue of the provisions contained under Section 5 of the Limitation Act\". \n\nIn view of the importance of the question, the learned Judges were of the opinion that the matter required to be considered by a Full Bench and therefore, they passed the order of reference dated June 17, 1991, in the following terms:\n \"It is evident from the foregoing that the decisions of the Supreme Court, nor of this Court, are uniform on this very important question. We are of the opinion that it is necessary that the controversy relating to the application of Section 5 of the Limitation Act read with Section 29(2) of the Limitation Act to proceedings before a Labour Court constituted under Section 7 of the Industrial Disputes Act has to be decided by a Full Bench of this Court. One other question which incidentally arises is as to whether Section 29(2) of the Limitation Act read with Article 137 makes Section 5 applicable only to Civil and Criminal Courts on which jurisdiction is conferred by the virtue of the provisions of special or local Act\". \n\n2. Before we consider the aforesaid question, it would be apposite to refer to the relevant facts of the case. No other questions than those referred to above arise for consideration in the writ appeal and therefore it can be disposed of on the basis of the answers to the question referred to the Full Bench for decision.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-1", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "3. Aggrieved by the order of termination dated July 5, 1984, Sri K. Sriramakrishnaiah, the 3rd respondent herein, filed an appeal under Section 41(1) of the Andhra Pradesh Shops and Establishments Act No. 15 of 1966 (hereinafter referred to as the Act) before the Authority constituted under the Act, the 2nd respondent herein. The appeal was allowed and the order of termination was set aside with a direction to reinstate the employee \"with all back wages, continuity of service and all attendant benefits\" by an order dated April 29, 1985. Against such an order, second appeal lies to the Labour Court under Section 41(3) of the Act. The period of limitation prescribed under the provisions for filing the second appeal is thirty days from the date of communication of the decision. As the appeal was preferred beyond the period of limitation of thirty days, the appellant herein filed I.A.No.298 of 1985 on the file of the Labour Court, Hyderabad for condoning the delay of seven days in filing the second appeal. The learned Presiding Officer of the Labour Court dismissed the application by his order dated February 28, 1986 holding that there was neither a provision in the Act conferring power on the second appellate authority to condone the delay in filing the Second Appeal, nor was Section 5 of the Limitation Act applicable to the proceedings. Challenging the validity of this order, Writ Petition No. 4087 of 1986 on the file of this Court had been filed. The learned Judge dismissed the writ petition on April 14, 1986 holding that the Labour Court, which had been constituted as the Second Appellate Authority under the Act, had no power to condone the delay in filing the Second Appeal. Aggrieved by this order, the present writ appeal has been preferred.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-2", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "4. In order to appreciate the contentions advanced on behalf of the contesting parties, it would be necessary to refer to the relevant provisions of Act No. 15 of 1966. Though this Act has been repealed by the Andhra Pradesh Shops and Establishments Act No. 20 of 1988, it is not necessary to refer to the provisions of the repealing Act as it has no application in the instant case. Section 41 of the Act No. 15 of 1966 reads as follows:\n\"41. Appointment of authority to hear and decide appeals arising out of termination of service:\n(1)(a) The Government may, by notification, appoint for any area as may be specified therein, an authority to hear and decide appeals arising out of the termination of service of employees under Section 40. \n\n(b) Any employee whose service has been terminated may appeal to the authority concerned within such time and in such manner as may be prescribed. \n\n(2) The authority may, after inquiry in the prescribed manner, dismiss the appeal or direct the reinstatement of the employee with or without wages for the period he was kept out of employment or direct payment of compensation without reinstatement or grant of such other relief as it deems fit in the circumstances of the case. \n\n(3) Against any decision of the authority under Sub- section (2), a second appeal shall lie to the Labour Court constituted under Section 7 of the Industrial Disputes Act, 1947, within thirty days from the date of communication of the decision and the decision of the Labour Court on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of that Court.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-3", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "(4) Any amount directed to be paid under this Section may be recovered-\n(a) if the authority is a Magistrate, by the authority, as if it were a fine imposed by him as Magistrate; and \n \n\n(b) if the authority is not a Magistrate, by any Magistrate to whom the authority makes application in this behalf, as if it were a fine imposed by such Magistrate\". \n\nThe State Government has been conferred power under Section 62 to make rules for carrying out the purposes of the Act. In the exercise of this power, the State Government made the Andhra Pradesh Shops and Establishments Rules, 1968. Rule 21 deals with the appeals under Section 41. It reads:\n\"21. Appeals under Section 41 : (1) An appeal under Sub-section (1) of Section 41 shall be preferred to the appellate authority appointed by the Government under that subsection by the employee within sixty days from the date of service of the order terminating his services with the employer; such service shall be deemed to be effective if carried out either personally or if that be not practicable, by prepaid registered post to his last known address when the date of such service shall be deemed to be the date when the letter would arrive in ordinary course of post. \n\nProvided that the appellate authority may admit an appeal after the expiration of the period of sixty days where the appellant satisfies the appellate authority that he had sufficient cause for not preferring the appeal within the period of sixty days. \n\n(2)(a) The procedure to be followed by the appellate authority for hearing appeals preferred to it under Sub-section (1) of Section 41 shall be summary. It shall pass orders giving its reasons therefor. \n\n(b) If the employer fails to appear on the specified date, the authority may proceed to hear and determine the application ex parte.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-4", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "(c) If the applicant fails to appear on the specified date, the authority may dismiss the application. \n\nProvided that an order passed under Clause(b) or Clause (c) may be set aside and the application reheard on the good cause being shown by the defaulting party within one month from the date of the said order, after service of notice on the opposite party. :\n(d) The parties shall not be entitled to produce additional evidence whether oral or docu mentary before the appellate authority. But if- :\n(i) the employer from whose order the appeal is preferred has refused to admit evidence which ought to have been admitted; or \n \n\n(ii) the appellate authority requires any document to be produced or any witness to be examined to enable it to pass orders or for any other substantial cause, the authority may allow such evidence or document to be produced, or witness to be examined.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-5", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "(e) Wherever additional evidence is allowed to be produced by the appellate authority, it shall record the reason for its admission. \n(f) The result of the appeal shall be communicated to the parties as soon as possible. Copies of the orders shall also be furnished to the parties if required by them. The copies shall be on stamped papers to be furnished by the parties\"  \n 5. From the provisions referred to above, it is manifest that a first appeal is provided against an order of termination, to an authority appointed by the State Government for that purpose. The period of limitation and the manner in which it has to be filed are left to the rule-making authority to prescribe. The State Government, which is the rule-making authority, prescribed in Rule 21 limitation of sixty days for preferring the first appeal and conferred power on the appellate authority to admit an appeal after the expiration of the period of sixty days, where the appellant satisfied the authority that he had sufficient cause for not preferring the appeal within the prescribed period. But, so far as the second appeal is concerned, the Legislature itself has designated the appellate authority, viz., the Labour Court constituted under Section 7 of the Industrial Disputes Act, 1947 and also prescribed the period of limitation of thirty days for the second appeal. It is pertinent to note that the Legislature has not conferred power on the second appellate authority to condone the delay in preferring an appeal after the expiration of the period of limitation. In view of the aforesaid provisions, the Labour Court as well as the learned single Judge had taken the view that a second appeal preferred beyond the period of limitation of thirty days could not be entertained.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-6", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "6. Under Section 7 of the Industrial Disputes Act, 1947, a Labour Court can be constituted by the appropriate Government by a notification in the Official Gazette, for the adjudication of industrial disputes relating to any matter specified in the Second Schedule to the Act and for performing such other functions as may be assigned to it under the Act. The Labour Court shall consist of one person only. Unless a person is or has been a Judge of a High Court; or has for a period of not less than three years, been a District Judge or an Additional District Judge; or he has held any judicial office in India for not less than seven years; or has been the Presiding Officer of a Labour Court constituted under any Provincial Act for not less than five years, he is not qualified for appointment as a Presiding Officer of a Labour Court. Section 11, which deals with the procedures, powers and duties of the authorities under the Industrial Disputes Act including the Labour Courts, and Section 11-B which relates to the execution of an award made by a Labour court, which have a bearing are extracted: \n \"11. Procedure and powers of Conciliation Officers, Boards, Courts and Tribunals:- (1) Subject to any rules that may be made in this behalf, an Arbitrator, a Board, Court, Labour Court, Tribunal or National Tribunal shall follow such procedure as the Arbitrator or other authority concerned may think fit. \n (2) A Conciliation Officer or a member of a Board, or Court or the Presiding Officer of a : Labour Court, Tribunal or National Tribunal may for the purpose of inquiry into any existing or apprehended industrial dispute after giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-7", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "(3) Every Board, Court, Labour Court, Tribunal and National Tribunal shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit, in respect of the following matters namely:- \n (a) enforcing the attendance of any person and examining him on oath; \n (b) compelling the production of documents and material objects; \n (c) issuing commissions for the examination of witnesses; \n (d) in respect of such other matters as may be prescribed; and every inquiry or investigation by a Board, Court, Labour Court, Tribunal or National Tribunal, shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code, 1860 (45 of 1860).", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-8", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "................  \n (5) A Court, Labour Court, Tribunal or National Tribunal may, if it so thinks fit, appoint one or more persons having special knowledge of the matter under consideration as assessor or assessors to advise it in the proceeding before it. \n (6) All conciliation officers, members of a Board or Court and Presiding Officer of a Labour Court, Tribunal or National Tribunal shall be deemed to be public servants within the meaning of Section 21 of the Indian Penal Code 1860 (45 of 1860). \n (7) Subject to any rules made under this Act, the costs of, and incidental to, any proceeding before a Labour Court, Tribunal or National Tribunal shall be in the discretion of that Labour Court, Tribunal or National Tribunal and the Labour Court, Tribunal or National Tribunal, as the case may be shall have full power to determine by and to whom and to what extent and subject to what conditions, if any, such costs are to be paid and to give all necessary directions for the purpose aforesaid and such costs may, on application made to the appropriate Government by the person entitled, be recovered by that Government in the same manner as an arrear of land revenue. \n (8) Every LabourCourt, Tribunal or National Tribunal shall be deemed to be Civil Court for the purposes of Sections 345, 346 ad 348 of the Code of Criminal Procedure, 1973 (2 of 1973)\".  \n\"11-B. Power of Labour Court or Tribunal to execute its award by decree:- A Labour Court or a Tribunal shall have the power of Civil Court to execute its award or any settlement as a decree of a Civil Court\". \n 7. Two rules, which are relevant for the purpose of this case, are Rules 12 and 26 of the Andhra Pradesh Industrial Disputes Rules, 1958 and they are as under:", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-9", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "\"12. Proceedings before the Labour Court or Tribunal: Where the State Government refers any industrial dispute for adjudication to a Labour Court or Industrial Tribunal, within two weeks of the date of receipt of order of reference, the party representing workmen and the employer involved in the dispute shall file with the Labour Court or Industrial Tribunal, as the case may be, a statement of the demands relating to the issues only as are included in the order of reference and shall also forward a copy of such statement to each one of the opposite parties involved in the said dispute: \n Provided that where the Labour Court or Industrial Tribunal, as the case may be, considers it necessary, it may: \n (a) extend the time limit for filing of such statement; or", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-10", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "(b) reduce the time limit for filing of such statement to one week in emergent cases for reasons to be recorded in writing; or   \n \n\n (c) where both the parties agree, reduce the time limit for filing of such statement as per such agreement; or  \n \n\n (d) where both the parties agree, dispense with the requirement of filing of such statement altogether; \n (e) allow at any stage of the proceedings amendments to such statement to the extent as may be necessary for the purpose of determining the real issues included in the order of reference.  \n (2) Within two weeks of the receipt of the statement referred to in Sub-rule (1), the opposite party shall file its rejoinder with the Labour Court or Tribunal, as the case may be, and simultaneously forward a copy thereof to the other party : \n Provided that such rejoinder shall relate only to such of the issues as are included in the order for reference: \n Provided further that where the Labour Court or Industrial Tribunal, as the case may be, considers it necessary, may- \n (a) extend the time limit for filing of such rejoinder; or  \n \n\n (b) reduce the time limit for filing of such rejoinder to one week in emergent cases for reasons to be recorded in writing; or   \n \n\n (c) where both the parties agree, reduce the time limit for filing of such rejoinder as per such agreement; or", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-11", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "(d) where both the parties agree, dispense with the requirement of filing of such rejoinder altogether; \n (e) allow at any stage of the proceedings amendments to such rejoinder to the extent as may be necessary for the purpose of determining the real issues included in the order of reference.   \n (3) The Labour Court or Tribunal, as the case may be, shall ordinarily fix the date for the first hearing of the dispute within six weeks of the date on which it was referred for adjudication: \n Provided that the Labour Court or Tribunal, as the case may be, may, for reasons to be recorded in writing, fix a later date for the first hearing of the dispute.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-12", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "(4) The hearing shall ordinarily be continued from day to day and arguments shall follow immediately after the closing of evidence. \n (5) The Labour Court or Tribunal, as the case may be, shall not ordinarily grant an adjournment for a period exceeding a week at a time, not more than three adjournments in all at the instance of any one of the parties to the dispute: \n Provided that the Labour Courts or Tribunal, as the case may be, may, for reasons to be recorded in writing, grant an adjournment exceeding a week ormore than three adjournments at the instance of any one of the parties to the dispute. \n (6) The Labour Court or Tribunal, as the case may be, shall, as the examination of each witness proceeds, make a memorandum of the substance of what he deposes, and such memorandum shall be written and signed by the presiding officer : \nProvided that the Labour Court or Tribunal, as the case may be, may follow the procedure laid down in Rule 5 of Order XVIII of the First Schedule to the Code of Civil Procedure, 1908 (Central Act 5 of 1908) if he considers necessary so to da, in view of the nature of the particular industrial dispute pending before it\".   \n \"26. Power of Boards, Courts, Labour Courts and Tribunals: In addition to the powers conferred by the Act, Boards, Courts, Labour Courts or Tribunals shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (Central Act V of 1908), when trying a suit, in respect of the following matters, namely:- \n (a) discovery and inspection; \n (b) granting adjournment; \n (c) reception of evidence taken of affidavit;", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-13", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "(c) reception of evidence taken of affidavit;\n and the Board, Court, Labour Court or Tribunal may summon and examine any person whose evidence appears to it to be material and shall be deemed to be a Civil Court within the meaning of Sections 480 and 482 of the Code of Criminal Procedure, 1898 (Central Act V of 1898)\".  \n 8. Another Act, the provisions of which fall the consideration in this case, is the Limitation Act No. 36 of 1963. The short preamble to the Limitation Act reads thus: \n \"An Act to consolidate and amend the law for the limitation of suits and other proceedings and for purposes connected therewith\".", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-14", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "Subject to the provisions contained in Sections 4 to 24 every suit instituted, appeal preferred and application made after the prescribed period, shall be dismissed although limitation has not been set up as a defence (Section 3). Under Section 5, the Court has power to admit an appeal or an application other than application filed under the provisions of Order XXI of the Code of Civil Procedure, if it is satisfied that there is sufficient cause for not preferring the appeal or making the application within the period of limitation. Sub-section (2) of Section 29 provides that where any special or local law prescribes for any suit, appeal or application, a period of limitation different from the period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period is the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 shall apply only in so far as and to the extent to which they are not expressly excluded by such special or local law. Article 137 in the Schedule to the Limitation Act, which attracts attention in this case prescribes the period of limitation of three years for any other application for which no period of limitation is provided elsewhere in the 3rd Division of the Schedule and the period of limitation begins to run from the time when the right to apply accrues. This is a residuary article in the 3rd Division relating to applications. The Article is herein extracted: \n  137. Any other application      Three      When the\n     for which no period        years      right to\n     of limitation is                    apply\n     provided elsewhere                    accrues.\n     in this division.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-15", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "The corresponding Article 181 in the repealed Indian Limitation Act, 1908 provided that for the applications for which no period of limitation was provided elsewhere in the Schedule or by Section 48 of the Code of Civil Procedure, 1908, the period of limitation was three years from the time when the right to apply accrued. \n  181. Applications for            Three      When the\n     which no period of          years      right to\n     limitation is provided                 apply accrues.\n     elsewhere in this                     \n     Schedule or by Section\n     48 of the Code\n     of Civil Procedure,\n     1908.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-16", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "9. The scope and ambit of Article 181 in the First Schedule to the Indian Limitation Act, No. IX of 1908 and its applicability to the application made by the Official Liquidator under Section 38 of the Indian Companies Act for rectification of the Register of a Limited Company fell for consideration in Sha Mulchand & Co. Ltd. v. Jawahar Mills Ltd., Salem, , before a Bench of four learned Judges of the Supreme Court. They referred to the following passage in the judgment of the Judicial Committee in Hansraj Gupta v. Official Liquidators, Dehra Dun Mussoorie Electric Tramway Company, 60 Indian Appeals, p. 13 at p. 20: \n \"It is common ground that the only Article in that Schedule which could apply to such an application is Article 181; but a series of authorities commencing with Bal Manekbai v. Manekji Kavasji, 1 Bom. 213, has taken the view that Article 181 only relates to applications under the Code of Civil Procedure, in which case no period of limitation has been prescribed for the application.....\" \n The learned Judges observed:", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-17", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "The learned Judges observed: \n \"This long catena of decisions may well be said to have, as it were added the words \"under the Code\" in the first column of that Article. If those words had actually been used in that column then a subsequent amendment of Articles 158 and 178 certainly would not have affected the meaning of that Article. If, however, as a result of judicial construction, those words have come to be read into the first column as if those words actually occurred therein, we are not of opinion, as at present advised, that the subsequent amendment of Articles 158 and 178 must necessarily and automatically have the effect of altering the long acquired meaning of Article 181 on the sole and simple ground that after the amendment the reason on which the old construction was founded is no longer available\". \n 10. We may add that the amended Articles 158 and 178 pertain to the applications filed under the Arbitration Act. \n 11. We will now refer to the relevant decisions of the Supreme Court wherein the question relating to the applicability of the provisions of the Limitation Act to the proceedings arising under the Industrial Disputes Act has been considered. Before we do so, let us look into the provisions of Section 33-C(2) of the Industrial Disputes Act, 1947: \n 33-C(2) \"Where any workman is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money and if any question arises as to the amount of money due or as to the amount at which such benefit should be computed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Court as may be specified in this behalf by the appropriate Government\". (as it stood prior to its amendment).", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-18", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "The Payment of Wages Act, 1936 prescribes period of limitation for recovery of wages. Section 33-C(2) of the Industrial Disputes Act, 1947 does not prescribe any period of limitation for recovery of any money by an employee from his employer. In such circumstances, the following question came up for consideration before a Bench of three learned Judges of the Supreme Court in Bombay Gas Co. Ltd v. Gopal Bhiva and Ors. (1963-II-LLJ-608): \"whether the fact that for recovery of wages, limitation has been prescribed by the Payment of Wages Act, justify the introduction of considerations of limitation in regard to proceedings taken under Section 33-C(2) of the Industrial Disputes Act\". The question was answered in the following words (pp. 613-614): \n \"The words of S.33-C(2) are plain and unambiguous and it would be the duty of the Labour Court to give effect to the said provisions without any considerations of limitation. No doubt, such belated claims made on a large scale may cause considerable inconvenience to the employer, but that is a consideration which the legislature may take into account and if the legislature feels that fair play and justice require that some limitation should be prescribed, it may proceed to do so. In the absence of any provisions, however, the Labour Court cannot import any such consideration in dealing with the applications made under Section 33-C(2)\". \n As to the applicability of Article 181 of the Limitation Act, 1908 to the proceedings under the Industrial Disputes Act, 1947, the learned Judges observed:(p. 614): \n \"It is well settled that Article 181 Limitation Act applies only to applications which are made under the Code of Civil Procedure, and so, its extension to applications made under Section 33-C(2) of the Act would not be justified\".", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-19", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "12. After the Indian Limitation Act, 1908 was repealed by the Limitation Act, 1963, an identical point was raised before a Bench of two learned Judges of the Supreme Court in Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli: (1969-II-LLJ 651). The learned Judges referred to the earlier decisions of the Supreme Court and held that Article 137 in the Schedule to the Limitation Act, 1963 was not applicable to applications under Section 33-C(2) of the Industrial Disputes Act, 1947. The relevant passage is extracted. (pp. 660- 661):", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-20", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "\"It appears to us that the view expressed by this Court in those cases must be held to be applicable, even when considering the scope and applicability of Article 137 in the new Limitation Act of 1963. The language of Article 137 is only slightly different from that of the earlier Article 181 inasmuch as, when prescribing the three years' period of limitation, the first column giving the description of the application reads as \"any other application for which no period of limitation is provided elsewhere in this division\". In fact, the addition of the word \"other\" between the words \"any\" and \"application\" would indicate that the legislature wanted to make it clear that the principle of interpretation of Article 181 on the basis of ejusdem generis should be applied when interpreting the new Article 137. This word \"other\" implies a reference to earlier Articles, and, consequently, in interpreting this Article, regard must be had to the provisions contained in all the earlier Articles. The other Articles in the third division to the Schedule refer to applications under the Code of Civil Procedure, with the exception of applications under the Arbitration Act and also in two cases of applications under the Code of Criminal Procedure. The effect of introduction in the third division of the Schedule of reference to applications under the Arbitration Act in the Old Limitation Act has already been considered by this Court in the case of Sha Mulchand & Co. Ltd. . We think that, on the same principle, it must be held that even the further alteration made in the Articles contained in the third division of the Schedule to the New Limitation Act containing references to applications under the Code of Criminal Procedure cannot be held to have materially altered the scope of the residuary Article 137 which deals with other applications. It is not possible to hold that the intention of the legislature was to drastically alter the scope of this Article so as to include within it all applications irrespective of the fact whether they had any reference to", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-21", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "this Article so as to include within it all applications irrespective of the fact whether they had any reference to the Code of Civil Procedure.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-22", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "This point, in our opinion, may be looked at from another angle also. When this Court earlier held that all the Articles in the third division to the Schedule, including Article 181 of the Limitation Act of 1908 governed applications under the Code of Civil Procedure only, it clearly implied that the applications must be presented to a Court governed by the Code of Civil Procedure. Even the applications under the Arbitration Act that were included within the third division by amendment of Articles 158 and 178 were to be presented to Courts whose proceedings were governed by the Code of Civil Procedure. At best the further amendment now made enlarges the scope of the third division of the Schedule so as also to include some applications presented to Courts governed by the Code of Criminal Procedure. One factor atleast remains constant and that is that the applications must be to Courts to be governed by the Articles in this division. The scope of the various Articles in this division cannot be held to have been so enlarged as to include within them applications to bodies other than Courts, such as a quasi- judicial Tribunal or even an executive authority. An Industrial Tribunal or a Labour Court dealing with applications or references under the Act are not Courts and they are in no way governed either by the Code of Civil Procedure or the Code of Criminal Procedure. We cannot, therefore, accept the submission made that this Article will apply even to applications made to an Industrial Tribunal or a Labour Court. The alterations made in the Article and in the New Act cannot, in our opinion, justify the interpretation that even applications presented to bodies, other than Courts, are now to be governed for purposes of limitation by Article 137\"", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-23", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "In this decision, the distinction between Article 181 in the repealed Act and Article 137 in the present Limitation Act has been explained by the Supreme Court. Whereas Article 181 of Limitation Act 1908 applied to the applications made under the Code of Civil Procedure, Article 137 of the Limitation Act, 1963 only enlarged the scope of the third division of the Schedule to the Act so as also to include some applications presented to a Court governed by the Code of Criminal Procedure. In this Judgment, it has been categorically laid down that the Articles in the third division of the Schedule to the Limitation Act, 1963 are applicable only to the applications made to the Courts and they are not applicable to the applications made to bodies other than Courts, such as Quasi-Judicial Tribunals. Industrial Tribunals and Labour Courts dealing with the applications or references arising under the Industrial Disputes Act are not Courts and they are not governed by the provisions of either the Code of Civil Procedure or the Code of Criminal Procedure, except to the limited extent specified in Section 11 of the Industrial Disputes Act and Rule 26 of the Rules made thereunder.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-24", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "13. A Bench of three learned Judges of the Supreme Court in Nityanand M. Joshi and Anr. v. the Life Insurance Corporation of India and Ors.: (1969-II-LLJ-711) reiterated the view expressed above, in the following terms:(p.712) \"In our view, Article 137 only contemplates applications to Courts. In the Third Division of the Schedule to the Limitation Act, 1963, all the other applications mentioned in the various Articles are applications filed in a Court. Further, Section 4 of the Limitation Act, 1963, provides for the contingency when the prescribed period for any application expires on a holiday and the only contingency contemplated is \"when the Court is closed\". Again under Section 5 it is only a Court which is enabled to admit an application after the prescribed period has expired if the Court is satisfied that the applicant had sufficient cause for not preferring the application. It seems to us that the scheme of the Indian Limitation Act is that it only deals with applications to Courts, and that the Labour Court is not a court within the Indian Limitation Act, 1963\".", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-25", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "However, differing from the view expressed in Athani Municipality case (supra) \"that in spite of the changes made in the Indian Limitation Act, 1963, no drastic change was intended in the scope of Article 137 so as to include within it all applications irrespective of the fact whether they had any reference to the Code of Civil Procedure or not\" the learned Judges observed as follows: (pp.712-713) \"It is not necessary to express our views.... It seems to us that it may require serious consideration whether applications to Courts under other provisions, apart from Civil Procedure Code, are included within Article 137 of the Limitation Act, 1963 or not. But the view of the learned Judges is clear and categorical that the Indian Limitation Act, 1963 only deals with the applications to court and that the Labour Court is not a court within the meaning of the Indian Limitation Act\". \n 14. The point which was left open in the above decision was decided by a Bench of three learned Judges of the Supreme Court in the Kerala State Electricity Board, Trivandrum v. T.P. Kunhaliumma, . It was held that Article 137 was applicable not only to the applications made under the Code of Civil Procedure, but also to the applications made under any other Act, to a Court. In other words, Article 137 was applicable to an application made to any Court whether it be an application made under the Civil Procedure Code or some other Act.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-26", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "This is a case arising under the Telegraph Act, 1885. The provisions of the Act contemplate determination of compensation payable under Section 10 of the Act, by the District Judge. Having noticed that the provisions of the Act contain intrinsic evidence that the reference to the District Judge means reference to the District Court, the learned Judges have taken the view that the provisions of the Limitation Act are applicable to the applications made to the District Judge; the relevant portion of the judgment is as under: \n \"The alteration of the division as well as the change in the collection of words in Article 137 of the Limitation Act, 1963 compared with Article 181 of the 1908 Limitation Act shows that applications contemplated under Article 137 are not applications confined to the Code of Civil Procedure. In the 1908 Limitation Act, there was no division between applications in specified cases and other application as in 1963 Limitation Act. The words \"any other application\" under Article 137 cannot be said on the principle ejusdem generis to be applications under the Civil Procedure Code other than those mentioned in Part I of the third division. Any other application under Article 137 would be petition or any application under any Act. But it has to be an application to a Court for the reason that Sections 4 and 5 of the 1963 Limitation Act speak of expiry of prescribed period when court is closed and extension of prescribed period if applicant or the appellant satisfies the court that he had sufficient cause for not preferring the appeal or making the application during such period\". \n 15. Rejecting the contention that Section 5 of the Limitation Act is applicable to the proceedings before the Collector under Kosi Area (Restoration of Lands to Raiyats) Act, 1951, a two-Judge Bench of the Supreme Court has held in Smt. Sushila Devi v. Ramanandan Prasad and Ors. :", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-27", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "\"We do not see how Section 5 could be involved in connection with the application made on October 17, 1965 by the first respondent. Under Section 5 of the Limitation Act an appeal or application \"may be admitted after the prescribed period if the appellant or applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period\". The Collector to whom the application was made was not a Court, though Section 15 of the Act vested him with certain specified powers under the Code of Civil Procedure; also, the kind of application that was made had no time limit prescribed for it, and no question of extending the time could therefore arise. We therefore think that the High Court misdirected itself in referring to Section 5 of the Limitation Act\". \n 16. It is manifest from the dicta in the aforesaid decisions that a Labour Court is not a court within the meaning of the Indian Limitation Act. Another principle which has been clearly enunciated is that the Limitation Act is applicable only to the applications made to a court either under the Civil Procedure Code or any other Act. In view of those decisions, it is not at all necessary to consider any further whether the Labour Court is a court within the meaning of the Indian Limitation Act or not.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-28", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "17. Even otherwise, we do not find any force in the contention of Mr. A.K. Jayaprakash Rao, the learned counsel for the appellant, that in view of the provisions of Sections 7, 11 and 11-B of the Industrial Disputes Act, 1947 read with Rules 12 and 26 of the Andhra Pradesh Industrial Disputes Rules, 1958, a Labour Court is a Court within the meaning of the Indian Limitation Act. Section 7 merely deals with the constitution of a Labour Court. Just because a District Judge happens to preside over a Labour Court, it does not automatically become a court. Under Section 11, only limited powers under the Civil Procedure Code regarding the enforcement of the attendance of a person, compelling the production of documents and issuing commissions for the examination of witnesses, are conferred on the Labour Court. It is deemed to be a Civil Court only for the limited purpose of Sections 345, 346 and 348 of the Code of Criminal Procedure. It is left to the Labour Court to follow such procedure as it may think fit. The power conferred on a Labour Court to execute its award as the decree of a Civil Court, does not have the effect of transforming it into a Civil Court. \n 18. In Bharat Bank Ltd. Delhi v. The Employees of The Bharat Bank Ltd., Delhi, (1950-LLJ-921) Justice Mahajan, (as he then was), explained the characteristics of a Court as under (P-929):", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-29", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "\"As pointed out in Halsbury's Laws of England, the word \"court\" originally meant the King's Palace but subsequently acquired the meaning of (1) a place where justice was administered, and (2) the person or persons who administer it. In the Indian Evidence Act, it is defined as including all Judges and Magistrates and all persons except arbitrators legally authorised to take evidence. This definition is by no means exhaustive and has been framed only for the purposes of the Act. There can be no doubt that to be a Court, the person or persons who constitute it must be entrusted with judicial functions, that is, of deciding litigated questions according to law...... \n It appears to me that before a person or persons can be said to constitute a Court, it must be held that they derive their powers from the State and are exercising the judicial powers of the State. In R v. London County Council, (1931) 2. K.B. 215: (100L. .K.K.B. 760) Saville L.J. gave the following meaning to the word Court or judicial authority\": \n \"It is not necessary that it should be a court in the sense that this Court is a court; it is enough if it is exercising, after hearing evidence, judicial functions in the sense that it has to decide on evidence between a proposal and an opposition; and it is not necessary to be strictly a Court; if it is a tribunal which has to decide rightly after hearing evidence and opposition.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-30", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "As pointed out in picturesque language by Lord Sankey L.C. in Shell Co. of Australia v. Federal Commissioner of Taxation, (1931) A.C. 275: (100 L.J.P.C. 55), there are Tribunals with many of the trappings of a Court which, nevertheless, are not Courts in the strict sense of exercising judicial power. It seems to me that such Tribunals though they are not full-fledged Courts, yet exercise quasi-judicial functions within the ambit of the word \"Tribunal\".....\"  \n The learned Judge explained the nature of the functions performed by an Industrial Tribuna1(p.932): \n \"In my opinion, therefore, the Industrial Tribunal has all the necessary attributes of a Court of Justice..... That circumstance does not make them anything else but Tribunals exercising judicial power of the State, though in a degree different from the ordinary courts and to an extent which is also different from that enjoyed by an ordinary Court of law. They may rightly be described as quasi-judicial bodies because they are out of the hierarchy of the ordinary judicial system....\"", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-31", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "19. The majority decision in Bharat Bank Ltd., Delhi v. The Employees of the Bharat Bank Ltd., Delhi (supra), has been adopted unani: mously by the Supreme Court in Durga Shankar Mehta v. Thankur Raghuraj Singh and Ors. . Speaking for the Court, Justice Mukherji has observed that it is now well settled by the majority decision of theCourt in the case of Bharat Bank Ltd., Delhi (supra) that the expression \"Tribunal\" as used in Article 136 does not mean the same thing as \"Court\", but includes within its ambit all adjudicating bodies provided they are constituted by the State and are invested with judicial as distinguished from purely administrative or executive functions. The same view has been reiterated by the Supreme Court in Associated Cement Companies Ltd. v. Sharma and Anr. (1965-I-LLJ-433). \n 20. In Brajnandan Sinha v. Jyothi Narain, , it was contended that the Commissioner appointed under the Public Servants (Inquiries) Act, 1850 was a Court within the meaning of Section 3 of the Contempt of Courts Act, 1952. Rejecting the contention, the learned Judges explained in extenso the meaning of the word \"Court\" and held that the courts subordinate to the High Courts would prima facie mean the Courts of Law subordinate to the High Courts in the hierarchy of courts established for the purpose of administration of justice. \n 21. In Shell Co. of Australia v. Federal Commissioner of Taxation, 1931 A.C. 275, the Privy Council defined 'Judicial Power' and enumerated certain negative propositions in relation to the subject: \n \"1. A Tribunal is not necessarily a court in this strict sense because it gives final decision; \n 2. Nor because it hears witnesses on oath;", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-32", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "2. Nor because it hears witnesses on oath; \n 3. Nor because two or more contending parties appear before it between whom it has to decide; \n 4. Nor because it gives decisions which affect the rights of subjects; \n 5. Nor because there is an appeal to a court; \n 6. Nor because it is a body to which a matter is referred by another body\".  \n 22. The following passage in Rex v. Electricity Commissioner, 1924-1 K.B. 171, was quoted with approval in Brajnandan Sinha v. Jyothi Narain, (supra). \n \"An administrative Tribunal may act judicially, but still remain an administrative Tribunal as distinguished from a court, strictly so called. Mere externals do not make a direction to an administrative officer by an ad hoc Tribunal an exercise by a Court of judicial power\". \n 23. Therefore, merely because a Labour Court constituted under Section 7 of the Industrial Disputes Act has certain trappings of a Civil Court, it cannot be considered to be a Civil Court. The judicial functions performed by a Labour Court are different from those performed by an ordinary Court of law. A Labour Court has no other function except that of adjudicating matters entrusted to it under the provisions of the Industrial Disputes Act. It is outside the hierarchy of the ordinary judicial system. The Code of Civil Procedure is applicable to its proceedings only to a limited extent and it is open to the Labour Court to adopt such procedure which it deems necessary. Therefore, a Labour Court cannot be considered to be an ordinary Court of law and it is only a Tribunal exercising judicial functions.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-33", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "24. The Limitation Act cannot be extended by analogy or reference to proceedings to which they do not expressly apply or could be said to apply by necessary implication, as pointed out by the Supreme Court in A.S.K. Krishnappa v. S.V.V. Somiah, : \n \"The Limitation Act is a consolidating and amending statute relating to the limitation of suits, appeals and certain types of applications to courts and must, therefore, be regarded as an exhaustive Code. It is a piece of objective or procedural law and not of substantive law. Rules of procedure, whatever they may be, are to be applied only to matters to which they are made applicable by the legislature expressly or by necessary implication. They cannot be extended by analogy or reference to proceedings to which they do not expressly apply or could be said to apply by necessary implication. It would, therefore, not be correct to apply any of the provisions of the Limitation Act to matters which do not strictly fall within the purview of those provisions. The provisions of Sections 3 to 28 of the Limitation Act cannot be applied to situations which fall outside their purview. These provisions do not adumbrate any general principles of substantive law nor do they confer any substantive rights on litigants and, therefore, cannot be permitted to have greater application than what is explicit or implicit in them\". \n 25. Repelling the contention that the provisions of the Indian Limitation Act apply to proceedings like an election petition filed under the Representation of the Peoples Act, the Supreme Court held in K.V. Rao v. B.N. Reddi, :", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-34", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "\"But, an election petition stands on a different footing. The trial of such a petition and the powers of the court in respect thereof are all circumscribed by the Act. The Indian Limitation Act of 1963 is an Act to consolidate and amend the law of limitation of suits and other proceedings and for purposes connected therewith. The provisions of this Act will apply to all civil proceedings and some special criminal proceedings which can be taken in a Court of law unless the application thereof has been excluded by any enactment; the extent of such application is governed by Section 29(2) of the Limitation Act. In our opinion, however, the Limitation Act cannot apply to proceedings like an election petition inasmuch as the Representation of the Peoples Act is a complete and self-contained code which does not admit of the introduction of the principles or the provisions of law contained in the Indian Limitation Act\". \n 26. Even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act, it would nonetheless be open to the Court to examine whether and to what extent the nature of those provisions or the nature of the subject matter and scheme of the special law exclude their operation, as laid down by the Supreme Court in Hukumdev Narain Yadav v. Lalit Narian Mishra . In the Representation of the People Act, 1951, there is no provision expressly excluding the applicability of Sections 4 to 24 of the Limitation Act to the proceedings in an election petition. However, having regard to the scheme and the nature of the remedy provided under the Representation of the People Act, the learned Judges held that the provisions of the Limitation Act were by necessary implication excluded and that they cannot be called in aid to supplement the provisions of the special Act, viz., the Representation of the People Act.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-35", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "27. The Andhra Pradesh Shops and Establishments Act, 1966 is a labour welfare legislation containing all the relevant provisions relating to the conditions of service including disciplinary proceedings against the employees working in the shops and establishments. The Legislature itself has left it to the State Government to prescribe the period of limitation and the manner of disposal of the first appeal. In the exercise of rule-making power, the State Government made Rule 21 of the Andhra Pradesh Shops and Establishments Rules prescribing the period of sixty days as limitation for preferring a first appeal and specifically conferred the power on the first appellate authority to admit an appeal presented after the expiration of the period of limitation if it was satisfied that there was sufficient cause for condoning the delay. The disposal of the first appeal is summary in nature. The Labour Court constituted under Section 7 of the Industrial Disputes Act is designated as the second appellate authority by the Legislature itself. Under Section 41(3) of the Act, the Legislature itself has prescribed the period of limitation of thirty days for filing the second appeal but has not considered it necessary to confer the power on the second appellate authority to admit an appeal preferred after the iexpiration of the period of thirty days. So far as the termination of services of the employees working in the shops and establishments is concerned, the provisions of the Act and the Rules made thereunder prescribe as to what acts and omissions constitute misconduct. The procedure to be followed in taking disciplinary action is also prescribed thereunder. Against an order of termination, right of first appeal and second appeal is provided. Finality is attached to an order passed by the second appellate authority and it shall be given effect within such time as may be specified in the order of the authority. Any amount directed to be paid to a party can be recovered as if it were a fine by a Magistrate. It may be that keeping in view the beneficial nature of the legislation and the need to obviate indefinite prolongation of proceedings, the", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-36", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "the beneficial nature of the legislation and the need to obviate indefinite prolongation of proceedings, the Legislature did not intend to confer the power on the second appellate authority to admit an appeal which was presented after the prescribed period of limitation had expired. If the intention of the State Legislature is to achieve finality of the proceedings expeditiously without giving scope to the parties to protract the litigation, such intention cannot be defeated by extending the application of the provisions of the Limitation Act to the proceedings under the Act. In labour welfare legislation, it is not uncommon for the Legislature, to prescribe certain limitations in the filing of appeals. For example, under the provisions of the Workmen's Compensation Act, even a first appeal preferred under Section 30 of that Act to the High Court against an order of the Commissioner of Workmen's Compensation cannot be entertained unless a substantial question of law is involved. Thus, it appears to us that the Andhra Pradesh Shops and Establishments Act constitutes a self-contained code so far as the conditions of service of the employees working in the shops and establishments including the disciplinary proceedings if any initiated against them and the right of appeal provided in respect of such proceedings, are concerned. Therefore, having regard to the scheme and the nature of remedies provided under the Shops and Establishments Act and the rules made thereunder, it has to be held that the application of the provisions of Section 5 of the Limitation Act to the filing of appeals under the Act and the rules has by necessary implication been excluded.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-37", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "28. Let us now refer to the decisions wherein the applicability of the provisions of the Limitation Act to the proceedings arising under the special Acts has been dealt with. Under Section 93 of the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act, 1950, limitation of sixty days for preferring an appeal has been prescribed. It contained a specific provision that the provisions of the Indian Limitation Act, 1908 shall apply for the purposes of the computation of the period of limitation. In view of the provisions of Sub-section (2) of Section 29 of the Limitation Act, 1963, an argument has been advanced before a Division Bench of this Court that the provisions of Sections 4 to 24 of the Limitation Act apply to the appeals filed under the Tenancy Act as there is no express exclusion of the provisions of the Limitation Act. Accepting the contention, the Division Bench has held in Guru Batchaiah v. K. Ahalyabai, 1975 (2) APLJ 66 that Sections 4 to 24 of the Limitation Act are applicable to the appeals and revisions filed under the Tenancy Act. However, another Division Bench of this Court has taken a contrary view in K. Venkaiah and Ors. v. K. Venkateswara Rao and Anr. holding that Section 5 of the Limitation Act, has no application to the proceedings under the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act, 1950. In this case, the applicability of Section 5 Limitation Act has been considered with reference to the provisions of Section 29(2) of that Act. Relying on the decision of the Supreme Court in Athani Municipality v. Labour Court, Hubli, (supra), the Division Bench has pointed out:", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-38", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "\"Bound as we are by the aforesaid decisions, we must hold that even though the authorities under the Hyderabad Tenancy Act are 'Courts' within the meaning of the said expression employed in Section 5 of the Limitation Act, yet it has no application, for the reason that they are not Civil Courts, and hence the Limitation Act itself has no application to proceedings before such authorities, except, of course, in so far as they are expressly made applicable by the special enactment\". \n This view of the Division Bench has been upheld by the Supreme Court in Sakuru v. Tanaji . \n 29. The learned counsel for the appellant has drawn our attention to the judgment of a learned Judge of this Court in T. Satyanarayana, In Re. 1985 (2) ALT 9, in support of his contention that the period between the date of the application for a copy of the full text of the judgment and the date of receipt of the same, can be excluded. Having regard to the provisions of Rule 21(2)(f) of the Andhra Pradesh Shops and Establishments Rules, 1968, which reads as follows. \n \"The result of the appeal shall be communicated to the parties as soon as possible. Copies of the orders shall also be furnished to the parties if required, by them. The copies shall be on stamped papers to be furnished by the parties\". the learned Judge held that the period between the date of the application for copy of the full text of the judgment and the date of receipt of the same, should necessarily be excluded. In that case, the question whether the provisions of the Limitation Act are applicable to the proceedings arising under the A.P. Shops arid Establishments Act did not arise for consideration.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-39", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "30. Mr. A.K. Jayaprakash Rao, the learned counsel for the appellant, has placed reliance on a decision of the Full Bench of the Gujarat High Court in Shaikh Mohammedbhi Khan Hussainbhai & etc. v. The Manager, Chandrabhanu Cinema and Ors. 1986 LIC 1749, in support of his contention that a Labour Court is a court and not a Tribunal. The question that has been considered in that case was whether the Labour Courts and the Industrial Tribunals constituted under the Industrial Disputes Act are Courts subordinate to the High Court within the meaning of Section 2 read with Section 10 of the Contempt of Courts Act. It is no doubt true that the Full Bench has held that the Labour Courts and the Industrial Tribunals are courts subordinate to the High Court within the meaning of the Contempt of Courts Act. But, that decision has no relevance in a case arising under the A.P. Shops and Establishments Act, in which the question that has to be decided is whether the operation of the provisions of the Limitation Act can be extended to the proceedings arising under the Act.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-40", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "31. The Full Bench of the Allahabad High Court has held in Commissioner of Sales Tax, U.P., Lucknow v. Parson Tools and Plants, Kanpur, , that the time spent in prosecuting the application for setting aside the order of dismissal or appeal filed under the U.P. Sales Tax Act can be excluded in computing the period of limitation for filing the revision, by the application of the principle underlying Section 14(2) of the Limitation Act, inspite of the fact that the learned Judges have categorically held that the word 'Court' occurring in Sub-section (2) of Section 14 of the Limitation Act signifies a Court in stricto sensu and does not include an authority who acts as a Tribunal or a Quasi-Judicial Tribunal. Disapproving that view, the Supreme Court held in The Commissioner of Sales Tax, Uttar Pradesh, Lucknow v. Parson Tools and Plants, Kanpur, as under: \n \"there is no room for argument that the Appellate- Authority and the Judge (Revisions) Sales-Tax exercising jurisdiction under the Sales Tax Act, are Courts. They are merely administrative Tribunals and \"not courts\". Section 14, Limitation Act, therefore, does not, in terms, apply to proceedings before such Tribunals.\"", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-41", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "32. In The Kerala State Electricity Board, Trivandrum v. T.P. Kunhaliumma (supra), the question for consideration was whether the provisions of the Limitation Act were applicable to the applications filed under Section 16(3) of the Telegraph Act. The provisions of the Telegraph Act contemplate determination of the compensation payable under Section 10. Applications can be filed under Section 16(3) to the District Judge within whose jurisdiction the property is situate, if any dispute arises regarding the determination of the compensation under Section 10 of the Telegraph Act. On the basis of the principle \"where by statutes, matters are referred for determination by a Court of Record with no further provision, the necessary implication is that the court will determine the matters as a Court\", laid down in National Telephone Company Limited v. The Post Master General 1913 A.C. 546 the learned Judges of the Supreme Court held as under: \n \"In the present case, the statute makes the reference to the District Judge as the Presiding Judge of the District Court. In many statutes reference is made to the District Judge under this particular title while the intention is to refer to the Court of the District Judge. The Telegraph Act in Section 16 contains intrinsic evidence that the District Judge is mentioned there as the Court of the District Judge..... Again in Section 34 of the Telegraph Act, reference is made to payment of court-fees and issue of processes, both of which suggest that the ordinary machinery of a court of civil jurisdiction is being made available for the settlement of these disputes...... The District Judge under the Telegraph Act acts as a Civil Court in dealing with applications under Section 16 of the Telegraph Act\".", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-42", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "Referring to the changed definition of the words \"applicant\" and \"application\" contained in Section 2(a) and 2(b) of the 1963 Limitation Act, the learned Judges were of the opinion that the applications contemplated under Article 137 included the petitions originally or otherwise filed under special laws. The meaning given to the word \"application\" in Article 181 of the 1908 Limitation Act on the principle of 'ejusdem generis' by a two Judge Bench of the Supreme Court in Athani Municipality v. Labour Court, Hubli, (supra) was not accepted by the three Judge Bench in the Kerala State Electricity Board, (supra) case white interpreting Article 137 of the 1963 Limitation Act. The learned Judges construed Article 137 as referrable to the applications and petitions filed not only under the Civil Procedure Code but also those filed under any Act, in a Civil Court. Thus the three Judge Bench in this case has taken a different view from the one taken by the two Judge Bench and held that the provisions of the Limitation Act are applicable to an application filed under the special Act in a District Court. As already pointed out, the ratio of the decision in Athani Municipality case (supra) in so far as the appli cation of Limitation Act to the proceedings in a Civil Court is concerned, remains unaffected by this later judgment.  \n 33. From the foregoing discussion, it is clear that a Labour Court which has been designated as a second appellate authority under the A.P. Shops and Establishments Act, is not a Civil Court. The appeal preferred to it is under a special Act and not under the provisions of the Civil Procedure Code. Therefore, the provisions of the Limitation Act are not applicable to an application filed for condonation of delay in filing the appeal.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-43", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "34. Mohd. Ashfaq v. State Transport Appellate Tribunal, U.P. and Ors. , is a case arising under the provisions of the Motor Vehicles Act 1939. One of the contentions was that Section 5 of the Limitation Act, 1963 was applicable to an application made for renewal of a permit under Sub-section (2) of Section 58 of the Motor Vehicles Act, 1939. A permit can be renewed on an application made for that purpose and it is disposed of as if it were an application for a permit. The proviso to the sub-section reads as follows: \n \"Provided that the application for the renewal of a permit shall be made- \n (a) in the case of a stage carriage permit or a public carrier's permit, not less than one hundred and twenty days before the date of its expiry; and", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-44", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "(b) in any other case, not less than sixty days before the date of its expiry: \n Provided further that, other conditions being equal, an application for renewal shall be given preference over new applications for permits.  \n (3) Notwithstanding anything contained in the first proviso to Sub-section (2), the Regional Transport Authority may entertain an application for the renewal of a permit after the last date specified in the said proviso for the making of such an application, if the application is made not more than fifteen days after the said last date and is accompanied by the prescribed fee\".", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-45", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "Construing these provisions, the learned Judges have held that the discretion vested in the Regional Transport Authority to entertain an ap plication for renewal of a permit is limited to only fifteen days after the expiration of the pe riod of limitation. It has been further held that the discretion shall be exercised not on any ar bitrary or fanciful grounds and it has to be exer cised in a judicial manner on well established legal principles. It has been pointed out that it could never have been the intention of the Leg islature that even where there is no sufficient cause for delay in making an application for renewal, the Regional Transport Authority should still be bound to entertain the application for renewal merely on the ground that the delay is of not more than fifteen days. Sub-section (3) of Section 58 of the Motor Vehicles Act clearly meant that if the application for renewal was beyond time by more than fifteen days, the Re gional Transport Authority shall not be entitled to entertain the application, or in other words, it shall have no power to condone the delay. Thus, there is an express provision in Sub-section (3) that the delay in making the application for re newal shall be condonable only if it was of not more than fifteen days and that expressly ex cludes the applicability of Section 5 of the Limitation Act in cases where an application for renewal was delayed by more than fifteen days. In our view, this decision does not in any way help the learned Counsel for the appellant. In this case, the learned Judges did not consider the question whether the provisions of the Limitation Act were applicable to the applications filed under the Motor Vehicles Act. As the contention advanced on behalf of the appellant therein was found to be not tenable even under the provisions of Section 29(2) of the Limitation Act, 1963, it was rejected on that ground. Therefore, this decision cannot be taken as the one laying down the principle that the provisions of", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-46", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "ground. Therefore, this decision cannot be taken as the one laying down the principle that the provisions of the Limitation Act are applicable to the applications arising under the provisions of the Motor Vehicles Act.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-47", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "35. Another decision cited by the learned counsel for the appellant is the one rendered by the Supreme Court in a case arising under the provisions of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953. Under this Act, appeal is provided to the Divisional Commissioner. The two-Judge Bench of the Supreme Court has held in S. G.V. Samithi Ltd. v. Mahabir Sugar Mills (P) Ltd. that the provisions of Section 5 of the Limitation Act, 1963 are applicable to the appeal before the Divisional Commissioner. The learned Judges have proceeded on the footing that the Divisional Commissioner exercises the appellate powers under the Act as the Revenue Court and not as a persona designata. Therefore, Section 5 of the Limitation Act is held to be applicable to the appeal filed before him. Under Section 5(2) of the Civil Procedure Code, \"Revenue Court\" means 'a court having jurisdiction under any local law to entertain suits or other proceedings relating to the rent, revenue or profits of lands used for agricultural purposes'. In this decision there is no reference to the provisions of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953, and the learned Judges have proceeded on the footing that the Divisional Commissioner has been acting as a Revenue Court and not as a persona designata. Therefore, it has been held that the provisions of Section 5 of the Limitation Act are applicable to the proceedings before him.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-48", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "36. In a case arising under the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act, 1950, a two-Judge Bench of the Supreme Court in Sakuru v. Tanaji, (supra) referred to the earlier decisions of the Supreme Court in Town Municipal Council, Athani v. Presiding Officer, Labour Court, Hubli, (supra), Nityananda M. Joshi v. Life Insurance Corporation of India, (supra) and Sushila Devi v. Ramanandan Prasad (supra) and reiterated the following principle, holding that it was well settled by the decisions referred to above: \n \"....The provisions of the Limitation Act, 1963 apply only to proceedings in \"Courts\" and not to appeals or applications before bodies other than courts such as quasi- Judicial Tribunals or Executive Authorities, notwithstanding the fact that such bodies or authorities may be vested with certain specified powers conferred on Courts under the Codes of Civil or Criminal Procedure. The Collector before whom the appeal was preferred by the appellant herein under Section 90 of the Act not being a Court, the Limitation Act, as such, had no applicability to the proceedings before him\". \n 37. A Full Bench of the Kerala High Court dealt with the same question in a matter arising under the Kerala Buildings (Lease and Rent Control) Act, 1965 and expressed the view that the Limitation Act dealt only with the applications to Courts (vide Jokkim Fernandez v. Amina Kunhi Umma, (F.B.).", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-49", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "\"This being the position, even if the power under Section 5 were to be read into a special local law by reason of the provisions of Section 29 of the Limitation Act, that power is exercisable only by Court and not by Tribunals or other authorities such as the appellate authority in this case\". Subsequently, a Division Bench of the same Court had held in U. Chacko v. P. Marakkar, , that the Limitation Act was applicable only to the proceedings before a court and that the appellate authority under the Kerala Buildings (Lease and Rent Control Act, 1965 was not a Court. We consider that these decisions lay down the correct principle. \n 38. Employees of State Insurance Corporation, Ministry of Labour and Employment, Hyderabad v. Andhra Pradesh State Electricity Board, Himayatnagar, Hyderabad, 1970 LIC 921 is a case arising under the Employees State Insurance Act, 1948. One of the points urged before a Division Bench of this Court was that a Claim Petition filed before the Employees Insurance Court was in the nature of a suit and therefore, the provisions of the Limitation Act were applicable. Repelling that contention, it was held that the provisions of the Limitation Act would not apply to a proceedings before the Employees Insurance Court. \n 39. A learned Judge of this Court has expressed the view that the Limitation Act has no application to the proceedings before the Tribunal under the A.P. Co-operative Societies Act (vide Nellore District Co-operative Marketing Society Ltd. v. Co-operative Tribunal (Principal District Munsif), Nellore and Ors. 1987 (1) ALT 551.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-50", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "40. Thus, the preponderance of judicial opinion based on well established principles of law is to the effect that the provisions of Section 5 of the Limitation Act are applicable to the proceedings in a Court and they are not applicable to the proceedings in a Tribunal. \n 41. Even the provisions of Sub-section (2) of Section 29 of the Limitation Act, 1963 are attracted only when an appeal or an application under any special or local law is provided to a Court and they will not apply where such an appeal or application under special or local law is provided to a Tribunal or authority, which is not a court. The Supreme Court has made it clear in The Kerala State Electricity Board, Trivandrum v. T.P. Kunhaliumma (supra) that any other application contemplated under Article 137 covers only applications that are filed under any special or local law in a court and not before a Tribunal or authority. \n 42. In view of the foregoing discussions, we hold as follows: \n (1) The provisions of Section 5 read with Section 29(2) of the Limitation Act, 1963 are not applicable to an appeal or an application filed before the Labour Court constituted under Section 7 of the Industrial Disputes Act, 1947 and designated as the second appellate authority under Section 41(3) of the A.P. Shops and Establishments Act, 1966.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "59dd6b8f4ce3-51", "Titles": "Nalgonda Co-Op. Marketing ... vs Labour Court And Ors. on 18 March, 1993", "text": "(2) The provisions of Section 29(2) of the Limitation Act, 1963 read with Article 137 in the Schedule to the Act, make Section 5 of the Act applicable to an appeal or application filed under any special or local law in a Civil or Criminal Court in so far as and to the extent to which Section 5 is not expressly excluded and they have no application to an appeal or application filed under any special or local law before a Tribunal which is not such a Court.  \n 43. The questions are accordingly answered. \n 44. In view of our answers to the questions referred to us and as no other question arises for consideration in this writ appeal, it is dismissed. There shall be no order as to costs.", "source": "https://indiankanoon.org/doc/866097/"}
+{"id": "38eda8e121a5-0", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "JUDGMENT B.K. Somasekhara, J.   \n 1. The judgment and decree of the learned Sub-Judge, Chirala (Mr. B. Eswara Reddy) in O.S.No. 61 of 1971 dated 9-3-1981 are challenged in this appeal. The suit was dismissed with costs. Obviously aggrieved by the judgment and decree, the appellants who are the plaintiffs in the suit preferred this appeal. The respondents are the defendants. There are two plaintiffs and 26 defendants in the suit. Defendant No. 1 died during the pendency of the suit and defendants 2 to 26 were brought on record as the legal representatives of defendant No. 1. Convenience warrants to refer the parties as plaintiffs and defendants.  \n 2. The suit was filed of recovery of possession of the suit schedule lands, for past mesne profits for a period of three yea. s, for future mesne profits after enquiry, for costs and for such other reliefs as the Court may deem fit to grant in the nature of the case. The suit schedule lands are subjected to the plaint schedule as follows:   \n (1) D. No. 346/3   Seri dry land measuring  Ac. 4.40\n(2) D. No. 331/2     -do-   Ac. 4.49\n(3) D. No. 477     Seri wet land   Ac. 4.21\n(4) D. No. 481/3     -do-   Ac. 0.50\n(5) D. No. 142/1     -do-   Ac. 3.86\n               ---------\n\n       Total  Ac. 17. 46\n        ---------", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-1", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "All the defendants resisted the suit. Defendants 1,6 to 12,14,16 tol9 filed individual written statements, whereas defendants 2,3,4,5,13, and 15 filed join t written statement. Defendant No. 17 adopted the written statement of defendant No. 18 and defendants 13 and 15 adopted the written statement of defendant No. 1. The other defendants have not filed any written statement. Certain facts in the pleadings find no controversy. Plaintiff No. 2 is the son of plaintiff No. 1 Defendant No. 1 is the only son of one late Daggubati Chowdaramma (refers to a man, but not a woman). Rajamma is his sole daughter and the sister of defendant No. 1. She was married to the first plaintiff in the year 1925. Chowdaramma died in or about the year 1938 and Rajamma died in October, 1968. The relationship between the family of the plaintiffs and Chowdaramma including defendant No. 1 was quite cordial till some time prior to the date of the suit.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-2", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "4. Defendant No. 1 has contended that the suit of the plaintiff has been the result of asserting his rights over the property in the share and the interest in the film business carried on by him and plaintiff No. 1 and that is a counter blast to his defence in CS. No. 101/1965 and C.S. No. 108/1971 in the High Court of Madras. Plaintiff No. 1 who was doing film business persuaded defendant No. 1 to become a partner in Shambu Films whose production of a film became a very big success realising huge profits which the plaintiff alone appropriated for himself. Therefore, the other partners questioned him and when he did not oblige them to share the properties, one Yarlagadda Radhakrishna Murthy a cousin of plaintiff No. 1 filed C.S. No. 101 of 1965 in the High Court of Madras for dissolution of the partnership and for accounts. Defendant No. 1 was the sole defendant in that suit. He was prevailed upon by plaintiff No. 1 not to enter appearence or contest the litigation so that he could amicably settle the matter with his client. Defendant No. 1 acted accordingly. It appears that plaintiff No. 1 settled the matter in the suit with other partners by paying them certain amounts without settling the claim of defendant No. 1. Therefore, he had to contest the suit by engaging an Advocate pressing his claim as against plaintiff No. 1. In the mean while defendant No. 2 filed C.S. No. 108/1971 in the High Court of Madras which was contested by plaintiff No. 1. Therefore, the present suit was filed after exchange of notices between the parties, as a counter-blast, in the circumstances stated above.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-3", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "5. The plaintiff pleaded that during his visit at Karamchedu, he learnt that defendant No. 1 had been conveying portions of the suit schedule lands to defendants 6 to 19 who are his dose associates and bench men and that they had been inducted into possession of the same only to create obstacles in the way of the rights of the plaintiffs. It is contended that such conveyances under the document are devoid of any consideration and are void. DefendantNo. 1 while denying these allegations has pleaded and contended that during the life time of Rajamma only, he sold away some of the suit lands in favour of defendants 6 to 19 under the registered sale deeds in his own right and with the full knowledge of the plaintiffs and Rajamma. It is contended that such alienations cannot be challenged by the plaintiffs. Defendants 2 to 5 have practically adopted all the contentions of defendant No. 1 in their written statement. They have denied the gift deed executed by defendant No. 1 in favour of Rajamma. They have contended that such a gift deed cannot create any right or title in favour of Rajamma much less on the plaintiffs after her death. These defendants being the members of the joint family and defendants 4 and 5 being the undivided sons of defendant No. 1 who are the members of the joint family in the coparcenery, are not bound by such a gift deed. They have also contended that such a gift deed is not acted upon. They have further contended that they have perfected their right and title to the suit schedule properties to the extent of their share by adverse possession.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-4", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "6. Defendants 6 to 19 who are the alienees of some of the suit schedule lands have raised almost similar contentions in their written statement in answer to the plaint allegations. In regard to the nature of the suit properties and the right of defendant No. 1 as contended by him, they have fully supported defendant No. 1 The Gift deed in favour of Rajamma said to have been executed by defendant No. 1 is contended to be absolutely null and void to the extent of the properties purchased by them from defendant No. 1 They have contended that the sales in their favour were for legal necessity for the benefits of the joint family of defendant No. 1 and his children. They have pleaded that before the sales in their favour, defendant No. 1 consulted plaintiff No. 1 and his wife Rajamma when they came to attend the marriage of defendant No. 2 in February, 1962, when they assured him that the properties in question belonged to the joint family and that they had no right in them since the gift deed in favour of Rajamma was a sham and nominal one created for the purpose of screening the properties from the effect of Land Ceiling legislation and with such assurance, these defendants purchased the lands from defendant No. 1. Therefore, the plaintiffs are estopped from challenging the alienations of the lands by defendant No. 1 in favour of these defendants. All of them contend that they are the purchasers of the lands from defendant No. 1 for consideration and without notice of the alleged defect in titled of defendant No. 1.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-5", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "7. Defendant Nos. 6 to 19 have pointed out that the portions of the lands they have purchased were for valuable considerations. Defendant No. 6 purchased some portion of land in D. No. 477 for a consideration of Rs. 4,000/- in the year 1965. Defendant Nos. 7,8,9,10,11,12 to 19 have purchased specified portions of lands from out of the land in D. No. 477 which is Item No. 3 of the suit schedule for valuable considerations under registered sale deeds. They have pleaded that they came into possession of the suit lands which they purchased as above immediately on the dates of the sale and continued as such till the date of the sale and continued as such till the dates of the sale and continued as such till the date of the suit. Since neither the plaintiffs nor Rajamma were ever in possession of such lands within the 12 years next before the suit, and since defendant No. 1 had perfected his title to them by adverse possession by the date of the suit, these defendants are also entitled to such a benefit of perfection of title by adverse possession.  \n 8. The plaintiffs gota registered notice issued through their Advocate to the defendants before the suit to which some of them have sen reply wherein defendant No. 1 had admitted the gift deed in favour of Rajamma but set up the defence as above. They have contended that such a defence is totally false. The plaintiffs have sought for a decree as prayed for. The defendants have contended that the suit is not maintainable and the plaintiffs are not entitled to the decree as prayed for or to any extent. Inter alia they have also raised certain contentions regarding the valuation of the suit and the cause of action, thereby sought for the dismissal of the suit with costs.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-6", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "9. The parties to the suit went to trial on the following issues which were settled on the basis of the pleadings:  \n (1) Whether the gift deed dated 12-4-1957 was executed nominally to avoid the land ceiling or agricultural holdings as pleaded by the 1st defendant and whether such gift is maintainable at all?  \n (2) Whether the gift deed dated 12-4-57 is a colourable and nominal transaction, and whether it is not acted upon as pleaded by the defendants?  \n (3) Whether the 1st plaintiff and his wife represented to the alienees that the gift deed was only a sham and nominal one and that they have no title to the suit schedule properties and if so, whether the plaintiffs are estopped from questioning the validity of the alienations?  \n (4) Whether the plaintiffs and late Rajamma acquiesced in sales in favour of the alienees?  \n (5) Whether the defendants 6 to 15 and 17 to 19 are bona fide purchasers for value without notice of any alleged defect in the title of the 1st defendant?  \n (6) Whether the conveyances and contracts executed by defendants 1 to 5 in favour of defendants 6 to 19 are true, valid and binding on the plaintiffs?  \n (7) Whether the plaintiffs have no title to the suit schedule properties?  \n (8) Whether the defendants acquired title to the suit schedule properties by prescription and pleaded by them?  \n (9) Whether the plaintiffs are entitled for possession of suit schedule properties and if so, to what profits they are entitled?  \n (10) Whether the court fee paid is correct?  \n (11) Whether the suit is bad for mis-joinder or non-joinder of parties?  \n (12) To what relief?", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-7", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "(12) To what relief?  \n 10. During the trial both oral and documentary evidence were produced. Plaintiff No. 1 examined himself as P.W1 and his brother as P.W. 2. For the defendants, defendant No. 2 examined himself as D.W1, Defandant No. 20 as D.W.3, defendant No. 6 as D.W.I 1, defendant No. 17 as D.W.13, defendant No. 10 as D.W.14, defendant No. 9 as D.W.15, defendant No. 16 as D.W.16 and they have also examined the witnesses - D.Ws. 2, 4 to 10,12 and 17. By way of documentary evidence Exs. Al to A20 were got marked for the plaintiffs whereas, Exs.B-1 to B-36 were got marked for the defendants.  \n 11. After affording an opportunity of being heard to both the sides and on considering the materials before him, the learned Sub Judge held Issues 1, 2, 4 and 7 against the plaintiffs, Issue No. 3 in favour of the plaintiffs, Issue Nos. 5, 6, 8 and 9 as unnecessaiy and issued No. 12 also against the plaintiffs and consequently dismissed the suit directing the parties to bear their respective costs.  \n 12. In this appeal the findings of the learned Sub Judge against the plaintiffs and the ultimate decision are challenged as wrong and illegal and deserves to be set aside. In brief the findings of the trial court on the issues comprising the following questions are challenged:  \n (a) Nature of the suit lands as joint family properties of Chowdaramma and defendant No. 1.  \n (b) gift of suit lands to Rajamma at the time of marriage by way of Pasupukunkuma.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-8", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "(c) proof of gift deed supporting the gift by way of Pasupukunkuma.  \n (d) possession)f suit lands with defendant No. 1 only to manage them on behalf of Rajamma.   \n (e) management of suit lands of plaintiffs through P.W2.  \n (f) payment of produce from suit lands to Rajamma by defendant No. 1 both directly and through P.W2.  \n (g) regarding the gift deed in favour of Rajamma acted upon by the conduct of parties to document and circumstances - the nominal nature of the document - the similar gift deeds, having been acted upon including the partition deed between the 1st defendant and his sons.   \n (h) alienations of suit lands in favour of defendants 6 to 20 to void gift deed an to set up adverse possession.  \n (i) rejection of circumstances in favour of the plaintiffs and acceptance of circumstances against the defendants as proof.  \n (j) dismissal of suit.   \n 13. Meharchand Noori, the learned Advocate for the appellants plaintiffs has raised similar contentions in support of such grounds with all serious efforts and sincerity whereas Mr. Harina the learned Advocate for lite defendants made similar efforts with sincerity to repeal such contentions.  \n 14. Thus in the back-ground, the grounds of appeal and the contentions and the counter contentions, the following points arise for consideration:  \n (1) (a) whether the findings of the learned Sub Judge on issues 1, 2, 4, 7 and 12 against the plaintiffs are justified?  \n (b) if not which of the findings are not correct?  \n (2) Whether the learned Sub Judge was right in disbelieving the case of the plaintiffs and in dismissing the suit based on the findings of the issues?", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-9", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "(3) Whether any of the findings of the learned Sub Judge on any of the issues deserve to be set aside or modified to any extent?  \n (4) (a) Whether the appeal deserves to be allowed?  \n (b) Whether the suit of the plaintiffs deserve to be decreed?  \n (5) To what order?   \n 15. Although the nature of the suit properties was found to be a controversy, in view of the pleadings, they being the joint family properties of Chowdaramma and defendant No. 1 appears to be conceded or atleast not disputed. No one in the case at no time either testified or fortified that any document about Chowdaramma acquiring the suit schedule lands as his own or that he enjoyed them as his self-acquired properties. The evidence brooks to concession that Chowdaramma was a rich man in Karamchedu Village owning extensive properties including agricultural lands to an extent of Ac. 200.00 to Ac. 250.00 etc. That obviously covers the suit schedule lands also in the absence of any definite stand or evidence to hold to the contrary. In fact with a presumptive understanding of the matter, the question was not either agitated or atleast pressed before the trial court not the learned Sub Judge has dealt with the same. This Court is convinced that the suit schedule lands were the joint family properties of Chowdaramma and defendant No. 1 since the relevant time from which the plaintiffs are trying to lay a claim over the same.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-10", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "16. There is no specific issue whether at all there was a gift of the suit properties by Chowdaramma in favour of his daughter Rajamma at the time of her marriage with Plaintiff No. 1 as Pasupukunkuma, but this question has been -dealt with as an incidental question while dealing with issue Nos. 1, 2 and 7. The clear plea in the plaint, the denial of the same in the written statements and the evidence sought to be produced or demolished by the parties during the trial and the deliberations over the same by the learned Sub Judge to give a definite rinding on the question has made it not only a fact in issue, but an issue arising out of the pleadings, a trial over the same and a categoric finding against the plaintiffs to be challenged in this appeal. Therefore, even without raising a formal issue on the question, there is a decision after trial which is permissible in law. Thus the question is being examined in this appeal as if an issue was raised and decided in the suit and challenged in this appeal. It was rightly pointed out that the question is also covered under issue No. 7 since the title cannot be established without proving the gift. The definite case of the plaintiffs is that the suit lands were gifted to Rajamma the wife of plaintiff No. 1 by her father Chowdaramma by way of Pasupukunkuma. The plea and particulars in this regard are to be found in plaint Para-3(b) as follows:", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-11", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "\"The suit property was given as a marriage gift and towards 'Pasupukunkuma' by the late Chowdaramma to his only daughter Rajamma as is usual among the affluent Kamma families. The marriage of Rajamma took place in 1925 with the first plaintiff. The second plaintiff is their only son. From the beginning till recently the relationship between the family of the plaintiff and that of his brother-in-law i.e. the first defendant was very cordial. Chowdaramma died in or about 1938 leaving his daughter Rajamma and his son who is the first defendant herein. The property that was gifted was in the possession and enjoyment of Rajamma.\"  \n Admittedly there was no gift deed much less any document evidencing the gift. For the first time in year 1957, Ex. A3, the document evidencing such a gift came into existence. The circumstances under which such a document came into existence are pleaded in para 3(c) of the plaint as hereunder:  \n \"In 1953 the first plaintiff along with his wife Rajamma left for Madras and settled down there where he was able to acquire extensive properties. Naturally the management of the suit property was entrusted to the first defendant who used to send the income to the said Rajamma. Later on, Rajamma felt that it would be better in the interest of all concerned to have a registered instrument evidencing the gift, and the first defendant executed a registered gift deed in respect of the plaint schedule land on 12-4-1957. Rajamma continued to enjoy the proceeds from the suit land almost till the end of her life though she never bothered about the details of income in view of her immense affection for her brother i.e. the first defendant herein. Accordingly, the first defendant used to send the income through Sri Y.Ranganayakulu, who is the brother of the first plaintiff. The gift was a completed transaction.\"", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-12", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "To repeat, there was no document evidencing the gift in between 1925 and 12-4-1957 the date of Ex.A3. The defendants have categorically denied the above pleas. However, defendant No. 1 coming out with certain explanations as to why be executed Ex.A3 and as to the circumstances under which it came into existence. To read into the relevant portions in his written statement:", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-13", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "\"This defendant states that at the time of his father's death he was a minor and the first plaintiff being son-in-law of the family, was the eldest member in the family and consequently all the people including his (this defendant's) mother had a very soft corner for the 1st plaintiff and had practically reverence for him without understanding the guileful nature of the plaintiff. Consequently he was guiding all the affairs of the family, particularly because of his experience in litigation and business. Actually this defendant in view of respect given by his own mother to the first plaintiff, had reposed active confidence in the 1st plaintiff and was implicitly obeying all the directions given to him by the 1st plaintiff from time to time. This defendant states that the gift deed dated 12-4-1957 was brought about by the 1st plaintiff on the representation that impending legislation is likely to impose ceilings on agricultural lands and consequently it would be better to create some documents to make it appear that all the properties were not being held by the same individual, though they are to be enjoyed by the same i.e. this defendant. This defendant simply believed in the representation made by the 1st plaintiff and in view of the active confidence he had reposed in him and without suspecting the bona fides of the 1st plaintiff herein and in accordance with the advice and direction of the 1st plaintiff herein the gift deed came into existence. In fact even before and at the time of execution of the said gift deed the 1st plaintiff assured this defendant that the gift deed would not convey any right, title or interest to his wife since the property belonged to the joint family of the 1st defendant and his sons and would only be a colourable deed to screen the properties from the impending legislature and Land Reforms........The deceased Rajamma had nothing to do with the transactions in question and as aforesaid in the circumstances stated above the entire scheme was brought about", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-14", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "transactions in question and as aforesaid in the circumstances stated above the entire scheme was brought about only by the 1st plaintiff herein.......This defendant states that the gift deed was never acted upon and that the recitals therein were false and were got up by the 1st plaintiff to give an apparent, osensible reality to the said deed. Even after the execution of the said deed this defendant was and is in possession and enjoyment of the properties.\"", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-15", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "The other defendants have practically adopted the contentions of defendant No. 1 as above.  \n \"The legal position may be sumarised thus: The Hindu law texts conferred a right upon a daughter or a sister, as the case may be, to have a share in the family property at the time of partition. That right was lost by efflux of time. But it became crystallized into a moral obligation. The father or his representative can make a valid gift, by way of reasonable provision for the maintenance of the daughter, regard being had to the financial and other relevant circumstances of the family. By custom or by convenience, such gifts are made at the time of marriage but the right of the father or his representative to make such a gift is not confined to the marriage occasion-It is a normal (moral ?) obligation and it continues to subsist till it is discharged. Marriage is only a customary occasion for such a gift. But the obligation can be discharged at any time, either during the life time of the father or thereafter.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-16", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "It is not possible to lay down a hard and fast rule, prescribing the quantitative limits of such a gift as that would depend on the facts of each case and it can only be decided by Courts, regard being had to the overall picture of the extent of the family estate, the number of daughters to be provided for and other paramount charges and other similar circumstances. If the father is within his rights to make a gift of a reasonable extent of the family property for the maintenance of a daughter, it cannot be said that the said gift must be made only by one document or only at a single point of time. The validity of the resonableness of a gift does not depend upon the plurality of documents but on the power of the father to make a gift and the reasonableness of the gift so made. If once the power is granted and the reasonableness of the gift is not disputed, die fact that two gift deeds were executed instead of one, cannot make the gift any the less a valid one.\"", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-17", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "Such a legal position is not varied in Perumalakka v. Kumarasan Balakrishnan, , when it was stated by the Supreme Court that while movable ancestral property can be gifted out of affection to the wife or daughter or a son, which is within reasonable limits, immovable property can be gifted only for pious purposes i.e. charitable and religious purposes. It can be gifted to the daughter in fulfilment of an antenuptial promise. It cannot however, be gifted merely out of love (principle borrowed from Gurramma v. Mallapa, ). Therefore, within the expressions used by the Supreme Court, the gift by way of Pasupukunkuma can be very well brought within the emphasized portions supra. In substance, the gift by way of Pasupukunkuma would be a valid gift which may be given by the father or his representative by custom or by convenience at the time of marriage or later, by virtue of a normal moral obligation to subsist till is is discharged. Perhaps, with such a settled legal principle as above, many precedents have recognized such a gift by custom among Hindus without actually explaining them. Despite the context of expression may bear a scared marital gift for her marital life, it is in essence a provision for the maintenance of the daughter conveying the idea that she should have independent means of her own to satisfy her personal needs. Similar expressions - 'choli bongdi' of 'haldi kumkum' are held to convey such idea in Sri Rajah Malraju Venkata Ramakrishna Kondala Rao v. Sri Rani Rajyalakshmi Vapayamma Rao Zamindarini Garu, . The rule of customary gifts by way of 'pasupukunkuma' to a daughter so crystalised into Hindu Law create and connote an absolute right in her for all legal purposes (Chatrathi Jagannadha Rao v. Jatmal", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-18", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "in her for all legal purposes (Chatrathi Jagannadha Rao v. Jatmal Madanlal Jakotia Firm, AIR 1958 A.P. 662). Such pasupukunkuma gifts are held to be legal and valid and accepted in Land Ceiling Law proceedings - under Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973 upto till today (C.K. Anavema Reddy v. A.P. Land Reforms Appellate Tribunal, (1977) 1 APLJ 33, Bhubaneswar Naik Santhosh Raj v. Special Tahsildar (Land Reforms), , Jasti Ramakrishna Rao v. Authorised Officer, 1980 (1) An.W.R. 255 and G. Thima Reddy v. The Special Thasildar, Land Reforms, .", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-19", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "18. Sri Mehar Chand Noori, the learned Advocate for the appellants is well fortified to his legal postulations of the title of the appellants through Rajamma subject to proof of the plea of gift by way of Pasupukunkuma. Sri Harinath, the learned Advocate for the respondents strikes a note of dissent in his contest for an oral and unregistered gift to legally exist particularly after the Transfer of Property Act, 1882 came into force with effect from 1-7-1882. The law is square and bare to bear his contest. A gift under Hindu Law may be made orally or in writing (pages 476 and 477 of Mulla' Hindu Law, 16th Edn.). But the vexed question whether a gift requires a writing and registration remained for a long, was about the effect of Sections 123 and 129 of Transfer of Property Act after it came into force. In the earlier stages of the application of such provisions, the question was not so much about the requirement of the written and registered gift deed, but about the other requisites of the gift deed, namely, existence of the gift and the delivery of possession of the gifted property. In that context it was being postulated that mere registration of a gift deed did not pass title from the donor to the donee (pages 476 and 477 of Mulla's Hindu Law supra). But the question appears to be no longer vexed or res integta. The doubt commenced with Allam Gangadhar Rao v. V. Gangarao, , V. Poornachandra Rao v. State of A.P. (1977)1 APLJ 132 and C.R.P. No. 2177 of 1977 dated 9-3-1978 (A.P.) ended with reference to Division Bench and decision in Bhubaneswar Naik Santoshrai v. The Special Tahsildar, Land", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-20", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "in Bhubaneswar Naik Santoshrai v. The Special Tahsildar, Land Reforms, Tekkali, . Their Lordships C. Kondaiah, C.J. and Seetharam Reddy,)., as they then were, considered the questions whether gift made in favour of a daughter or sister without any deed of conveyance being registered, is liable to be excluded from the holding of the donor for the purpose of Section 8 of the A.P. Land Reforms Act, 1973. We are not concerned with the second question. The first question was held in the negative. Referring to Serandayya Pillai v. Shankaralingam Pillai, (1959) 2 MLJ 502 and Commissioner of Gift Tax v. Ch. Chandrasekhara Reddy, 1977 (1) An.W.R. 82 = 1976 ALT 121 (NRC), the question was considered and answered - to read in their own words:", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-21", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "\"What becomes main fest from the conspectus of above case law is that a daughter, under Hindu Law had at the time of 'Manu' a right to share in the father' property along with her brothers. After a considerable passage of time, the ultimate remnant is that a father is under an obligation to maintain her within the meaning of Section 3 of the Hindu Adoptions and Maintenance Act which includes the reasonable expenses of her marriage and therefore any property moveable or immovable, given to her for or at the time of marriage cannot be termed as a 'gift' within the meaning of Section 122 of T.P. Act as the essential ingredients of gift are conspicuous by their absence in this transaction of giving the property to the daughter by way of Tasupukunkuma' which is both involuntary as well as for consideration. Once the said transaction is taken out of the ambit of Section 122 of T.P. Act, it is not at all obligatory that the said document, if it is in writing, requires any registration within the meaning of Section 123 of T.P. Act and under Section 17 of the Registration Act. In fact it is quite apparent that the transaction of giving away the property by way of \"Pasupukunkuma\" could very well be done orally and if any instrument in writing has been brought into existence, the same does not require any registration as the said instrument can be used for the proof of transaction by way of evidence........\" \n Since this view is being consistently followed by this Court (Jasti Ramkrishna Rao's case (9 supra) and G. Thimma Reddy's case (10 supra)), it is binding on us. Therefore, the contention to the contrary presented by Sri Harinath, the learned Advocate for the respondents can no longer subsist.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-22", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "19. The stage is thus ripened to know whether there was really a gift of the suit lands as Pasupukunkuma by her father. Significally enough, the categoric plea in the plaint para 3(b) extracted above means, a presumptive gift towards Pasupikumkuma to his only daughter Rajamma as usual among the affluent Kamma families. Uncontrovertedly Chowdaramma and the appellants belong to Kamma family. Mr. Mehar Chand Noori, the learned Advocate for the appellants tried to present a plea of custom among affluent Kamma families, as a rule in regard to gift towards Pasupukunkuma. Mr .Harinath, the learned Advocate for the respondents repels it in the absence of a definite plea in the plaint in this regard except an improvement in the evidence. Apparently there is no plea of custom among Kamma family in regard to such a gift nor any legal recognition to such a custom among such families is established. As rightly pointed out, such a custom was brought out only in the testimony of plaintiff No. 1 when he stated that there is a custom in Kamma community, to give some land to the bride by her parents at the time of marriage, that the suit lands were given to Rajamma as Pasupukunkuma and this custom is followed invariably in affluent Kamma families and that at the time of marriage, his father-in-law gifted the suit properties to his wife as Pasupukunkuma. P.W.2 his own brother repeated it to testify that the suit lands were gifted to Rajamma as Pasupukunkuma at the time of marriage and there is such a custom in their community. Neither plaintiff No. 1 nor P.W2 has elaborated such a plea of custom to complete the so-called plea in the plaint. Mr. Meharchand Noori, the learned Advocate for the appellants-plaintiffs appears to be not correct in", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-23", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "Noori, the learned Advocate for the appellants-plaintiffs appears to be not correct in contending that the contesting defendants, in particular defendant No. 1 and h is other family members, have conceded such a custom and therefore, there was no necessity either to plead or prove such a custom. They have specifically denied such a custom although it has come in their evidence that some properties were given to the daughters of defendant No. 1 by way of Pasupukunkuma. Even such transactions are sought to be explained in the written statement of defendant No. 1 including the partition to evade the operation of Land Ceiling Laws. The question whether really a gift by way of Pasupukunkuma was given is required to be examined from the evidence and it is independent from the question whether there is an established custom among Kamma families to gift the properties including the lands, towards Pasupukunkuma. At the worst, the family custom is admitted to be pleaded or proved. This Court in a latest pronouncement in Garimella Annapoornayya v. K. Appalanarasimha Murthy, , had the occasion to deal with certain questions and answered them in relation to plea and proof of custom. It has been held therein that:", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-24", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "\".....As a first measure, such a custom should be pleaded in specific terms what the custom is, upon which a party is relying on, regard within the scope of Order VI Rule 3 of C.P.C. appears to be settled by the Supreme Court in more than one precedent.........\"", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-25", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "It is also difficult to accept the contention of the learned Advocate that such a custom among such communities is judicially noticed. It is true that the Courts can notice the existence of such a custom under Section 57 of the Evidence Act which dispenses the proof of the same by virtue of Section 56 of the Evidence Act. Therefore, where it is not established as a custom not judicially noticed, such a custom can be set up and established like any other custom and there is no bar to raise such a plea and proof. It may be noted that what is judicially noticed in precedents supra is that there exists a custom among Hindus to give some properties including immovable properties to a daughter or sister at the time of marriage or alter towards Pasupukunkuma and not specifically that such a custom exists in particular communities like Kammas etc, as alleged or contended. Only to that extent, the court can take judicial notice under Section 57 of the Evidence Act which requires no proof by virtue of Section 56 of the Evidence Act. But still the fact remains whether the plaintiffs have proved such a fact of gifting the suit lands to Rajamma by her father, as rightly stated by the learned Sub Judge. The learned Sub Judge has rejected the proof of the alleged gift of suit lands to Rajamma towards Pasupukunkuma by her father. Number of reasons are given in support of the same. This court finds no reason to the contrary as they are based on evidence and unexceptionable. It is true that Chowdaramma had only a son and a daughter. He was a rich man., He owned more than Ac.200.00 of land. It was not improbable if he had either contemplated or given any properties to his only daughter Rajamma towards Pasupukunkuma. There was no reason for providing her maintenance as, admittedly plaintiff No. 1 himself was a rich man. Even the extent of the suit lands is not so much as to doubt", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-26", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "himself was a rich man. Even the extent of the suit lands is not so much as to doubt the donor's intention to make them a gift towards Pasupukunkuma. It is nobody's case that nothing else was given to plaintiff No. 1 or Rajamma at the time of marriage except the suit land s to make it a part of the marriage presentation. As we can understand, the tone and tenor of the case and the evidence of the plaintiffs, such a gift was some thing more than the normal presentations or gifts at the time of marriage. Except plaintiff No. 1 and his brother P.W2, no other person has come forward to speak about such a gift. The marriage of plaintiff No. 1 with Rajamma took place in the year 1925. At that time plaintiff No. 1, P. W2 and Rajamma were not only minors, but practically they were the infants aged not more than 10 to 15 years. It is pointed out that P.W. 2 was hardly 10-year-old in the year 1925. Their mental maturity, their knowledge and their understanding of the decision of elders and their conduct in giving certain gifts including Pasupukunkuma can never be a safe basis to accept the proof of the same. The testimony of plaintiff No. 1 and his brother P.W 2 is found to be totally unsatisfactory in regard to the proof of such a gift. If we go by the requisites of a gift in Hindu Law, it appears to be mandatory that a gift under the law is not valid unless it is accepted and accompanied by delivery of possession of the subject of the gift from the donor to the done. Therefore, even while not making the provisions of the Transfer of Property Act applicable to such a gift towards Pasupukunkuma, the law appears to be that even where there is a registered deed by a donor, there cannot be any proof of acceptance by the donee", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-27", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "there is a registered deed by a donor, there cannot be any proof of acceptance by the donee and the acceptance must be proved as a independent fact (Item 358 at pages 476 and 477 of Mulla's Hindu Law 15th Edn.). The testimony of P. Ws 1 and 2 does not indicate that there was any manner of acceptance of gift by Rajamma from her father at any time till she died, except stating that she was in possession of the same and was receiving the produce from defendant No. 1. It is true that the delivery of possession of the gifted property may constitute the acceptance of gift. In this case, it is found that the possession of the suit lands never passed on to Rajamma at any time nor she exercised any act of possession over the same. The lands remained in the possession of defendant No. 1 throughout. There was no mutation of the record s in the name of Rajamma so far as those lands are concerned, there was no payment of land revenue by her, there was no mention of her name in any revenue records in regard to the suit lands at any time till she died. Regarding the payment of the usufruct or the income from the suit lands to Rajamma, the matter has remained only in the testimony of plaintiff No. 1 and P.W.2. Their interested testimony is found to be conflicting and inconsistent with the realities. It is true that admittedly, Rajamma and defendant No. 1 were on cordial terms throughout. When her husband Plaintiff No. 1 was himself a rich man having lot of movable and immovable properties in Karamchedu village arid in Madras and acquired lot of money in film-business, it is highly improbable that she had a need to insist payment of any usufruct from defendant No. 1, nor in her good relationship with the only brother, would ask him to pay the income from the land. Even assuming that he spared", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-28", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "the only brother, would ask him to pay the income from the land. Even assuming that he spared some income not only from the suit lands, but the other properties of the family to a sister that cannot partake the conuct of a person in sparing the income from the lands towards the right of the other person. The circumstance that plaintiff No. 1 and his brother P.W2 were managing their lands at Karamchedu village and not cultivating or arranging for cultivation of the suit lands for a long time or perhaps at no time, is inconsistent with any gift of the lands to Rajamma. It is nobody's case that Rajamma had at any time evinced any interest in the management or cultivation of the suit lands. Therefore, if at all they were managed on her behalf, that must be by the first plaintiff either directly or through his brother P.W.2. Regarding the management of the lands also, the evidence of the plaintiffs is not consistent or probable. In the plaint, the plaintiffs came out with a theory that the property that was gifted to Rajamma was managed by defendant No. 1 subsequent to 1953 as she along with plaintiff No. 1 went to Madras and settled down there. But in the evidence plaintiff No. 1 came out with a different theory. According to him, his father cultivated the suit lands personally till 1941 and leased out them for some time and that he managed them up to 1953 and thereafter defendant No. 1 managed them. The conflict between the plea and proof cannot be accepted in law. Even then, he was not able to prove such a changed version. Admittedly, both plaintiff No. 1 and P.W.2 have got their lands at Karamchedu village and they personally cultivated them for some years and leased out them for some years and, as rightly pointed out by the learned Sub Judge, it is highly improbable that they would have allowed the suit lands to be looked", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-29", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "the learned Sub Judge, it is highly improbable that they would have allowed the suit lands to be looked after by defendant No. 1 subsequent to 1953. Admittedly, P.W.2 remained in the Village although plaintiff No. 1 and his wife went to Madras and there was no difficulty to manage the lands by P.W.2. Plaintiff No. 1 and P.W.2 were not able to give the correct boundaries of the suit lands when tested in cross-examination. Their demeanour and expressions are rightly noted by the learned Sub Judge; as well versed persons in litigation and experienced they would not have failed to get the lands mutated in the name of Rajamma or paid the cyst if they had actually cultivated the lands of behalf of Rajamma. Thereby it is rightly concluded by the learned Sub Judge that plaintiff No. 1 or his brother could not have managed the suit lands till the year 1953 either by themselves or through their father till he died or get them cultivated. On the other hand it is found from the testimony of defendant No. 2 as D.W.I and D.Ws. 5 to 10 (which includes some of the defendants) and also the lease deeds - Exs.B-7, B8, B-26, to B-33 - most of the mare in the hand-writing of P.W.I himself- show that the suit lands were being cultivated through some of the defendants by defendant No. 1 and with the assistance of plaintiff No. 1 The testimony of the witnesses stated above, corroborates the testimony of defendant No. 2 in regard to the cultivation of the suit lands with the management of defendant No. 1. so, the whole theory of the plaintiffs about the management of the suit lands in various ways stated above appears to be improbable and not true.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-30", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "20. Regarding the gift towards Pasupukunkuma to Rajamma by her father, the testimony of defendant No. 2 as D.W.I has no worth as he was not even contemplated in the destiny of earth who his father defendant No. 1 himself was 3 or 4 years and at the time of marriage of his sister Rajamma. There is the evidence of D.W.2 an old lady aged 76 years and also the mother-in-law of defendant No. 1 and a close relative of plaintiff No. 1 (said to be the grand son of the grand mother's younger sister of the witness has testified that she attended the marriage of Rajamma and he (Chowdaramma) did not give any land to her at the time of the marriage as Pasupukunkuma nor handed over any land to her. She has also testified that defendant No. 1 did not make any arrangement to give the land to Rajamma and the suit lands were never given to her by her father or defendant No. 1. She has also denied possession of either Rajamma or plaintiffs over the suit lands. She was also made to speak about the absence of any practice or custom in the family to give lands to daughters towards Pasupukumkuma at the time of marriage. She appears to be the daughter of a person owning Ac. 2,000.00 of land and 4 Agraharams and did not get anything for herself towards Pasupukumkuma nor she gave any lands to her three daughters at the time of their marriages. She has given some other instances of the marriages of Kamma families wherein no such practice was found. It was contended by Mr. Meharchand Noori, the learned Advocate for the plaintiffs that this witness is dose to the defendants that the plaintiff although she is a relative of both of them and her testimony cannot be relied upon in proof of such a theory. If her testimony", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-31", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "both of them and her testimony cannot be relied upon in proof of such a theory. If her testimony were to be judged by itself, the interestedness would have reduced the worth of her evidence, but in the light of the plaintiffs' own evidence as above with lot of improbabilities, the testimony of D.W.2 is sufficient to believe to the contra. As a whole, the learned Sub Judge with all application of mind and assessment of evidence before him with cogent and convincing reasons, has rightly come to the conclusion that the evidence of the plaintiffs is lacking to prove the gift of the suit lands to Rajamma towards Pasupukumkuma.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-32", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "21. The trump card and the sheet anchor of the case of the plaintiffs appear to be Ex. A3 purporting to be a registered document dated 12-4-57 between Rajamma and defendant No. 1 regarding the event of gifting of suit lands towards Pasupukunkuma by her father and acknowledge by defendant No. 1 onl2-4-1957 along with his sons viz.,defendants2and3. Actually it is a certified copy of the original registered document titled as a gift deed and which was allowed as a secondary evidence on the ground that the original is lost, as per the testimony of plaintiff No. 1. It is in Telugu language and a translation of the same into English language has been got done through Mr. Sadasiva Reddy, a learned Advocate of this Court on 15-9-1994. It reads as follows:  \n \"Deed of conveyance for immovable property of the value of Rs. 20,000.00.  \n This deed of conveyance of immovable property is executed on the 12th April, 1957 A.D. in favour of Rajamma, wife of Yarlagadda Venkanna Chowdary, Kamma, cultivation etc., resident of Karamchedu village in Chirala Subdivision, Guntur District by (1) Daggubati Chowdaramma's son Lakshminarayana and his undivided minor sons, (2) Chowdaramma and (3) Chennakesava Rao represented by their father the said Lakshminarayana, residents of the same village.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-33", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "You happen to be the elder sister of Lakshminarayana who is one among us. Be it at the time of your marriage or thereafter, be it under the arrangement made by late Sri Chowdaramma who is your father as well as the father of Lakshminarayana amongst us or under the arrangement made by Lakshminarayana among us, out of love and affection for you we have already given to you the immovable property belonging to us which is shown in the schedule below towards your Pasupu Kumkuma. Since you wanted to have an appropriate deed, now this deed in executed in your favour. As the possession of the schedule property was given to you even before, you should pay the Government taxes for the said property and you and your successors should enjoy the property according to your will with absolute rights to gift and sell etc. This deed of conveyance is executed with our consent.\"", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-34", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "Both the sides have conceded the correctness of the translation. In fact Mr.Sadasiva Reddy, the Advocate did the Commission work by way of professional and expert service without any remuneration which deserves appreciation and compliments. The learned Advocate for the defendants made a very serious effort both in the trial court and in this court to demolish Ex.A-3 as a document not proved in accordance with law to remain as part of evidence, for appreciation or for acceptance. As a document intending to convey immovable property worth Rs. 20,000/- with the titled as a Gift deed, it required by law to be a registered instrument signed by or on behalf of the donor and attested by at least two witnesses by virtue of Section 123 of the T.P. Act. Whether or not the property passed under the document, it is covered by such a provision and therefore, the document is also covered by Section 68 of the Evidence Act whereby it could not be used as evidence until one attesting witness has been called for the purpose of proving its execution. But the proviso exempts such a proof by examining one of he attestors where unless its execution by the person by whom it purports to have been executed has specifically denied the execution. In this case in the written statement, defendant No. 1 specifically admitted the execution of the gift deed, When Ex.A-3 was presented for marking, it was not objected to on the ground that the attestor is not examined. In fact, its execution has been proved by defendants themselves by exmining one of the attestors D.W.8 who has testified in specific terms that defendant No. 1 executed the original of Ex.A-3 in favour of Rajamma in the year 1957. The view of the learned Sub Judge that there is no specific denial of the execution by defendants 4 and 5 appears to be correct. Although defendants 2 to 5 have filed two sets of written statements they have", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-35", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "to be correct. Although defendants 2 to 5 have filed two sets of written statements they have practically adopted the written statements of defendant No. 1. Defendant No. 2 did not specifically denied the execution of Ex.A-3 when he was in the witness box. Defendants 1 to 3 are parties to the document and therefore, the learned Sub Judge considered whether Ex.A-3 may be taken as proved as against defendants 4 and 5. The other defendants like defendants 4 and 5 have only denied the genuineness of Ex. A-3, but not the execution. Moreover the alienees are claiming the suit lands only through defendant No. 1. An attempt was made to read into the proviso to Section 68 of the Evidence Act that even where the execution is denied by the persons who are not parties to the document, the provision warrants the examination of one of the attesting witnesses to prove it. A careful reading into the provision cannot admit such an interpretation that even where a person who is not a party to the document denies the execution of the document required by law to be attested, Section 68 mandates the examination of one of the attesting witnesses for the purpose of proof. Such a view appears to be beyond the expressions in the proviso to Section 68 of the Evidence Act which in unambiguous terms clearly expect the examination of the attesting witnesses where the execution of the document is denied by the person by whom it purports to have been executed, (specifically denies it). It was also sought to be argued that execution of Ex. A-3 in the strict sense of the term, is not established except for a purpose. This Court is not able to make any such distinction in the nature of clear stand taken by the defendants in the written statements. Although Ex. A-3 is styled as a gift deed and has specifically mentioned in the plaint, it was not intended to be the true transaction under which the", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-36", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "and has specifically mentioned in the plaint, it was not intended to be the true transaction under which the gift was given to Rajamma, but it was executed by defendants 1 to 3 after a gap of 32 years either to evidence a past gift or to acknowledge such a gift as Rajamma insisted for such a document from defendant No. 1. Admittedly, no such gift was given, nor could be given by defendant No. 1 nor by defendants 2 and 3 who were not in existence at the relevant time to treat Ex.A3 as an acknowledgment of such a gift. In fact if we can properly understand the case of the plaintiffs, there was a gift towardas Pauspukumkuma by Chowdramma at the time of the marriage of Rajamma in the year 1925, but the document Ex.A-3 came into existence in the year 1957 as desired by her. Neither the pleadings, nor the evidence purported to contemplate any gift by defendants 1 to 3 in favour of Rajamma under Ex.A-3 as a first measure to transfer the suit lands in her name. Mr. Merchand Noori, the leraned Advocate for the plaintiffs appears to be totally not correct or justified in thinking that Ex.A-3 could be the gift deed upon which the plaintiffs could base the suit. It that time of argument is accepted, Ex.A-3 itself puts the plaintiffs out of Court. Plaintiff No. 1 himself did not testify that this wife got the gift under Ex.A-3. His clever way of answering questions in the cross-examination also did not make his basis of title on Ex.A-3. His following expressions reject the contention of the learned Advocate as above:", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-37", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "\"....... About a month or two prior to the execution of Ex.A-3, D1 came to me and my wife and represented that his wife and his brother-in-law are demanding him to effect a partition of the family property to safeguard the interests of his minor sons as he is indulging in Manures and Film business. My wife advised him to effect partition and also to make suitable arrangements for his unmarried daughters, In that connection my wife requested him to execute gift deed in respect of the land already presented to her earlier so that disputes may not arise in future with his sons etc. Accordingly D-l executed the original of Ex.A-3.\"", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-38", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "In conclusion it was stated that Ex. A3 is a collateral document to evidence the alleged gift to Rajamma by way of Pasupukumkuma and may be an admission by defendants 1 to 3 if that gift is true and at any rate can never be an acknowledgement of a gift, since it was never made by any of them. Patently, Ex. A-3 is a unilateral document. Rajamma is not a party to the document. P.W.I has admitted that neither he nor Rajamma was present at the time of original of Ex.A-3. It is not their case that atleast they were present in the village Karam(sic)du when the original of Ex.A-3 came into existence. Admittedly, defendants 2 and 3 were minors at the relevant time. Therefore, the whole question is whether defendant No. 1 himself would have taken so much of interest to execute such a document in favour of his sister who was at Madras at the relevant time along with his minor sons only to create a circumstance against him and his children in regard to the joint family properties and get it registered by himself. At no stretch of imagin(sic) Ex. A3 can be taken to bind defendants 2 and 3 who were the members of the joint family and the coparceners to make an admission against themselves in regard to a gift said to have come into existence 32 years prior to the date of the document. Even the contents of the document are not consistent with the case of the plaintiff much less the realities. It is stated as if there was an agreement made by late Chowdramma both at the time of marriage or thereafter to give the immovable propery to Rajamma towards Pasupukumkuma including the arrangement made by defendant No. 1 to give the same to Rajamma for that purpose out of love and affection and that had already been given to her as detailed in the schedule.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-39", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "purpose out of love and affection and that had already been given to her as detailed in the schedule. Mr, Harinath, the learned counsel for the defendants is totally right in saying that no such theory is found in the plaint. Defendant No. 1 was never in the picture at the time of the marriage or the alleged gift by late Chowdramma. Therefore, on facts themselves, Ex. A3 failed to support the case of the plaintiffs. There is not even a recital therein that the possession of the suit lands was delivered to Rajamma either at the time of her marriage or at any time subsequent thereto or that she was in possession of them by the time the document was executed on 12-4-57. There is only a vague expression that they were already given to her towards pasupukumkuma. There is a further expression that since the possession was already given to her even before she should pay the taxes for the lands to the Government. There is not even a whisper either in the plaint or in the testimony of plaintiff No. 1 and P.W2 that possession was handed over to Rajamma or that she had paid the tax to the suit lands at any time nor they have paid it on her behalf. The documentary evidence is also nil regarding the payment of such taxes. The testimony of plaintiff No. 1 does not mean that Rajamma herself evinced any interest to get a document from defendent No. 1 to support the gift and on the other hand, it is made to appeares if defendant No. 1 himself approached her pleading certain difficulties when she advised him to effect partition in the family by making suitable arrangements for the unmarried daughters and in that connection she requested him to execute gift deed in respect of the lands already presented to her, so that disputes my not arise in future with his sons. Such an expression is patently absent in the plaint wherein it is stated that Rajamma felt that it well be better", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-40", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "is patently absent in the plaint wherein it is stated that Rajamma felt that it well be better in the interest of all concerned to have a registered instrument evidencing gift and therefore, defendant No. 1 executed the gift deed. Furthermore, such versions are totally absent in Ex.A-3. The reason for bringing out such a document is mentioned therein, as Rajamma wanted to have an appropriate deed and therefore, he was executing the deed in her favour. Since Rajamma is not a party to the document, it is difficult to know the reasons for her to insist for such a document from defendant No. 1 particularly when she and her brothers were on cordial terms even till the date of Ex.A-3, and it is highly improbable mat suddenly she insisted for such a document or that defendant No. 1 oblighed for that voluntarily. None can visualise such a document to sprout suddenly without any back-ground that too, with very vague and bald expressions. Ex.A-3 is totally silent as to who was managing the suit lands as on the date of the document, who cultivated the lands and who collected the produce from them. A supporting or collateral document like Ex.A-3 if had come to avoid future problems, would not have failed either to make Rajamma a party or to express all the important circumstances as detailed above including dear reasons as to why such a document come into existence. The testimony of plaintiff No. 1 is also something different from what is mentioned in the plaint and Ex.A-3. He is emphatic that the suit lands were given to his wife who was aged 9 years at the time of her marriage with him. He is also emphatic that defendants 1 to 3 did not give the gift of the suit lands to his wife, but they only ratified the gift given by their father. That is again silent in the plaint and Ex.A-3. To the question whether his father-in-law promised to give the suit", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-41", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "plaint and Ex.A-3. To the question whether his father-in-law promised to give the suit properties to his wife he came up with an answer that the question did not arise as he actually gifted the suit properties and actually he was telling his mother and others that he would give Ac.60.00 to Ac.70.00 to his daughter as she is the only daughter and as he happened to be the nephew of his father. He even goes to the extent of saying that his father-in-law promised to give 1/3rd of his estate which may come to about Ac.70.00. to the question whether the recitals in Ex.A-3 are correct or not, plaintiff No. 1 tried to avoid it by saying that the total effect of the document is true, but he did not see the document. Therefore, it is doubtful whether the writings in Ex.A-3 represent the truth or the realities or whether it is worth the scroll or the paper upon which some thing is written. D.W.3 the attestor of Ex.A-3 is emphatic that the suit lands in Ex.A-3 regarding the gift etc., are not true and no land was delivered to Rajamma at any time and that she was never in possession and enjoyment of the suit land. He appears to be a person belonging to Daggubati family of defendants and also a relative of the plaintiffs and he was also cultivating a portion of the land of the defendants called Beeti chenu as a tenant and at the time of deposition, he was fairly an aged man of 57 years and there is no reason to reject his testimony. At any rate, that is sufficient to discredit the contents of Ex.A-3 and the testimony of Plaintiff No. 1.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-42", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "22. A serious question is raised by Mr. Merchand Noori, the learned Advocate for the plaintiffs that defendant No. 1 having admitted the execution of Ex.A3, the burden of proving the contrary to the contents of the document should be heavily placed on him and other defendants for two reasons. Firstly, according to him defendants 1 to 3 who are parties to the document are hit by the rules of estoppel and secondly due to the prohibition under Sections 91 and | 92 of the Evidence Act. The first contention appears to have some force in so far as defendant No. 1 is concerned, but not defendants 2 and 3 who were minors at the time of execution of the document and the other defendants who are not parties to the document. Such an estoppel operates against defendant No. 1 by virtue of Sections 17 and 31 of the Indian Evidence Act. That may amount to an estoppel by admission in a document. But Section 31 contemplates that such admissions are not conclusive proof of the matters admitted, but they may operate as estoppels under the provision and the law appears to be settled that such admission operating as estoppels are capable of explantion. That is what defendants 1 to 3 have done in this case. They have not only tried to explain the circumstances under which Ex. A3 came to be executed but also that it was not intended to be acted upon and that it was not actually acted upon.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-43", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "23. Mr. Meharchand Noori, the learned Advocate has a serious grievance that the learned Sub Judge threw the entire burden on the plaintiffs in regard to Ex. A-3 when the execution of the same is admitted and when the burden of proving to the contrary to the contents of the document were heavily resting on the shoulders of the defendants. That is how, according to him, the learned Sub-Judge has drawn conclusions against the plaintiffs with illegal process deserving to be not worthy of acceptance. Mr. Harinath, the learned Advocate for the defendants contends to the contrary that in the nature of the defence taken by the defendants read with the conduct of plaintiff No. 1 in regard to Ex.A-3, the learned Sub Judge was totally justified in adopting such a process. The law in this regard appears to be not explored either by the trial Court or by the learned Advocates. It is true that defendants 1 to 3 being parties to Ex.A-3 are hit by the doctrine of estoppel and as already pointed out, their explanation has to be satisfactorily demonstrated and till then by virtue of Sections 101 to 103 and 106 of the Evidence Act, the burden should be heavily on the defendants to establish to the contrary. Since the terms of the contract between the parties have been reduced into writing as per Ex.A-3 which is also a registered document, nomally speaking, defendants 1 to 3 are debarred from producing any oral evidence contrary to the contents of Ex.A-3 in view of Section 92 of the Evidence Act. But if they are able to come within any of the provisos 1 to 6 of Section 92, then, they can be relieved of such a prohibition. Since it is pleaded that Ex.A-3 came into existence under certain circumstances at the instance of plaintiff No. 1 himself and with his advice to avoid certain anticipated land legislation regarding the ceiling of the holdings of agricultural", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-44", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "himself and with his advice to avoid certain anticipated land legislation regarding the ceiling of the holdings of agricultural lands and that it was not intended to be acted upon nor it was acted upon etc., the case clearly falls within proviso No. 1 to Section 92 of the Evidence Act wherein if such facts are proved they would invalidate Ex.A-3. Incidentally in the nature of the explanation given by defendants 1 to 3 in the written statements and the evidence through the testimony of D .W .2 and others and from the totality of the circumstances, the dominating position of plaintiff No. 1 in the family throughout and his undue influence to bring out certain documents including Ex.A3 during the relevant time and the good faith of the transactions under Ex. A3 has been question. The case thus attract Section 111 of the Evidence Act inasmuch as Section 16(3) of the Indian Contract Act. Section 111 of the Evidence Act may be usefully extracted and read as hereunder:", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-45", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "\"Where there is a question as to the good faith of the a transaction between parties one of whom stands to the other in a position of active confidence, the burden of proving the good faith of the transaction is on the party who is in a position of active confidence\"  \n The implication of the evidence shows that plaintiff No. 1 was in a position of active confidence in relation to the\" family of Chowdaramma including defendants 1 to 3 throughout. Specifically the dominant role played by plaintiff No. 1 in bringing out Ex. A-3 is alleged. Although, the name if Rajamma is made use of in Ex. A-3, ultimately it is sought to be used or misused for the benefit of plaintiff No. 1 thereby showing that allegedly he misused his position of active confidence with defendants 1 to 3. In other words, there is a serious question as to good faith of the transaction under Ex. A-3. Thus by virtue of Section 111 of the Evidence Act. The burden of proving good faith of the transaction would lie on the plaintiffs regarding Ex. A-3. since plaintiff No. 1 is said to be a person in the position of active confidence. It appears that:", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-46", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "\"the principle is of universal application and must not be regarded as a technical rule of evidence and it applies to all the cases where influence is acquired and abused and to all other cases where persons stand in confidential relation and where predominating influence exists and to every case where confidence is reposed and betrayed.\" (Pages 995 and 996 of Sarkar on Evidence 13th Edn.) The principle on which the Court act in relieving against transactions on the ground of inequality of footing between the parties is not confined to cases where a fiduciary relation can be shown to exist, but extends to all the varieties of relations in which dominions may be exercised by one man over another. (Page 996 of Sarkar on Evidence supra). Section 16 of the Contract Act provides for the cases in which one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage and in Section 16(2)(a) of the Contract Act \"standing in a fiduciary relation to the other\" is given as an example of a person who is in a position to dominate the will of another. Section 16(3) of the Contract Act supplements Section 111 of the Evidence Act and they should be read together (Page 996 of Sarkar on Evidence supra). The law has gone to the extent of expressing that the Court will regard the matter with jealous suspicion, and will either set aside the instrument as conclusively void will throw upon the person benefitted the burden of establishing beyond all reasonable doubt the perfect fairness and honesty of the entire transaction (Taylor's Evidence Act Section 151, quoted at Page 996,997 of the Evidence Act supra). While dealing with the implications of Section 16(2) and (3) of the Contract Act, law is settled that \"by Sub-section (2) of Section 16, a presumption of undue influence shall be deemed to arise if the conditions set out therein are", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-47", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "16, a presumption of undue influence shall be deemed to arise if the conditions set out therein are fulfilled. Sub-section (3) lays down the conditions for raising a rebuttable presumption that a transaction is procured by the exercise of undue influence. The reason for the rule in Sub-section (3) is that a person who has obtained an advantage over another by dominating his will, may also remain in a position to suppress the requisite evidence in support of the plea of undue in fluence. (ladli Pd. v. Kamal Distillery Co.,-- of Sarkar on Evidence supra). Therefore, even assuming that the initial burden of proving contrary to Ex.A-3 rested on defendants 1 to 3, it must be taken to have been shifted to the plaintiffs to establish that it was a transaction which was not tainted by bad faith, undue influence or the intention to procure an advantage over defendants 1 to 3 misusing the dominating position it held by plaintiff No. 1 till and at the relevant time. In that context the burden of proof in regard to Ex.A-3 has been rightly placed on the plaintiffs to establish the good faith in the transaction. However, Mr. Meharchand Noori the learned Advocate for the plaintiffs argued in the alternative that all the legal implications are subject to the proof of the ingredients and the stipulations in the provisions by sufficient evidence and that stands to reason.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-48", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "24. The learned Sub Judge has dealt with the evidence to come to the conclusion that althrough plaintiff No. 1 was holding the position of the active confidence in regard to the family of Chowdaramma and was dominating the will of defendants 1 to 3. The evidence and circumstances appear to be ample in this regard. As already pointed out when plaintiff No. 1 married Rajamma, defendant No. 1 was an infant aged three or four years, in the year 1925. When Chowdaramma died in the year 1938 defendant No. 1 was hardly aged 15 or 16 years. By then plaintiff No. 1 had already attained the age and the status in the family. Admittedly, he is a nephew of Chowdramma. Except defendant No. 1, there was no other adult male member in the family of Chowdaramma when he died. Plaintiff No. 1 who married the only daughter of Chowdaramma at that time was the only adult male member close to the family of Chowdaramma. It is not suggested to D.W.I or any other witness that the family could fall back on the assistance and the advice of any other person close to the family except plaintiff No. 1. On the other hand, the positive evidence in the case is that plaintiff No. 1 was prevailed upon or took lot of interest in the affairs of the family including the management and alienation of the family members, number of times. In Exs. P-1 to P-3 the registered sale deeds executed by the wife of Chowdramma and the mother of defendant No. 1 (obviously the mother-in-law of plaintiff No. 1), plaintiff No. 1 has figured as an indentifying witness. Plaintiff No. 1 is the scribe of the registered sale deed Ex.P-4 executed by the mother of fedendant No. 1 as", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-49", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "the registered sale deed Ex.P-4 executed by the mother of fedendant No. 1 as a guardian of minor defendant No. 1. He is also the scribe of the agreement of sale dated 10-12-1959 executed in favour of defendant No. 1. He has also either attested, indentified or scribed several documents concerning the family of Chowdaramma for a considerably long span of time. He has also either arranged for the cultivation of the family lands by himself or through his brother P.W. 2. Exs. B-2, B-7, B-8 and B-26 are such instances. Exs.B-7 is in his hand-writing. He has also shown concern in the lease deeds Exs.B-26 to B-30 under which lands of the family of Chowdaramma were leased out to several tenants. Plaintiff No. 1 could not escape the consequences of these . documents on him to demonstrate that he was a man of active confidence in the family of Chowdaramma for a very long itme and atleast till the date of Ex.A-3. It is also in the evidence that he did joint business withdefendant No. 1 from 1948 to 1954 and he inducted him into the partnership business in Shambu Films in the year 1956. Hesoldmotor car of defendant No. 1 under Ex.B-35 dated 16-8-57. He appears to be an expert in the sale and purchase of cars as his admission shows that he has sold hundreds of cars including the one under Ex. B-35. Admittedly, the relationship between plaintiff No. 1, Rajamma and defendant No. 1 was quite cordial during the year 1957 and in particular at the ,time of Ex.A-3. Therefore, even if we accept the evidence of plaintiff No. 1 that he either arranged", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-50", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "Therefore, even if we accept the evidence of plaintiff No. 1 that he either arranged for the cultivation of the suit lands through P.W2 or others it could be for no other reason except he being a man who stood to defendant No. 1 and others in a position of active confidence. Therefore, the burden of poving good faith of the transaction under Ex.A-3 was on him. The evidence and the circumstances of the case have totally shown that plaintiff No. 1 has failed to discharge such a burden to any extent. Affluent person by himself coming into the family of Chowdaramma as son-in-law and being a dose nephew of Chowdaramma who had been prevailed upon by the widow of Chowdramma and a minor brother-in-law defendant No. 1 to assist, advise and join in certain transactions and who diverted defendant No. 1 from the family occupation of agriculture to a film business in Madras, tried to take advantage of Ex.A-3 which was brought about in the year 1957 in the name of his wife Rajamma. The circumstances are very strong to hold that neither Rajamma nor defendants 1 to 3 were interested in Ex.A-3 and if at all any body who could have taken interest or lead in such a transaction, it must be plaintiff No. 1 and noneelse. As he did in the case of so many documents stated above, the probability that he was behind Ex.A-3 for all purpose cannot be ruled out. That it came out at the instance of Rajamma as alleged in the plaint and as stated by him and as is mentioned in Ex. A3, appears to be a total improbability. When nothing happened in regard to the suit lands till Rajamma died and till the parties were on cordial terms, if plaintiff No. 1 thought of the benefit under Ex.A-3 claiming to be legal heir of Rajamma, could never be a good faith if not", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-51", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "claiming to be legal heir of Rajamma, could never be a good faith if not an express bad faith. This appears to be a dear case of betrayal of such an active confidence reposed to in him by defendant No. 1 and the members of his family by practising bad faith and in effect exerting undue influence.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-52", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "25. Then the question is whether Ex.A3 came out under the crcumstances set up by defendants 1 to 5 as a nominal document due to the anticipated land ceiling legislation and that it was not acted upon. If that is established, Ex.A3 could be styled either as bename or as nominal one not intended to be acted upon. The expressions 'benami/nominal' did not appear to have acquired a clear meaning for a long time or till some years back. The word 'benami' is an Indian word popularly called as benami system which is a subject of Hindu Law and commonly knowrras 'furzee' among Mohammedans and in fact it is a persian compound word, made up of 'be' which means 'without' and 'name' which means 'name'. It means literally 'without a name' and denotes a transaction effected by a person without using his own name but in the name of another. But many transactions originate in fraud and many of them which did not so originate are made use of for a fraudulent purpose more especially for the purpose of keeping out creditors who are told when they come to execute a decree, that the property belongs to the fictitious owner, and cannot be seized, (page No. 685 of Mulla's Hindu Law 15th Edn.). But that is a contextual expression used in law as above, but it appears to have acquired a meaning synonym to nominal' as benami transactions are synonymly used as nominal transactions. In Sree Meenaksi Mills Ltd., Madurai v. Commissioner of lncomeTax, Madras, the Supreme Court has approved the equation in the meaning of the true expressions as:", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-53", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "\"The 'benami' is used to denote two classes of transactions which differ from each other in their legal character and incidents. In one sense, it signifies a transaction which is real. But the word benami' is also occasionally used perhaps not quite accurately to refer to the same transaction. The fundamental difference between these two classes of transaction is that whereas in the former there is an operative transfer resulting in the vesting of title in the transferee in the later there is none such the transferor continuing to retain the title notwithstanding the execution of the transfer deed. It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the personnamed in the deed is the real transferee or to enquire into the question as to who paid the consideration for the transfer. But in the later class of cases, when the question is whether the transfer is genuine or sham, the point for decision would be not who paid the consideration but whether any consideration was paid.\"", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-54", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "Therefore, in Ramarao v. State of Bombay, , it was held that the word 'nominal' shows that there was nothing of substance about the offer and endorsements and fomalities by which an attempt was made to give some semblance of regularity to what was done cannot cloak in legal guise that which was nothing better than a device to vest the appellant's property in Revenue Officer holding on behalf of Government\". Both the dictionary meaning and the law dictionary meaning appear to ha vein substance, conceived the same idea in regard to such transactions. To read into the dictionary meaning, 'nominal' means, existing in the name only, nor real or actual and virtually nothing, (right column page 804 of Concise Oxford Dictionary, 1990 Edn.). Same meaning was accepted in Black's Law Dictionary 4th Edn of 1951 at page 1199, to mean, \"existing in name only, not real or substantial, nor real or actual, merely named stating or given with reference to actual conditions\". Such a theory in this case appears to enforce itself in all respects. There is no proof of gift towards Pasupukunkuma in fact. Neither Rajamma nor plaintiff No. 1 interested in her bestowed any attention or interest over the suit lands by way of such a gift. Rajamma was never in the picture either before or at the time when Ex. A-3 came into existence. If at all anybody could have taken interestin the document, it was plaintiff No. 1 who was actively in confidence assisting the family of defendant No. 1 or Chowdaramma since beginning to bring about so many documents. The contents of Ex.A3 failed to corroborate the conduct of the parties throughout. The so-called gift was never completed in law or fact as there is no proof of acceptance of gift by the donee or the delivery of possession to her either before or at the time of Ex.A-3. No revenue record", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-55", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "delivery of possession to her either before or at the time of Ex.A-3. No revenue record bear support to such a document particularly in regard to agricultural lands. The law appears to have laid down some tests to determine whether a transaction is benami or nominal. Although the initial burden to prove such a nature of the transaction is on the person who sets it up, the court lias to see all the surrounding circumstances. Broadly stated the testing circumstances are, the possession of the parties, their relationship the motive which could govern their action, custody of the title deeds and subsequent conduct of the parties. (Pages 3438 and 3440 of Fields Law of Evidence Vol. 1 IV 1987 11th Edn.). The law in this regard appears to have been succinctly laid down in P. Krishna Bhatta v. M. Ganapathi Bhatta, . So, such tests are to be applied atleast from the date of Ex. A3. The position of the parties and the relationship between them are well established to satisfy the initial tests that it was possible for hem and in particular plaintiff No. 1 to bring about such a document which can be called as benami or nominal. The motive is said to be the anticipated Land Ceiling Legislation popularly called as Kala Venkata Rao's Bill. Mr. Mehar Chand the learned Advocate for the defendants (sic. plaintiffs) has pointed out that originally 1957 Ordinance Nos was issued in this regard which was replaced by Act 10/1957 and further Act 10/1961. He has contended that the transaction in question came into existence not connecting the date of such Ordinance of the Act. Mr. Harinath, the learned Advocate for the defendants has contended that such documents need not coincide with such Legislation but the mind of land owners both before and after the law should be judged to examine whether they would bring about such transactions to avoid the law.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-56", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "after the law should be judged to examine whether they would bring about such transactions to avoid the law. Admittedly such Legislation has fixed some ceiling limit of the holdings of the agricultural lands with certain legal consequences regarding the excess holdings. Mr. Harinath, the learned Advocate for the defendants has rightly pointed out that before any such law is contemplated both through political and other mehtods, the affected persons would be made to know about it and would obviously think of evading law by both leal and illegal methods. It may stretch for sufficient time both before and after the Legislation. Ex.A-3 is dated 12-4-1957. Patently it has come into existence within the close proximity of such a land Legislation, the learned Sub Judge has rightly pointed out that even the plaintiffs 1 and 2 who are brothers, managed to bring about a partition between them at the relevant time to get over from the effect of such a Legislation. Number of documents have come into existence in the family of defendants 1 to 5 themselves within the dose proximity of Ex.A-3. Ex.A-6 a registered partition deed came into being between defendant No. 1, his sons and Exs.A-7 to A-9 the registered gift deeds dated 29-7-57,19-7-57 and 19-7-57 respectively between defendant Nos. 1, 20,23 and 24 came into existence in such a close proximity and succession and it is the case of defendants 1 to 5 that those documents also were brought about at the instance of plaintiff No. 1 to a void the land Legislation. The manner in which plaintiff No. 1 has deposed and the admissions made by him shows that he is a man of experience, a man of tact and a man of ingenuitie. When he lent his hand in support of so many transactions for the family of defendants 1 to 5 throughout, his lending support", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-57", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "support of so many transactions for the family of defendants 1 to 5 throughout, his lending support to avoid the land legislation by means of such transactions cannot be ruled out. Although such circumstances cannot be established with certainity with positive evidence, the totality of the circumstances themselves may be sufficient to hold in the affirmative. The time may not be too long or the law may not be helpless to ignore such influences of Legislations to evade them by bringing out such transactions to go into the realm of judicial notice of the courts under Section 57 of the Evidence Act which require no proof by virtue of Section 56 of the Evidence Act. Judging the conduct of plaintiff No. 1 and others under such transactions, this court would be justified in judicially noticing that such transactions including Ex.A-3 must have been brought about to evade the expected land ceiling Legislation at the relevant time. Although such a circumstance may not be the only material to call a document nominal one, that would be a very strong corroborative circumstance to be judged in the light of other circumstances also.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-58", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "26. The negative motive to avoid the contemplated land Legislation by means of Ex.A-3 if be a circumstance, a positive motive is pleaded by plaintiff No. 1 as to why Ex.A-3 came into existence. That was Rajamma's desire to have a document at that juncture although the gift was already given to him in the year 1925 itself to avoid future difficulties. The reason for such a brewing difficulty is never spelt out in the plaint. What is mentioned therein is that when the management of the suit lands was with defendant No. 1 who used to send income to Rajamma, she felt that it would be better to all the concerned, to have a registered instrument evidencing the gift. Why it was better in the interest of all concerned finds no elaboration. Although plaintiff No. 1, Rajamma, defendant No. 1 and others were in cordial terms at that time, how the interests of such persons was in stake, if no gift deed was brought out, is not explained. It is also in the evidence that plaintiff No. 1 came out with a theory that about a month or two prior to the execution of Ex.A-3, defendant No. 1 met him and his wife Rajamma, and represented that his wife and his brother-in-law are demanding him to effect partition of the family properties to safeguard the interests of the minor sons, as he is indulging in some manure and film business, his wife advised him to effect partition and to make arrangement for his unmarried daughters and in that connection Rajamma advised him to execute a gift deed so that disputes may not arise in future and according to them, the original of Ex.A-3 was executed. This appears to be an afterthought. Almost contemporaneously with Ex.A-3, Ex.A-6 the registered partition deed dated 27-7-1957 has also came into existence. The contents of these documents do not indicate the motive", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-59", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "has also came into existence. The contents of these documents do not indicate the motive behind the persons to bring about such documents. These documents were followed by other gift deeds - Exs.A-6 to A-9 between defendant No. 1 and defendants 22 and 23. Their contents also do not support such a version. The oral evidence in this case also do not confirm or corroborate the motive to bring about Exj.A-3 after a long time after the gift. The witnesses and defendant No. 1 although close to him are not made to admit such a theory in the cross-examination. Therefore, the motive was a test to bring about Ex.A-3, is tending more towards the probability of defendants case than that of the plaintiffs. The possession of the suit lands never went to either Rajamma or the plaintiffs even after Ex.A-3, despite the recital therein that the posession of the property was given to Rajamma. Not only such a recital is not supported by satisfactory evidence but also the positive evidence and the conduct of the parties reject such a theory. Even after Ex. A3, no revenue record mentions the name of Rajamma in regard to the suit lands till she died. Even after her death no such entry is attempted to be made in the revenue records by the plaintiffs. In support of the recitals in Ex. A-3 that Rajamma had to pay government taxes for the gifted properties, there is no evidence of payment of the same either by Rajamma or after her death by the plaintiffs till the suit was filed. On the other hand, admittedly, defendant No. 1 and the other defendants who purchased some portions of the suit lands are paying the land revenue. It is in the evidence consistently that defendants 6 to 16 have been in possession of the portions of the suit lands purchased by them under the registered sale deeds Exs.A-10 to A-13 and A-15. Admittedly,", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-60", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "sale deeds Exs.A-10 to A-13 and A-15. Admittedly, they have been in possession of such lands up till the date of the suit and thereafter. Atleast from the tested testimony of defendants viz., D.Ws. 11,13 to 16 and 17, the plaintiffs were not successsful in showing that Rajamma had come into possession at any time or she was dispossessed or that plaintiffs were in possession at any time of that they were dispossessed by defendant No. 1 or other defendants. Therefore, the evidence that defendant No. 1 was in possession of the suit lands throughout even after Ex. A-3 and he transferred the possession to the said defendants to continue till the date of the suit, supports one of the test of the theory that Ex. A-3 was not acted upon. Here only, we can conclude the circumstances of possession, that the theory of collection of the produce by Rajamma or the plaintiffs is totally wanting in proof.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-61", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "27. Ex.A3 is a certified copy of the original deed. The original is not produced. Nothing is mentioned in the plaint as to what happened to the original deed. Even the written statement of defendant No. 1 is silent in this regard. However, it apperas to have been filed along with the plaint. Since the document was executed in favour of Rajamma, she being the beneficiary was expected to have it with her. In veiw of Ex.A-3 being an unilateral document would have thrown some light as to whether the document was given to Rajamma or it remained with defendant No. 1 In the deposition also plaintiff No. 1 did not say whether Rajamma came into possession of the original of Ex.A-3 at the time of the document or subsequently. But he only stated that he lost the original gift deed due to misplacement and therefore, he was filing Ex.A-3. It is only in the cross-examination in answer to the question whether the recital in Ex.A-3 gift deed are correct, he came out with an answer that the total effect of the document is true, he did not see the document, his wife kept it in the box and the contents of the document are correct. As rightly pointed out by the learned Sub Judge, both the sides have come with a version that the original of Ex.A-3 is lost. Defendant No. 1 is dead and defendant No. 2 who examined himself as D.W. 1 must have been a teenager as on the date of Ex.A-3 and could not have known much about the possession of the same. However, he being a party to the document was expected to say something about the custody of the document and has categorically stated that the original of Ex.A-3 has not been given to him or his wife and it was with his father. If we go by the recitals of Ex.A-3, with the conduct of plaintiff No.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-62", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "If we go by the recitals of Ex.A-3, with the conduct of plaintiff No. 1 and other circumstances, it is possible to hold that the original of Ex.A-3 never remained with Rajamma or plaintiffs and it must have remained with defendant No. 1. Defendant No. 2 has testified that he saw the document in the year 1965-66 when he attended income-tax matters of his father at Bapatla and that document and other documents were kept in a bundle and they are all missing. Under the circumstances, the version of defendant No. 2 deserves greater weight than that of the plaintiffs. Plaintiff No. 1 being an experienced and shrewed person in active confidence with the family of defendant No. 1 and who must have been in the back-ground of Ex. A-3 for the reasons stated above, would not have failed to take custody of the original document at any time. Even the exchange of notices appears to have not brought out the theory that Ex.A-3 was with Rajamma and it was lost. Therefore, except marking of Ex.A-3 as secondary evidence on the ground that the original is lost, there is no proof that the custody of the original documents was with the beneficiary Rajamma or with the plaintiffs till the suit was filed. As a whole, the case of defendants has satisfied me test of want of custody of the documents (original of A-3) with Rajamma and plaintiffs to term it as nominal.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-63", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "28. Several circumstances are depended upon by both the sides in regard to the question whether Ex. A3 was acted upon or not. The learned Sub Judge has referred to them in detail and has accepted the circumstances which are in favour or the defendants to hold that Ex. A3 was nominal and not acted upon. Such circumstances are based on evidence in the case. The circumstances in favour of the defendants are:  \n \"(1) The relationship between Rajamma and her family with defendant No. 1 was cordial at the time of Ex.A3 not to raise any suspicion in her mind insisting for a registered gift deed from defendant No. 1 regarding the suit lands.  \n (2) Rajamma would not have left the suit properties with defendant No. 1 throughout for such a long time if he had any suspicion in her brother either regarding her rights or regarding his conduct in acting adverse to her interests and there was no reason for her to insist for a document.  \n (3) Plaintiff No. 1 an experienced man in so many fields and also well versed in legal implications would not have failed to arrange for payment of cist by Rajamma regarding the suit lands or would not have allowed, lands to continue with defendant No. 1 and other defendants under the sale deeds even after Ex.A-3.  \n (4) When his own brother P.W. 2 was in the village managing other lands including his, there was no reason for Rajamma or plaintiffs to allow defendant No. 1 to manage the suit lands on behalf of Rajamma or the plaintiffs.  \n (5) The parties are very closely related to each other whereby the matters went on with more of confidence than agitating for the rights till they fell out due to certain litigations.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-64", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "(6) Many documents consecutively followed Ex.A3 (like Exs.A-6 to A-9) between plaintiff No. 1 and his brother P.W2 although they were on good terms to support the probability that mere were serious attempts to evade the Land Ceiling Legislation which was expected to come out soon then.  \n (7) Rajamma and plaintiffs never raised even their little finger in any manner to collect the produce from the suit lands at any time.  \n (8) Plaintiff No. 1 was more interested in his business and other avocations at Madras after 1953 than thingking of suit lands either to have been belonging to his wife Rajamma or to succeed along with plaintiff No. 2 after Rajamma died.  \n (9) Even defendant No. 1 remained in Madras from 1961 to 1969 in connection with his business and even then the suit lands were not managed by plaintiff No. 1 or his brother P.W2 although he was attending to other lands of plaintiff No. 1 in the village.  \n (10) Suit items 1 and 2 were dry lands and were converted it no wet lands in about the year 1969. Suit items 1, 2 and 3 were included in the Lift Irrigation society of which one Daggubati Raghavaiah the brother-in-law of P.W.2 was the President till 1-9-1976. The lands were converted into wet lands under Dhanyalakshmi Lift Irrigation Scheme and Rajamma was not a member of Dhanyalakshmi Lift Irrigation Scheme at the relevant time, nor she took any interest in getting the lands converted into wet lands.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-65", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "(11) On the other hand, Ex. B- 21 shows that defendant No. 1 was a member of the said Society and paid Rs. 2,000/- (under receipt Ex.B-21) and the lands were converted into wet lands.  \n (12) The custody of the original of Ex.A-3 never went to Rajamma or plaintiffs, but remained with defendant No. 1.  \n (13) All the taxes and land revenue are paid by defendant No. 1 to the suit lands throughout and plaintiffs and Rajamma have never paid them.  \n (14) The relationship between plaintiffs and defendants No. 1 and defendant No. 2 became strained after litigation in Madras courts between plaintiff No. 1 and defendant No. 1 and others, and another suit between defendant No. 2 and plaintiff No. 1 and particularly after the suit of defendant No. 2 filed in August, 1971, the present suit having been filed on 17-9-1971 and after exchange of notices the present suit having been filed as a counter-blast.   \n The circumstances in favour of the plaintiffs are:  \n (1) Exs.A-7 to A-9 the gift deeds in the name of defendants 20, 22 and 23 came out within a short time after Ex. A3 towards Pasupukumkuma as in the case of Ex.A-3 which are said to have been acted upon.  \n (2) Exs. A-6 the partition deed between defendant No. 1 and his sons dated 27-7-1957 which came into existence within a short time after Ex.A-3 patently omitted to include suit lands for the purpose of partition although they are said to be the joint family properties.  \n (3) The cordial relationship between the parties at the relevant time.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-66", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "(3) The cordial relationship between the parties at the relevant time.  \n (4) Custody of original of Ex.A-3 not proved to be with defendant No. 1 (5) Defendant No. 1 in regard to loss after his business in Madras and in film-business incurring loss of Rs. 6,00,000/- to Rs. 7,00,000/- whereby one Vijaya Distributors obtained two decrees against him in the year 1967 and 1969 thereby somehow he was to cling on to the suit lands to overcome the financial crisis.  \n (6) The income-tax return filed by plaintiff No. 1 for the year 1968-69 showing the income of Rajamma from her lands, to mean that, she got the lands under Ex.A3 (Exs.A4, A5, A16 and A17) (The learned Sub Judge has found these circumstances not proved by the plaintiffs and this court also feels that in the first place, such income of Rajamma may not be connected to the suit lands in the absence of evidence as above and particularly in view of plaintiff No. 1 having acquired properties in Madras and perhaps Rajamma might have had some income from some lands acquired in Madras. The learned Sub Judge has dealt with the matter in a detailed and perfect manner in this regard which cannot be lightly rejected in the absence of any other material or circumstances.)", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-67", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "29. Now considering the circumstances stated above both for and against the parties, the ample circumstances in favour of the defendants over-weigh the little or few circumstances in favour of the plaintiffs in regard to the question whether Ex. A3 was acted upon or not and this Court fully endorses the finding and the view of the learned Sub Judge that Ex.A3 was not acted upon. The totality of the circumstances thus bring home the nominal nature of Ex.A3 being not acted upon and having brought into being for a purpose other than what is mentioned therein and what the plaintiffs are canvassing. This Court appreciates the unexceptionable manner in which this matter was dealt with by the learned Sub Judge. The learned Sub Judge has rightly held that there is no evidence to accept the theory of plaintiff No. 1 and his wife Rajamma acquiescing their rights in the suit lands if any by representing to the alienee defendants that Ex.A3 is sham, nominal and that they have no title and therefore, they are estopped from questioning the alienations. In this regard, except the testimony of some of the defendants. There is no supporting material. No such recital is found in any of the sale deeds in favour. Similarly the finding of the learned Sub Judge regarding defendants 6 to 15 and 17 to 19 being the bona fide purchasers of the suit lands for value without notice of the alleged defect in the title of defendant No. 1,deserves to be confirmed. Strictly speaking when the plaintiffs have failed to prove the title to the suit lands and when it was very much with defendant No. 1 as the time of the sale transaction, such a contention covered by issue No. 5 may not arise. Therefore, the alienations in their favour would be valid and binding on defendant No. 1 and the plaintiffs under the circumstances. Thus the finding of the learned Sub Judge on Issues 1 to 6 are to be", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-68", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "circumstances. Thus the finding of the learned Sub Judge on Issues 1 to 6 are to be justifiably supported and confirmed.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-69", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "30. Mr. Harinath, the learned Advocate for the defendants appears to be not right in contending that defendants have perfected their title to the suit lands by adverse possession. Strictly speaking this can never be a case of adverse possession to perfect the title on the part of the defendants. On the other hand, this is a square case wherein the parties have set up the rival titled to the suit lands. Nowhere the defendants have pleaded that the possession of the suit lands was lost either by Chowdaramma or by defendant No. 1 or by any other person. Similarly although the plaintiffs came out with a plea of possession of the suit lands with Rajamma under the gift since inception and although the suit is filed for possession of the lands, there is not even a whisper that either Rajamma or plaintiffs were dispossessed from them, any time by any one. That is how, the suit for possession is based on title. Whereas the defendants while denying title to the plaintiffs have categorically set up continuance of title with them. As rightly contended in the written statement, this is a case of loss of title by prescription. The legal and lucid distinction between the doctrines of 'adverse possession' and 'prescription' appears to be well established. 'Adverse possession' means :  \n \"The enjoyment of land, or such estate as lies in grant, under such circumstances as indicate that such enjoyment has been commenced and continued under an assertion or colour of right on the part of the possessor......  \n The statute of limitation is the source of title by adverse possession....  \n The adverse possession must be actual continued, visible, notorious, distinct and hostile.\" \n (Pages 152 and 153 of Bouvier's Law Dictionary Vol.1,3rd Revision 1914) Adverse possession' is:", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-70", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "\"that form of possession or occupancy of land which is inconsistent with the title of the rightful owner and tends to extinguish that persons's title.  \n Possession is not held to be adverse if it can be referred to a lawful title. The person setting up adverse possession may have been hodling under the rightful owner's title viz., trustees, guardians, bailiffs or agents. Such persons cannot set up adverse possession.\"  \n (Pages 50 ad 51 of T.M. Mukherjee's Law Lexicon Vol. 1, 1971 Edn.) A prescriptive title rests upon a different principle from that of a title arising under the statute of limitations. Prescription operates evidence of a grantande confers a positive title (Page 152 of Bouvier's Law Dictionary supra). The science of law as jurisprudence has a definite meaning and expression in regard to the two doctrines. To understand the same, we must read into:   \n \"Prescription may be defined as the effect of lapse of time in creating and destroying rights; it is the operation of time as vestitive fact. It is of two kinds viz., (1) positive or acquisitive prescription and (2) negatie or extinctive prescription. The former is the creation of a right, the latter is the destruction of one, by the lapse of time. An example of the former is the acquisition of a right of way by the de facto use of it for twenty years.....", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-71", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "Lapse of time therefore, has two opposite effects. In positive prescription it is a title of right, but in negative presciption it is a divestitive fact. Whether it shall operate in the one way or in the other depends on whether it is or is not accompanied by possession. Positive prescription is the investitive operation of lapse of time with possession, while negative prescription is the divestitive operation of lapse of time without posssession. Long possession creates rights, and long want of possession destroys them. If a person possesses an easement for twenty years without owning it, he begins at the end of that period to own as well as to posssesss it. Conversely, if a person owns land for twelve years without possessing it. he ceases on the termination of that period either to own or to possess it. In both forms of prescription, fact and right, possession and ownership, tend to coincidence. Ex facto oritur jus. If the root of fact is destroyed, the right growing out of it withers and dies in course of time. If the fact is resent, the right will in the fullness of time proceed from it.\"", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-72", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "(Pages 435 of Salmond on Jurisprudence, 12th Edn. by P.J.Fitzgerald) Therefore, sometimes it is said that adverse possession is the converse of right by prescription, and vice versa is also stated to be true. In this case, neither Rajamma nor plaintiffs came into possession of the suit lands at any time till the date of the suit. They never showed any semblance of possession over them either directly or constructively. Even assuming that they got title to the suit lands. They allowed the real owners to continue in possession as the insignia of the continuance of their title. Neither Chowdaramma nor defendant No. 1 or any other defendants either in mind or body, lost the possession over the suit lands. They continued their possession as owners. Therefore, Rajamma and the plaintiffs presuming that they own the suit lands for 12 years and more (in this case it is 46 years) without possessing them, they ceased on the termination of that period either to own them or to possess them. Therefore, this may be a negative prescription as divestitive operation of lapse of time to possession. A t any rate, this could be neither a case of prescription nor adverse posssession on the part of the defendants who and whose purchasers in title were the owners with title and possession and continued as such till to-day. Therefore, there was neither vestitive nor divestitive fact or law in their case.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-73", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "31. Here only law of limitation operating on the present case can be examined and recorded. The suit is for possession based 6n title and therefore, it is govered by Article 65 of the Limitation Act, 1963. The period of limitation for such a suit is 12years when the possession of the defendants became adverse to the plaintiffs. Patently neither Rajamma nor plaintiffs were in possession of the suit lands within 12 years next before the suit. Strictly speaking, it ran to commence from the year 1925 when the gift is said to have been conferred on Rajamma towards Pasupukunkuma. Even assuming that it commenced from the date of Ex.A3 viz., 12-4-1957, the period of limitation ended on 12-4-1969. The cause of action for the suit mentioned in the plaint is the death of Rajamma in October, 1968. The date of suit is 17-9-1971. In all cases of bar of limitation in any manner including the prescription or adverse possession, the rule of tacking operates. (Pages 56 to 63 of Law of Adverse Possession by B.N. Guha and Pages 349 and 350 of Easements & Licences by Katiyar). By the time Rajamma died, there was a lapse of 11 years 6 months from the date of Ex.A-3. By the time the suit was filed there was a further lapse of time of about three years. Thus by adding the period of lapse of time till Rajamma died till the date of Ex.A-3 as tacking to the further period till the date of suit, it would be 14 years 5 months and 5 days. Thus the suit was hopelessly barred by limitation when it was filed by operation of the law of prescription read with Article 65 of the Limitation Act.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "38eda8e121a5-74", "Titles": "Yarlagadda Venkakka Choudary ... vs Daggubati Lakshminarayana ... on 31 March, 1995", "text": "32. Having failed to establish their title to the suit properties, the plaintiffs cannot get the possession of the same. Obviously,' the defendants not being in wrongful possession throughout are not liable to pay any mesne profits to the plaintiffs. The rest of the contentions covered by Issues 10 and 11 regarding payment of court fee and mis-joinder and non-joinder of parties are not pressed. The plaintiffs are not entitled to get any relief in the suit and the learned Sub Judge has rightly dismissed the suit. This is not a case wherein the rule that costs follow the event can be excepted.  \n 33. In the result, the appeal is dismissed with costs of the defendants, (respondents) throughout.  \n 34. Before parting with the case, it may be said to the credit of the learned Sub Judge Mr. B. Eswara Reddy about the dealing with the matter in all meticulous details in a most satisfactory way leading to correct findings and the final result. He deserves all the appreciation from this Court. It is proper that a Certificate of appreciation should be issued to the learned Sub Judge and the Registry shall do so.", "source": "https://indiankanoon.org/doc/601148/"}
+{"id": "3c6527bd05e0-0", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "JUDGMENT Madhava Reddi, J. \n\n1. The only question that arises for consideration in this petition for the issue of a writ of certiorari is whether the Sales Tax Appellate Tribunal has jurisdiction to dismiss an appeal filed before it under Section 31 of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as the Act) for default. \n\n2. The petitioner herein was assessed to sales tax for the year 1956-57 by the Deputy Commercial Tax Officer, Gudur, on a turnover of Rs. 63,205.21. After an unsuccessful appeal to the Assistant Commissioner for Commercial Taxes, Guntur, he preferred a further appeal to the Sales Tax Appellate Tribunal on 6th March, 1968, under Section 21 of the Sales Tax Act. On 29th June, 1968, when the appeal was posted for hearing, as the appellant and his counsel were absent, the Tribunal dismissed the appeal for default. The petition for restoration of this appeal was also dismissed on 17th April, 1969. It is not necessary to deal with the several other contentions in this writ petition in the view we are taking on the main contention raised by the learned counsel for the petitioner.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-1", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "3. Any dealer objecting to an order passed or proceeding recorded by any prescribed authority under Section 19 of the Act or by a Deputy Commissioner suo motu under Sub-section (4-C) of Section 14 or under Sub-section (2) of Section 20, may prefer an appeal to the Tribunal under Section 21 of the Act. The appeal has to be filed within sixty days from the date on which the order or proceeding is served on the dealer. The Appellate Tribunal is, however, given power to condone the delay in preferring the appeal on sufficient cause being shown. The memorandum of appeal is required to be in the prescribed form and accompanied by a fee not exceeding Rs. 100. The petitioner preferred an appeal in compliance with the provisions of Sub-sections (1), (3) and (6) of Section 21 of the Act. Sub-sections (4) and (5) of Section 21 lay down as to how the Tribunal should dispose of the appeal and also as to what the powers of the Appellate Tribunal are Sub-sections (4) and (5) of Section 21 read as follows :\nSection 21. (4)(a) The Appellate Tribunal may, after giving both parties to the appeal, a reasonable opportunity of being heard-\n(i) confirm, reduce, enhance or annul the assessment or the penalty or both; or\n \n\n(ii) set aside the assessment or the penalty, or both, and direct the assessing authority to pass a fresh order after such further inquiry as may be directed; or\n \n\n(iii) pass such other orders as it may think fit:\nProvided that if the appeal involves a question of law, a decision on which is pending in any proceeding before the High Court or the Supreme Court, the Appellate Tribunal may defer the hearing of the appeal before it, till such proceeding is disposed of.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-2", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "21. (5) Before passing any order under Sub-section (4), the Appellate Tribunal may make such inquiry as it deems fit or remand the case to the appellate authority against whose order the appeal was preferred or to the assessing authority concerned, for an inquiry and report on any specified point or points,\n \n\n4. The Tribunal is given power Under-Sections 3 and 4 of the Act to make regulations consistent with the provisions of the Act and the rules made thereunder for regulating its procedure and the disposal of its business. These regulations are required to be published in the Andhra Pradesh Gazette. Section 3 of the Act so far as it is relevant for our present purpose reads as follows :\n Section 3. (1) The State Government shall appoint an Appellate Tribunal consisting of a Chairman and two other members to exercise the functions conferred on the Appellate Tribunal by or under this Act. The Chairman shall be a judicial officer not below the rank of a District Judge and of the other two members one shall be an officer of the State Government not below the rank of a Deputy Commissioner of Commercial Taxes, and the other shall be a Chartered Accountant, or a person possessing the degree of M.Com. or B.Com. (Hons.) of any recognised University in India for at least ten years. \n\n(4) The Appellate Tribunal shall, with the previous sanction of the State Government make regulations consistent with the provisions of this Act and the rules made thereunder, for regulating its procedure and the disposal of its business. \n\n(5) The regulations made under Sub-section (4) shall be published in the Andhra Pradesh Gazette.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-3", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "5. In exercise of these powers the Tribunal has made regulations in Government Memorandum No. 34908-B/S/57-3, Revenue, dated 24th July, 1957. Under Clause 9 of the Regulations the power to dismiss an appeal for default and for readmission of appeal so dismissed is specially vested with the Tribunal in the following words :\n9. (1) After the appeal has been registered, notice of the day fixed for hearing under regulation 8 in Form 'C shall be delivered or issued by registered post to the party.    The notice shall state that if he does not appear on the day so fixed or on any other day to which the hearing may be adjourned, the appeal will be dismissed for default or disposed of on merits, ex parte.\n \n\n(2)   Where an appeal, application  or  petition has been dismissed for default or disposed of ex parte,  the appellant,  applicant or petitioner may apply to the Tribunal for readmission of the appeal, application or petition; and where it is shown  to  the satisfaction  of the   Tribunal that he was prevented by sufficient cause from appearing when the appeal, application, or petition was called   on   for   hearing,   the  Tribunal  may   readmit   the appeal, application or petition on such terms as it thinks fit;\n \n\n(3)   An  application   for   readmission   of   an   appeal,   application or petition dismissed for default or disposed of ex parte, shall be made within thirty days from the date of communication of the order of dismissal.\n \n\n6. In purported exercise of this power, the Tribunal has dismissed the appeal preferred by the petitioner and on taking the facts and circumstances of the case into consideration refused to readmit the appeal.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-4", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "7. Mr. Dasaratharama Reddi, the learned counsel for the petitioner, argues that Section 21(4) of the Act does not empower the Tribunal to dismiss an appeal, duly filed by a dealer and admitted by the Tribunal, for default. It is enjoined to dispose of the same on merits. The regulation framed by the Tribunal in exercise of its power under Sub-section (4) of Section 3 cannot clothe the Tribunal with a power to dismiss the appeal for default. The regulation is inconsistent with the provisions of the Act. It is also contended that Section 3(4) vests jurisdiction in the Tribunal to make regulations only to regulate its procedure and the disposal of its business and that Clause 9 of the Regulation is beyond the scope of the authority vested in the Tribunal in this behalf. The Regulation, therefore, is ultra vires of the powers of the Tribunal as well as inconsistent with the Act and, therefore, the Tribunal has no jurisdiction to dismiss the appeal for default. In spite of the non-appearance of the appellant and his counsel on the date of the hearing of the appeal, the Tribunal ought to have disposed of the appeal on merits. We find ourselves in entire agreement with this contention.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-5", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "8. A dealer under the Andhra Pradesh General Sales Tax Act is given a right of appeal before the Appellate Tribunal under Section 21 of the Act against certain orders of the prescribed authority made on appeal under Section 19 of the Act and also against certain orders of the Deputy Commissioner. The matter of assessment of tax on the turnover of a dealer under the Andhra Pradesh General Sales Tax Act is not limited in its effect to the dealer alone. It affects the revenues of the State. The assessment of the sales tax cannot, therefore, be equated to a lis between two private individuals. As it is a matter affecting the revenue of the State the authorities constituted under the Act, including the Tribunal, are clothed with certain statutory duties under the Act and in discharge of these duties even to act suo motu and revise the assessments. The Tribunal may on being seized with a matter when an appeal is filed, is empowered even to enhance the assessment and not merely to confirm or annul the same. It is against this background that we have to judge the powers of the Appellate Tribunal enumerated under Section 21(4) of the Act. Under Sub-Section (4) of Section 21, the Appellate Tribunal may not only confirm, reduce, enhance or annul the assessment or the penalty or both but may also set aside the assessment or the penalty or both and direct the assessing authority to pass a fresh order after further enquiry. In addition to these powers under Sub-Clause (iii) of Section 21(4)(a) the Tribunal is given power to pass such further orders as it may deem fit. A reading of Sub-clauses (i) and (ii) of Section 21(4)(a) discloses that the power vested in the Tribunal relates to the merits of the assessment order and on an examination of the merits of the order under appeal, it may confirm, reduce, enhance or annul the assessment or the penalty or direct a", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-6", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "appeal, it may confirm, reduce, enhance or annul the assessment or the penalty or direct a fresh assessment after further enquiry. Sub-clause (iii) occurring thereafter must, in the context, be read ejusdem generis with the other two clauses. If the other two clauses require the Tribunal to examine the merits of the assessment and pass the order enumerated therein, Sub-clause (iii) must likewise refer to the passing of such order as it may think fit on examination of the merits of the assessment order. An appeal before the Appellate Tribunal may raise questions of fact and law and any decision thereon may result in the reduction of the tax or enhancement of the same. But once an appeal is before the Tribunal, the Appellate Tribunal has jurisdiction even to enhance the tax, of course, after giving a reasonable opportunity to the appellant-assessee of being heard. No sooner than the appeal is before the Tribunal the assessee is exposed to even enhancement of the tax and that is a power which is specifically vested in the Tribunal under Sub-clause (ii) of Section 21(4)(a). In fact, it is the duty of the Tribunal on an examination of a memorandum of appeal filed before it to see if the facts of the case warrant any enhancement. As already pointed out, in disposing of an appeal, the authorities under the Act do not discharge the duty of disposing of a \"Us\" between two private parties. Just as they are required to see that the assessee is not burdened with an amount of tax not envisaged by the Act or on the facts of the case, they are also enjoined to see that the tax legally leviable under the Act does not escape assessment by any erroneous order of the Subordinate authorities. The Tribunal, in exercise of its appellate jurisdiction, cannot evade the discharge of the statutory duty by dismissing the appeal for default on the failure of the appellant and his counsel to appear before it. After preferring the appeal,", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-7", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "default on the failure of the appellant and his counsel to appear before it. After preferring the appeal, the appellant may realise that far from the tax imposed by the subordinate authorities being reduced on appeal, the Appellate Tribunal may enhance it and therefore may deliberately absent himself. By such deliberate absence of the appellant and his counsel, the Appellate Tribunal cannot be divested of its jurisdiction to enhance the tax. This necessarily implies that even in the absence of the appellant and his counsel, the Tribunal is required to examine the assessment of tax and penalty on merits, irrespective of the fact whether the appellant chooses to be present or not. If under Sub-clause (iii) the Tribunal could be said to have jurisdiction to dismiss an appeal for default of appearance of the appellant and his counsel then it would be rendering nugatory the power and duty, i.e., the power to enhance vested in the Appellate Tribunal under Sub-clause (ii) of Section 21(4) (a) of the Act. Viewed in the larger context of the duty of the Appellate Tribunal to safeguard the revenue realisable under the Act and the specific power vested in it to enhance the assessment, Sub-clause (iii) cannot be read so as to clothe the Tribunal with the power to dismiss the appeal for default.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-8", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "9. A similar view has been taken by the Allahabad High Court in Hindustan Metal Works v. Sales Tax Officer [1964] 15 S.T.C. 116 in the following words:\n The intention of the Legislature in enacting Section 9 of the U.P. Sales Tax Act, 1948, is to make the appellate court under the Sales Tax Act a watch-dog in the general public interest and particularly on behalf of the public revenues in so far as taxes are gathered through the instrumentality of the Sales Tax Act. The intention that the appeal once filed by the assessee should be disposed of only on its merits is clear from the language used in Section 9 which rules out the possibility of the dismissal of an appeal for default.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-9", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "10. The scope of Sub-clause (iii) of Section 21(4)(a) may also be viewed from another angle. The order of the Appellate Tribunal made under Section 21(4)(a) is not final. It is subject to a revision to the High Court as provided under Section 22 of the Act. Any dealer may prefer a revision to the High Court against an order of the Appellate Tribunal on the ground that the Appellate Tribunal has either decided erroneously or failed to decide any question of law. It must have been necessarily intended by this provision that whenever a question of law arises in an appeal pending before the Tribunal, the Tribunal must decide the same. Any failure to decide that question of law by dismissing the appeal for default would be liable to be revised by the High Court under Section 22 of the Act, for Section 22 does not make an exception in cases where the appellant or his counsel do not appear. Once the High Court finds that a question of law arose before the Tribunal and the Tribunal, for whatever reason it may be, fails to decide that question of law, as envisaged by Section 22, the High Court would have to necessarily exercise its revisional jurisdiction. It cannot be said that under Sub-clause (iii) of Section 21(4)(a) the Tribunal is vested with the jurisdiction to dismiss an appeal for default and it acts according to law in so dismissing the appeal for default and yet under Section 22 of the Act, the High Court should revise that order as the Tribunal has failed to decide a question of law for non-appearance of the appellant and his counsel. If the Tribunal has got the power to dismiss an appeal for default, then such dismissal cannot be erroneous and if it is not erroneous the revisional power of the High Court could not be invoked. If Sub-clause (iii) were to be read so as to mean that the Tribunal has the power to dismiss an", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-10", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "(iii) were to be read so as to mean that the Tribunal has the power to dismiss an appeal for default then the High Court in exercise of its revisional jurisdiction cannot interfere with such an order. But yet the question of law arising in an appeal before the Tribunal not having been decided by the Tribunal, the High Court would be required to interfere in revision with the order of assessment. Such could not be the intention of the Legislature. The provisions of Section 21(4) of the Act which deal with the powers of the Appellate Tribunal in disposing of an appeal and Section 22 of the Act which deals with the revisional power of the High Court in respect of the orders of the Tribunal, must be read harmoniously. So read, at least in such cases, where questions of law arise in an appeal before the Tribunal, the Tribunal must be deemed to have no power to dismiss the appeal for default of appearance of the appellant for, any failure to decide the questions of law arising in the appeal, even for non-appearance of the appellant, would render the order of the Tribunal liable to be set aside on revision. In view of the wording of Section 21(4) of the Act, we are of the opinion that the power to dismiss for default cannot be said to be vested in the Appellate Tribunal even in respect of appeals in which questions of fact arise. As already pointed out, the Tribunal once seized with the jurisdiction on the admission of an appeal may even enhance the assessment or penalty which could be done only on an examination of the merits of each case. The expression similar to the one contained in Sub-clause (iii) of Section 21(4)(a), namely, \"pass such orders as it may think fit\" also occurring in Section 33(4) of the Income-tax Act came up for consideration before their Lordships of the Supreme Court in the Commissioner of Income-tax, Madras v. Chenniappa", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-11", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "of the Supreme Court in the Commissioner of Income-tax, Madras v. Chenniappa [1969] 1 S.C.W.R. 680. Grover, J., speaking for the court observed as follows :", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-12", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "The scheme of the provisions of the Act relating to the Appellate Tribunal apparently is that it has to dispose of an appeal by making such orders as it thinks fit on the merits. It follows from the language of Section 33(4) and in particular the use of the word 'thereon' that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned has failed to appear Their Lordships referring in particular to the word \"thereon\" in Section 33(4) held that the words \" 'pass such orders as the Tribunal thinks fit' include all the powers (except possibly the power of enhancement) which are conferred upon the Appellate Assistant Commissioner by Section 31 of the Act. The provisions contained in Section 66 about making a reference on questions of law to the High Court will be rendered nugatory if any such power is attributed to the Appellate Tribunal by which it can dismiss an appeal, which has otherwise been properly filed, for default, without making any order thereon in accordance with Section 33(4). The position becomes quite simple when it is remembered that the assessee or the Commissioner of Income-tax, if aggrieved by the orders of the Appellate Tribunal, can have resort only to the provisions of Section 66. So far as the questions of fact are concerned the decision of the Tribunal is final and reference can be sought to the High Court only on questions of law. The High Court exercises purely advisory jurisdiction and has no appellate or revisional powers. The advisory jurisdiction can be exercised on a proper reference being made and that cannot be done unless the Tribunal itself has passed proper order under Section 33(4). It follows from all this that the Appellate Tribunal is", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-13", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "order under Section 33(4). It follows from all this that the Appellate Tribunal is bound to give a proper decision on questions of fact as well as law which can only be done if the appeal is disposed of on the merits and not dismissed owing to the absence of the appellant....Thus looking at the substantive provisions of the Act there is no escape from the conclusion that under Section 33(4) the Appellate Tribunal has to dispose of the appeal on the merits and cannot short-circuit the same by dismissing it for default of appearance.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-14", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "11. The decision in the above case applies with equal force to the case under consideration in the writ petition. Under the Andhra Pradesh General Sales Tax Act, 1957, a reference as is contemplated by Section 66 of the Income-tax Act is not provided; instead a dealer, as already pointed out, is given a right of revision against an order of the Tribunal where the Tribunal has decided the question erroneously or where there is a failure to decide a question of law arising. There is no revision against a question of fact. Evidently, the Act contemplates the Tribunal to be a final authority on questions of fact. The proper appreciation of a question of law, in very many cases, may not be possible unless there is a final decision on a question of fact by the Tribunal. Under Sub-section (9) of Section 21 the Tribunal's order is final subject to the provisions of Section 22. Unless it is held that the Tribunal is bound to give a decision on the merits both on questions of law and fact and that it cannot dismiss an appeal for default, as observed by the Supreme Court in the Commissioner of Income-tax, Madras v. Chenniappa Mudaliar [1969] 1 S.C.W.R. 680, the right of revision provided to a dealer before the High Court may be rendered nugatory and all that the High Court in such circumstances may have to do is to hold that the Tribunal ought not to have dismissed the appeal for default and ought not have failed to dispose of the questions of law arising before it and in that view, direct the Tribunal to dispose of the matter afresh.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-15", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "12. The learned Government Pleader however contended that the decision in Commissioner of Income-tax, Madras v. Chenniappa Mudaliar [1969] 1 S.C.W.R. 680 turns upon the wording of Section 33(4) of the Income-tax Act and in particular on the word \"thereon\" occurring therein. However, in our opinion the absence of the word \"thereon\" in Section 21(4) does not make any difference. The power exercisable by the Appellate Tribunal under Section 21(4) of the Andhra Pradesh Sales Tax Act is with respect to the appeal filed under Section 21 and the powers of the Appellate Tribunal enumerated in the Sub-section are with reference to the said appeal. The Tribunal may pass such order as it thinks fit only on the appeal. In the context in which Sub-clause (3) occurs, we are of the view that the powers of the Appellate Tribunal in regard to the dismissal of an appeal under Section 21(4) of the Act are analogous to the powers of the Appellate Tribunal under the Income-tax Act and does not clothe it with the power to dismiss an appeal for default.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-16", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "13. In this connection, the Government Pleader relied upon a Full Bench decision of this court in Palaniswami Chetty v. Salla Muthamma (1966) 2 An. W.R. 349 in which their Lordships were considering the question whether under Rule 22(8) framed under the Andhra Pradesh Buildings (Lease, Rent and Eviction Control) Rules, 1981, which reads as follows:\n The Controller or the appellate authority deciding the dispute shall record a brief note of the evidence of the parties and witnesses who attend, and upon the evidence so recorded, and after consideration of any documentary evidence produced by the parties, a decision shall be given in accordance with justice, equity and good conscience by the Controller or appellate authority. The decision given shall be reduced to writing. If any party duly summoned to attend does not attend, the dispute may be decided ex parte\", the rent Controller is empowered to dismiss an appeal for default.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-17", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "14. The decision to our mind cannot be of much assistance firstly because the proceedings under the said Act bears no analogy to the assessment proceedings and the appeals preferred under the Andhra Pradesh General Sales Tax Act. Under the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, the dispute is entirely between a landlord and a tenant. It is a \"Us\" between the two parties as regards their rights and obligations arising under the special enactment and the Rent Controller is called upon to adjudicate on the rights of the parties and the Rent Controller or the appellate authority is given power to give a decision in accordance with justice, equity and good conscience. On the construction of the provisions of the said rule and the enactment, their Lordships were of the view that the appellate authority had jurisdiction to dismiss a petition or appeal for default of appearance and they also held that such a decision is a decision on the appeal. Here we are concerned with the powers of the Appellate Tribunal under the Sales Tax Act which is enjoined to see that assessments are made in accordance with the provisions of the Act in the general interest of the public and in the interests of the public revenue. That apart the wording of the rules and the scheme, the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act under which they were framed, are totally different and the object sought to be achieved by them bear no analogy to the one sought to be achieved by the Andhra Pradesh Sales Tax Act. \n\n15. We are, therefore, clearly of the view that Section 21(4) of the Act does not authorise the Appellate Tribunal to dismiss an appeal for default of appearance of the appellant; it must dispose of the appeal on merits irrespective of the fact whether the appellant appears on the date of hearing or not.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-18", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "16. The learned Government Pleader sought to justify the power of the Tribunal to dismiss an appeal also on the ground that regulation 9(1) framed under Section 3(4) of the Act by the Tribunal, authorised the Tribunal to dismiss an appeal for default. It cannot be gainsaid that any rule or regulation framed in exercise of the power vested under the Act can neither contravene the provisions of the Act nor be inconsistent therewith. A power that is vested in the Tribunal can neither be abridged nor enlarged by a regulation framed thereunder, nor can a Tribunal be exonerated by a regulation from the performance of a duty required of it under the Act. The regulation cannot travel beyond the scope of the Act. If the power to dismiss an appeal for default cannot be found to be vested in the Appellate Tribunal under Section 21(4) of the Act, the Tribunal cannot be clothed with that power under the Regulation for any such vesting of power under the Regulation would be derogatory to and inconsistent with Section 21 of the Act and as such must be struck down. In Abdul Subhan Saheb & Sons v. Mysore Sales Tax Appellate Tribunal [1965] 16 S.T.C. 17 a Bench of the Mysore High Court considering regulation 8(2) of the Appellate Tribunal Regulations, 1957, which clothed the Appellate Tribunal under the Mysore Sales Tax Act with a similar power held:\n Regulation 8(2) of the Appellate Tribunal Regulations, 1957, to the extent it purports to empower the Appellate Tribunal to dismiss an appeal before it for default of appearance of the appellant or his Advocate is ultra vires of Section 22(4) of the Mysore Sales Tax Act, 1957.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-19", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "17. Section 22(4) of the Mysore Sales Tax Act also authorised the Appellate Tribunal to pass such orders thereon (appeal) as it thinks fit. Manchanda, J., in Hindustan Metal Works v. Sales Tax Officer [1964] 15 S.T.C. 116 also held that Rule 68 of the U.P. Sales Tax Rules, 1948, which empowered the appellate authority to dismiss an appeal for default, is ultra vires of Section 9 of the U.P. Sales Tax Act. With regard to this decision, the learned Government Pleader argues that the appellate authority under the U.P. Sales Tax Act was not empowered to pass such orders as it thinks fit with regard to the appeal before it. A reading of the judgment in that case discloses that the conclusion was arrived at by the learned Judge on a consideration of the entire scheme of the Act and in particular the power vested in the appellate authority to enhance the tax once an appeal is filed before it. The reasoning of the said decision accords with our view expressed above. In the decision reported in the Commissioner of Income-tax, Madras v. Chenniappa Mudaliar [1969] 1 S.C.W.R. 680 the question whether Rule 24 of the Appellate Tribunal Rules, in so far as it enables the Tribunal to dismiss an appeal for default of appearance, was ultra vires the provisions of Section 33 of the Income-tax Act, 1922, came up for consideration. Having held that under Section 33(4) the Appellate Tribunal was enjoined to decide the appeal on merits and cannot short-circuit the same for dismissing it for default of appearance the Supreme Court further held as follows :-", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-20", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "it is true that the Tribunal's powers in dealing with appeals are of the widest amplitude and have, in some cases, been held similar to, and identical with, the powers of an appellate court under the Civil Procedure Code. Assuming that for the aforesaid reasons the Appellate Tribunal is competent to set aside an order dismissing an appeal for default in exercise of its inherent power there are serious difficulties in upholding the validity of Rule 24. It clearly comes into conflict with Sub-section (4) of Section 33 and in the event of repugnancy between the substantive provisions of the Act and a rule it is the rule which must give way to the provisions of the Act.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-21", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "18. These observations of their Lordships of the Supreme Court apply with equal force to the Sales Tax Appellate Tribunal which under Section 3(4) of the Andhra Pradesh Sales Tax Act is authorised to make regulations for regulating its procedure and disposal of its business and is not vested with the power to frame rules for carrying out the purpose of the Act. \n\n19. It was, therefore, contended that vesting power to dismiss an appeal for default is a matter regulating the procedure before a Tribunal and also a matter concerning the disposal of the business and that Clause 9 of the Regulation is within the ambit of Section 3(4) of the Act.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-22", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "20. The learned Government Pleader, however, lastly contends that the power to dismiss an appeal for default is not inconsistent or derogatory to any provision of the Act. What he urges is that the Act is silent as to what the Tribunal should do when the appellant fails to appear. Where the Act is silent, the Tribunal in exercise of its powers to regulate its own procedure and the disposal of its business under Sub-section (4) of Section 3 may properly frame a regulation authorising the dismissal of an appeal for default. We arc unable to agree with this contention. Where a statute provides a right of appeal to a particular Tribunal constituted under the Act, which has no inherent jurisdiction, the power to make a particular order must be found within the four corners of the Act. The decision on an appeal is not a matter of procedure. The manner in which that decision should be arrived at and the steps that have to be adopted before that decision is rendered would be a matter of procedure but not the decision itself. While the Tribunal could regulate the procedure for the disposal of the appeals it could neither enlarge nor abridge the scope of the order which a Tribunal could make with regard to the final disposal of the appeal itself. The disposal of the appeal is not a matter of procedure but one which relates to the power of the Tribunal. In exercise of the authority vested under Section 3(4) of the Act, the Tribunal could not in the guise of regulating its procedure enlarge its powers and clothe itself with the power which it did not have under the Act. Much less could the power to dismiss for default be brought within the power of the Tribunal to frame regulations for the disposal of its business. What is envisaged by the use of the expression \"disposal of its business\" is to authorise the Tribunal to make regulations in regard to the place of hearing of appeals, the time of hearing the appeals, the order in which several appeals before it would be taken up and the", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-23", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "time of hearing the appeals, the order in which several appeals before it would be taken up and the like.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "3c6527bd05e0-24", "Titles": "Oversea Mica Exports vs Secretary, Sales Tax Appellate ... on 18 September, 1969", "text": "21. For all the above reasons we hold that the Appellate Tribunal under the Andhra Pradesh General Sales Tax Act, 1957, has no jurisdiction to dismiss an appeal filed under Section 21 of the Act for default of appearance of the appellant or his counsel. Clause 9(1) of the Regulation of the Andhra Pradesh General Sales Tax Appellate Tribunal Regulations, 1957, contained in Memorandum No. 34908-B/S/57-3 Revenue, dated 24th July, 1957, in so far as it empowers the appellate authority to dismiss an appeal for default is repugnant to Section 21(4) of the Act and ultra vires of the power of the Tribunal under Section 3(4) read with Section 21(4) of the Act and is, therefore, struck down. The Tribunal must, therefore, be held to have acted without jurisdiction in dismissing the appeal for default on 29th June, 1964, and to have failed to exercise a jurisdiction vested in it in not disposing of the appeal filed by the petitioner herein on merits. The order of the Tribunal dated 29th June, 1964, and its subsequent order dated 17th April, 1965, dismissing the petition are accordingly quashed and the Tribunal is directed to dispose of the appeal filed by the petitioner herein on merits in accordance with law in the light of the observations made above. \n\n22. The writ petition, therefore, succeeds and is accordingly allowed with costs.    Advocate's fee Rs. 200.", "source": "https://indiankanoon.org/doc/753491/"}
+{"id": "194cc78dd3d4-0", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "ORDER", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-1", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "1. In all these criminal petitions, a short but interesting and importing question of law arises for consideration of this Court as to whether this Court, in exercise of its inherent jurisdiction under Section 482 Code of Criminal Procedure (for short 'the Code'), can direct the subordinate criminal courts to accord permission to compound an offence which is otherwise non-compoundable under the Code ? \n2. Directions are sought from this Court to compound variety of non-compoundable offences such as Section 138 of the Negotiable Instruments Act (Criminal Petitions Nos. 3460 and 3461 of 1994), Section 498-A of the Indian Penal Code (Crl.P. No. 277 and 932 of 1994 and 2633 and 2685 of 1995), Sections 494 and 498-A, I.P.C. (Crl.Ps. Nos. 748 of 1994 and 1662 of 1995), Section 307 of Indian Penal Code (Crl.M.P. No. 1182/94), Section 452, I.P.C. (Crl. Petns. Nos. 2951 and 2952 of 1995).", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-2", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "3. In Crl.P. No. 277 of 1994, the petitioner-accused was already convicted and sentenced by the Judicial Magistrate of First Class, Sattenapalli by judgment dated 8-4-1993 for the offence u/s. 498-A, I.P.C. and Crl.A. No. 36 of 1993 preferred by him was pending before the learned Sessions Judge, Khammam. In Crl. Petitions Nos. 3460 and 3461 of 1993, the petitioners-accused in the said cases were convicted and sentenced to suffer imprisonment for one year and pay fine for the offence punishable under Section 138 of the Negotiable Instruments Act by the II Additional Judicial Magistrate of First Class, Rajahmundry in C.C. Nos. 74 and 75 of 1990 and the appeals - Cr.A. Nos. 121 and 122 of 1991 preferred by them are pending before the learned II Additional Sessions Judge, Rajahmundry. Similarly in Crl.P. No. 1182 of 1994 3rd petitioner who is the accused in S.C. No. 327 of 1992 was convicted and sentenced to suffer rigorous imprisonment for 7 years by the Assistant Sessions Judge, Karimnagar for the offence under Section 307, I.P.C. against the accused preferred Crl.A. No. 6 of 1993 and the same is pending before the II Additional Sessions Judge, Karimnagar. \n4. Admittedly, the offences which are subject-matter of the proceedings in the Courts below are non-compoundable offences. \n CAN THIS COURT GIVE DIRECTIONS TO THE SUBORDINATE CRIMINAL COURTS TO PERMIT COMPOUNDING OF OFFENCES WHICH ARE OTHERWISE NON-COMPOUNDABLE UNDER SECTION 482, Cr.P.C. ?", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-3", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "5. In view of the importance of the question of law involved, I have requested Shri C. Padmanabha Reddy, learned Senior Counsel to assist the Court as Amicus Curiae and accordingly, the learned Senior Counsel assisted the Court. \n6. The learned Senior Counsel submits that the High Court, in exercise of its inherent jurisdiction under Section 482 of the Code cannot direct compounding of offences which are otherwise non-compoundable. The learned counsel submits that in the absence of specific provisions, no Court can grant permission to compound any non-compoundable offence. It is submitted that the compounding of offences is specifically regulated by the Code of Criminal Procedure and any direction in this regard by the High Court to compound the offence which is non-compoundable, would be against the public policy and therefore wholly barred. \n7. Before adverting to the submissions made by the learned Senior counsel, it would be appropriate to make a brief survey with regard to the nature, scope and power of this Court under Section 482 of the Code. It is fairly well settled that Section 482 of the Code does not confer any new powers on the High Court. It merely safeguards the existing inherent powers possessed by the Court necessary to secure the ends of justice. The power is to be sparingly used. The power is conferred upon the High Court to pass orders that may be necessary to give effect to any order passed under the Code or to prevent abuse of the process of any Court. Necessary orders can always be made by invoking this provision to secure the ends of justice. \n8. Before analysing the nature and scope of the jurisdiction of the High Court under Section 482 of the Code in the context of the present question, it is necessary to refer to some relevant provisions of the Code.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-4", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "9. Section 2(n) defines 'offence'. According to the said definition, 'offence' means any act or omission made punishable by any law for the time being in force and includes any act in respect of which a complaint may be made under Section 20 of the Cattle Trespass Act. \n10. It is Section 320 of the Code of Criminal Procedure which deals with compounding of offences. The provisions are exhaustive in their nature and the whole scheme of compounding of the offences is dealt with and regulated by Section 320 of the Code. The relevant provisions contained in Section 320 read as follows :- \n \"320. Compounding of offences. - (1) The offences punishable under the Sections of the Indian Penal Code specified in the first two columns of the Table next following may be compounded by the persons mentioned in the third column of that Table (Table - Omitted) (2) The offences punishable under the sections of the Indian Penal Code specified in the first two columns of the Table next following may, with the permission of the Court before which any prosecution for such offence is pending, be compounded by the persons mentioned in the third column of that Table (Table - Omitted) (3) When any offence is compoundable under this section, the abetment i of such offence or an attempt to commit such offence (when such attempt is itself an offence), may be compounded in like manner. \n(4)(a) When the person who would otherwise be competent to compound an offence under this section is under the age of eighteen years, or is an idiot or a lunatic, any person competent to contract on his behalf may, with the permission of the Court, compound such offence.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-5", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "(b) When the person who would otherwise be competent to compound an offence under this Section is dead, the legal representative as defined in the Code of Civil Procedure, 1908, of such person may, with the consent of the Court compound such offence. \n(5) When the accused has been committed for trial or when he has been convicted and an appeal is pending, no composition for the offence shall be allowed without the leave of the Court to which he is committed, or as the case may be, before which the appeal is to be heard. \n(6) A High Court or Court of Session acting in the exercise of its powers of revision under Section 401 may allow any person to compound any offence which such person is competent to compound under this Section. \n(7) No offence shall be compounded if the accused is, by reason of a previous conviction, liable either to enhanced punishment or to a punishment of a different kind for such offence. \n(8) The composition of an offence under this section shall have the effect of an acquittal of the accused with whom the offence has been compounded. \n(9) No offence shall be compounded except as provided by this Section.\"  \nIt would also be appropriate to refer to Section 482 of the Code which runs as follows :- \n\"482. Saving of inherent powers of High Court : \nNothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.\"  \nSection 482, Cr.P.C., corresponds to Section 561-A of the Old Criminal Procedure Code, 1898. \n11. In R. P. Kapur v. State of Punjab, , the Supreme Court in categorical terms held (Para 6) :", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-6", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "\"There is no doubt that this inherent power cannot be exercised in regard to matters specifically covered by the other provisions of the Code.\"  \n12. In Palaniappa Gounder v. State of Tamil Nadu, , the issue before the apex Court was whether, in view of the express provision contained in Section 357 of the Code of Criminal Procedure, the High Court had power to pass an order for compensation, in exercise of its inherent powers. The apex Court held as follows (Para 3 of Cri LJ) : \n \"Section 482 of the Code under which the heirs of the deceased filed the application for compensation corresponds to S. 561-A of the Criminal Procedure Code, 1898. It saves the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under the Code or to prevent abuse of the process of any Court or otherwise to secure the ends of justice. A provision which saves the inherent powers of a Court cannot override any express provision contained in the Statute which saves that power. This is put in another form by saying that if there is an express provision in a statute governing a particular subject-matter there is no scope for invoking or exercising the inherent powers of the Court because the Court ought to apply the provisions of the statute which are made advisedly to govern the particular subject-matter. From this it will be clear that the application made by the heirs of the deceased for compensation could not have been made under Section 482 since S. 357 expressly confers power on the Court to pass an order for payment of compensation in the circumstances mentioned therein.\"  \n13. In Madhu Limaye v. State of Maharashtra, , the apex Court, held (Para 8 of Cri LJ) : \n \"The High Court possessed and possesses the inherent powers to be exercised ex debito justitiae to do the real and the substantial justice for the administration of which alone Courts exist.\"", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-7", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "The apex Court, while laying down the parameters of the jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure said (Para 8 of Cri LJ) : \n\"At the outset the following principles may be noticed in relation to the exercise of the inherent power of the High Court which have been followed ordinarily and generally, almost invariably, barring a few exceptions :- \n(1) That the power is not to be restored to if there is a specific provision in the Code for the redress of the grievance of the aggrieved party; \n(2) That it should be exercised very sparingly to prevent abuse of process of any Court or otherwise to secure the ends of justice; \n(3) That it should not be exercised as against the express bar of law engrafted in any other provision of the Code.\"   \n14. In Simirkhia v. Dolley Mukherjee, AIR 1990 SC 1605, 1990 Cri LJ 1599 while considering whether the High Court is empowered to review its own decision under the purported inherent power, the Supreme Court held : (Paras 2 and 4 of Cri LJ) \"The inherent power under Section 482 is intended to prevent the abuse of the process of the Court and to secure ends of justice. Such power cannot be exercised to do something which is expressly barred under the Code. \n  xxx                  xxx                 xxx \n \"If a matter is covered by an express letter of law, the Court cannot give a go by to the statutory provisions and instead evolve a new provision in the garb of inherent jurisdiction.\"", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-8", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "While saying so, the Supreme Court referred to its earlier decision in Sooraj Devi v. Pyarelal, , wherein the apex Court held (para 5 of Cri LJ) : \n   \n\n\"Now it is well settled that the inherent power of the Court cannot be exercised for doing that which is specifically prohibited by the Code.\"", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-9", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "15. Shri Padmanabha Reddy, the learned Senior Counsel brings to my notice the decision rendered by the Constitutional Bench of the Supreme Court in Union Carbide Corporation v. Union of India, , and submits that the matter is now authoritatively decided by the Supreme Court that this Court, in exercise of its inherent jurisdiction cannot direct compounding of offences which are otherwise non-compoundable under the Code. It is necessary to refer to a few facts of that case so as to appreciate as to in what context, the apex Court laid down the law which is relevant for our purpose. An action for compensation was initiated by the Union as parens patriae before the District Court, Bhopal in O.S. No. 1113 of 1986 Under Bhopal Gas Leak Disaster (Proceesing of Claims) Act, 1985. When an interlocutory matter pertaining to the interim-compensation came up for hearing before the Supreme Court there was a Court assisted settlement of the main suit claim itself. The criminal liability of the Union Carbide Corporation was also finally terminated and put to an end by that Court assisted settlement of the main suit. It was specifically urged before the Supreme Court that the termination of the pending criminal proceedings brought about by the orders dated 14th and 15th February, 1989 is bad in law and were liable to be set aside on the ground that if the orders are construed as permitting a compounding of offences, they run in the teeth of the statutory prohibition contained in Section 320(9) of the Code of Criminal Procedure. While dealing with this issue, the Supreme Court held : (At page 278 of AIR) \"The order terminating the pending criminal proceedings is not supportable on the strict terms of Ss. 320 of 321 or 482, Cr.P.C.\"", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-10", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "Having said that, the Supreme Court justified its earlier court assisted settlement with reference to its powers under Art. 142 of the Constitution of India, for doing complete justice between the parties. In categorical terms, the apex court held : (At pp. 278, Para 43 of AIR) \"The proposition that a provision in any ordinary law irrespective of the importance of the public policy on which it is founded, operates to limit the powers of the apex court under Art. 142(1) is unsound and erroneous. In both Garg's as well as Antulay's case the point was one of violation of constitutional provisions and constitutional rights. The observations as to the effect of inconsistency with statutory provisions were really unnecessary in those cases as the decisions in the ultimate analysis turned on the breach of constitutional rights. We agree with Shri Nariman that the power of the Court under Art. 142 in so far as quashing of criminal proceedings is concerned is not exhausted by Ss. 320 or 321 or 482, Cr.P.C. or all of them put together. The power under Art. 142 is at an entirely different level and of a different quality. Prohibitions or limitations in the Statute might embody and reflect the scheme of a particular law, taking into account the nature and status of the authority or the Court on which conferment of powers ..... limited in some appropriate ..... way is contemplated. The limitations may not necessarily reflect or be based on any fundamental considerations of public policy.\"  \nA close reading of the said decision of the Supreme Court would show that even the Supreme Court, in the absence of its plenary jurisdiction under Article 142 of the Constitution of India, would not have compounded the offence which is otherwise non-compoundable.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-11", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "16. The learned Senior Counsel also relied upon a decision of Madras High Court in Sankar Rangayya v. Sankar Ramayya, AIR 1916 Mad 483 : (1915) 16 Cri LJ 750) in support of the proposition that an order allowing composition of the offence is not an incidental order and that an offence cannot be allowed to be compounded when the case comes before the High Court in revision. In the said case, it is categorically held that no offences shall be compounded except where the provisions of Section 345 (present Section 320) are satisfied as to each of the contingencies provided for in the section itself. \n17. Shri Padmanabha Reddy, learned senior counsel refers to a decision of the Supreme Court in Dharampal v. Ramshri, . The Supreme Court in the said case was concerned with a question as to whether the High Court could have invoked its jurisdiction under Section 482 of the Code in entertaining a second revision application which is expressly barred by Section 397(3) of the Code. In the said context, the Supreme Court held (Para 4) : \n \"It is now well settled that the inherent powers under Section 482 of the Code cannot be utilised for exercising powers which are expressly barred by the Code.\"  \n18. In Ganesh Narayan Hegde v. S. Bangarappa, (1995) 2 All Cri LR 211 while dealing with the power of the High Court under Section 482 of the Code. No doubt the Supreme Court held : \n \"While it is true that availing of the remedy of the revision to the Sessions Judge under Section 399 does not bar a person from invoking the power of the High Court under Section 482, it is equally true that the High Court should not act as second Revisional Court under the garb of exercising inherent powers.\"", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-12", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "19. On an conspectus and analysis of all these decisions, it is absolutely clear that the inherent jurisdiction of the High Court under Section 482, Cr.P.C., is available to be exercised for advancement of justice and if any attempt is made to abuse the process of any Court, the High Court shall interfere and exercise its jurisdiction to prevent the same. It is also manifestly clear that this court in exercise of its jurisdiction under Section 482, Cr.P.C. shall not pass any order or issue any direction contrary to the provisions of the Code. The inherent jurisdiction conferred upon this Court merely enables the Court to deal with the situation which is not contemplated by the Code to give effect to any order passed under the Code. This inherent power of the High Court can never be exercised compelling the subordinate criminal courts to act in any manner contravening the provisions of the Code. Such an order can never be termed as an order passed to prevent the abuse of the process of any court. It cannot also be said that such order would secure the ends of justice. Every legal power has its own limitations. There is nothing like unlimited power. So also the power conferred upon this Court under Section 482 of the Code of Criminal Procedure. \n20. The legislative mandate enshrined in Section 320(9) of the Code is manifestly clear. It is couched in a mandatory form. This court, in exercise of the jurisdiction under Section 482 of the Code cannot add, vary or amend a statutory provision. Section 320 of the Code which deals with compounding of offences is exhaustive in its nature and only those offences can be compounded in accordance with the provisions of Section 320 of the Code and not in any other manner.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-13", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "21. It is not the duty of the Court either to enlarge the scope of the legislation or the intention of the legislature when the language of a provision is plain and unambiguous. The Court cannot re-writ, recast or reframe the legislation for the very good reason that it has no power to legislate. (see Union of India v. Deoki Nandan Aggarwal 1991 AIR SCW 2754.)", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-14", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "22. Dealing with the similar situation, the apex Court in State of Kerala v. Mathai Verghese, said (Para 1 of Cri LJ) : \n \"When the legislature does not speak the Court interpreting the relevant provision of law cannot substitute the ..... The High Court cannot do so for, the court can merely interpret the section; it cannot re-write, recast, or redesign the section. In interpreting the provision the exercise undertaken by the Court is to make explicit the intention which enacted the legislation. It is not for the court to reframe the legislation for the very good reason that the powers to 'legislate' have not been conferred on the court.\"  \n23. Can the High Court in exercise of its jurisdiction under Section 482, Cr.P.C., convert a non-bailable offence into a bailable offence or vice versa ? Can the High Court in exercise of its powers under Section 482, Cr.P.C., make a non-cognizable offence as a cognizable offence or otherwise ? The answer should be an emphatic No. Likewise, the High Court, in exercise of its inherent jurisdiction under Section 482 of the Code cannot command the sub-ordinate criminal courts to permit the parties to compound an offence which is not otherwise compoundable. An argument was sought to be raised that such an order can be passed to meet the ends of justice. The court renders justice in accordance with law and not in accordance its own notion. Administration of justice in accordance with the provisions of the Code of Criminal Procedure by the Sub-ordinate criminal courts can never be said that Courts are acting contrary to justice. Can it be said that the refusal to compound the offence by the subordinate criminal court is an abuse of the process of the Court ? It is not. Therefore, the question of this Court exercising jurisdiction under Section 482, Cr.P.C. in such a situation as if to prevent the abuse of the process of the Court does not arise.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-15", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "24. Parliament, in its wisdom, thought that only certain offences specified under Section 320 of the Code alone can be compounded and no other offences. Variety of factors must have been taken into consideration by the Parliament in limiting the offences which can be compounded. It is not possible for this Court to ascertain as to what were the legislative inputs in enacting Section 320 in to the Code of Criminal Procedure. Parliament knows better as to what facts constitute an offence and as to whether such an offence should be compounded. It is a matter of social policy concerning social order. May be, Parliament thought that such of those offences which are not compoundable under the Code are offences where larger interests of the society is involved. Any orders passed by this Court directing the subordinate criminal courts to compound the offences which are not otherwise compoundable would amount to compelling the subordinate criminal courts to act in contravention of law. Such directions would be destructive of the Rule of Law. \n25. This Court, by issuing such directions, could not confer jurisdiction on the criminal courts to compound a non-compoundable offence which it did not possess such jurisdiction under the scheme of the Code. It is well settled that the power to create or enlarge the jurisdiction is in the exclusive domain of the legislature and such power being legislative in character, the legislature alone can do it by law. This Court can neither divest nor enlarge the jurisdiction of any court.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-16", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "26. However, certain decisions were brought to my notice whereunder the High Courts, in exercise of jurisdiction under Section 482, Cr.P.C. directed compounding of offences particularly in the offences relating to matrimonial matters. The learned counsel refers to Arivind Bhushan Chugh v. Dr. Promila alias Ritu, (1992) 3 Cur Cri R 2272 (Delhi), Manoj Kumar Behl v. State, (1992) 3 Cur Cri R 2939 (Delhi), State of Rajasthan v. Gopal Lal (1992) 3 Cur Cri R 2953 (Raj). \n27. In State of Rajasthan v. Gopal Lal (1992 (3) Cur Cri R 2953) (supra), the Rajasthan High Court expressed its opinion that it is high time the legislature should consider whether offence punishable under Section 498-A, I.P.C. should be included in the list of offences under Section 320, Cr.P.C. I am in entire agreement with the view and endorse the opinion expressed by the learned Judge of the Rajasthan High Court. But I am not in agreement with the said decision of the Rajasthan High Court upholding compounding of offence ordered by the Additional Chief Judicial Magistrate, Jaipur. So also, the judgment of the Punjab and Haryana High Court in Parkash Singh v. Smt. Santosh Kaur, (1994) 1 All Cri LR 319 wherein the offences punishable under Sections 406, 498A and 34 of the Indian Penal Code were quashed by the High Court in exercise of its jurisdiction under Section 482, Cr.P.C. as the matter was compromised between the parties.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-17", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "28. The learned counsel Sri C. Padmanabha Reddy also referred to decisions of this Court in G. Srinivasulu v. S.H.O., Kandukur (1992) 1 APLJ 452 and M. Padma Balaji v. A. Krishnam Raju (1995) 2 Andh LT 10 (NRC). In none of these decisions, there is any discussion whatsoever about the nature, scope and power and jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure. \n29. The learned Senior Counsel also brought to my notice a decision of the Supreme Court in Mahesh Chand v. State of Rajasthan, . It is obvious that the apex court has not declared any law as such, but in the facts and circumstances of that particular case on hand, it appears, the Supreme Court itself had compounded the offence and directed the trial court to record the compounding of the offence. The power for issuing such direction is traceable to Art. 142 of the Constitution of India in view of the peculiar facts and circumstances of that case. \n30. However, Sri Padmanabha Reddy, the learned senior Counsel referred to a decision of the Division Bench of this Court in D. Vijayalakshmi v. State (1993) 2 Andh LT (Cri) 159. In the said case, the Division Bench of this Court took the view that in exceptional circumstances only and not as a matter of course, the High Court can direct the subordinate criminal courts to permit the parties to compound the offence punishable under S. 498-A, I.P.C., only. After an elaborate consideration, the Division Bench held :", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-18", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "\"the permission sought for to compound the offence under Section 498-A, I.P.C. pursuant to the settlement or compromise and understanding between the spouses can be accorded by the High Court under Section 482, Cr.P.C. is not justified to be used as a matter of course in each and every case. We are of the firm view that in matrimonial cases, that too, in exceptional circumstances where the disputes arose between the wife and the husband resulting in filing a complaint and a petition for divorce which ultimately resulted in the form of compromise either for divorce or for re-union, and where some of the Sections complained of are compundable and some non-compoundable, the High Court alone is competent, exercising the inherent power vested in it under Section 482, Cr.P.C. to permit the parties to compound a non-compoundable offence along with other compoundable offences, after being satisfied with the compromise entered into between the parties.\"  \nHowever, the Division Bench held : \n \"We are still of the firm view that in the case of non-compoundable offences in general the High Court has no power to permit the parties to compound the same. Sympathy towards the accused shown in special set of circumstances is different from applying the provisions of the Act. Sympathy cannot be a ground for applying the inherent powers vested in the High Court under Section 482, Cr.P.C. It is should be exercised in exceptional cases only to prevent the abuse of the process of the Court or to meet the ends of justice. Sympathy has no place to outweigh the powers given under a particular statute.\"  \nThe learned Judges further observed :", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-19", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "The learned Judges further observed : \n \"The Legislature has introduced this special Chapter bringing a new Section 498A considering the plight of women in the society at the hands of their husbands and in-laws. However, when under the Hindu Marriage Act, reconciliation proceedings are there in spite of serious allegations, we feel that in case of genuine compromise effected between the parties (husband and wife) and if an application has been filed voluntarily by the two parties and if the Court satisfies that any special circumstances exist warranting granting of permission to compound a non-compoundable offence and if it is in the interests of both the parties, the High Court under special circumstances, exercising the inherent power under Section 482, Cr.P.C. may allow the parties to compound such offences. We are not here to lay down a general proposition that the Court is competent to permit the parties in all the cases to compound a non-compoundable offence. The law with regard to exercising of the inherent power is very clear. To prevent abuse of any Court or otherwise secure the ends of justice, the High Court has got inherent powers under Section 482, Cr.P.C., to pass such order as is necessary in the facts and circumstances of the case.\"", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-20", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "I have carefully gone through the judgment. The learned Judges of the Division Bench undoubtedly held that this Court, in exercise of its powers under Sections 482, Cr.P.C. in a given case, can direct an offence punishable under Section 498-A, I.P.C., to be compounded. The Division Bench has not expressed any opinion with regard to other non-compoundable offences. The Division Bench never expressed any opinion as to whether any non-compoundable offence, except the offence under Section 498-A, I.P.C. can be ordered to be compounded by this Court in exercise of the powers under Section 482, Cr.P.C. The Division Bench seems to be of the opinion that even this power should be sparingly used in a given case after satisfying itself to its genuineness, the background of the settlement between the husband and wife. Therefore, the Division Bench decision is not an authorative pronouncement for the propostion that this Court has the power or jurisdiction to direct compounding of the offences which are otherwise non-compoundable. \n31. It is fairly well-settled that a single Judge is definitely bound by the judgment of the Division Bench with regard to the same subject-matter. The doctrine of precedent requires such compliance. \n32. The question before me is a larger one than that was canvassed before and dealt with by the Division Bench. The question of jurisdiction was not pointedly projected before the said Division Bench and obviously, therefore, was not dealt with.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-21", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "33. The Division Bench was concerned with one particular aspect as to whether the offence under Section 498A of the Indian Penal Code can be directed to be compounded, whereas the cases before me involve other offences also including the one under Section 307, I.P.C. Section 138 of the Negotiable Instruments Act. In Criminal Petitions Nos. 2951 and 2952 of 1995, the offence, alleged to have been committed by the petitioners accused included the offence under Section 452, I.P.C. also which is non-compoundable, for which now permission is sought for compounding the same. Even with regard to the jurisdiction of this Court for directing the offence punishable under Section 498-A, I.P.C. to be compounded, I express my inability to agree with the view taken by the learned Judges of the Division Bench. Then the question would be as to whether am I bound by the said judgment ? \n34. In the entire judgment of the Division Bench, nowhere there is a reference to sub-section (9) of Section 320 of the Code which is mandatory in its nature containing the legislative command to the effect that no other offence except the offences stated in Section 320 itself can be compounded. Had the Division Bench noticed sub-section (9) of Section 320 of the Code in my humble opinion, the result would have been different. Therefore, the judgment rendered by the Division Bench is without reference to the relevant mandatory provision of law and also prestigious binding authorities. Therefore, the judgment must be regarded as given in per incuriam with regard to exercise of jurisdiction under Section 482, Cr.P.C. in relation to compounding of non-compoundable offences.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-22", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "35. That apart, the binding precedent in Union Carbide Corporation's case (supra) is not brought to the notice of the Division Bench. Another binding precedent of the Supreme Court in Dharampal's case (1993 Cri LJ 1049) (supra) was also not brought to the notice of the Division Bench. \n36. The question directly came up for consideration before the Supreme Court in Ram Pujan v. State of Uttar Pradesh, . In the said case, the offence punishable under Section 326 of the Indian Penal Code was compromised between the parties at the appeal stage and the High Court referred the matter to the trial court for verification of the compromise. After the compromise was got verified, the High Court passed an order stating that the offence under Section 326, I.P.C. was non-compoundable and permission to compound the said offence could not be granted, but reduced the sentence in view of the compromise from four years to two years. The Supreme Court, speaking through Khanna, J. held (Para 7) : \n \"The Major offence for which the appellants have been convicted is no doubt non-compoundable, but the fact of compromise can be taken into account in determining the quantum of sentence.\"  \nClearly, the order of the High Court in refusing permission to compound the offence is upheld by the Supreme Court. \n37. Similarly, in Rajinder Singh v. State (Delhi Admn.) , the Supreme Court was dealing with an appeal regarding conviction of the petitioner therein under Sections 325 and 452, I.P.C. The matter was compromised between the parties. The Supreme Court stated thus :-", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-23", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "\"The former offence can be compounded with the permission of the court. We grant permission to the parties to compound the said offence. The effect of that is the acquittal of the petitioner in view of the provision of law contained in Section 320(8) of Cr.P.C. for the offence under Section 325. \nThe other offence under Section 452 is not compoundable. Under the circumstances, while maintaining conviction of the petitioner under the said provision of law we reduced the sentence to the period already undergone.\"  \n38. In Biswabahan v. Gopen Chandra, the Supreme Court in categorical terms said : It is therefore clear that to have the effect of an acquittal the offence compounded must be one specified either under sub-section (1) or sub-section (2) of Section 345 of the old Code (Section 320 new). The principle behind the scheme seems to that wrongs of certain classes which affect mainly a person in his individual capacity or character may be sufficient redressed by composition with or without the leave of the court as the case may be. The Supreme Court categorically held : \n \"If a person is charged with an offence, then unless there is some provision for composition of it the law must take its course and the charge enquired into resulting either in conviction or acquittal. If composition of an offence was permissible under the law, the effect of such composition would depend on what the law provided for.\"  \nNone of these binding precedents are noticed by the Division Bench. The law declared by the Supreme Court is binding upon this Court and is the constitutional command enshrined under Art. 141 of the Constitution of India.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-24", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "39. Compounding of offences which are otherwise non-compundable under Section 320 of the Code are expressly barred by sub-section (9) of Section 320 of the Code. Therefore, the judgment of the Division Bench even with regard to its applicability to the offence under Section 498A, I.P.C. is given per incuriam. \n40. The doctrine of per incuriam is explained by the apex court in Mamleshwar v. Kanayaiya Lal, :- \n \"We do not intend to detract from the rule that, in exceptional instances, whereby obvious inadvertence or oversight a judgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, it may not have the sway of binding precedents. It should be a glaring case, an obstrusive omission.\"  \nThe doctrine is undestood by the Court of Appeal in Young v. Bristol Aeroplane Company Ltd. (1944) 1 KB 718 as follows :", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-25", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "\"Where the court has construed a statute or a rule having the force of a stuatute its decision stands on the same footing as any other decision on a question of law, but where the court is satisfied that an earlier decision was given in ignorance of the terms of a statute or a rule having the force of a statute the position is very different. It cannot in our opinion, be right to say that in such a case the court is entitled to disregard the statutory provisions and is bound to follow a decision of its own given when that provision was not present to its mind. Cases of this description are examples of decisions given in per incuriam. We do not think that it would be right to say that there may not be other cases of decisions given per incuriam in which this court might properly consider itself entitled not to follow an earlier decision of its own. Such cases would obviously be of the rarest occurrence and must be dealt with in accordance with their special facts. Two classes of decisions per incuriam fall outside the scope of our inquiry, namely, those where the court has acted in ignorance of a previous decision of its own or of a court of co-ordinate jurisdiction which covers the case before it - in such a case a subsequent court must decide which of the two decisions it ought to follow; and those where it had acted in ignorance of the House of Lords which covers the point in such a case, a subsequent Court is bound by the decision of the House of Lords.\"", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-26", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "\"A decision is given per incuriam when the court has acted in ignorance of a previous decision of its own or of a court of co-ordinate jurisdiction which covered the case before it or when it has acted in ignorance of a decision of the House of Lords. A decision may also be given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. As a general rule, the only cases in which decisions should be held to be given per incuriam are those given in ignorance of some inconsistent statute or binding authority.\" (See Hallsbury's Law of England, 3rd Edition, Vol. 22 at page 800).  \n41. A seven Judges Constitutional Bench of the Supreme Court authoritatively declared the Law as to what constitutes 'per incuriam' in A. R. Antulay v. R. S. Nayak, as follows :- \n \"'Per incuriam' are those decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the court concerned, so that in such cases some part of the decision or some step in the reasoning on which it is based, is found, on that account to be demonstrably wrong.\" \n\"The principle that the size of the Bench whether it is comprised of two or three or more Judges - does not matter.\"  \nIt is settled rule that if a decision is given in per incuriam, the Court can ignore it. \n42. My learned brother Justice M. N. Rao had an occasion to consider the doctine of 'per incuriam' in a judgment rendered in Smt. Kannamma v. Dist. Collector Ranga Reddy (1990) 1 Andh WR 722 and put the law very succinctly as follows :", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-27", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "\"Unfortunately, without noticing the above binding precedent, it was held by this Court - These cases, I must declare with due respect to the learned Judges are per incuriam - Even if any Division Bench of this Court or for that matter a Full Bench of this Court had taken the view - it must be deemed to be no longer good law after the authoritative pronouncement of the Supreme Court in Laxman Ambaji's case - I do not consider it appropriate to refer the matter to a Division Bench for the obvious reason that on the question under consideration the decision of the Supreme Court in Laxman Ambaji's case holds the field and without noticing the same, this court had taken a contrary view.\"  \nFor the aforesaid reasons, the decision of the Division Bench which is rendered in per incuriam is not a binding precedent. There is no need to refer the matter to Division Bench or Full Bench. I need to say no more on this aspect. \n43. The power conferred upon this Court under Section 482, Cr.P.C., is general in nature. The provision protects the inherent jurisdiction of this Court to meet any eventuality not contemplated by the Code of Criminal Procedure to give effect to the orders passed by the Courts and to prevent the abuse of the process of the Court and to pass appropriate orders to meet the ends of justice. Whereas Section 320 of the Code is a special provision dealing with compounding of offences. It exhaustively deals with as to what are the offences that there compoundable and the manner in which they are to be compounded and further it specifically commands that no other offence other than those mentioned in Section 320 of the Code shall be allowed to be compounded. The effect of compounding of an offence is the acquittal of the accused in the case.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-28", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "44. It is well established doctrine of interpretation that the provisions contained in a statutory enactment have to be construed as to be in harmony with each other and that where, under a specific section or rule a particular subject has received special treatment, such special provision will exclude the applicability of any general provision which might otherwise cover the said topic. (See Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh Bhupesh Kumar Sheth ). \n45. Application of any general principle must yield to the limiting terms of the statutory principle itself (see Union of India v. Raghubir Singh ).", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-29", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "46. A similar situation arose under Criminal Justice (Temporary provisions) Act (Northern Ireland), 1970 in Kennedy v. Spraft, (1971) 2 WLR 667 (HL). By Section 1 of the Criminal Justice (Temporary Provision) Act (Northern Ireland), 1970, it was provided that 'any person' who is convicted of an offence, committed during the period of present emergency, under any of the statutory provisions mentioned in column 1 of the Schedule, shall, notwithstanding anything to the contrary contained in that or any other statutory provision, be sentenced to imprisonment for not less than the period specified opposite that provision in column No. 2 of the Schedule II'. The question that arose was whether a court sentencing an accused under the aforesaid provision had power to suspend the sentence and release the accused on probation under Section 18 of the Treatment of Offenders Act, 1968. Having regard to the mischief at which the Act was aimed, i.e., to ensure greater uniformity of sentences and to deter further out-breaks of violence, it was held that the court had no power to award suspended sentence and the words in the section 'shall be sentenced to imprisonment' for a specified period, meant that the accused be punished by sending him to prison.\" (See G. P. Singh's Interpretation of Statutes). \n47. In view of the aforesaid, discussion, I hold that this court has no power and jurisdiction to direct the subordinate criminal courts to permit the parties to compound the offences which are otherwise non-compoundable in exercise of the inherent jurisdiction under Section 482 of the Code of Criminal Procedure. \n48. In the view I have taken supra, the petitions cannot be entertained by this Court and all the petitions are accordingly dismissed.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "194cc78dd3d4-30", "Titles": "Annamdevula Srinivasa Rao And ... vs State Of Andhra Pradesh And Etc. on 11 August, 1995", "text": "49. Before parting with the case, this Court with gratitude acknowledges the invaluable assistance rendered by Sri C. Padmanabha Reddy, the learned Senior counsel for his assistance was in the spirit of a real and true friend of the Court. \n50. Petition dismissed.", "source": "https://indiankanoon.org/doc/228972/"}
+{"id": "6c50091db120-0", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "JUDGMENT P. Chandra Reddy, C.J. \n\n 1. This second appeal arises out of a suit instituted by the 1st respondent in the Court of the District Munsif of Masulipatam for dissolution of partnership, for accounts and other incidental reliefs. This appeal concerns a timber business of one Jaldu Venkata Subbarao of Masulipatam who executed a will on 20-6-1942. He died on 22-6-1942 leaving behind him his widow and considerable assets including the timber business in dispute. \n By and under the terms of the will he made certain bequests in favour of his near relations and faithful servants. The decision of this appeal turns mainly on the relevant clauses of the testament. It is useful to set out the relevant clauses of the will- \n \"I have appointed three individuals mentioned herein as executors arid trustees of my estate after my death -- Thatiparti Nagapotharao, Jaldu Manikyalarao, Pulaparti Viswanadhani. It is provided that at my death all my estate shall vest in the three individuals mentioned herein who shall act according to the provisions mentioned in the wilt .......", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-1", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "It is provided that from Chaitra Sudha Panchame of year Swablianu separate accounts shall be maintained and in the timber shop at Masulipatam 1/4th share wilt be allotted to Dintakurti Satyanarayanamurthy and he should improve business and continue it protecting my adopted son till lie becomes a major. Another 1/4th share will be set apart and if the executors are willing they would give it to the following persons -- Kantheti Narasimharao, Jaldu Bapannarao, Kantheti Satyanarayanamurthy.\" \n Immediately after his death the property of the testator became the subject-matter of litigation. The genuineness of the will was attacked by his widow as well as the 4th defendant in two separate suits, but it is not necessary to give the details. Ultimately, the validity of the will seems to have been upheld, but it is not necessary to advert to it at any length here. The plaintiff who is no other than the nephew of the testator being a son of one of the brothers instituted the present suit for the reliefs mentioned above as he was not given his due share of the income in the said business. \n The three executors were impleaded as defendants 1 to 3. The adopted son was added as the 8th defendant who is the appellant before us. It is not necessary for us to refer to the array of the other parties.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-2", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "2. By opening fresh accounts, and by acting otherwise, the executor implemented sonic of the terms of the will. On account of disputes amongst the executors inter se, the business seems to have been suspended some time later, but one of the legatees, namely, Dintakurti Satyanarayana who was impleaded as 6th defendant in the suit resumed the business some time in the year 1946. In such a situation, the plaintiff brought the present suit praying for dissolution of partnership business and for accounts. \n 3. The answer of defendants 1 and 2 i.e., two of the executors was that the gift to the plaintiff and the defendants 4 and 5 did not consist of any share of the corpus but only a share in the profits, that as the plaintiff and defendants 4 and 5 were not settled in life the testator had desired that ell information regarding the legacy in their favour should be withheld from them and that after the testator's death the executors agreed to give the plaintiff and defendants 4 and 5 a 1/4th share in the profits and fresh accounts were accordingly opened. But the executors deferred their payment of the share of profits for some reasons which need not be detailed here.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-3", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "4. The 3rd defendant adopted a different attitude and said that the executors did not exercise the discretion vested in them under the will to give a 1/4th share to plaintiff and defendants 4 and 5. While the 4th defendant supported the plaintiff, the 5th defendant denied the genuineness of the will and repudiated any interest in the business of the testator. The other defendants fell in line with the 3rd defendant. The contesting defendants also raised a plea that the judgment in the suit filed by the 4th defendant earlier operated as res judicata against him. Various other issues were raised by the pleadings, but they will be dealt with in the proper context. \n 5. After the conclusion of the trial but before the judgment was delivered, the 5th defendant put in a petition for amendment of his written statement and issues by permitting him to ask for relief based on the terms of the will. This application was not allowed on the ground that it was very belated. The trial court passed a preliminary decree as follows: \n 1. The partnership shall stand dissolved as on 11-4-1946; \n 2. The plaintiff and the 4th defendant shall each be entitled to 1/12th share in the net profits of the timber business of the testator in Bandar; \n 3. The account books of the partnership shall be taken as the basis for ascertaining the profits. \n 4. The value of the stock-in-trade of the business on 11-4-1946 be ascertained and a 1/12th share therein shall be paid to each of the plaintiff and the 4th defendant.  \n The trial court declined to pass a decree in favour of the 5th defendant as in its view he disowned all interest in the business.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-4", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "6. The 5th and 8th defendants who were aggrieved by this decree preferred appeals A.S. 26/1953 and 45/1952 respectively. The plaintiff who was also aggrieved with certain directions in the decree preferred the memo, of cross-objections. The lower court allowed the appeal of the 5th defendant but dismissed the appeal of the 8th defendant with costs and allowed the memo, of cross-objections. It is this judgment of the Subordinate Court that is brought under appeal. Its validity is impugned on various grounds. \n 7. At the outset, it is contended by the counsel for the appellants that the bequest in favour of plaintiff and defendants 4 and 5 being only a conditional one and the conditions imposed thereunder riot having been fulfilled the whole thing falls into the residue and so far as that share was concerned, there was intestacy. Alternatively, it is maintained that the testator had conferred only a power of appointment on the executors and this power not having been exercised no right has accrued to the plaintiff or defendants 4 and 5. \n Though this problem was not raised in this precise form in the Courts below, we permitted the appellant to argue it as it is a pure question of law. We are not very much impressed with the first argument. There is no basis for the submission that the bequest in favour of plaintiff and defendants 4 and 5 was conditional one. The present bequest cannot be regarded as conditional devise as the requirements of such a bequest are not present in this case. In fact, the learned counsel for the appellant did not persist in describing it as conditional bequest; and, he fell back upon the alternative contention.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-5", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "The argument advanced is that the language of the relevant clause, namely, ^^vanqyks [email protected] efj;ksd Hkkx Hkq ;sikZVq psfl ,D>sD;qVyqZ b\"Veq v\";s ;sMy ykHkHkq f;P;qP;qaMs ykxqu ;sikZVq ps;MeSaufn** communicates the idea that the assigning of a share to these persons entirely depended on the will and pleasure of the executors and the non-exercise of their discretion has left these individuals without any remedy. In support of his contention the learned counsel for the appellant cited to us several rulings of English and Indian Courts. \n 8. The point for determination is whether the construction that is sought to be put on the material recitals, namely, that it is a mere power that is conferred upon the executors is correct or whether it is power coupled with interest. \n 9. Before we examine the various authorities, called in aid by the counsel on either side, we may mention that the right of a testator to grant a power of appointment to a person designated in the will authorising to regulate the final devolution of the estate at the termination of the interest previously created has been recognised by the Courts of this land and the Privy Council as far back as Bai Motivahoo v. Bai Mamoobai, 24 Ind App 93 (PC), thereby sanctioning a great extension of the testamentary powers. Legislative sanction was given to this by enacting explanation to Section 69 of the Indian Succession Act; \n \"Where a man is invested with power to determine the disposition of property of which he is not the owner, he is said to have power to appoint such property.\"", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-6", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "10. Coming now to the rulings, we will first refer to Bull v. Vardy, (1791) 30 ER 338. There, the testator bequeathed to his wife several houses but did not give her any interest in the general produce of his state. The will inter alia recited: \n \"I further empower my wife to give away at her death 1,000/-; 100 of it to Elizabeth and 100 to Mrs. Bennet and the other 800 to be disposed of by her by will.\" \n The testator gave his two sisters his money in securities for their lives and said that his legatees were to take nothing till after the death of his wife and two sisters. He then distributed his property into small legacies and gave the residue to two young women named Crowe. The wife without making any disposition of the whole or a part of 1,000 aforementioned died. \n Elizabeth Turner laid a bill against the executors of the widow of the testator claiming 100 which she had power to leave to the claimant. It was argued on behalf of the plaintiff that the 100 which the wife of the testator was empowered to give was sufficiently devised by the will and that words connoting recommendation, desire, request, etc., were in their nature compulsory and words of devise and when the testator empowered his wife to give to a certain object a certain sum there was a legacy. \n This was negatived by L.C.B. Eyre in the view that the wife had no interest at all in the 100 and as such there was nothing to raise a trust and consequently the devise to her was only a naked authority. The ratio decidendi is contained in the following passage:", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-7", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "\"The plain import of the words with the context seems to be this: He gives the residue to these women named. Crowe; but says his wife may dispose of 1,000/- if she pleases; if she does, she must give 100 to each of these women; the rest as she pleases. The word 'empower' in its most obvious sense is enough to create a charge. The party must execute the power to create a charge.\" \n It is true this case has stood the test of time and still holds the field, but does not render any assistance to the appellant as it applies to a set of different circumstances from those of the present. There, the wife was not given any interest in 1,000. She was given only a power to dispose of 1,000 forming part of the residue of the estate given to two women named Crowe. If the wife did not exercise that power during her lifetime it would belong to the residue of the legatee and so there was nothing to raise a trust. Further, out of 1,000/- a provision was made only for 200. Thus, it is a clear case where no trust was created in favour of either Elizabeth Turner or Mr. Bennett. \n 11. The case next cited for the appellant Is In re, Week's Settlement, 1897-1 Ch 289. In that case, the will of the testatrix that fell to be considered by the Courts conferred on her husband a life-interest in certain property. Then followed the clause: \n \"And I give to him power to dispose of all such property by will amongst our children in accordance with the power granted to him as regards the other property which I have under my marriage-settlement\".", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-8", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "There were children but the husband died intestate without having exercised the power of disposition. It was decided by Romer L. J. (Romer J., as ha then was) that what was conferred on the husband was a mere power and not one coupled with interest, which was bound to be exercised. Therefore, there was no gift to the children by implication. Romer J., began by saying that \"I should gather from the terms of the will that it was mere power conferred on the husband,\" \n The learned Judge also remarked that the authorities cited to him did not show that \"any hard and fast rule that a gift to A for life with power to A to appoint among a class and nothing more must, if there is no gift over in the will, be held to be a gift by implication to the class in default of the power being exercised.\" He added that the indication should be found in the will that the testator or testatrix did intend that the class or some of the class to take--intended in fact that the power should be regarded in the nature of a trust -- only, a power of selection being given, as for example, a gift to A for life with a gift-over to such of a class as A shall appoint. \n Thus, this is not an authority for the proposition that whenever a power of appointment is conferred that should he construed as a mere power and that no trust can be implied in favour of objects of that power.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-9", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "12. In re. Combe; Combo v. Combe, 1925-1 Ch 210, which followed 1897-1 Ch 289 is of the same character. In that ease by his will one Harvey T. Brazazon Combe after appointing his wife and son to be executors and trustees, devised and bequeathed his residuary, real and personal estate, to trustees upon trust for conversion and to hold the net proceeds and the investments representing the same in trust to pay the income to his wife during widowhood and after her death or remarriage in trust for his only son for life and from and after his death \"in trust for such person or persons as my said son ...... shall by will appoint.\" \n The will proceeded \"but I direct that such appointment must be confined to any relation or relation of mine of the whole blood.\" It was held by Tomlin J., that the will did not show any intention on the part of the testator to make a trust in favour of the objects of power and consequently \"if the son released his power of appointment, the property would go subject to the two life interests as on an intestacy.\" The main consideration that weighed with the learned Judge in coming to that conclusion was that there was uncertainty as to class of persons for whose benefit he could create a trust which the son was under a duty to execute. The following passage gives the reason for the learned Judge's opinion:", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-10", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "\"I have no difficulty in coming to the conclusion that there is in this will no indication adequate to enable me to conclude that a trust was intended to be created. The class said to be the beneficiaries hem differs wholly from the class which is the subject of the discussion in the cases that were cited. That was generally the testator's children, or, at any rate a quite definite and ascertained class, What this class is going to be, if it became necessary to ascertain it, I confess at the moment I am unable to say. \n At any rate it does not seem to me to be such a class as justifies me in saying that the testator meant it to benefit in any event. I think it may very well be that the form of this will is deliberate and that he really meant his son to have a life interest and to be able to dispose of the property afterwards, provided that it was not left wholly out of the family, and that for the rest he was content to let it go as the law would make it go upon an intestacy. I see no reason on the words of this will for importing into it something which I am quite sure is not there.\"  \n That case is therefore based upon the words of the will and upon the uncertainty and indefiniteness of the objects of power. Here also the learned Judge said that there was no inflexible rule in regard to such matters which means that the decision has to be reached on the dispositive words in the will.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-11", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "13. Re, Eddowes, (1861) 62 ER 430, cited by the counsel for the appellant in his reply also belongs to the same category. What happened in that case was that a testator after having made a bequest of the residuary estate to his seven children revoked by a codicil the share given in the will to one of the sons and gave the same to his trustees by a trust at their uncontrolled discretion to apply the same or such parts thereof as they should think proper for the personal maintenance and support or otherwise for the benefit of the said son or otherwise to apply the same in augmentation of the shares of the testator's other children. \n The trustees did not exercise the power but paid the share in question into court under the Trustee Relief Act. It was laid down by Vice Chancellor Sir R.T. Kindersley that there being no gift in favour of the person who would he benefited by the exercise of the power, no gift could be implied. Consequently, there was intestacy with respect to that share. This is an obvious case of a mere power and not one coupled with interest. \n On the terms of the will, no gift could be implied. This does not therefore advance the case of the appellant in any way. \n 14. It was then argued by Sri Somasundaram with great insistence that the principle enunciated in Kumarasami v. Subbaraya, ILR 9 Mad 325, would govern the instant case on hand. There, a Hindu by his will after appointing certain persons as executors for the purpose of managing the estate gave them the following direction: \n \"You should give my brothers, their wives and children, according to your wishes.\"", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-12", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "\"You should give my brothers, their wives and children, according to your wishes.\" \n Justice Brandt and Justice Parker in reversing the judgment of Justice Kerman in regard to the effect of these words observed that the words expressed a wish only and not a command and that though the objects of the testator's benevolence were clearly mentioned there was uncertainty both as to the property and the way in which it should go. It was also remarked by both the learned Judges that the executors who were given the power of general direction did not exercise but renounced the only character in which it was competent to exercise it. \n Since they have not chosen to act, the Court would not act unless the power is coupled with a trust. It is manifest that it is the uncertainty as to the property to be distributed amongst the persons intended to be benefited by the testator and the mode of distribution that induced the learned Judge to give that decision. \n 15. The other case called in aid by Sri Somasundaram does not come to the rescue of the appellant. In Mussoori Bank v. Albert Charles Raynor ILR 4 All 500 (PC), the testator made a gift in these words: \n \"I give to my dearly beloved wife the whole of my property both real and personal (described) feeling confident that she will act justly to our children in dividing the same when no longer required by her.\"", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-13", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "The Privy Council in setting aside the judgment of the High Court of Allahabad held that under the will an absolute estate was given to the wife and no trust was created for the benefit of the children. It is seen that in that case no obligation was cast on the wife to leave any property to the children. It was a mere pious wish of the testator which was left to his wife to give effect or not. This does not lend any support to the theory propounded by the counsel for the appellant. \n 16. Bhaidas Shivdas v. Bai Ghulab, ILR 46 Bom 153: (AIR 1922 PC 193), also does not carry the appellant anywhere. That was a case where a Hindu under his will constituted his wife the owner of the property (malik) and provided that she should leave whatever property might remain after her death to two named daughters as she liked. On a construction of this clause, the Privy Council agreed with the view of the High Court that the widow took an absolute estate and there was no trust created in favour of the two daughters of the testator and the testator merely expressed a wish. \n 17. We will now examine the other line of cases. One of the earliest cases where the principle is stated in clear terms and it was relied on in almost all the rulings of the English Courts on the subject is Brown v. Higgs, (1799) 31 ER 366. In that case one Henry Brown bequeathed inter alia the leasehold interest of an estate for life to his nephew John Brown and the heirs-male of the body lawfully begotten and in default of such heirs to one of the sons of his nephew Samuel Brown as John Brown might direct by conveyance in his life or by his last will and testament.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-14", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "He bequeathed to John Brown another leasehold interest upon trust subject to certain charges, to employ the remainder of the rent to such children of Samuel Brown as John Brown shall think most deserving and could make the best use of it or to the children of his nephew William Augustus Brown, if any. John Brown died without issue soon after the execution of the will his first mentioned nephew having predeceased him leaving a son and two daughters. The second nephew also died in the testator's life leaving some children. His widow who was given some legacies remarried Charles Higgs. \n A suit was filed by the children of Samuel Brown against the testator's widow and the next of kin for establishing the will and for other reliefs. One of the questions that fell to be determined was whether the surplus rents after the charges created by the will were so given to such children of Samuel Brown as John Brown would think most deserving and that he would put it to the best use of it or to the children of William Augustus Brown was a gift to all the children or only to such of them as John Brown would select. If the intention of the testator as could be gathered from the will was the former, the death of the testator i.e., John Brown would make no difference. \n But, if that was not the intention, the bequest would fail with the death of John Brown by reason of the selection not having been made. Sir Richard Arden M.R. construed the relevant clause of the will as giving to the children of Samuel Brown or William Augustus Brown with a power to John Brown to select any he thought fit and to exclude others, and that it could not be said that nothing was intended for them, exclusive of the appointment of John Brown. The learned Judge added:", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-15", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "\"The fair construction is that at all events the testator meant it to give to the children and these words of appointment he used only to give a power to John Brown to select some and exclude the others.\" \n The decree which was originally pronounced on Rolls was affirmed on rehearing. This was confirmed by the Court of Appeal, the judgment having been delivered by Lord Chancellor Eldon in Brown v. Higgs, (1801) 32 ER 473. The rule governing these cases is expressed by the Lord Chancellor in these words: \n \"It is perfectly clear that where there is a mere power of disposing and that power is excluded this Court cannot execute it. It is equally clear that whenever a trust is created and the execution of that trust fails by the death of the trustee or by accident this Court will execute the trust.\" \n The matter was taken up in further appeal to the House of Lords in Brown v. Higgs. (1801) 34 ER 290 without success. \n 18. The earlier case on the point is Cower v. Mainwaring, (1750) 26 ER 57. It contains the same principle as in (1799) 31 ER 366. The principle of Brown v. Higgs (supra) was affirmed by Chittey J. in Wilson v. Duguid, (1883) 24 Ch D 244. There, the relevant clause in the will as could be extracted from the Special Case in the report is as follows :", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-16", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "\".......and from and after the decease of the survivor of them, the said William Duguid and Sarah his wife upon trust to assign the said premises upto and amongst such of the children of the said William Duguid and Sarah his wife then living, in such manner, shares, times, proportions as the said William Duguid and Sarah his wife jointly or the survivor of them separately, should by any writing appoint, and in case there should be no such child or children, then upon trust for the said Robert Keeling the younger for life, and after his decease upon trust to assign the said premises unto and amongst such of his children, and in such manner, shares, times and proportion as he should by any writing appoint.\" \n The question was whether all the children of Robert Keeling could take, whether all his children or those only who were living at his death in 1863 or those that were living at the death of Sara Duguid 13 years later or those living at the death of William Duguid subsequently. The answer of the learned Judge was that there was a trust for all the children of Robert in equal shares subject to a power of selection and distribution exercisable by him either by a deed inter vivos or a will. The learned Judge observed that if it was necessary to resort to technical reasoning, he would hold having regard to the words in which the will was formulated that there was a plain implication of trust.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-17", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "19. Burrongh v. Philox, (1840) 41 ER 299 is in consonance with the doctrine of (1799) 31 ER 366. Lord Cottonham after discussing some of the leading cases said that \"when the general intention appeared in favour of a class or a particular intention in favour of a class to be selected by another person and the particular intention fails by reason of the selection not being made the Court will carry into effect the general intention in favour of the class.\" \n Izod v. Izod (1863) 55 ER 95 is another case which applied the rule adumbrated in (1799) 31 ER 366. \n 20. The principle that could be gathered from the various authorities is that if the will gives an indication that the testator or testatrix intended to to create a gift in favour of the objects of benevolence and the power conferred upon the appointee is only one of selection it will he regarded as in the nature of a trust. This intention must be sufficiently apparent on the will. If there is no gift over or express disposition in default of the exercise of that power a gift may be implied to the class equally in default of appointment or \"the appointment is construed in the manner the appointee would select.\" \n But the absence of a gift-over does not necessarily disclose that a trust was created. It is not an absolute rule of law but only one of construction and is only an aid in gathering the intention of the testator. Where a power of selection is in the nature of a trust cast on the donee of that power if the selection is not made, the members of the class take equally. The Court will not permit the objects of the power to suffer by negligence or conduct of the donee of power but would put into effect the intentions of the testator and thus fasten on the property a trust for their benefit.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-18", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "In such a situation, the Court will not permit the intention of the testator to be defeated by the donee of power not executing it. IP there is uncertainty as to the objects or subject of bounty or to the mode of distribution of the property if may be regarded as a naked power. If it is a mere power it lapses if it is not executed. \n Where the intention of the testator to benefit a person is reasonably clear and the subject-matter of the gift is also mentioned, the power given to an appointee will be in the nature of a trust so, that the non-exercise of it will not defeat the gift. The passages in \"Jarman on Wills\" pages 660 to 662 (8th edition) which contain the correct legal principles on the topic bear out the views expressed by us above. \n 21. We will now proceed to ascertain the intentions of the testator in this respect bearing in mind the rules stated above. In the consideration of this question, it may not be out of place to take into account the surrounding circumstances. We have to gather the intention of the settlor by reading the instrument as a whole and in the context of the attendant circumstances. The group of persons who are intended to be benefited by the material clause were in impecunious circumstances and were running into debts. \n It could be seen from the draft of the will prepared two days earlier that the testator was anxious to give them the bequest in such a manner as to put it beyond the reach of the creditors. So, this would throw light on the unquestionable intention of the testator to make a gift to this class of persons. It cannot also be ignored that these three persons were closely related to him and the testator was anxious to make provision for every one oft his relatives, even remote ones and his faithful servants. Another significant circumstance is the absence of a gift-over.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-19", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "Para 16 of the will shows that the legacies mentioned earlier were excluded and it was only the rest that was given to the residuary legatee. If really he had in mind the eventuality of the legacies failing, he would have directed this also to fall into the residue in default of its taking effect which means he was certain that the gift would not lapse, so, we think that the power of selection given was only in regard to the time of vesting. \n It has to be noted that the testator himself has set aside a 1/4th share and then said that if the executors desire they will go on giving that share to the three individuals mentioned therein. It is the use of the words ^^Hkkxeqyq f;PpqPpqMs ykxqu** meaning ''will go on giving a share\" that has induced the Courts below to hold that the testator himself made the bequest of the corpus but left discretion to the executors as regards profits therefrom. \n We do not see any basis for this distinction between the corpus and the profits as there are no words to indicate that the testator himself had in mind such a distinction. We are alive to the fact that the bequest to these legatees is not expressed in so many words but we have to collect the intention of the testator not only from the words used but also from various other considerations. In this context, the remarks of the Privy Council in Narasimha Apparow v. Parthasaradhi Apparow, ILR 37 Mad 199 (PC) are quite pertinent:", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-20", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "\"In all cases the primary duty of a Court is to ascertain from the language of the testator what were his intentions, i.e., to construe the will. It is true that in. so doing they are entitled and bound to bear in mind other matters than merely the words used. They must consider the surrounding circumstances, the position of the testator, his family relationships, the probability that he would use word in a particular sense, and many other things which are often summed up in the somewhat picturesque figure \"The Court is entitled to put itself into the testator's armchair.\" \n Having regard to the several factors indicated above, we feel that the only reasonable inference to be drawn is that discretion was given to the executors to choose the time of vesting and not unfettered discretion either to confer benefit on the class or deprive them altogether of any benevolence. \n 22. Even assuming that the interpretation sought to be put on the will by the appellant were correct, we think it does not make any practical difference. In this case, the power was executed by two of the executors i.e., defendants 1 and 2, the third one refusing to join in the exercise of it. The question is whether that is a valid exercise of the power. It is urged by Sri Somasundaram that the power being a joint one it is not competent to two of them alone to execute it and that it shall be done by all the three and no legal consequences will spring from two of them alone acting in that behalf.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-21", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "Support is sought for this proposition from ILR 37 Mad 199 (PC). In that case, the subject-matter of litigation concerned the zamindary of Nidadavol and Medur. The primary question for decision in that case was whether the power of adoption conferred by the then zamindar on his two wives under his last will and testament could be exercised by only one of the two. The Privy Council decided that as the testator gave a power to his two wives as personae designates it could not be executed by one of them alone, that the exercise of the power vested in the joint donee and the death of one of the donees of power put an end to the joint power. \n Having regard to the fact that notwithstanding that he could authorise one of the two widows to make the adoption he chose to vest the authority in the discretion of both the wives, their Lordships thought that it was the intention of the testa for that it should be exercised by both of them jointly. The decision rested on the ascertainment of the intentions of the testator from the language of the will. \n 23. That this dictum is not applicable to an ordinary joint power is plain from the following sentence in the judgment of their Lordships: \n \"The case is different where the power is vested not in personae designatae but in the occupants for the time being of a specified office such as executors or trustees, but that is not the case which we have to consider here.\" \n Surely, it cannot be disputed that this power of appointment was given to the three individuals mentioned above because they were holding office of: executors and not in their individual capacity. \n 24. The rule enacted in Section 311 of the Indian Succession Act places the matter beyond controversy. Section 311 provides:", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-22", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "\"When there are several executors or administrators, the powers of all may, in the absence of any direction to the contrary, be exercised by any one of them who has proved the will or taken out administration.\" \n If any authority is needed for the proposition enunciated above, reference may be made to Alamuru Sitaramaswamy v. Venkata Raghavacharyulu, 16 Mad LW 52: (AIR 1922 Mad 214) which laid down that such power could be exorcised by two out of the three executors appointed under a will. There can be no scope for the argument that the power in the instant case does not fall within the ambit of the section. The submission of the appellant in this behalf cannot therefore succeed. In our view, the exercise of the power by only two out of three executors is a valid one. \n 25. It was alternatively contended that in the circumstances of the case it cannot be predicated that defendants 1 and 2 executed the power for the following reasons:  \n 26. In the written statement it was pleaded that these two executors chose to give effect to the intentions of the testator by agreeing to give a share to the three individuals in the profits soon after the death of the testator, but that the legatees had no interest in the corpus. The earlier part of the statement is in conflict with the attitude they assumed in the suit filed by the present 4th defendant for a declaration (O.S. 38 of 1943, District Court, Krishna/O.S. 53/1914 Sub Court, Bandar) in which it was stated that the executors were not prepared to exercise the power conferred on them.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-23", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "Further, the Courts below found that the story of defendants 1 and 2 that they executed the power prior to the institution of the suit was unacceptable and that they had not done it prior to the filing of the suit. That being the case, it could not he said that there was in fact an exercise of the power by the executors, argued the learned counsel. \n 27. We are unable to give weight to this argument. It is no doubt true that the position taken up by them in the suit filed by the fourth defendant is not in consonance with their having executed that power immediately after the death of the testator. But their written statements in this suit in clear terms brings out their willingness to exercise that power. \n Their previous attitude would not preclude them from doing what was expected of them by the testator. The present written statement can reasonably be construed as expressing their inclination to give effect to the wishes of the testator. The pleas that the legacy in question was only in regard to the profits also does not present any insurmountable difficulty. That is how the executors understood the bequest. \n It implies a decision on their part to give this group of beneficiaries what in their opinion was the subject-matter of that gift. That does not communicate the idea that they wanted to split it into two parts, exercise discretion with regard to one and refuse it with regard to the other. If ultimately the Court comes to the conclusion that the bequest comprised of the corpus as well as the profits accruing therefrom in the 1/4th share of the business, the exercisable power would attach to the corpus as well. \n In our judgment this is the only reasonable way of interpreting it. So, even on this assumption the plaintiff and others are entitled to the share allotted to them under the will of the testator.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-24", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "28. This leads us to the question as to the period for which the plaintiff and the 4th defendant could claim the profits. It is contended for the appellants that the right of the plaintiff and the 4th defendant to receive the profits should be restricted to a period subsequent to the exercise of the power by the executors or from the date of the plaint when the Court would be deemed to have executed that power as such right flows only from either of the two acts. \n The profits accruing before that date would fall into the residue, continued Sri Somasundaram. On the other hand the learned Advocate-General tries to sustain the judgment of the trial Court on the argument that all the profits accruing before the date of vesting also go along with the corpus since the contingency contemplated by the testator had happened. He submitted that where there is a contingent legacy or a bequest but the testator directed the subject-matter to be set apart and when the contingency happens the property with its accretions would belong to the legatee. \n 29. In support of this theory, he placed before us some decisions of English Courts, one of which is Re: Medlock; Ruffle v. Medlock (1886) 54 LT 828. In that case the testator bequested to his trustees a sum of 750 to pay and divide the same equally between such of his three grand children naming them as should be living at his death and should then have attained the age of twenty one years or have married, or should thereafter attain that age, or marry. \n It was further provided in the will that in default of any such person attaining a vested interest the 750 Pounds and the investments representing the same should fall into his residuary personal estate. The ratio underlying the judgment of Justice Kay was put thus:", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-25", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "\"Therefore it seems to me upon principle that if it is clear upon the testator's will that he has directed the contingent legacy to be immediately set apart for the benefit of the objects of the gift when the contingency which he has indicated, happens, when that contingency does happen the fund set apart with all its accretions belongs to this contingent legatees. The question is whether in this case I find such a segregation.\" \n To the same effect is the judgment of Chitty, J. in Clements v. Pears all 1894-1 Ch. 665 which followed (1886) 54 LT 828. The judgment of the Court of Appeal in Woodin v. Glass, 1895-2 Ch, 309 contains an elaborate discussion on the topic. Lord Lindley reviewed all the earlier cases and re-affirmed the principles laid down in (1886) 54 LT 828 (supra) and 1894-1 Ch. 665 (supra). \n The effect of these decisions is, that if a contigent legacy is segregated and set aside from the general estate of the testator the income would not tall into the residue but goes with the legacy. But, if the subject matter of the gift is not directed to be set apart from the rest of the estate it would not carry the intermediate income, This is how the the proposition is stated in \"Theobald on the Law of Wills\" at p. 166 (11th edition):", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-26", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "\"Before 1926 a contingent specific bequest of chattels real or pure personalty, did not carry the intermediate profits, unless the subject-matter of the gift was directed to be set apart from the rest of the testator's estate. The severance had to take place by virtue of directions given by the testator with reference to the subject-matter of the gift. If the subject-matter of the gift was set aside by the executors, merely because the rest of the estate had become distributable, the gift did not carry the intermediate income.\" \n We feel that the dictum laid down in these cases would not apply to wills in our country as there is a specific provision in the Indian Succession Act enacted in Section 349 to cover such cases and it is in these words : \n \"The legatee of a specific legacy is entitled to the clear produce thereof, if any from the testator's death. \n Exception: A specific bequest contingent in its terms, does not comprise the produce of the legacy between the death of the testator and the vesting of the legacy. The clear produce of it forms part of the residue of the testator's estate.\"  \n The illustration have also to be extracted as they are very helpful in interpreting the section: \n \"(i) A bequeaths his flock of sheep to B. Between the death of A and delivery by his executor the sheep arc shorn or some of the ewes produce lambs. The wool and lambs are the property of B. \n (ii) A bequeaths his Government securities to B, but postpones the delivery of them till the death of C. The interest which falls due between the-death of A and the death of C belongs to B, and must, unless he is a minor, be paid to him as it is received.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-27", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "(iii) The testator bequeaths all his four percent Government promissory notes to A when he shall complete the age of 18. A, if he completes that age, is entitled to receive the notes, but the interest which accrues in respect of them between the testator's death and A's completing 18, forms part of the residue.\"  \n It is argued by the learned Advocate-General that the exception to Section 349 embodies the principle enunciated in the English decisions noticed above. That being so, the exception should be interpreted in the light of those, rulings. We arc unable to accede to this contention. The exception in clear and unambiguous language says that a specific contingent bequest would not comprise the produce between the two dates while the main section lays down that a specific bequest which is vested but in regard to which the enjoyment is postponed would carry the interim income from the time of the testator's death. \n It looks to us that the rule embodied in this section is a departure from the propositions enunciated in the authorities relied on by the learned Advocate-General. Therefore, if it is the exception to that section which applies to this case the legatees would not be entitled to the income between the two material dates. However, in our Opinion, the appropriate provision in this context is not the exception but the main section itself. We feel that this is a specific bequest which is vested in interest but the vesting is postponed to a time dependent upon the discretion of the executors.\" \n The case, therefore, resembles one which is contemplated by illustration 2. While in that illustration the enjoyment is postponed till the happening of a particular event, in the instant case the vesting is postponed till such time as the executors choose. In this view, we hold that the plaintiff and the 4th defendant could claim their due share of profits.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-28", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "30. We will now dispose of another point that was argued by Sri Somasundaram, namely, that the legatees under the will are merely co-owners and do not occupy the position of partners. It is maintained that the essence of partnership is an agreement between the parties to share the profits and in the case of legatees or donees that element being absent they could not constitute a partnership. \n To substantiate this, our attention is invited to the definition. of partnership in Section 4 of the Indian Partnership Act as also to some passages in Mulla's Indian Partnership Act (2nd edition). The ingredients of partnership are set out at p. 302, Mulla's Indian Partnership Act (2nd edition) as follows; \n \"(1) There must be an agreement entered into by all the persons concerned; \n (2) The agreement must be to share the profits of a business; and (3) the business must be carried on by all or any of the persons concerned, acting for all.\"  \n At p. 305 the distinction between co-owners and partnership is pointed out thus;", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-29", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "At p. 305 the distinction between co-owners and partnership is pointed out thus; \n \"There is not partnership without combination to carry on a business, and therefore the mere fact that persons own in common something which produces returns and divide those returns according to their respective interests, does not make them partners. 'Persons who have no mutual rights and obligations do not constitute an association because they happen to have a common interest or several interests in something which is to be divided between them'\" etc. This point is devoid of any substance. There can be no quarrel with the proposition that a co-ownership is not the same thing as partnership. The mere fact that the legatees or donees under a will or a deed inter vivos as the case may be, or heirs at law happen to have common interest in some thing which is divisible amongst them would not make them partners. But, if such persons continue the business either after the death of the testator or when the inheritance falls as the case may be it could not be postulated that there was no partnership. \n They are not precluded from carrying on such a business. When the business is continued, there is an implied agreement amongst the various individuals having a common interest in the business. Such a principle is beyond dispute. This is the effect of Satferaju v. Pallaniraju, ILR 41 Mad 939: (AIR 1919 Mad 950). That aside, we fail to see what difference it makes for the purpose of this case. \n Even if the parties are in the position of co-owners they cannot be denied their share of the profits or the income derived from the business. When this was pointed out to the counsel for the appellants, he conceded that it was so and the position of his client is not in any way affected even if the legatees in question are regarded as co-owners.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-30", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "31. There remains the question whether the 4th defendant is barred by the doctrine of res judicata under Section 11 of the Code of Civil Procedure. What is argued for the appellants is that the judgment in O.S. 38/43 secured by the 4th defendant operates as res judicata against him by the principle of 'might and ought' in Explanation 4 to Section 11 Civil Procedure Code, which says; \n \"Any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit.\" \n It is submitted that it was open to the 4th defendant in the prior litigation to advance the claim; founded on the will and he not having done so is precluded from agitating that matter in the present suit. O.S. 38/1943 was filed by the 4th defendant for a declaration that the will put forward by the executors and the 6th defendant was not a genuine one. It was averred in that suit that he entered into an agreement with Jaldu Venkata Subbarao the alleged testator by and under which he became a partner with a two annas share. \n The right of the plaintiff therein (4th defendant in the present suit) was questioned by the defendants in that suit inter alia on the grounds that he could not assail the genuineness of the will, for the reason that he was not interested in the estate of late Venkata Subbarao and that even otherwise his rights, if any, could not he affected by the will. It is in that context that two additional issues were framed: \n \"5. Whether plaintiff has got a share in Musulipatam Timber Depot of Late J. V. Subbarao.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-31", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "6. Whether the suit is not maintainable for reasons stated in paras 2 to 5 of 1st defendant's written statement?\"  \n Issue No. 5 was found against plaintiff. In view of that finding, it was decided that the plaintiff was not entitled to any relief in the suit and in the result, the suit was dismissed. \n 32. The contention pressed upon us by Sri. Somasundaram is that an issue relating to a share of the 4th defendant was raised in that suit and that issue having been decided; against him that is conclusive against him. The 4th defendant was not prevented from resting his claim to a share on the alternative basis also i. e., under the will. Since he had not urged the alternative ground in that suit he is debarred from doing it in the present suit by force of Explanation 4 to S. 11 Civil Procedure Code. \n 33. In support of this theory, a reliance is placed on Sree Muthoo Raghunadha Periyaoodya Taver v. Katama Nachiar, 11 Moo Ind App 50 (PC). In that case, there was an earlier suit instituted in 1832 for the recovery of the zamihdari of Shiva Ganga and there was an issue relating to the validity of a testamentary paper, but finally the party who claimed under that testamentary disposition rested his case on the assumption of the zamindar being undivided and abandoned his claim under the alleged will.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-32", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "A decision was given against him on the ground that the zamindari was a self-acquired one and therefore the question of division or no division was immaterial. Thereupon, a fresh suit was instituted for the purpose of establishing the will. It was held by the Privy Council that the decision in the prior suit was final so far as it concerned that will as its validity was properly at issue in prior litigation and that was abandoned. \n We cannot derive any assistance from that case. There, an issue touching upon the validity of the will was specifically raised, but it was abandoned. Further, the plaintiff could have founded his claim upon the will alternatively in the prior suit. It was in such a situation that their Lordships applied the principle of res judicata. \n 34. Doorga Pershad Singh v. Doorga Konwari, ILR 4 Cal 190 (PCJ is also another instance of the same principle. There a suit filed by a Hindu widow governed by the Mitakshara as the heiress of her deceased son was decreed. One of the parties to that Suit brought a fresh suit alleging a family custom which excluded female heirs and gave him a preferential right among the male heirs. It was held that plea was not open to him in the second suit by virtue of the doctrine of res judicata. \n The reason of the rule there is that he could have set up this defence and if proved would have negatived the claim of the plaintiff in the earlier suit on that objection. Masilamania Pillai v. Thiruvengadam Pilla, ILR 31 Mad 385 and Fateh Singh v. Jagannath Baksh Singh, ILR 47 All 158: (AIR 1925 PC 55) also illustrate the same proposition.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-33", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "35. We do not think these cases have much of a bearing on the present enquiry. In our judgment, there is no scope for extending the doctrine of res judicata to this case. The subject-matter of the two suits as also the capacities in which they were brought are altogether different. The object of the first suit was to obtain a declaration that the will was forged one whereas in the present one the purpose is to get legacy given under the will. Therefore, the area and scope of the previous litigation are different from those of the present one. \n It is true in O.S. 38/1943 issue 5 bore on the right of the then plaintiff to a share in the partnership. But it should be remembered that that issue was founded upon a pleading that the suit was not maintainable since he had no interest in the estate that was the subject of the will of late Venkatasubbarao. That issue therefore became germane to the decision of the question as to the status of the plaintiff to maintain the suit. That this is so clearly appears from the judgment in that suit. In discussing the maintainability of the suit this is what the Subordinate Judge says: \n \"In para 11 of the plaint, the only ground given by the plaintiff as cause of action to file this suit is that he has got an interest in the Masulipatam Timber Depot of Jaldu Venkata Subbarao. Since I have found that he has no sort of interest in the suit depot, the very foundation of the plaintiff's case is knocked out and he has therefore no locus standi to maintain this suit.\"", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-34", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "Thus, it is manifest that issue 5 referred to above was considered only as having a bearing on the right of the plaintiff to impugn the genuineness of the will. That being the case, it could not be said that the issues now arising in this case should be deemed to have been directly and substantially in issue in the earlier suit. It cannot also be ignored that the first suit was instituted by the 4th defendant in the capacity of one who had entered into partnership with Venkata Subbarao during his life-time while in the present the claim is as a legatee under the will of the said Venkata Subbarao. \n The cause of action also cannot be said to be the same to attract the applicability of the principle underlying Section 11. It is necessary that the cause of action on which both the suits are based should be the same. In ILR 31 Mad 385 relied on by the appellant, it is said: \n The real test, therefore, is whether the cause of action, or transaction on which the two suits are based, is the same, and not whether the transaction is sought to be established in different modes or by different means.\" \n Applying this criterion, it must be held that the bar of res judicata cannot come into operation in this case. This is not a case where the same transaction is sought to be established in two different modes, as in the cases cited for the appellants.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-35", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "36. The fallowing decisions are nearer to the present case. In Thandavan v. Valliamma, ILR 15 Mad 336 the object of the previous suit was to get a declaration that the will was a forgery, but the property was not then sued for. The same party was held not to be precluded by the decree in the former suit declaring the genuineness of the will from impugning the validity of the will in a subsequent suit since in the former suit the property was not sued for. \n In Dhanapalu Chetti v. Anantha Chetti, 24 Mad LJ 418 a suit was instituted for a declaration that the properties disposed of by a testator were the undivided family properties of themselves and the testator. The suit was dismissed on the ground that the testator was divided by the time of his death. It was held that this was not a bar to a second suit as reversioner on the footing that the will gave only a widow's estate to the legatees. The doctrine of T. K. Ummatha v. T. K. Cheria Kunhamed, ILR 4 Mad 308 also accords with this. \n 37. In the present case the 4th defendant could not have made any claim on the strength of the will as it would have been incongruous having regard to the nature of the suit there. It would have introduced an utterly inconsistent claim in that suit. For these reasons, we hold that the adjudication in the previous suit docs not stand in the way of the 4th defendant recovering his share of the legacy under the will. We, therefore, reject this contention also.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-36", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "38. There remains the appeal relating to the 5th defendant. The judgment of the lower Court is attacked by the appellant as being an unsound: one. The complaint of the appellant in this behalf is that the lower appellate Court ought not to have permitted the appellant to invoke Order 6 Rule 17 C. P. C. having regard to the late stage at which the request was made in the trial court and also the circumstances in which the amendment was sought. \n 39. The arguments adduced for the appellant in this behalf are substantial and deserve much weight. The narration of facts reveals that in the original written statement the 5th defendant not only called in question the genuineness of the will but wanted also the suit to be dismissed against him alleging that he was not a necessary party. Thus, far from not putting forward any rights in the partnership by and under the will it was specifically stated that he never functioned as a partner. Having regard to this written statement the material issues were framed thus: \n \"(1) Whether the plaintiff and the 4th defendant had any share in the suit timber business according to the will relied on in the plaint? \n (2) Whether the 5th defendant was a necessary party to the suit?\"  \n The trial proceeded on the basis of these issues and concluded on 15-9-1952. Two days after that, i.e., six years two months after the original written statement was put in, the 5th defendant sought an amendment of the written statement. We may extract in extenso the affidavit filed in support of the petition to the extent it contains the reasons given by this defendant in view of the importance of the context:", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-37", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "\"I was not personally aware of the execution of the will and I was not informed by the executors about their having given a four-anna share to me, plaintiff and 4th defendant. I pleaded in my written statement that I was not aware of the fact of such a share having been given to us and consequently that I was not a necessary party. I never disclaimed any such share if there was any such. The averment that the suit might be dismissed was made only in the routine manner. \n Even the plaint averments make it clear that it was a consolidated share of 4 annas that was directed to be given jointly to plaintiff, 4th defendant and myself. Therefore, even according to the plaint either all of us get the share or do not. Issue No. 1 ought to have been therefore framed so as to say whether the plaintiff, 4th defendant and 5th defendant are entitled to a share in the suit business and not confined to plaintiff and 4th defendant alone. Issue No. III is also unnecessary, I therefore submit that the issue had to be recast accordingly. \n \"4. By subsequent events it has transpired that the truth and binding nature of the will of late Jaldu Venkata Subba Rao Garu which was in dispute for a long time was finally admitted by all the concerned patties. It also now transpires from the evidence of the executors that they have in fact given a four-anna share jointly to plaintiff, 4th defendant and myself.\"", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-38", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "The trial Court rejected this application but that order is not before us. We do not get any inkling in the judgment as to the reasons for the dismissal. All that is stated there is that since the 5th defendant filed a written statement supporting the 3rd defendant and disclaiming any interest in it he could not have any share in it. The reasons given by the Subordinate Judge for allowing the appeal filed by the 5th defendant are these:-- \n \"The object of the contentions of the 5th defendant was to deny the existence of the will dated 20-6-1942. He merely pleaded that he was not aware of the fact that plaintiff 4th defendant and himself were given a share and at the time when he filed the written statement he supported the stand of the 3rd defendant who was antagonistic to the other two executors. \n The observations of the learned District Munsif in para 23 of the judgment that the 5th defendant disclaimed his interest in the business are incorrect inasmuch as the learned District Munsif did not refer in that paragraph to the application filed by the 5th defendant to have his written statement amended. If the plaintiff and the 4th defendant are to get a share in the timber business it is not as if the 5th defendant is foregoing his own proportionate share in that business.\"", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-39", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "It is plain that the learned Subordinate Judge did not approach the question from the right stand point. His criticism regarding the observations of the Munsif in para 23 does not stand any scrutiny. The mere fact that an application for amendment of the written statement was filed by the 5th defendant did not detract from what was stated in the original written statement. He did not consider whether any grounds existed for accepting an application for amendment of the written statement. Evidently what influenced the learned Judge was that since the plaintiff, the 4th defendant and the 5th defendant were together given a 1/4 share there was no reason why the 5th defendant should be deprived of his quota in that 1/4th share. We think that was not a decisive test. The learned Subordinate Judge had not applied his mind to the real question whether an amendment of the written statement was warranted by the circumstances of this case. \n If only the learned Judge had given any thought to this aspect of the matter, he would have arrived at a contrary decision. It has to be noted that the allegation in paragraph 3 that this defendant is not aware of the execution of the will is not a true one. Along with the plaint the copy of the will in dispute was marked as Ex. A-1 and therefore the knowledge of contents must be attributed to him. \n That apart, a specific reference is made in the written statement to that will. There is also no substance in the complaint that issue No. 1 as it stood ought not to have been framed and issue No. 3 was also unnecessary. These issues were formulated on the pleadings including the written statement of the defendant. One fails to understand how a grievance could be made of any of these issues when the defendant himself said that he was not a necessary party, that he did not claim any interest in the business and that the suit should be dismissed with his costs.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-40", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "There can be little doubt that the application for amendment was lacking in bona fides. We understand that the 5th defendant approached the Court with the prayer for amendment two days after the trial ended having regard to the views expressed by the trial Court regarding the tenability of the contentions of the contesting defendants. \n 40. It is true that as a general rule amendment of pleadings should be liberally granted to enable the real question between the parties decided except when it occasions any injury to the opposite party. All the rules of procedure are devised only in the interests of proper administration of justice and they should be made to serve that end. Therefore, the powers conferred on a Court by Order 6 Rule 17, C.P.C. should be liberally exercised. \n But an amendment claiming reliefs absolutely inconsistent with those in the original written statement would not come within the purview of Order 6 Rule 17, C.P.C. The exercise of the power given under Order 6 Rule 17, C.P.C., is subject to the same qualifications as stated by the Privy Council in Ma Shwe Mya v. Maung Mo Hnaung, ILR 48 Cal 832: (AIR 1922 PC 249):-- \n  \".........  but nonetheless no power    has yet been given to enable one distinct cause of action to be substituted for another, nor to change, by means of amendment the subject-matter of the suits.\"", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-41", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "41. In the instant case, the amended written\nstatement wholly displaces the original one and\ndestroys all that was stated and claimed therein.\nThe reliefs claimed in the amended written statement are in contravention of the original prayer\nfor the dismissal of the suit with his costs. The\nCourts normally should not allow the party to raise,\nan amendment which is in direct negation of what\nis stated or contained in. the original statement. See\nSheik Masthan Sahib v. P Balarami Reddy, . \n \n\n 42.  Another consideration that should enter the decision  of the point arising  under Order  6   Rule 17 is the stage at which it should be permitted to be  raised.   Unless there are  good  and proper reasons an amendment of plaint or written statement should not be allowed after the case is closed. In Vedachala    Chettiar   v.  Ameena  Bi Ammal,     AIR 1944     Mad     121 (F. B.), when the   plaintiff's evidence was about to be concluded, one of the defendants sought leave of the Court for amendment of one of the issues by inserting some words, and that   defendant   succeeded   in      inducing   the   trial Court to make that amendment.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-42", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "But, while giving the judgment, the Court did not   give effect  to   the   amendment  but   proceeded on the basis  of the original written statement.  In dealing with that matter, this is what Chief Justice Leach who spoke for the court remarked:-- \n \"It is regrettable that the amendment of the issues should have been allowed ...... It was far too late at the close of the plaintiffs case to allow defendant 4 to set up a new case. The application has been renewed in this Court, but we see no reason to differ from the District Munsif. It would mean the remanding of the case for the taking of further evidence and the plea was raised too late in the trial Court.\" \n The present is an a fortiori case, and it would not be proper to allow the defendant to introduce the amendment sought. \n 43. In this connection, we may usefully refer to a ruling of the English Court in Laird v. Briggs, (1880) 16 Ch D 440. In that case the plaintiff claimed to be a tenant in possession of the part of the fore-shore in the sea at Margate and he sought to restrain the defendant from removing shingle from the fore-shore. The defendant claimed an easement by reason of his enjoyment entitling him to do the acts complained of and also stated that the plaintiff was in possession of the foreshore in question subject to his rights. \n At the trial he wanted to have his written statement amended by striking out the qualifying words \"thus making his denial of plaintiff's possession an absolute one and claiming the possession of the foreshore.\" Justice Fry disallowed it remarking that it would completely change his case.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-43", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "44. The case on hand is not one where the party was unaware of his rights and came to know of them some time after the tiling of the written statement. He was fully aware of the existence of the will and what rights flowed from it. But, he chose to deny its genuineness since it suited his purpose then. It should be borne in mind in this context that at that time his sister i.e. the widow of Venkata Subbarao was contesting the wilt and he must have thought that it would he more paying to sail with her rather than be content with a 1/12th share under the terms of the will. \n It is only when the contest regarding the genuineness of the will was found to be unfruitful this change of front was resorted to. In the circumstances, we think the judgment of the lower appellate Court on this part of the case cannot be sustained. \n 45. None of the rulings called, in aid on he-half of the 5th defendant (3rd respondent) is helpful to him. In Ahmed Hossein v. Chembelli, , in a suit on a dishonoured cheque it was not recited in the plaint that notice of dishonour was given or circumstances existed which rendered it unnecessary to issue such a notice. The plaintiff was permitted to introduce the statement. The learned Judge thought that it should be done in the interests of justice.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-44", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "In Pramada v. Sagarmal, an additional claim was permitted by the High Court by way of amendment for the reason that by the time the amendment was sought, only preliminary issue was decided and the case had not been taken up. It was remarked in the course of the judgment that amendments ought to be granted unless a party was acting mala fide or by his blunder some injury to his opponent which could not be compensated by costs would be caused. The rule stated in Union of India v. Shalimar Tar Products. is the same as the one in . \n 46. In Amolakchand v. Firm, Sadhuram Tularam, AIR 1954 Nag 200 the defendant who admitted in the written statement the plaintiffs right for redemption of a mortgage was permitted by way of amendment to set up ownership and exclusive title to the property in dispute and thus denied the plaintiff's right to redeem. It was held by Justice Chowdary that though the amendment would change the nature of the defence it could be allowed if sufficient grounds were shown. In support of his decision, the following passage from Cropper v. Smith, (1884) 26 Ch D 700 was extracted :-- \n \"It is a well established principle that the object of the Courts is to decide the rights of the parties and not to punish them for mistakes they make in the conduct of their case by deciding otherwise than in accordance with their rights.... I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct if it can be done without injustice to the other party.\"", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-45", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "These remarks were also relied on strongly by the counsel for the respondent. It is plain from that passage that if the error or mistake is fraudulent or was designed to overreach, a Court will not allow amendment. We need not express our view, as to the correctness of the authority of that case. There, it is specifically stated that such an amendment would not be allowed if asked at a late stage and even otherwise the request could be granted only if sufficient grounds are shown. \n Another instance of an admission made by one of the defendants being allowed to be withdrawn by amendment is Hollis v. Burton, 1992-3 Ch D 226. The amendment was permitted as it was proved by reliable evidence that the admission was made by mistake. In Bhimudu v. Pitchayya, 1946-1 Mad LJ 462: (AIR 1946 Mad 497) the new relief asked for in the amendment petition was necessitated by something that had occurred after the filing of the suit and so an appropriate relief was to be asked for by amending the plaint. \n In Gopalarao v. Peda Kitamma, , a suit in individual capacity was allowed to be converted into one in a representative capacity as a manager of the joint family. Another case relied on by the 3rd respondent is Chunnilal v. Deoram, AIR 1948 Nag 119. Far from establishing any theory favourable to him, it negatives his case. It is laid down there that amendment of pleadings shall not be allowed unless the amendments are necessary for the decision of the real question in controversy, and that the real question in controversy is one which is involved in the issues framed in the trial court.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-46", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "A Court will not allow an amendment which would completely change the front in the defence and the defence should not be so altered as to introduce a set of circumstances different from and inconsistent with those pleaded initially. No principle can be extracted from any of these authorities which is contrary to what we have stated. On the other hand, the observations in some of the cases are detrimental to this respondent.  \nThe 5th defendant was acting mala fide as indicated above and moreover the application for amendment of the written statement as also for the deletion of some and recasting of the issues was very late i.e., after the trial ended and just before the delivery of the judgment. Consequently, the \"beneficial legal principle\" embodied in Order 6 Rule 17 C.P.C., cannot be taken advantage of by him. There are no valid grounds for allowing an amendment of this nature. It follows that the appeal as against the 5th defendant is allowed without costs. It is dismissed with costs as against plaintiff and defendant 4. \n 47. This appeal having been set down this day for being mentioned, the Court made the following:-- \nORDER", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "6c50091db120-47", "Titles": "Jaldu Anantha Raghurama Arya vs Jaldu Bapanna Rao And Ors. on 8 August, 1958", "text": "48. A consolidated sum of Rs. 750/- is fixed towards advocate's. Out of this, the plaintiff's Advocate will get Rs. 500/- and the 4th defendant's Advocate Rs. 250/-.", "source": "https://indiankanoon.org/doc/1111061/"}
+{"id": "0b224756b7bf-0", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "JUDGMENT Obul Reddi, J. \n\n 1. The question referred to this Bench of seven Judges by a Division Bench to which two of us ( Obul Reddi and Madhava Reddy, JJ. ) were members, is \"Whether a plaintiff can lay action for recovery of the amount advanced by him basing on the original cause of action when the negotiable instrument evidencing the transaction is inadmissible in evidence under Section 35 of the Stamp Act. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-1", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "2. The necessity to refer the question to a larger Bench arose as a result of the view expressed by Gopal Rao Ekbote, J. ( as he then was ) in Mohd. Jamal Saheb v. Munnar Begum, , which does not accord with the ruling of the Full Bench of the Madras High Court in Perumal Chettiar v. Kamakshi Ammal, ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ( FB ) ). The learned Judge, Gopal Rao Ekbote, held that the plaintiff can have his money back through the document is in-admissible in evidence because it is in-sufficiently stamped and that Section 91 of the Evidence Act is no bar to the plaintiff succeeding on a non-contractual basis, that is, in an action for money had and received. In so coming to the conclusion, the learned Judge seems to have felt that he is not bound by the decision of the Full Bench in ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ( FB ) as \" two decisions decided in 1918 by the Privy Council ( John v. Dodwell and Co. Ltd. AIR 1918 PC 241 and Juscurn Boid v. Prithichandlal, AIR 1918 PC 151 ) were not brought to the notice of the Full Bench \". Having regard to the fact that the High Courts of Allahabad, Bombay and some other High Courts have taken a view different from that expressed by the Full Bench of five Judges of the Madras High Court in ILR ( 1938 ) Mad 933 ( 935 ) = ( AIR 1938 Mad 785 ( FB ) the question posed above was referred for consideration by a larger Bench.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-2", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "3. It may be necessary at the outset to refer to the contentions put forth by the counsel appearing for the petitioner and the counsel appearing for the respondent. Mr. C. N. Babu appearing for the petitioners in C. R. P. No. 255/65, relying upon the decision in Pithi Reddy v. Velayudasivan, ( 1885-1887 ) ILR 10 Mad 94 and Perumal Chettiar's case, ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ( FB ) ) contended that a plaintiff cannot recover money lent on a unstamped or an insufficiently stamped promissory note apart from the note in view of the bar of Section 35 of the Stamp Act and Section 91 of the Evidence Act. It is further contended by him that there is no presumption, when the lending of the money and the execution of a promissory note are contemporaneous that the promissory note operates as a conditional payment or a collateral security so as to say that the real contract is different from what is embodied in the promissory note and thus bypass the provisions of Section 91 of the Evidence Act.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-3", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "4. Mr. K. Jagannadha Rao appearing for the petitioner in C. R. P. No. 1998 of 1966 similarly contended that the view expressed by the Full Bench in Perumal Chettiar's case. ILR ( 1938 ) Mad 933 = AIR 1938 Mad 785 (FB) is the correct view and that it stood the test of time from 1938 onwards and that the learned single Judge of this Court was not justified in invoking the theory of ' money had and received ' on the ground that \" two decisions decided in 1918 by the Privy Council \" were not taken into consideration by the Full Bench. According to the learned counsel, there is no question of presumption of a conditional payment or collateral security where the money lending and the execution of the promissory note are part and parcel of the same transaction, in other words, contemporaneous or simultaneous and that being the case, the plaintiff is not entitled to set up a case independent of the note in view of the stringent provisions of Section 91 of the Evidence Act. The learned counsel also contended that when the factum of loan itself cannot be established by any means other than the promissory note itself, where the debt is not an antecedent debt, in respect of which a promissory note has been taken, because of the bar of Section 35 of the Stamp Act and Section 91 of the Evidence Act, no obligation under Section 70 of the Contract Act will arise under the theory of ' implied promise. '", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-4", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "5. Mr. Venkata Reddy and Mr. M. Jagannadha Rao appearing for the respondent ( decree-holder ) contended that, even where lending of money and execution of the promissory note are contemporaneous and form part and parcel of the same transaction, the promissory thus taken operates only as a conditional discharge and not full or complete discharge of the loan and when the promissory note becomes in-admissible in evidence, the creditor will be entitled to fall back on the original demand. The learned counsel also, relying upon the language of Section 70 of the Contract Act, contended that the expression \" anything \" is of sufficient amplitude to bring within its ambit transactions of money and that the creditor will be entitled to recover on the principles of ' implied promise ' or ' money had and received '. In short the learned counsel contended that the view of the Full Bench of the Madras High Court in Perumal Chettiar's case. ILR (1938) Mad 933 = AIR 1938 Mad 785 ( FB ), is not correct and the decision requires to be overruled. \n\n 6. It is, therefore, necessary having regard to the contentions put forth by the learned counsel appearing for both sides and the view expressed by the learned single Judge, which is in conflict with the Full Bench's to frame the following questions for decision --\n \"1. Whether a plaintiff can bring action for recovery of the amount advanced by him basing on the original consideration when the promissory note on foot of which action is brought is in-admissible in evidence under Section 35 of the Stamp Act, and, if so, under what circumstances ?", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-5", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "2. If the promissory note is in-admissible in evidence, whether action can be maintained for recovery of the amount either on the theory of \" money had and received \" or under the provisions of Section 70 of the Contract Act. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-6", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "7. It may be made plain at the beginning itself, before we consider the questions, that we are not concerned with a case where a promissory note has been executed in respect of an antecedent debt we are here concerned with the question under what circumstances the loan could be recovered apart from the promissory note, which is not duly stamped, when the execution of the promissory note is contemporaneous or simultaneous with the borrowing. There are no decisions of the Supreme Court so far which have any bearing on the questions raised. We, therefore, have necessarily to look to the decisions of the various High Courts and English Courts for answering the questions. The Courts in India have expressed divergent views as to the recovery of the loan independently of the note given. Broadly the decisions come under three categories (1) those which hold that, if the promissory note is not receivable in evidence because of the absolute prohibition of Section 35 of the Stamp Act, no action would lie independently of the note and to hold otherwise would be nullifying the provisions of Section 91 of the Evidence Act; (2) Notwithstandiing the bar of Section 35 of the Stamp Act, it would still be open to the creditor to prove the loan and all its terms in the case of a contemporaneous transaction also, independently of the promissory note by letting in other evidence and Section 91 of the Evidence Act will not operate as a bar and action can also be maintained on the principle of money had and received under Section 70 of the Contract Act; and (3) which say that, even where the bar of Section 35 of the Stamp Act and Section 91 of the Evidence Act is there provided the promissory note does not embody all the terms of the contract, the true nature of such transaction can be proved where the instrument is given as a collateral security or by way of conditional payment provided it is so alternatively pleaded in the plaint.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-7", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "as a collateral security or by way of conditional payment provided it is so alternatively pleaded in the plaint. In Perumal Chettiar's case. ILR (1938) Mad 933 = AIR 1938 Mad 785 (FB) it was the third view that was expressed by the Full Bench. We may now proceed to examine the conflicting views expressed by the High Courts in India.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-8", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "8. The opinion of the Calcutta High Court, it may be said, has not been consistent. While some of the decisions adopt the strict rule of the bar of Section 91 of the Evidence Act as stated by Chief Justice Garth in Sheikh Khan, (1881) ILR 7 Cal 256, the other decisions show a marked departure from the strict rule enunciated by Garth, C.J. which we will refer to presently. \n\n 9. The earliest of the cases is the case of Golap Chund Marwaree v. Thakurani Mohokoom Kooaree. (1878) ILR 3 Cal 314, where it was held that the plaintiff could fall back on the original consideration when an insufficiently or unstamped promissory note cannot be received in evidence. But that would appear to be a case where a suit was filed by an indorsee of an unstamped promissory note, for the Court of first instance refused to allow the plaintiff to summon the production of the second defendant's books in order to show therefrom that the 1st defendant was the debtor for the amount for which the note was given. We are unable to subscribe to the view taken in this case for an indoors obviously cannot fall back on the original consideration between the maker and the payee.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-9", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "10. The case of (1881) ILR 7 Cal 256 has been followed as laying down the authoritative pronouncement in innumerable cases of the several High Courts (Including the Full Bench decision of the Madras High Court). That case came up before Sir. Richard Garth, C.J. and McDonell. J. On reference from the Judge of the Small Cause Court at Dacca. Garth C.J. speaking for the Court said:\n \"When a cause of action for money is once complete in itself, whether for goods sold or for money lent, or for any other claim, and the debtor then gives bill or note to the creditor for payment of the money at a future time the creditor, if the bill or note is not paid at maturity may always, as a rule sue for the original consideration provided that he has not endorsed or lost or parted with the bill or note under such circumstances as to make the debtor liable upon it to some third person. In such cases, the bill or note is said to be taken by the creditor on account of the debt, and if it is not paid at maturity, the creditor may disregard the bill or note and sue for the original consideration. But when the original cause of action is the bill or note itself and does not exist independently of it, as for instance when in consideration of A depositing money with B.B. contracts by a promissory note to repay with interest at six month's date, here there is no cause of action for money itself because the deposit is made upon the terms contained in the note and no other. In such a case, the note is the only contract between the parties, and if for want of proper stamp or some other reason the note is not admissible in evidence the creditor must lost his money.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-10", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "This passage was interpreted differently by another learned Chief Justice of the same Court in Pramatha Natha Sandal v. Dwarka Nath Dey. (1896) ILR 23 Cal 851, Sir. Comer Petheram .C.J. interpreted what was held by Garth, C.J. as not in conflict with the view he was taking and after referring to the above passage from Garth. C.J.'s judgment observed (at page 853) \"But a reference to the earlier portion of the Judgment shows that such was not the meaning of the Chief Justice, and that when he spoke of a deposit he did not mean a loan as he then says where money is lent and a bill or note given for the loan which is not paid at maturity, the creditor may disregard the note and sue on the original consideration. This is in accordance with the case of (1878) ILR 3 Cal 314.\" \n That opinion of Petheram. C.J., was based on what is stated in Farr v. Price, (1800) 1 East 55 = 102 ER 22 viz. That the existence of an unstamped promissory note does not debar the plaintiff from recovering on the original consideration if the pleadings are properly framed for that purpose.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-11", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "11. In Indra Chandra v. Hiralal Rong. AIR 1936 Cal 127 and Mahatobuddin Mia v. Md, Nazir Joddar AIR 1936 Cal 170 R.C.Mitter. J., sitting single, held that it is not necessary that there should be an independent express contract prior to the execution of such a promissory note and that the fact that the money has been lent implies a promise to repay it and the plaintiff in such a case has a cause of action on the implied promise, which is independent of the promissory note. The fact that the money has been lent according to the learned Judge gives a cause of action to the plaintiff which is independent of the promissory note and in so holding he relied upon what Sir. Comer Petheram, C.J. said in (1896) ILR 23 Cal 851 that an implied contract to repay money lent always arises from the fact that the money is lent even though no express promise, either written or verbal is made to repay it. But the same learned Judge, we may point out, had expressed a different opinion in Firm Tarachand v. Tamijuddin, AIR 1935 Cal 658 where he said that if the plaintiff's cause of action to recover the money had become complete before the execution of the promissory note, he would be entitled to sue and succeed on the original: but if he does not base his case in the plaint on the original consideration, he is out of Court because the promissory note is inadmissible in evidence being insufficiently stamped. In so holding he relied upon the decision of the Privy Council in Sadasuk Janki Das v. Sir Kishen Pershad, SIR 1918 PC 146 and followed the decision in Sheik Akbar v. Sheikh Khan, (1881) ILR 7 Cal 256 and Nazir", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-12", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "v. Sheikh Khan, (1881) ILR 7 Cal 256 and Nazir Khan, v. Raz Mohan, AIR 1931 ALL 185 (FB). His view in the 1935 case was that if the execution of the promissory note and the borrowing of the money are contemporaneous constituting part and parcel of the same transaction and the note becomes inadmissible in evidence the plaintiff will be out of Court. The learned Judge with great respect to him seemed to swing between the two stands taken by the two Chief Justices of his Court. We do not even find a passing reference to the earlier decision of his in AIR 1935 Cal 658 in his two later Judgments as to what led him to take a different view.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-13", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "12. Chief Justice Jenkins of the Bombay High Court sitting with Justice Candy in Krishnaji Narayan Parkhi v. Rajamal Manikchand Marwari, (1900) ILR 24 Bom 360 was dealing with a case of liability arising out of a hundi. There the plaintiff lent the defendant Rs. 675/- and at the same time took a hundi to secure its repayment. There was the admission of liability by the defendant and he had promised to pay. There was also the further fact that the hundi had been admitted in evidence, as no objection was taken as to the absence or deficiency in stamping. The learned Chief Justice, therefore, said that it is perfectly true that the terms of the contract contained in the hundi can, apart from the conditions which permit secondary evidence, only be proved by the hundi, but this does not prevent proof of the loan independently of the note. The learned Chief Justice relied upon the decision in Chenbasapa v. Lakshman Ramachandra, (1894) ILR 18 Bom 369. Where the distinction between cases in which the suit is brought solely on the note or hundi and cases in which there is and can be a claim to recover the original loan has been acknowledged. It may be pointed out that the learned Chief Justice was not considering the question under what circumstances when an action fails on a promissory note executed contemporaneously with the borrowing of the money on account of the bar of Section 35 of the Stamp Act, it would not debar the plaintiff from resorting to the original consideration.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-14", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "13. Kemp J. In Jacob 7 Co.v. Vicumsey. AIR 1927 Bom 437, followed the decision in (1900) ILR 24 Bom 360 on the ground that it is binding upon him, in holding that if the promissory note is insufficiently stamped the plaintiff can proceed with the suit on the loan. He however doubted the correctness of that decision as it appeared to conflict with the provisions of Section 91, Illustration (b) of the Evidence Act .", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-15", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "14. We may now notice some of the leading cases of the Allahabad High Court, which reveal that the view expressed in Sirdarkuar v. Chandrawati, ( 1882 ) ILR 4 All 330 ; Kundan Lal v. Sahu Bhikhari Das, AIR 1929 All 254; Nazir Khan v. Ram Mohan, AIR 1931 All 183 ( FB ) and Kunwar Bahadur v. Suraj Baksh, AIR 1932 Oudh 235 ( FB ) is no longer good law in view of the subsequent decision of the Full Bench of that Court in Sheo Nath Prasad v. Sarjoo Nonia, AIR 1943 All 220 (FB) which is followed in Lakshmi Narain v. Mt. Aparna Devi, . As the latest opinion of the Allahabad High Court as expressed in AIR 1943 All 220 and is in conflict with the Full Bench decision of the Madras High Court in Perumal Chettiar's case, ILR ( 1938 ) Mad 933 = ( AIR 1938 Mad 785 ) ( FB ) it may be useful to notice the leading cases of that Court :\n 15. In ( 1882 ) ILR 4 All 330, a case arising in second appeal, it was expressed by Straight and Broadhurst, JJ. That in a case where the adjustment of accounts took place and the bond was made, it was intended to consolidate and secure the debt due from the defendant to the appellant, and the new contract was to subsist between the parties in suppression of the former one. The learned Judges however observed that :\n \"Much though we might have wished to be able to hold that the bond entered into between the parties did not preclude the plaintiff-appellant from recovering on his account stated, we find ourselves unable to do so. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-16", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "16. The decision in Ram Sarup v. Jasodha Kunwar, ( 1912 ) ILR 34 All 158 which runs counter to the above view was rested on the dictum of Lord Kenyon in the well-known case of (1800) 1 East 55 = 102 ER 22 in holding that even where the debt is inseparable from the promissory note, the debt could be proved notwithstanding the note is not admissible in evidence. The learned Judges in Banarasi Prasad v. Fazl Ahmad, (1906) ILR 28 All 298, though purported to follow the case of (1881) ILR 7 Cal 256 by saying that the law on the subject is clearly stated by Garth C. J., however swung to the opposite view by observing :\n \"It seems to us therefore that the Court of first instance ought not to have summarily dismissed the plaint, but ought to have given the plaintiff an opportunity of proving the consideration of the note if there was such consideration. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-17", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "In a later case viz., Baijnath Das v. Salig Ram, (1912) 16 Ind Cas 33 (All) the learned Judges, after referring to the bar of Section 91 of the Evidence Act, however, took the view that where a promissory note is taken in consideration of the money advanced and is held to be inadmissible in evidence, a suit filed on foot of such a note may be treated as a suit for money had and received if the pleadings are properly framed without treating it as such a suit. These decisions were considered by Sulaiman and Kendall, JJ., in AIR 1929 All 254 and the view expressed by the learned Judges was quoted and endorsed by Sir Lionel Leach, C. J. in Perumal Cettiar's case, ILR (1938) Mad 933 = (AIR 1938 Mad 785) (FB) to the extent of the scope of Section 91 of the Evidence Act. What Sulaiman and Kendall, JJ. Said that case is that if a hundi is the embodiment of the whole of the contract between the parties and it is not admissible in evidence and cannot be looked at for the purpose of finding out the terms of the contract other evidence to prove the terms of such contract cannot be allowed. But where the hundi embodies only a part of the contract between the parties it cannot be said that the whole contract is reduced to the form of a hundi and Section 91 does not exclude evidence showing the terms of the whole contract which cannot be determined from the hundi alone. But the view of the learned Judges in so far as the applicability of Section 70 of the Contract Act was not endorsed by the Full Bench as may be seen from the judgment of Justice Varadachariar. What was said in the case of a hundi which need not necessarily contain all the terms of the agreement between the parties was applied by the", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-18", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "hundi which need not necessarily contain all the terms of the agreement between the parties was applied by the Madras Full Bench to a promissory note. The learned Judges, Sulaiman and Kendall, JJ. However affirmed the view in Baijanath Das's case (1912) 16 1nd Cas 33 (ALL) that, when a hundi is held to be inadmissible in the evidence, the plaintiff would still be able to succeed on the basis of the theory of 'money had and received' or for compensation and this view did not find favour with Varadachariar. J.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-19", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "17. A Full Bench of the same Court composed of Mears. C.J. Mukerji and Young. JJ. In AIR 1931 ALL 183 (FB) overruled the decisions in (1912) ILR 34 AII158 and (1906) ILR 28 AII 293 referred to supra and followed the decisions Parsotham Narain v. Taley Singh, (1903) ILR 26 AII 178 and Sheikh Akbar v. Sheikh Khan. (1882) ILR 7 Cal 256. As may be seen from the Judgment of Mukerji. J. Who spoke for the Full Bench he did not approve the view of Sulaiman and Kendall, JJ. In so far as invoking the aid of Section 70 of the same Court in Miyan Bux v. Mt. Bodhiya, AIR 1928 AII 371 (SB). One of the learned Judges of the Special Bench, Sen. J. Refused to express any opinion on the ground that it is outside the scope of reference to determine whether a plaintiff can maintain a claim against the debtor founded upon an obligation independent of a promissory note. Although he was of the view that \"though the promissory note was in a form forbidden by law, it was admissible in evidence under Section 91 of the Evidence Act and the answer of two learned Judges. Boy and Kendall, JJ. Viz. The plaintiff could sue of the basis of any obligation whether antecedent to or arising simultaneously with the execution of the promissory note was not called for.\"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-20", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "The view of the Full Bench as expressed by Mukherji J., that verbal negotiations leading upto an express contract in writing cannot be set up as an independent contract and are not admissible in evidence as provided by Section 91 and that where there is an express promise will not be inferred, was overruled by a Full Bench of five Judges in AIR 1943 All 220 ( FB ).", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-21", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "18. A Full Bench of the Oudh High Court consisting of Wazir Hasan, C. J. Srivastava and Raza, JJ. However, took a different view from the one expressed in AIR 1931 All 183 ( FB ) holding that, in spite of the provisions of Section 91, it is open to the party who has lent money on terms recorded in a promissory note which turns to be inadmissible in evidence for want of proper stamp duty to recover his money by proving orally the advance of the loan and that oral evidence to prove the terms of the contract however is admissible. Srivastava, J., with whom Nazir Hassan, C. J. \" generally agreed and Raza, J., agreed wholly, was not of the opinion that the fact of the advance of the loan or the amount of the loan cannot be regarded as one of the terms of the promissory note. \" In that view he opined that \" if it is not so, then the path of the plaintiff is clear. In the case of every loan there is a presumption of an implied contract to repay the loan. \" We shall deal later with the question of the presumption of an implied contract, but suffice it to say for the present that we are unable to understand how the amount of loan mentioned in the promissory note cannot be regarded as a term of the contract. A promissory note, as defined in Section 4 of the Negotiable Instruments Act, must contain an unconditional undertaking to pay a certain sum of money. If the amount of loan is not mentioned in the promissory note, then it ceases to be a promissory note which should constitute a contract between the maker and the payee. When the rate of interest, date of payment etc., could constitute terms of the promissory note, we fail to understand how it could be said that the amount on which interest is payable can", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-22", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "note, we fail to understand how it could be said that the amount on which interest is payable can be held to be not a term of the contract.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-23", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "19. We may now notice the facts of the Full Bench case in AIR 1943 All 220. That was a case where the plaintiff is said to have lent a sum of Rs. 495 /- to one Bhaggu Nonia and obtained a promissory note and a receipt on the same day from the debtor. After the suit was filed, the legal representatives of the deceased defendant were brought on record. The Court of first instance dismissed the claim on the ground that the promissory note was inadmissible in evidence and that apart from the promissory note, the loan cannot be proved by any other evidence. The judgment was affirmed in appeal by the Civil Judge. In the second appeal preferred by the plaintiff, the matter was referred to a Full Bench of five Judges by a single Judge of that Court as he felt that the Full Bench decision in AIR 1921 All 183 ( FB ) required reconsideration. The learned Judge, Dar, J., expressed total disagreement with the view of the Full Bench of the Madras High Court and concurred with the statement of law by Sir Arthur Page, C. J. as contained in proposition No. 3 of his judgment in Maung Chit v. Roshan and Co., AIR 1934 Rang 339 = ILR 12 Rang 500 ( FB ). He, however, found himself unable to agree with the 4th and 6th propositions of Sir Arthur Page C. J. ( which were endorsed by the Full Bench of the Madras High Court ) on the ground that he ( Page C. J. ) did not correctly state the law. To quote the learned Judge, Dar J.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-24", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "\"In my opinion the law on the subject may thus be stated. When a promissory note was given in consideration of a sum of money it is a question of fact in each case whether the sum of money was given as a loan or not as a loan; in absence of all evidence the presumption is that it was given by way of a loan, and there is a further presumption that the promissory note was given in conditional payment of the loan. If by reason of the defect of stamp the promissory note is held inadmissible in evidence, it is open to the plaintiff to prove the loan and all its terms and to recover the loan irrespective and independently of the promissory note by giving other evidence including that furnished by a contemporaneous receipt if there be any. It is for the defendant to prove that the promissory note was given for a sum of money which was not given as a loan or it was given in absolute satisfaction of the loan or the plaintiff has made it his own by his agreement or by his conduct. If the defendant succeeds in proving any of these facts the plaintiff shall be restricted to the promissory note and he shall not be allowed to recover independently of the promissory note. \" Having so said, he however was not prepared to express any opinion on the question whether the money given under a promissory note which is inadmissible in evidence for insufficiency of stamp can be recovered under Section 70 of the Contract Act. Mathur, J. Who wrote a separate Judgment concurring with the view on the main question, however, expressed the opinion, differing from Sulaiman and Kendall, JJ., in AIR 1929 All 254, that Section 70 of the Contract Act does not contemplate the case of payment of money and it will be doing violence to the language of the section to hold that the words ' lawfully does anything ' mean payment of money. On the other question, the learned Judge", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-25", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "words ' lawfully does anything ' mean payment of money. On the other question, the learned Judge agreed with the statement of the law made by Srivastava, J. In AIR 1932 Oudh 235 ( FB ) that Section 91 of the Evidence Act excluded parole evidence about the terms but not about the factum of the contract ; but he was unable to agree with him that the advance of the loan or the amount of the loan cannot be regarded as one of the terms of the promissory note. In the words of Mathur, J. \" As I look at the matter, I think that amount of the loan is certainly one of the terms of the contract as would be the manner or the time of its repayment. \" He was also not prepared to agree with Srivastava, J. That \" there is nothing in Section 91 to prevent the plaintiff from giving evidence to prove that at the time of the transaction the plaintiff paid a sum of Rs. 700 /- in cash to the defendant. ' The leaned Judge, Mathur, J. In our opinion, rightly commented that ' I think if this were allowed it would make Section 91 absolutely nugatory. \" Where we find it difficult to agree with Mathur, J., or Dar, J., with whom the other learned Judges of the Full Bench agreed is that it would be permissible to look at the document for the sake of determining whether it contained all the terms of the contract, after the document is held inadmissible in evidence for want of proper stamp under Section 35 of the Stamp Act. Mathur, J., in so coming to the conclusion sought support from what Sir Asutosh Mookerjee said in Ram Bahadur v. Dasuri Ram, ( 1913 ) 17 Cal LJ 399.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-26", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "\"The learned vakil for the respondent has ingeniously suggested that as the instrument itself must be held inadmissible, there is no proof that the terms of the contract for payment of interest were reduced to writing. This argument is obviously fallacious. The written instrument may be looked at for the purpose of showing that the terms of the contract for payment of interest had been reduced to writing within the meaning of Section 91. Evidence Act, or oral evidence may be given to show that the contract, as a matter of fact, was reduced to writing. \" \n The learned Judge also drew support, quoting, Lord Atkin from his judgment in Mohd. Akbar Khan v. Attar Singh, 1936 All LJ 986 = AIR 1936 PC 171. The Judicial Committee there held that the document which was contended to be a promissory note was not a promissory note but was merely a receipt containing the terms on which the amount was to be refunded. It was, therefore, said by Lord Atkin \"Being primarily a receipt, even if coupled with the promise to pay, it was not a promissory note. As the document did not record or purport to record all the terms of the contract between the parties and as there was nothing in the document explaining how the money came to be received the parties were not prevented from showing that it was paid by way of loan or deposit or for some other purpose. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-27", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "It is thus plain that what Lord Atkin said of a receipt which did not record all the terms of the contract cannot be applied to a case of a promissory note, which could not be received in evidence on account of the bar of Section 35 of the Stamp Act. It is in that context that Lord Atkin observed that Section 91 or 92 of the Evidence Act does not come in the way when \" the document does not record or purport to record all the terms of the contract between the parties. \" The ruling of the Judicial Committee, therefore, does not lend support to his ( Mathur, J.'s ) view as sought to be made out by him and for the same reason we regret we are unable to endorse the view of that eminent Judge, Sir Asutosh Mookerjee. We are also unable to agree with him for reasons which we will state presently when we deal with the scope of Section 35 that the words \" no instrument chargeable with duty shall be admitted in evidence for any purpose, \" occurring in Section 35 only mean that the document shall not be made the basis of the decision or that it shall not be relied on to support any finding, but to look at the document merely for the purpose of finding out whether it contained all the terms or not in order to attract the provisions of Section 91. Evidence Act would not be really admitting it in evidence.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-28", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "20. A division Bench of the Allahabad High Court in following the Full Bench decision in AIR 1943 All 220 ( FB ) held that :\n \".............. in the absence of the evidence to the contrary, the presumption is that it is as a conditional payment or as a collateral security only. Where it is in absolute payment or discharge of oral debt, the document alone can be used to prove the terms of the debt because in that case the debt has been reduced \" to the form of a document and therefore Section 91 is no bar to the proof of the debt other than by production of the document. \" \n\n In Patna, as observed by Varadachariar, J., in the Full Bench decision, the question can scarcely be regarded as settled ; ( Dhaneshwar Sahu v. Ramrup Gir, ILR 7 Pat 845 = ( AIR 1928 Pat 426) where Macpherson, J., concerned only on the ground of stare decisis.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-29", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "21. A Division Bench of the Patna High Court in Sarajoo Prasad v. Rampawari Devi. considered the question whether every loan carried with it a contract to repay and if so, it was open to the plaintiff to bring a suit on the original consideration of the handnote. That question was answered having regard to the facts of that case that the handnote was taken as a collateral security for the debt, for it was alleged in the plaint that, as collateral security for the two loans, plaintiff 2, defendants 1 and 2 and father of defendant 3 executed the handnote on 30th Magh 1342 in favour of the persons already named. In paragraph 15 of the plaint it was also said that the cause of action arose on 15th January 1935, the date of the loans and the date of the handnote. On those facts, the learned Judges held that, where it is clearly shown that a promissory note was intended to be merely a collateral security for the loan, the person advancing the loan can sue on the original consideration of loan itself instead of the note. We do not read that decision as laying down a general rule that in every case where as action brought on foot of the promissory note fails, there arises automatically a cause of action otherwise than upon the note itself on the presumption that it was given as a conditional discharge or collateral security.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-30", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "22. The Nagpur High Court in Udaram Mangiram v. Laxman Marwari, AIR 1927 Nag 241 held that even though the promissory note becomes inadmissible in evidence for want of proper stamp, the creditor can fall back on the original transaction under Section 70 of the Contract Act treating the promissory note as non-existent and ask for refund of the consideration paid. This decision supports the view of the learned Judge in , but runs counter to the Madras Full Bench view in Perumal Chettiar's case. ILR (1938) Mad 933 = AIR 1938 Mad 785 (FB).", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-31", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "23. A Division Bench of the Jammu and Kashmir High Court consisting of Fazl Ali and Janki Nath Bhat JJ. In Gulam Mohad. Labroo v. Habib Ullah. AIR 1966 J & K 127. After an elaborate review of the cases expressing divergent views, disagreed with the view expressed by the Full Bench of the Allahabad High Court in AIR 1943 AII 220 (FB) and held that, when the terms of the entire contract between the parties are reduced to the form of a promissory note and the advance of the loan and the execution of the promissory note are part of the same transaction, the provisions of Section 91 are a clear bar to any other evidence, except the promissory note and if the pronote is inadmissible in evidence, the whole suit must fail. In so holding, the learned Judges were not prepared to follow the view which accords either with the Allahabad Full Bench or the Madras Full Bench, as in the case of the former, according to them, they (the Judges there) completely ignored the existence of Section 91 of the Evidence Act and in the case of the latter, the Judges there have tried to bypass the provisions of S. 91 \"by introducing such theories as that of the pronote not containing all the terms of the contract or that of the pronote not being a final accord or discharge of the date, so on and so forth.\"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-32", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "24. The decision of the Mysore High Court in K. Anantharajaiah v. Shivaramaiah. AIR 1968 Mts 148 does not render any assistance to the respondents. It was held by Gopivallabha Iyengar, J. That where a creditor lent a loan and had taken a receipt and a promissory note to evidence it, his claim for recovery of loan without producing the promissory note is not maintainable. But it is however pointed out by him, that, if the cause of action is antecedent to the making of promissory note, then there is nothing to prevent the creditor from maintaining a suit on the original cause of action founded on the loan.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-33", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "25. Now it may be convenient to notice the Full Bench decision of the Rangoon High Court in AIR 1934 Rang 389 = ILR 12 Rang 500 (FB) which was approved by the Full Bench of the Madras High Court as regards the statement of law except proposition No. 3 formulated by Sir Arthur Page C.J. That was a case where the creditor had lent two sums of Rs.300/- and Rs.100/- to the debtor and on each occasion when the loan was made, a promissory note was executed by the debtor. A suit was filed in the Small Cause Court of Mandolay on foot of the promissory note or in the alternative a like sum for money lent. The promissory notes were not duly stamped and they were held inadmissible in evidence under Section 35 of the Stamp Act. A decree was, however, passed on the alternative claim for the amount of the loans without interest. On revision to the High Court Durkley. J. Referred the following question for determination by a Full Bench:\n \"When a creditor sues on a claim for money in respect of which the debtor has executed a promissory note, under what circumstances can the creditor sue for the original consideration if the promissory note cannot be proved.\" \n\n 26. The learned Chief Justice Sir Arthur Page deduced the following propositions of law on a consideration of the \"many Indian and English authorities on this question.\" \n\n 1. When a loan is contracted it is an implied term of the agreement that the loan shall be repaid (1913) 41 1nd App 142 (PC)", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-34", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "2. When a promissory note or a bill of exchange or indeed anything else, is given by the narrower to the lender in connection with the loan, either at the time when the loan is contracted or afterwards, the terms upon which it is given and taken is a question of fact and not of law, (1889) 22 QBD 610.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-35", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "3. It is prima facie to be presumed (although the presumption is rebuttable) that the parties to the loan transaction have agreed that the promissory note or other negotiable instrument given and taken in such circumstances shall be treated as conditional payment of the loan; the cause of action on the original consideration for money lent being suspended during the currency of the negotiable instrument, and if and so long as the rights of the parties under the instrument subsist and are enforceable; but the cause of action to recover the amount of the debt revives if the negotiable instrument is dishonoured or the rights thereunder are not enforceable. On the other hand the cause of action on the original consideration is extinguished when the amount due under the negotiable instrument is paid or if the lender by negotiating the instrument or by laches or otherwise has made the bill his own, and thus must be regarded as having accepted the negotiable instrument in accord and satisfaction of the borrower's liability on the original consideration.\" \n Then, after quoting Esher M.R. In Re Romer and Haslam, (1893) 2 QB 286 at p. 296 and Bowen. L.J. (Ibid. P. 300):Farr v. Price (1800) 1 East 55 = (102 ER 22) and noticing English and Indian cases the learned Chief Justice proceeded to say:", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-36", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "\"4. If a promissory note or other negotiable instrument is given by the borrower to the lender and the negotiable instrument is itself the consideration for the loan, or if the promissory note or other negotiable instrument is accepted as an accord and satisfaction of the original debt, the lender is restricted to his rights under the negotiable instrument, by which he must stand or fall in the one case the note or bill is itself the original consideration and in the other the original debt has been liquidated by the acceptance of the negotiable instrument.\"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-37", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "5. \"If it is agreed between the parties that the promissory note or other negotiable instrument shall be taken merely as collateral security for the repayment of the loan the lender is entitled to sue upon the original consideration independently of the security, and without regard to any rights that he may possess under the negotiable instrument,\"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-38", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "6. \"Further, if the terms of the agreement, by which I mean the whole of the terms, under which the loan was made have been embodied in a negotiable instrument or in any other document no evidence can be adduced in proof of the terms of the contract except the document itself, or secondary evidence of the contents of the document in cases in which secondary evidence thereof is admissible. It follows therefore that in such cases if the document which contains the whole of the terms of the agreement is not admissible in evidence a suit to recover the amount of the loan must fail because the plaintiff is not in a position to prove the debt.\" \n He, however, regarded the oft-quoted passage of Garth. C.J. in (1881) ILR 7 Cal 256 as unfortunate and incorrect. These six propositions deduced by Sir Arthur Page .C.J. were quoted by Sir Lionel Leach. C.J. who was a party to that decision as a puisne Judge of the Rangoon High Court and relied upon the propositions deduced except in so far as the third proposition is concerned. This is how Sir Lionel Leach. C.J. explained in Perumal Chettiar's case. ILR (1938) Mad 933 at p. 944 = (AIR 1938 Mad 785) (FB) in later changing his view as regards proposition No. 3.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-39", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "\"I concurred in this judgment and subject to one qualification I still consider that it correctly states the law. The qualification which I would now make has reference to the statement that the giving of a negotiable instrument operates prima facie as a conditional payment of the debt. On further consideration I have come to the conclusion that this must depend on the facts of the particular case and that there is no presumption that the instrument has been given as conditional payment. Therefore, in my opinion when the lender wishes to sue on the original contract on the ground that the instrument was given by way of conditional payment he must prove facts which warrant the inference.' What precisely has to be considered by us is whether there is a presumption, when a negotiable instrument is taken in lieu of payment, the parties intended it to be a conditional charge or a collateral security. While Mr. D. Venkata Reddy and Mr. M. Jagannadha Rao would argue that presumption automatically arises in every case of a promissory note taken in lieu of money payment, though such presumption is rebuttable. Mr. C.N. Babu and Mr. K. Jagannadha Rao contend that such a presumption does not automatically arise and it depends upon the intention of the parties and the circumstances under which the instrument was executed and whether the promissory note contains all the terms of the contract or not. \n 27. Before considering the correctness or otherwise of what was enunciated by the Full Bench, it may be necessary to notice what constitutes a conditional payment. Das, J. ( as he then was ) in Commr. Of Income-tax, Bombay v. Ogale Glass Works Ltd., explained that \"when it is said that a payment be negotiable instrument is a conditional payment what is meant is that such payment is subject to a condition subsequent that if the negotiable instrument is dishonoured on presentation the creditor may consider it as waste paper and resort to his original demand. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-40", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "This distinction between a collateral security and conditional payment is this. In the case of a collateral security, the cause of action is not suspended, but whereas conditional payment suspends the cause of action. \n\n 28. In Halsbury's Laws of England, Third Edition, Vol. 8 at p. 212, it is said that where a negotiable instrument is given by a debtor to his creditor the question upon what terms it is given is one of the fact, depending on the intention of the parties. The question whether a negotiable instrument has been accepted in absolute satisfaction or only as a conditional payment is one of fact and depends on the intention of the parties,. If what the parties intended is put in the instrument in other words, if all the terms agreed upon are incorporated in the promissory note itself then no difficulty arises. The difficulty arises only of all the terms relating to the contract are not found in the promissory note.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-41", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "29. All the decisions which accord with the view expressed in ( 1885-1887 ) ILR 10 Mad 94 and also the two of the cases in Gopala Padayachi v. Rajagopal Naidu, AIR 1926 Mad 1148 and Chinnayya Naidu v. Srinivasa Naidu, AIR 1935 Mad 206 = ( 67 ad LJ 912 ) which struck a different note were referred to in main judgment of Sir Lionel Leach, C. J., and in the judgment of Justice Varadachariar, Krishnasami v. Rangaswami, ( 1884 ) ILR 7 Mad 112 ( which ) was a case of an improperly stamped promissory note executed in favour of two members of a joint Hindu family in consideration of a loan given to them. It was held that though the promissory note was insufficiently stamped, that was no bar to the suit because the cause of action for the money lent was complete in itself before the giving of the note. It, therefore, appears to be a case of an antecedent debt as rightly put by Leach, C.J. Before Collins C. J. And Parker, J., in ( 1885-1887 ) ILR 10 Mad 94. It was urged on the strength of ( 1884 ) ILR 7 Mad 112, that the plaintiff may be permitted to prove the consideration which preceded the contract and that the suit may be regarded as one for the return of \" money lent \" to defendant. The learned Judges rejected that plea observing, \" We cannot assent to such a doctrine and to do so would entirely nullify the provisions of Section 91 of the Evidence Act. They went on to add ; \" It is a necessary condition to every written contract that the terms should be orally settled before they are reduced to writing, and to hold when", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-42", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "written contract that the terms should be orally settled before they are reduced to writing, and to hold when such a contract has been reduced to a writing that a plaintiff can take advantage of the absence of a stamp on the promissory note to sue at once for the return of money which he may have contracted to lend for a fixed period would entirely defeat the provisions of Section 91 of the Evidence Act.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-43", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "30. Mr. C. N. Babu, in the course of his arguments, sought to point out that the Full Bench departed from the strict rule of Section 91 operating as a bar stated in Pothireddy's case, ( 1885-1887 ) ILR 10 Mad 94, when the Full Bench said that even in the case of a contemporaneous transaction, if it could be shown that all the terms of the contract are not incorporated in the promissory note and a plea is found in the plaint to that effect so as to show that the promissory note was executed as a collateral security or conditional payment. Section 891 will not operate as a bar. The Full Bench no doubt did not make any difference between the case of an antecedent debt or a contemporaneous one in this regard but we see no conflict between Pothi Reddy's case, ( 1885-1887 ) ILR 10 Mad 94 and the Full Bench case, for Collins, C. J. and Parker, J., were never considering the question, if in certain given circumstances all the terms of the contract are not embodied in the promissory note. The Full Bench affirmed the view that, if the promissory note written in such a way as to leave no room to doubt the intention of the parties, no further evidence can be permitted in the face of the intention of the parties which has been completely expressed in the promissory note. In such a case, they also hold that the debt cannot be proved aliunde. It would no doubt appear prima facie that the rule viz., the bar of Section 91, laid down in Pothi Reddy's case, ( 1885-1887 ) ILR 10 Mad 94 is relaxed but Chief Justice Leach made it absolutely clear that Section 91 would operate as a bar if all the terms of the contract are embodied in the", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-44", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "that Section 91 would operate as a bar if all the terms of the contract are embodied in the promissory note. In ( 1884 ) ILR 7 Mad 112, the learned Judges were not considering a case where a plea of a collateral security or conditional payment was advanced before them on foot of the pleadings and, therefore, we feel that it may not be correct to say that what was laid down there covers actions brought on the alternative plea viz., that all the terms of the contract do not find a place in the note. The defendant in that case admitted the receipt of the money on the evening of the same day when he obtained the loan of Rs. 1,000 /- and promised to pay the same with interest in three instalments under the promissory note. There the memorandum which was held to be a promissory note, contained all the terms of the contract and it was not the case of the plaintiff there, as already pointed out, that it was executed as a collateral security or a conditional payment. The Full Bench, of course, has not stated in so many words what it meant by \" all the terms of the contract \", but it is quite plain that that expression ' all the terms of the contract ' was used only with reference to a collateral security or conditional payment as otherwise they would not have qualified it by stating \" where an instrument has been given as a collateral security or by way of conditional payment, a suit on the debt will lie \". Therefore, the words \" if it does not embody all the terms of the contract \" only mean, if the promissory note does not contain terms regarding its having been as a collateral security or as a conditional payment, it would be open to the plaintiff to fall back on the original demand provided such a plea is based on the pleadings.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-45", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "31. Sir Richard Couch, C. J., in Kedarnath v. Sham Lall, ( 1873 ) 11 Beng LR 405 at p. 412 was of the opinion that the promissory note is \" the only repository and the appropriate evidence of the agreement \". But that strict principle enunciated by him no longer holds the field even in the Calcutta High Court. The later decisions of the various High Courts would show the swing that, where all the terms are not embodied in the contract Section 91 is no bar to establish the true nature of the transaction viz., that was given as collateral security or by way of conditional payment. The diametrically opposite view , to what Couch, C. J., expressed as stated by the Full Bench of the Allahabad High Court in AIR 1943 All 220 ( FB ) is that, in every case, where a promissory note is executed simultaneously with the borrowing of the money, there is always a presumption that the promissory note was given by way of a conditional payment or as a collateral security and that the bar of Section 35 of the Stamp Act as to its inadmissibility owing to the defect in stamping or the bar of Section 91 of the Evidence Act will not preclude the plaintiff from falling back on the original demand. This view is based on the assumption that every loan contains an implied promise to repay the money and when the promissory note becomes inadmissible in evidence under Section 35 of the Stamp Act, the plaintiff has a cause of action de hors or independently of the promissory note notwithstanding that the borrowing of the money and the execution of the promissory note formed part of the same transaction. The presumption of an implied promise to repay the money when the promissory note is shut out from evidence by virtue of Section 35 of the Stamp Act is not recognised by the Full Bench of the Madras High Court.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-46", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "35 of the Stamp Act is not recognised by the Full Bench of the Madras High Court.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-47", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "32. As Sadasiva Iyer, J., pointed out in Muthusastrigal v. Viswanatha, ILR 38 Mad 660 at p. 663 = ( AIR 1914 Mad 657 (2) ). \" To import the doctrines laid down in English cases about vague obligations to repay arising out of equity and not out of contract or about obligations which can be enforced if the plaintiff skilfully draws up his plaint as one on account of money had and received cancelling the real contract of loan which had been reduced to the form a document is, it seems to me, merely trying to nullify Section 91, Evidence Act \". To the same effect was the view of Rankin, J. In Dula Meah v. Abdul Rahaman, 28 Cal WN 70 = 81 Ind Cas 461 = ( AIR 1924 Cal 452 ), where there is an express promise, an implied promise cannot be inferred. \n\n 33. Mr. M. Jagannadha Rao sought to rely upon certain English decisions to show that, even where the borrowing of money and the execution of the promissory note are contemporaneous and form part and parcel of the same transaction, still there exists always an implied promise to pay the loan notwithstanding the inadmissibility of the promissory note on account of the bar of Section 35 of the Stamp Act. What fails for determination is whether presumption as such that the promissory note was executed as a conditional payment or collateral security without further investigation or enquiry as to the intention of the parties at the time when they made the contract arises in the case of the contemporaneous transaction when Section 35 of the Stamp Act shuts out the promissory note from being admitted in evidence for \" any purpose \".", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-48", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "34. The case of Brown v. Watts, ( 1808 ) 127 ER 870, relied upon by Mr. M. Jagannadha Rao is not a case of a contemporaneous transaction. That was a case where \" the plaintiff declared on a promissory note with the usual counts for money, and upon an account stated. \" The note \" was upon a wrong stamp and therefore could not be read. \" Then the plaintiff proved a distinct admission of the original debt made before the note was given. The facts of that case show that it was a case of an antecedent debt and therefore it was held that the plaintiff may prove his original debt. \" \n\n 35. In Re Romer & Haslam, ( 1893 ) 2 QB 286 was also a case of a pre-existing debt for what has been held in that case that \" the handing by a client to his solicitor of a negotiable security for the amount of his bill of costs, coupled with the giving of a receipt by a solicitor in which it is expressed to be taken \" in settlement \" of his bill does not amount to repayment in the event of the negotiable security being dishonoured, unless there be proof ( the onus of which lies on the solicitor ) that such was at the time the intention of the parties, and that the client was aware of the effect of the transaction upon his right to tax the bill of costs. \" The facts of that case established that series of bills were sent by the solicitors to the clients and they were accompanied by cash account in which all payments on account were credited and showed a balance due to the solicitors.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-49", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "36. In Halsbury's Laws of England, Third Edition, Vol. 8 at page 213, it is stated having regard to what is held in ( 1893 ) 2 QB 286 C. A. that the question whether a negotiable instrument has been accepted in absolute satisfaction or only as a conditional payment is one of fact and depends on the intention of the parties. That, in our view, represents the correct position. Crowe v. Clay, ( 1854 ) V. 9 Exch 604 is another case of pre-existing debt incurred for goods delivered. \n\n 37. Payana Reena Saminathan v. Pana Lena Palaniappa, (1913 ) 41 Ind App 142 ( PC ) is not a case of contemporaneous there was in respect of a pre-existing liability under an award. The plaintiff in that case sued upon promissory notes, but the action failed owing to a material alternation in the notes. He afterwards sued to recover a part of the consideration for which the promissory notes had been given. It was held by the Judicial Committee, on those facts, that although the claims in the two actions arose out of the same transaction, they were in respect of different causes of action, and that consequently, the second action was not brought contrary to Section 34 of the Ceylon Civil Procedure Code ( same as Order 2, Rule 2 of the Indian Code of Civil Procedure ) and could not be maintained.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-50", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "38. Dargavarabu Sarrapu v. Rampratabu ( 1902 ) ILR 25 Mad 580 ( FB ) was also a case of an antecedent debt. The plaintiffs sold and delivered opium to defendants on different occasions taking a promissory note at each sale for the value of the parcel sold. The case of the defendants was that action should have been brought on the foot of the notes and not on the sales. But the Full Bench consisting of Sir Arnold White, C. J., Benson and Bhashyam Ayyangar, JJ., repelled that contention and held that the plaintiffs were entitled to sue for the price of the goods sold and delivered.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-51", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Jambhu Chetty v. Palaniappa Chettiar ( 1903 ) ILR 26 Mad 526, was a case where a suit was laid on the amount due on account of the goods sold and delivered and money lent. The defence was that the plaintiff was accepted hundis in discharge of the debt and was, in consequence, debarred from suing on the original consideration and that his remedy, if he had one, was on the hundis. What was held by the learned Judges, Benson and Bhasyam Ayyangar, JJ., is that it is a question of fact, with regard to promissory notes or bills or hundis, whether the parties intended them to operate as absolute or conditional payment and the presumption is that the effect of giving and taking a note or bill is that the debt was conditionally paid. It was also held on the evidence that the plaintiff had accepted the hundis unconditionally and was, in consequence, precluded from suing on original debt; in other words, the acceptance of the hundis was in complete discharge of the debt and not was conditional discharge and therefore, the plaintiff, having accepted the hundis unconditionally, cannot fall back on the original debt.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-52", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "39. What Benson and Sundaram Aiyar, JJ., said in Palaniappa Chetty v. Arunachellam Chetty, ( 1911 ) 21 Mad LJ 432 is that the general presumption is that a Bill of exchange or hundi given for a debt operates only as a conditional discharge of the debt : that the execution of a formal for the amount covered by the bill of exchange or hundi is not sufficient to rebut the presumption of conditional discharge ; and that an endorsement of receipt on the promissory note is on no better footing. We wish to observe that what is said of a bill of exchange or hundi cannot be made applicable to a promissory note, for a cheque, bill or hundi does not embody a promise to pay by the maker, but only a direction to another person and the lender can fall back on the implied promise in the absence of a promise in writing. The distinction between the promissory note and hundi or bill of exchange is explained by Vradachariar, J., in these words :\n \"But where the borrower gives his own promissory note as part of the loan transaction, it seems to me artificial to treat that every ' promise to pay ' obtained in that note as amounting to a payment, and then to seek to import the theory of ' conditional ' payment. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-53", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": ", was a case where an income-tax assessee expressly requested the Government to ' remit ' the amounts of the bills by cheques. The Government sent the cheques by post as requested by the assessee and posted them at Delhi and none of the cheques had been dishonoured on presentation. On those facts, Das J. ( as he then was ), after quoting Benjamin on Sale, 8th Edition, p. 23. Hart on Banking, 4th Edition, Vo. 1 p. 342, Byrne, J., in Felix Hadley & Co. v. Hadley ( 1898 ) 2 Ch 680 and Lord Maugham in Rhokana Corpn. Ltd. v. Inland Revenue Commrs. 1938 AC 380 observed at p. 433 :\n \"The position, therefore, is that in one view of the matter there was in the circumstances of this case, an implied agreement under which the cheques were accepted unconditionally as payment and on another view even if the cheques were taken conditionally the cheques not having been dishonoured but having been cashed, the payment related back to the dates of the receipt of the cheques and in law the dates of payments were the dates of the delivery of the cheques. \" \n\n It is on those facts that an implied agreement of unconditional acceptance of payment was inferred and it is therefore not an authority for the proposition relied upon by Mr. Jagannadha Rao.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-54", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "40. In Chitty on Contracts ( Twenty-third Edition ) dealing with \" payment by negotiable instrument \", it is pointed out in para 1184 at page 560 that \" Apart from express agreement a creditor is not bound to accept payment in any way except cash, i. e., legal tender. If, however, he accepts a negotiable instrument, such as a bill of exchange, promissory note or cheque, it is a question of fact depending on the intention of the parties, whether it is taken in absolute satisfaction of the debt, or only in conditional satisfaction. \" To the same effect is what is stated by Byles in his book on Bills of Exchange ( Twenty-second Edition ) at page 392 :\n \"The word ' payment ' is not always used in its strict legal sense. A plea of payment by bill means in law that the bill has been taken in satisfaction; but in the popular sense payment by bill may merely mean that a bill has been given for and on account of the debt. Whether a bill is taken in complete satisfaction or merely as conditional payment, is a question depending on the facts of each case, the onus lying on the party alleging that the bill operated as a complete satisfaction of the original debt, the presumption of fact being the other way. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-55", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "41. Leach, C. J. and Varadachari, J., after referring to the previous cases of the court ( it is not necessary to notice all those cases here ) as also the English decisions on the point because some of the High Courts followed the English rule of ' best evidence ', held that the English authorities which were cited before them and the Indian decisions, which followed the English authorities, do not really bear on the objection arising under Section 91 of the Evidence Act. The reason, as rightly stated by the learned Chief Justice is that the English rules of evidence are not statutory, but judge made and the tendency in England has always been to ignore as far as possible stamp objections ( See Taylor on Evidence Vol. 1 P. 276 ( 12th Edition ).) In this connection, it is not necessary for us to refer to the two decisions of the Madras High Court in AIR 1926 Mad 1148 and AIR 1935 Mad 206, which conflict with Pothi Reddy's case, ( 1885-1887 ) ILR 10 Mad 94, for those two decisions were referred to and overruled by the Full Bench.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-56", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "42. We may here refer in brief to the decisions of the Punjab High Court, which has consistently taken the view which accords with the view taken in Pothi Reddy's case ( 1885-1887 ) ILR 10 Mad 94, and Sheik Akbar v. Sheikh Khan, ( 1881 ) ILR 7 Cal 256. In Chanda Singh v. Amritsar Banking Co., AIR 1922 Lah 307, Chevis and Harison JJ., held that even in a case where the execution of the ' hundi ' had for certain reasons been postponed for sometime after the loan had been advanced, the loan, having been granted on the security of the ' hundi ', the plaintiff had no cause of action independent of the ' hundi ' and that, as the ' hundi ' was inadmissible in evidence and Section 91 of the Evidence Act forbids secondary evidence, the plaintiff's suit must fail. It was similarly held with regard to a promissory note by Broadway and Forde, JJ., in Ram Jas v. Shahabuddin, AIR 1927 Lah 89. To the same effect is the decision in Sohan Lal Nihal Chand v. Raghu Nath Singh, AIR 1934 Lah 606, where Shadi Lal, C. J. and Rangi Lal, J., went to the extent of holding that a decree cannot be passed on the basis of a promissory note which is inadmissible in evidence even if the defendant admits the liability on it. These decisions were referred to and followed by Khosla and Falshaw, JJ., in Amin Chand v. Firm Madho Rao Banwari Lal, .", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-57", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "43. Now let us examine whether the learned Judge, Gopal Rao Ekbote, J. had any valid reason in not following the Full Bench decision by invoking the theory of money had and received. He felt not bound by the Full Bench decision on the ground that the two decisions of the Privy Council in AIR 1918 PC 241 and AIR 1918 PC 151, were not noticed by the Full Bench. The question is whether those two decisions touch the question involved at all.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-58", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "44. AIR 1918 PC 151, was a case where a taluk was put up for auction for arrears of rent at the instance of the Zamindar. The purchaser paid the entire amount of the purchase money and also obtained a sale certificate of payment. The purchaser received an order for possession but a third party being desirous of contesting the right of the Zamindar to make the sale, sued for reversal of the sale. A decree for reversal of the sale was passed and the suit was, therefore, brought by the purchaser to recover from the Zamindar the total amount of purchase money including interest. The Court of first instance dismissed the suit as barred by limitation and that decree was affirmed by the High Court on appeal and that decision was the subject-matter of appeal before the Judicial Committee. They were construing Section 14 of the Bengal Patni Regulation 1819, which authorises a suit against the Zamindar for the reversal of the sale under the Regulation and then provides that \" the purchaser shall be made a party in such suits and upon decree passing for reversal of the sale the court shall be careful to indemnify him against all loss at the charge of the Zamindar at whose suit the sale may have been made \". It is with reference to that provision that it was observed :\n \"And so the Courts in that series of suits failed to apply the provision of Section 14 in a manner that would be conclusive as to the purchaser's right to be indemnified. How far the remedy provided by Section 14 in a purchaser's favour excludes all other remedies apart from any determination of an issue, is a question of some nicety. There is much to be said in favour of its exclusive character on the score of policy and convenience.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-59", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "xx xx xx xx xx xx xx But they again desirs to emphasize the point that if the Court observe the duty cost on them by Section 14 this difficulty never can arise. And they would only add this, that there decision of this appeal on other grounds is due to the particular course this litigation had taken, and must not be regarded as indicating an opinion that the suit is competent. \" \n This decision, it is manifest from the above facts has absolutely no bearing on the questions with which we are now concerned. The Privy Council based their conclusion on the express terms of Section 14 of the Regulation and were not expressing any views on the doctrine of \" money had and received \" generally, much less with reference to a claim under an unstamped promissory note.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-60", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "45. In AIR 1918 PC 241, the Privy Council was concerned with entrustment of the property to an agent. A stranger had taken transfer of property from the agent with knowledge of a breach of a duty committed by him in making the transfer. The transferee applied for the property according to the agent's instructions. It was, therefore, held that the transferee is accountable to the principal and that that obligation is not based on contract, but on fiduciary obligations. It was also held that the claim may also be maintainable, as it was not merely for conversion but alternatively to recover what was in effect a trust fund. Viscount Haldane discussed the theory of \" money had and received \" under the Common Law of England and observed :\n \"The question in the present case, where an agent in accordance with whose instructions appellants had acted, intervened between the owner and the tort-feasor was as what was the effect and extent of such affirmance of contractual relation. Could the contractual relation be split up and only part of it be approbated while the rest was reprobated and could any obligation based on its contract be imputed to the person whose tort was waived inconsistent with the actual contract which he, in point of fact, made with the intermediary ? \n\n xx                 xx          xx                      xx                          xx              xx                       xx                   xx           xx\n \n\npoint was one which their  Lordships were reluctant to deal with unnecessarily in an appeal from a Court which was not confined to administering the common law of  England and which could be disposed of on the other principle referred to. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-61", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "It is, therefore, clear that their Lordships did not choose to apply the common law of  England to Ceylon, which had its own laws.  This decision can obviously have no application where an action is laid on an improperly-stamped promissory note, the effect of which is governed by statutory provisions.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-62", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "46. AIR 1918 PC 146, which was relied upon in , is a case where it was held that it is contrary to established rules to contend that in an action on a bill of exchange or a promissory note against a person whose name properly appears as party to the instrument it is open either by way of claim or defence to show that the signatory was in reality acting for an undisclosed principal. The Judicial Committee was considering a case where the drawer of a hundi described himself beneath his signature as \" Acting Superintendent of the Private Treasury of His Excellency Sir Maharaja the Prime Minister of H. H. Nizam. \" It was held that it was nothing but a description of the drawer's position and was certainly not a signature in the form necessary for an agent signing on behalf of a Principal. The observation that \" it would of course have been open to the plaintiffs had they thought fit to have framed their case in an alternative form, and to have sued both of the hundis and, alternatively, upon the consideration \" relied upon by the learned single Judge in, , was with reference to a hundi transaction. As already adverted to the difficulty created by Section 91 of the Evidence Act does not come in the way as a cheque, bill or hundi does not embody a promise to pay by the maker, but only a direction to another person and therefore the lender can fall back on the implied promise in the absence of a promise in writing. The above discussion on the Privy Council cases would bear out that, as they were not relevant for the purpose of the question to be answered by the Full Bench, the need to consider them did not arise. However, in the dissenting judgment of Stodart, J., he noticed Sadasuk Janki Das's case, AIR 1918 PC 146, and that is indicative of the fact that the learned Judges of the Full Bench were invited to the decisions or were aware", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-63", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "indicative of the fact that the learned Judges of the Full Bench were invited to the decisions or were aware of them. We are, therefore, of the opinion, with great respect to the learned Judge, Gopal Rao Ekbote, J. That there was no warrant to strike a different note from what is laid down by the Full Bench on the assumption that, if the two decisions in AIR 1918 PC 151 and AIR 1918 PC 241, were noticed by the learned Judges of the Full Bench they would not have taken the view that they had taken.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-64", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "47. AIR 1929 Allahabad 254 is one of the cases where it was held that, even if the hundi is held to be inadmissible, the plaintiff would still be able to succeed if his suit can be treated as one for recovery of the money had and received or for compensation of money paid by him. That case was referred to and disagreement with the view taken there was expressed by Leach, C. J. It is not as if the learned Judge of the Full Bench did not consider the question whether the cause of action could be based on the doctrine of \" money and received \", for the learned Judge, Gopal Rao Ekbote, J. To assume that the opinion of the Full Bench would have been different had they looked at those two decisions in AIR 1918 PC 151 and AIR 1918 PC 241. \n\n 48. Now it remains to be considered how far Section 70 of the Contract Act can be invoked for the purpose of recovering the loan on the theory of ' implied promise to pay ' or ' money had and received ' . Section 70 of the Contract Act is in these terms :--\n \" Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-65", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "The learned Counsel, Mr. Jagannadha Rao, seeks to construe the words \" does anything \" or \" delivers anything \" as to include \" payment of money under promissory note \" and in support thereof, relied upon three decisions of the Supreme Court in State of West Bengal v. B. K. Mondal and Sons, ; New Marine Coal Co. v. Union of India, and Mulamchand v. State of Madhya Pradesh, in addition to other decisions which we shall presently refer. \n\n 49. Section 70 no doubt is intended to apply to all cases of benefit bona fide conferred by one person on another which benefit is enjoyed by the person receiving it. What the plaintiff is required to prove is that he did something lawful to another person or delivered something to him and that what he did or delivered was not intended to be gratuitous and the person to whom \" anything \" was delivered or done derived benefit under it, or has been a beneficiary of what he did or delivered to him so as to entitle him to be compensated or to restore the \" thing \" so delivered or done.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-66", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "50. Before referring to the cases of the Supreme Court, it may be necessary to refer to the other cases relied upon by the learned Counsel, Sri M. Jagannadha Rao. The case of a Royal Bank of Canada v. The King, 1913 AC 283, was an appeal from the judgment of the Supreme Court of Alberta. The main controversy was as to the validity of the statute ( Alberta Act 1 Geo 5 C 9 ) passed in 1910, dealing with the sale of certain bonds. The proceeds were deposited in certain banks, one of them being the Royal Bank of Canada, the defendant-appellant. The Government of Alberta brought action against the Royal Bank of Canada and two other companies to recover certain amount with interest being the amount of the deposit held by the bank. The Courts below had held against the Bank. On appeal, the Privy Council said that the lenders in London remitted their money to New York to be applied in carrying out the particular scheme which was established by the statutes of 1909 and the Orders in Council, and by the contracts and mortgage of that year. The money claimed in the action was paid to the appellant-Bank as one of those designated to act in carrying out the scheme. The Bank received the money at its branch in New York, and its general manager then gave instructions from the head office in Montreal to the manager of one of its local branches, at Edmonton in the province of Alberta for the opening of the credit for the special account. The local manager was told that he was to act on instructions from the head office, which retained control. Viscount Haldane therefore observed, \" It appears to their Lordships that the special account was opened solely for the purposes of the scheme, and that when the action of the Government in 1910 altered its conditions, the leaders in London were entitled to claim from the bank at its head office in Montreal the money which they had advanced solely for", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-67", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "entitled to claim from the bank at its head office in Montreal the money which they had advanced solely for a purpose which had ceased to exist. Their right was a civil right outside the province and the Legislature of the province could not legislate validly in derogation of that right. The statute was held to be beyond the powers of the Legislature of Alberta, inasmuch as what was sought to be enacted was neither confined to property and civil rights within the province nor directed solely to matters of merely local or private nature within it. In so holding Viscount Haldane extended the principle of English common law as to apply to cases of money transactions on the ground that, when money has been received by one person which, in justice and equity, belongs to another, under circumstances which render the receipt of it a receipt by the defendant to the use of the plaintiff, the latter may recover as for money had and received to his use. In stretching the principle he relied upon what Brett L. J., said in Wilson v. Church, ( 1879 ) 13 Ch D 1 at p. 49, viz., \" when money has been paid to borrowers in consideration of the undertaking of a scheme to be carried into effect subsequently to the payment and which has become abortive. \" The principle in that case was sought to be stretched here beyond limits of what was stated there, to a case of promissory note too on the ground that whatever may be the reason which invalidated the promissory note, still the right to recover the money is not lost. There, it should be remembered. the action was laid not on foot of any promissory note but solely on the ground that money remitted was to be applied in carrying out a particular scheme by certain statutes and the orders in Council and certain contracts. The Royal Bank of Canada, which had received monies was to carry out the scheme adumbrated under the statute. It was for that reason that the Privy", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-68", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "out the scheme adumbrated under the statute. It was for that reason that the Privy Council held that a civil right existed and was enforceable outside the province of Alberta and the Legislature of the province of Alberta could not validly legislate beyond its jurisdiction.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-69", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "51. What Lord Mansfield said in Moses v. Macferlan, ( 1760 ) 97 ER 676, cannot also applied where there is a statutory prohibition under the Stamp Act and the Evidence Act. It is not necessary to refer to the facts of that case except to state what Lord Mansfield observed, for that decision was not later followed in Sinclair v. Brougham, 1914 AC 398. What Lord Mansfield said in that case is this : ( at p. 680 ):\n \"This kind of equitable action to recover back money, which ought not in justice to be kept, is very beneficial, and therefore much encouraged. It lies only for money which ex aequo et bono, the defendant ought to refund. It does not lie for money paid by the plaintiff, which is claimed of him as payable in point of honour and honesty, although it could not have been recovered from him by any course of law; as in payment of a debt borrowed by the Statute of Limitations xx xx xx But it lies for money got through imposition. ( express or implied ) or extortion, or oppression; or an undue advantage taken of the plaintiff's situation contrary to laws made for the protection of persons under those circumstances. In one word, the gist of this kind of action is, that the defendant upon the circumstances of the case, is obliged by the ties of the natural justice and equity to refund the money. \" Lord Sumner, in 1914 AC 398 commented on what Lord Mansfield said in these terms ( at pp. 455, 456 ) :--", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-70", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "\"I think it is evident that Lord Mansfield did not conceive himself to be deciding that this action was one in which the Courts of common law administered \" an equity \" in the sense in which it was understood in the Court of Chancery and the cases actually decided show that the description of the action as being founded in the aequum et bonum is very far from being precise. Even the decision in ( 1760 ) 97 ER 676 which has since been dissented from for sometime unsettled the law ( see Smith's Leading Cases, Notes to Marriot v. Hampton, ( 1797 ) 7 TR 269 = 2 Sm LC ( 11th Ed. ) 421) and this last mentioned case is one which illustrates the proposition that money is not thus recoverable in all cases where it is unconscientious for the defendant to retain it, for no one could doubt that Hampton's retention of the money in that case was very like sharp practice............. There is now no ground left for suggesting as a recognizable \" equity \" the right to recover money in personam merely because it would be the right and fair thing that it should be refunded to the prayer. \" \n 52. It should be clearly borne in mind that the principles of natural justice, equity and good conscience cannot be imported so as to alter or put an end to the contractual rights or obligations regulated by statutes.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-71", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "53. Brook's Wharf and Bull Wharf Ltd. V. Goodman Brothers, )1937 1 KB 534, was a case where the defendants had imported a consignment of squirrel skin, out of which some of the packages stored in the warehouse were stolen. The plaintiffs as bonded warehousemen were compelled by law at the demand of the Customs to pay the duties on those packages out of their own moneys. The defendants had refused to supply for that purpose. The plaintiffs laid an action in respect of the amount paid towards customs duty on the ground that as between themselves and the defendants, the defendants were primarily liable for the duties. It is on those facts that it was held that the plaintiffs having been compelled under Section 85 of the Customs Consolidation Act. 1876. To pay the duties on the defendants' goods were entitled to be reimbursed the amount of the duties they had so paid. That was a case where the statute provided for reimbursement and as such it can have no application to a loan under a promissory note. There is an interesting commentary quoted hereunder on this case and 1914 AC 398 by P.H. Wins-field in (1937) 53 LQR 447. Which answers the theory of an implied promise or of liability in quasi-contract pleaded by the learned counsel, Mr. M. Jagannadha rao.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-72", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "\"The decision in the Brook's Wharf case was an application of the principle that where A has been compelled by law to pay, or, being compellable by law has paid money which B was ultimately liable to pay, so that B obtains the benefit of the payment by the discharge of his liability then B is held indebted to A in that amount. The principle is a familiar instance of liability in quasi-contract or, as the older pleaders described it an instance of the common indebitatus count for money paid. Lord Wright, in referring to some of the authorities on it. Said (at p.545)\"These statements of the principle do not put the obligation on any ground of implied contract or of constructive or notional by the Court simply under the circumstances of the case and on what the Court decides is just and reasonable, having regard to the relationship of the parties.  \n Now what is 'just and reasonable' except 'natural justice' in another guise? But I wish to add that (as I have tried to show elsewhere) this fiction of implied contract is really unnecessary in the law of quasi-contract at the present day. It did good service in the development of that department of the English system but at its best it was quite in adequate to explain intelligibly many of the decisions on quasi-contract and on the scope of elegantia juris we should be well rid of it nowadays. In 1914 AC 398 it led to this remarkable result . The Court started to search for a non-existent contract and abandoned the chase because even if it had found one, the contract would have been illegal. This remains one of a recent book by a famous mathematician intended for popular reading in which , in explaining the theory of relativity he first urged the uninstructed public to get into their heads the square root of -1 and then frankly admitted that no such quantity exist. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-73", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "54. Mr. Winsfield thus ridiculed the doctrines propounded by the English Courts, the latest of them being the principle of ' just and reasonable . ' That doctrine of ' just and reasonable ' applied in English common law cannot be invoked in the teeth of the provisions of Section 35 of the Stamp Act and Section 91 of the Evidence Act or beyond the scope of Section 70 of the Contract Act.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-74", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "55. The case of Fibrosa Spolka Akcyjna v. Fairbarin Lawson Combe Barbour Ltd., 1943 AC 32 was a case of frustration of contract. It was, therefore, stated by Lord Wright that :\n \"The claim of a party who has paid money under a contract, to recover it on the ground that the consideration for which he paid it has wholly failed is not based on any provision in the contract, but arises because in the circumstances the law gives a remedy in quasi contract to the party who has not got what he bargained for. Although, in the formation of a contract, a promise to do a thing may be the consideration, in dealing with the law of failure of consideration and the right to recover money on that ground it is generally speaking, not the promise which is referred to as the consideration, but its performance. \" \n\n As it was a case of frustration, the contract having become impossible of performance, Viscount Simon, in his judgment observed ( at p. 49 ) that :\n \"I can see no valid reason why the right to recover equally arise on frustration arising from supervening circumstances as it arises on frustration from destruction of a particular subject matter. \" \n\n Lord Wright, in the course of the same judgment described the nature of a quasi-contract in these words :\n \"It is clear that any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit that is to prevent a man from retaining the money of or some benefit derived from another which it is against conscience that he should keep. Such remedies in English Law are generically different from remedies in contract or in tort, and are now recognised to fall within a third category of the common law which has been quasi-contract or restitution. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-75", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Mr. M. Jagannadha Rao also placed reliance on a passage in Anson's Law of Contract ( Twenty-third Edition ) at page 601 : \" Where one person pays money to another in pursuance of an agreement which is ineffective, or which subsequently becomes so, he may recover from that other the money which he has paid \". Putting the case under the head of quasi-contractual liability, the nature of a quasi-contract is stated in Chapter XXI of Anson's Law of Contract, at page 589 in these words : \" Circumstances must occur under any system of law in which it becomes necessary to hold one person to be accountable to another, without any agreement on the part of the former to be so accountable on the ground that otherwise he would be retaining money or some other benefit which has come into his hands to which the law regards the other person as better entitled, or on the ground that without such accountability the other would unjustly suffer loss. The law of quasi-contract exists to prove remedies in circumstances of this kind. \" The three common law actions of a quasi-contractual nature as we get from page 590 of the same Volume are : (1) for money paid by the plaintiff to the defendant's use ; (2) for money had and received by the defendant to the plaintiff's use and (3) quantum meruit. It is under the first two heads that Mr. Jagannadha Rao sought to put his case as, according to him. Section 70 incorporates what is a quasi-contract in the English Common Law.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-76", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "56. The question of quasi-contract or implied promise to pay has to be examined in the context of the statutory prohibitions where a contract is made in writing and not on the basis of the principles enunciated under the English Common Law. The Supreme Court laid down the conditions under which Section 70 can be called in aid. In the case of Gajendragadkar, J., ( as he then was ) said that ( at P. 786 ) :", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-77", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Three conditions must be satisfied before this Section can be invoked. The first condition is that a person should lawfully do something for another person or deliver something to him. The second condition is that in doing the said thing or delivering the said thing he must not intend to act gratuitously and the third is that the person for whom something is done or to whom something is delivered must enjoy the benefit thereof. \" That was a case where the contract was held to be invalid because of the provisions of Section 175 (3) of the Government of India Act corresponding to Article 299 of the Constitution. The case of the contractors there was that they feared to put up certain temporary storage godowns at Aranbagh for the use of the Civil Supplies Department and the offer was accepted by the department by a letter dated 12th February, 1944 and after the offer was accepted, the contractors completed the constructions and sent the bill, which was duly paid in July, 1944. But meanwhile on 7th April, 1944, the contractors were requested by the Sub-Divisional Officer of the Department to submit their estimate for the construction of a kutcha road, guard room, office, kitchen and room for clerks at Arambagh for the use of the Department of Civil Supplies. That was followed by the visit of the Additional Deputy Director of Civil Supplies, who instructed the contractors to proceed with the construction in accordance with the estimates submitted by them. The constructions were completed and a bill was presented.. The State of West Bengal refuted the claim on the ground that the claims made in respect of the constructions were invalid as the constructions were unauthorised and there was no valid contract as required under Section 175 (3) of the Government of India Act to bind the Government of West Bengal. Their Lordships therefore held that the claim for compensation under Section 70 of the Contract Act is not made on the basis of a contract but on voluntary acceptance of a thing", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-78", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "of the Contract Act is not made on the basis of a contract but on voluntary acceptance of a thing and there was no conflict between Section 70 of the Contract Act and Section 175 (3) of the Government of India Act. In upholding the claim for compensation, Gajandragadkar, J., ( as he then was ) observed :--", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-79", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "\" Where a claim for compensation is made by one person against another under Section 70, it is not on the basis of any subsisting contract between the parties ; it is on the basis of the fact that something was done by the party for another and the said work so done has been voluntarily accepted by the other party. In regard to the claim made against the Government of a State under a Section 70 it may be that in many cases the work done or the goods delivered are the result of a request made by some officer or other on behalf of the said Government. In such a case, the request may be ineffective or invalid for the reason that the officer making the request was not authorised under Section 175 (3) of the Government of India Act, or if the said officer was authorised to make the said request the request becomes inoperative because it was not followed up by a contract executed in the manner prescribed by Section 175 (3) of the Government of India Act. In either case the thing has been delivered or the work has been done without a contract and that brings in Section 70. \" The same learned Judge spoke for the Court in , and following the earlier decisions in the learned Judge said :\n \" But in pursuance of the said void contract, A has performed his part and the Government of India has received the benefit of the performance of the contract by A ; Section 70 Contract Act, would apply and the Government of India was bound to make compensation to A in the form of the value of the said coal under that section. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-80", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "It is for the reason that the learned Judge held that since the Government had received the benefit under an invalid or void contract, it is nevertheless bound to make good or recompense the person who lawfully did something for the Government by which the Government benefited having voluntarily accepted the benefit, that Mr. Jagannadha Rao seeks to contend that here too the contract evidenced by the promissory note has become invalid by reason of the absolute bar of Section 35 of the Stamp Act and as such the lender cannot be deprived of the remedy available to him under the beneficial provision of Section 70. In support of his contention, he also invited our attention to another decision of the Supreme Court in where Ramaswami, J., construing the expression \" anything \" brought deposit of money into a Government Treasury also within the meaning of that expression. The learned Judge, after referring to the two earlier cases of the court referring to supra, observed :\n \" But if money is deposited and goods are supplied or if services are tendered in terms of the void contract. The provisions of Section 70 of the Indian contract Act may be applicable. In other words. If the conditions imposed by Section 70 of the Indian contract Act are satisfied then the provisions of that section can be invoked by the aggrieved party to the void contract.\"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-81", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "It is for the reason that in that case, the learned Judge said that money deposited is also recoverable by virtue of the provisions of Section 70, that Mr. M. Jagannadha Rao contended that. When a promissory note becomes invalid by reason of section 35 of the Stamp Act, it would still be open to the plaintiff to recover the money lent under the note under the provisions of section 70. As the expression \"anything delivered,\" according to the learned counsel, is of wide import or amplitude as to take within its ambit or range money given under an invalid promissory note. That was a case where the appellant had purchased a right to pluck, collect and remove the forest produce. Out of the forest produce only the tendu leaves crop was allowed to be enjoyed by the appellant on his depositing a sum Rs. 3,000 in the Government Treasury. The deposit was made by the appellant to save the tendu leaves crop from being sold to others by the Government. The case of the appellant was that he was entitled to the refund of the amount, as the right to collect tendu leaves had already been purchased by him. From the facts it is clear that that was a case of deposit of money by way of security, so that the tendu leaves crop may not be sold to others. The deposit of money as a security cannot be equated to money lent under a promissory note. For there is no element of lending when the money is deposited into the Treasury in terms of a condition imposed by the Government. There, there is no borrower or lender. It was therefore observed by Ramaswami, J,. That \"if money is deposited \" and goods are supplied or if services are rendered in terms of the void contract. The provisions of Section 70 of the contract Act may be applicable and that the money deposited could be recovered under Section 70 when a contract becomes invalid or void. It is in that", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-82", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "deposited could be recovered under Section 70 when a contract becomes invalid or void. It is in that context that the expression \"anything \" was construed to include \"money \" deposited. There is nothing in what the Supreme Court said in the three cases cited above, as sought to be made out by Mr. M. Jagannatha Rao. Which over rules the opinion of the Madras Full Bench. As expressed by Varadachariar, J., that Section 70 of the Contract Act is scarcely appropriate to a case of money lent to the defendant ; that there is no possibility in such a case or even a contemplation of the \" thing delivered \" being restored - which obviously means in specie ; and that lending money to the defendant cannot be described as something done for the defendant .", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-83", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "57. The essential difference or distinction between the three cases of the Supreme Court and an action based on foot of a promissory note where the bar of Section 35 of the Stamp Act operates is this : The recover of \"any thing \"under Section 70 is only by way of compensation or to restore the \" thing so done or delivered \". What the promisor promises to pay under a promissory note is a certain sum of money and therefore the question of payment of compensation will not arise in view of the specific terms embodied in the promissory note. The question of restoring the \" thing so done or delivered \" even if it is to be construed that that expression takes in \"money \" will not arise, for as stated by their Lordships of the Supreme Court. The remedy under Section 70 cannot be had on foot of a subsisting contract. \n 58. Now let us turn to Section 35 of the Stamp Act which imposed an absolute prohibition on the use of a promissory note if it is not duly Stamped. This section to the extent relevant reads :\n \"No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence. Or shall be acted upon, registered or authenticated by any such person or by any public officer unless such instrument is duly Stamped:\nProvided that-", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-84", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Provided that-\n (a) any such instrument not being an instrument chargeable with a duty not exceeding ten naya paise only, or a bill of exchange of promissory note, shall. Subject to all just exceptions be admitted in evidence on payment of the duty with which the same is chargeable, or. In the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees of when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion.\" \n It is well settled that a promissory note not duly stamped cannot be used for any purpose whatsoever and it is not one of those documents which could be received in evidence on payment of deficit duty and penalty.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-85", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "59. The expression \"for any purpose\" occurring in Section 35 was construed by the Madras High Court as early as in 1907 in Thaji Beebi V. Tirumalaiappa, (1907) 17 Mad LJ 308 and by the Allahabad High Court in Mt. Bibbo v. Gokaran Singh. AIR 1937 All 101 and later by the Privy council in Ram Rattan v. Parmanand. AIR 1946 PC 51, and by this Court in Sanjeeva Reddy v. Johanputra Reddy, . The Madras High Court held that an instrument which should have been Stamped according to law but is unstamped , is not admissible in evidence for any purpose whatsoever . The Allahabad High Court construed the expression \"for any purpose\" as undoubtedly implying \"for each and every purpose whatsoever , without any exception\" and the Privy Council set at rest the conflicting views expressed by the various High Courts by pointing out that the words \"for any purpose\" should be given their natural meaning and effect and would include a collateral purpose. In one of us (Obul Reddi, J.) held that there is a total and absolute bar as to the admission of an unstamped instrument whatever foreign or independent the purpose may be for which it is sought to be used unless there is compliance with the requirements of the provisos to Section 35.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-86", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "60. The question then to be considered is, when the promissory note itself cannot be used for any purpose for whatsoever because of the absolute bar of Section 35 of the Stamp Act whether the factum of loan can be established dehors or independently of the promissory note. Their Lordships of the Supreme Court were not considering a case where a contract becomes inadmissible for \" any purpose \" whatsoever. In those cases, the contracts were admissible in evidence; but they became invalid by reason of the constitutional provisions and hence an action could not be founded on those contracts which were not made in conformity with the requirements of the constitutional provisions. Here, the promissory note cannot be received in evidence and cannot be looked into for any purpose whatsoever, that is to say, no part of the document, be it a single sentence or a word can be received in evidence and to do so is to do violence to Section 35. Further as pointed out by Gajendragadkar, J. ( as he then was ) the claim for compensation was not based on foot of contract, which had become invalid, but on the work of lawfully done by the contractors under the orders of the Government officials, the Government having become the beneficiary of the works executed by the contractors. The obligation to recompense or make good to the extent the Government derived benefit arose not out of the contract, which became invalid, but independently of the contract. But here, the money is sought to be recovered on the basis of the contract put in writing viz., the promissory note, which cannot at all be received in evidence and looked into for any purpose whatsoever even if it be for a collateral purpose ( see AIR 1946 PC 51 ).", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-87", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "61. We may now read Section 91 of the Evidence Act to the extent material for our purpose :\n \"When the terms of a contract, or of a grant or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained. \n\nxx         xx                xx                        xx           xx                   xx                    xx             xx          xx                xx   \n \n\n Illustration (b) : If a contract is contained in a bill of exchange, the bill of exchange must be proved.\" \n \n\nIt is cardinal and well established principle of the law of evidence that where written contracts exist they shall be produced as being the best evidence of their contents. It is an inflexible rule that whenever a contract is reduced into writing the terms of the contract should be proved only by what is contained in the contract which the parties made voluntarily. They should be \" the repositories and memorials of truth \". Any other evidence is excluded from being used either as a substitute for such instruments or to contradict or alter them. It may be mentioned that the exceptions contained in Sections 95 and 97 have no application as the use of the promissory note is prohibited for any purpose by Section 35 of the Stamp Act. Oral evidence, therefore, cannot be substituted for a written contract which embodies the contractual terms for proof of those terms.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-88", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "62. Lord Cairns in the well known case of Shaw v. Foster, ( 1872 ) 5 HL 321 at p. 341 = ( 42 LJ Ch 49 ) dealing with deposit of a document of title, observed :\n \"Although it is a well-established rule of equity that a deposit of a document of title without more, without writing, or without word of mouth will create in equity a charge upon the property referred to. I apprehend that that general rule will not apply where you have a deposit accompanied by an actual written charge. In that case you must refer to the terms of the written document and any implication that might be raised, supposing there were no documents, is put out of the case and reduced to silence by the document by which alone you must be observed. \" \n\n Lord Carson in Subramanian v. Lutchman, AIR 1923 PC 50 = ( 50 ) Ind App 77 ) quoted with approval what Chief Justice said in ( 1873 ) 11 Beng LR 405 :\n \"The law upon the subject admits of no doubt. The rule with regard to writings is that oral proof cannot be substituted for the written evidence which the parties have put into writing. And the reason is that the writing is tacitly considered by the parties themselves as the only repository and the appropriate evidence of their agreement. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-89", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "To the same effect is what is held by Patanjali Sastri, J. ( as he then was ) in Rachpal Maharaj v. Bhagwandas, while dealing with the case of deposit of title deeds: ' if the parties choose to reduce the contract to writing, the implication is excluded by their express bargain, and the document will be the sole evidence of its terms '. These cases were referred to and followed by the Supreme Court in V. G. Rao v. Andhra Bank, . Referring to Ex. A-6 a document in that case, Hegde, J., observed : \" If that document is considered as a contract of mortgage between the Bank and the depositors, the same having not been registered, it is inadmissible in evidence. If on the other hand that document is considered as a mere memorandum evidencing the deposit of title deeds in pursuance of an earlier contract then the correctness of the recitals therein can be gone into without being inhibited by Sections 91 and 92 of the Evidence Act. \" \n\n 63. In K. Bhavanarayana v. S. Venkataratnam, a Division Bench of this Court, to which one of us ( Obul Reddi, J. ) was a party, dealing with the admissibility of a document. Ex. A-7 evidencing the deposit of title deeds, observed : that if a document of this nature is not registered as provided under Section 49 of the Indian Registration Act, it cannot be used as evidence at all and that the transaction cannot be proved by oral evidence either, in view of what is provided under Section 91 of the Evidence Act.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-90", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "64. It is not necessary to multiply decisions on this point, for in view of what the Privy Council say, when once the parties agreed to put on record the terms of the contract, in other words, put the terms agreed upon into writing, it is the document alone that could be looked into to ascertain the terms of the contract and that Section 91 of the Evidence Act prohibits any other evidence to prove or construe the contract reduced into writing.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-91", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "65. Now let us consider whether Section 91 comes in the way of a promissory note which does not incorporate or embody all the terms of the contract. Section 91 refers to all kinds of contracts. A promissory note is a document which requires by law to be in writing. The prohibition of Section 91 is only with regard to the terms of such contract reduced in writing. In other words, Section 91 excludes any evidence other than a promissory note for proof of its terms. All the terms of the contract need not be necessarily be embodied in a promissory note. If the terms required to be stated by Section 4 of the Negotiable Instruments Act, are incorporated in a contract, that would be sufficient to make it a promissory note. The parties may stipulate terms culminating in the giving of the promissory note, but all such terms may not be embodied in the promissory note in which event, if the promissory note becomes inadmissible in evidence by reason of Section 91 its terms cannot be proved by other evidence, but not the other terms of the contract which do not find a place in the promissory note. That is to say, if the terms of the contract relating to execution of the promissory note as a conditional discharge or collateral security are not embodied in the promissory note, it cannot be said that when the plaintiff seeks to establish on the basis of his pleadings that the promissory note was obtained by him by way of a collateral security or as a conditional payment, the bar imposed by Section 35 of the Stamp Act and Section 91 of the Evidence Act comes in the way of proving the terms relating to collateral security or conditional payment not embodied in the promissory note. To put it differently when a plaintiff sets up the case of collateral security or conditional payment on the failure of his action on foot of the promissory note, he does not", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-92", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "conditional payment on the failure of his action on foot of the promissory note, he does not seek to prove the terms contained in the promissory note, but seeks to prove the terms of the contract which are not embodied in the promissory note. In that case, it cannot be said that the plaintiff is attempting to nullify the provisions of S. 91 or by-passing or circumventing those provisions, for then his action is not on foot of the promissory note, but on the basis of the alternative cause of action shown in the plaint viz., that the promissory note was given by the debtor as a collateral security or conditional payment and on the basis of the alternative cause of action pleaded by him he would be entitled to let in other evidence to prove his claim. The bar of Section 91 therefore operates in such a case only to the extent of the terms of the contract embodied in the promissory note, but not to the terms of the contract which are not evidenced by the promissory note. In other words, the promissory note, which cannot be used for any other purpose whatsoever on account of the bar of Section 35 of the Stamp Act, becomes a ' worthless piece of paper ' in which event Section 91 will not come in the way, as the plea of conditional discharge or collateral security is not founded on the terms of the promissory note, but on the terms of the contract which do not find a place in the promissory note and that would put the case of the plaintiff beyond the reach of Section 91 of the Evidence Act.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-93", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "66. Mr. M. Jagannadha Rao made a feeble attempt to alternatively rest his case on the doctrine of in pari delicto potior est conditio defendantis for the reason that under Section 29 of the Stamp Act, in the absence of an agreement to the contrary, the expense of providing proper stamp shall be borne by the person making or executing a promissory note. In the first place, it should be borne in mind that there could always be an agreement between the parties that the expense of providing proper stamp shall be borne not by the party executing it, but by the party in whose favour it is executed. This doctrine only lays down that the Courts will refuse to enforce al illegal agreement at the instance of a person who is himself a party to an illegality or fraud. To apply the doctrine to the case of a promissory note, the defendant should be in a position to put the case under Sections 23 and 24 of the Contract Act which lay down what considerations are unlawful making the agreements void. We are unable to see how on the basis of Section 29 of the Stamp Act, a promissory note not duly stamped could be brought within the mischief of Sections 23 and 24 of the Contract Act. It is one thing to say that the contract evidenced by the promissory note is hit by Sections 23 and 24 of the Contract Act and another thing to say that the obligation case upon the executant of a promissory note to bear the expense of providing proper stamp has not been discharged by him. Section 29 does not say that the defendant shall affix the proper stamp on the promissory note. It only says that the defendant shall bear the expense of providing the proper stamp. That distinction should be borne in mind. The promisee can always recover the expense initially incurred by him from the executant of the promissory note. The action brought on a promissory note fails", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-94", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "the executant of the promissory note. The action brought on a promissory note fails not on account of any illegality attached to it as laid down in Section 23 or 24 of the Contract Act, but because of Section 35 of the Stamp Act, which makes it 'a worthless piece of paper' for any use in evidence. In-admissibility in evidence should not be mixed up on confused with illegality.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-95", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "67. Another feeble attempt was also made to contend that, when the cons, under Hindu Law are made liable for the father's debt not on the foot of a promissory note but on the basis of the personal law, why should not the debt be recovered from the promisor himself de hors or independently of the promissory not. It should be remembered that, if the action against a Hindu father, the executant of the promissory note, fails on account of the bar of Section 35 of the Stamp Act and Section 91 of the Evidence Act then there is no question of proceeding against the sons of recovery of the debt invoking the personal law. The liability of the sons to pay the father's debt arises not because the promissory note is duly stamped but on account of the personal law in respect of such a debt contracted by a Hindu father, so long as that debt is not tainted with immorality or vice. If this is borne in mind, there is no question of recovering the money lent under an insufficiently stamped promissory note, except in the manner and circumstances already made clear by us agreeing with the view of the Madras Full Bench.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-96", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "68. For the reasons recorded by us. We find no conflict between Perumal Chettiar's case ILR (1938) Mad 933 = (AIR 1938 Mad 785 (FB) and Pothi Reddy's case. (1887) ILR 10 Mad 94 and hold that the view, as expressed by the Full Bench is correct and that Section 70 of the Contract Act cannot be invoked on the theories of implied promise, money had and received, quasi-contract and just and reasonable or unjust enrichment or any other equitable doctrine. We cannot, therefore, endorse the view expressed by Gopal Rao Ekbote. J. in Mohammad Jamal Saheb's case, that \"on the basis of the theory of ' money had and received ' also, the plaintiff may be entitled to claim his money \". The questions posed by us are answered accordingly. \n\n 69. Before parting with this case, we would like to observe that, if any provision in any enactment requires an amendment, there cannot be a better one than the provisions of Section 35 of the Stamp Act so as to incorporate a proviso to make an insufficiently stamped promissory note, admissible in evidence by directing the person relying upon it to make the deficit stamp duty and subjecting him to such penalty as the Legislature may deem fit to impose. Such an amendment in our view, would not only bring about uniformity in the law in the various States, but also avoid unnecessary litigation and save quite a lot of judicial time. \n\n 70. We therefore, send back the civil revision petitions for disposal by a single Judge.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-97", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Alladi Kuppuswami, J.  \n 71. The question which has been referred to the Full Bench is as follows :\n \"Whether a plaintiff can lay action for recovery of the amount advanced by him basing on the original cause of action when the Negotiable Instrument evidencing the transaction is inadmissible in evidence under Section 35 of the Stamp Act. \" \n\n Having regard to the arguments advanced on both sides it was considered desirable to frame the following questions for consideration :\n \"Whether a plaintiff can bring action for recovery of the amount advanced by him basing on the original consideration when the promissory note on foot of which action is brought is inadmissible, in evidence under Section 35 of the Stamp Act, and if so, under what circumstances ?", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-98", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "2. If the promissory note is inadmissible in evidence whether action can be maintained for recovery of the amount either on the theory of \" money had and received \" or under the provisions of Section 70 of the Contract Act. \" \n For nearly a hundred years, the Courts in India have been struggling with the question whether a plaintiff is without any remedy if a promissory note executed in his favour is not stamped or insufficiently stamped and is in admissible in evidence or whether he is entitled to sue on the debt or on the consideration. Different views have been expressed from time to time expressing different shades of opinion. A mass of authorities representing the views of the High Courts from Jammu & Kashmir in the North to Kerala in the South have been placed before us. Sitting as we are in a Full Bench of seven Judges, it is not necessary for us to consider in detail all these decisions as none of these decisions are binding upon us. Of course, we have derived considerable light from the reasoning contained in some of those decisions and we are indebted to the advocates on both sides for the able manner in which their respective cases were presented. As the decisions have been discussed in detail in the judgments of my learned brothers Obul Reddi and Venkataramasastry, JJ. I have considered the matter mainly in the light of first principles. \n\n 72. The three provisions of law which have to be considered in dealing with the first question are :\n (a) Section 4 of the Negotiable Instruments Act which contains the definition of a ' promissory note ', (b) Section 35 of the Stamp Act and (c) Section 91 of the Evidence Act.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-99", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Section 4 of the Negotiable Instruments Act is as follows :\n \"A 'promissory note' is an instrument in writing ( not being a bank-note or a currency note ) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument. \" Section 35 of the Stamp Act in so far as it is relevant for the purpose of this reference is in these terms :--\n \"No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any public officer, unless such instrument is duly stamped ;\nProvided that :--\n (e) any such instrument not being an instrument chargeable with a duty not exceeding ten naya paise only, or a bill of exchange or promissory note shall subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to tentimes such duty or portion. \"  \n It is seen at once that a promissory note does not come under the proviso and is covered by the main Section.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-100", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "73. The relevant portion of Section 91 of the Evidence Act is in the following terms :\n \"When the terms of the contract, or of a grant of any other disposition of property, have been reduced to the form of a document no evidence shall be given in roof of the terms of such contract, grant or other disposition of the property............... except the document itself or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained. \" \n\nIllustration :\n (b) If a contract is contained in a bill of exchange, the bill of exchange must be proved. \n 74. Applying Section 91 to the document with which we are concerned viz; a promissory note, it is seen that if the promissory note contains the terms of the contract between the parties, then proof of such terms is to be given only by the document itself and no evidence except the document shall be given in proof of the terms. But in this case as the promissory note is unstamped or insufficiently stamped, it shall not be admitted in evidence for any purpose, nor shall it be acted upon. The combined effect of S. 91 of the Evidence Act and Section 35 of the Stamp Act would therefore be, in the case of unstamped or insufficiently stamped promissory note which contains the terms of the contract, that the promissory note is inadmissible for any purpose and no other proof of the terms of the contract is permissible, except the document, with the result that the plaintiff's suit in such a case will have to be dismissed.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-101", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "75. The question therefore, in every suit for the recovery of an amount for which a promissory note is executed resolves itself into this viz., whether the terms of the contract have been reduced to the form of a document, namely, the promissory note, or in other words whether the promissory note contains the terms of the contract. All that is required to satisfy the definition of a promissory note is that there must be an unconditional undertaking to pay a certain sum only to, or to the order of, a certain person or to the bearer of the instrument. There may be other terms of the contract between the parties, which may not find a place in the promissory note but still if the conditions mentioned in Section 4 of the Negotiable Instruments Act are satisfied it will be a valid promissory note. For instance, among the eight illustrations that are given to the definition, illustrations (a) and (b) are mentioned as being promissory notes. Illustration (a) states : \" I promise to pay B or order Rs. 500 \": and (b) states: \" I acknowledge myself to be indebted to B in Rs. 1000 /- to be paid on demand for value received. \" It is seen from the illustration (a) that the only term that is stated is that A promises to pay B or order Rs. 500 /-. No other terms of the contract are mentioned, for example, the rate of interest, or when the amount is to be paid and so on. Even so it is a valid promissory note. On the other hand a promissory note may also contain all the terms of the contract. The question whether a promissory note contains all the terms of the contract between the parties or not is a question of fact and has to be decided on the evidence in the case. There is no presumption either that it contains all the terms or that it does contain all", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-102", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "the case. There is no presumption either that it contains all the terms or that it does contain all the terms. If it contains all the terms, no evidence shall be given in proof of the terms, except the promissory note and as the promissory note is inadmissible for any purpose, the result would be that the terms cannot be proved at all and the plaintiff is left without a remedy. If, on the other hand, the promissory note does not contain all the terms, Section 91 of the Evidence Act is not a bar and he is entitled to allege and prove such terms by evidence other than the promissory note.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-103", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "76. In this connection it is necessary to bear in mind that a promissory note may be executed in different circumstances. \n\n (a) A person may incur a debt in the first instance and subsequently execute a promissory note promising to pay the amount due by him. For example, a promisor may purchase certain goods from the promisee and become indebted to him for the sale price and later on at the instance of the promisee execute a promissory note for the value of the goods purchased by him; or the promisor might have borrowed certain sum of money even without a document and later on at the instance of the latter may execute a promissory note for the amount borrowed.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-104", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "(b) A promissory note may be executed simultaneously with the loan advanced or the debt incurred. In this connection the expression ' simultaneously ' is used in the sense that the execution of the promissory note or the incurring of the debt from part of one and the same transaction . It is possible that they may be separated in point of time, for instance, the amount may be borrowed in the morning and the promissory note executed in the evening, but the true position is that they form part of the same transaction, the mere fact that they are separated by some interval of time would not really make a difference. \n 77. In cases coming under (a) it may be the intention of the parties that the previous debt is discharged by the execution of the promissory note and the promissory note alone should hence-forward be treated as constituting the contract between the parties. In other words, there is accord and satisfaction of the debt and thenceforward the liability based upon the promissory note. In such a case it is clear that the terms of the contract are reduced to a document within the meaning of Section 91 of the Evidence Act and it is not permissible to prove the terms of the contract by any other evidence except the promissory note, and as the promissory note itself is inadmissible under S. 35 of the Stamp Act for any purpose the suit must fail.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-105", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "78. On the other hand, the intention of the parties may be that it is regarded only as a conditional payment of the antecedent debt, or is taken by way of collateral security for the debt. In either case, the original contract is not in any way affected and if for any reason the promissory note cannot be enforced, the plaintiff is entitled to fall back on the original contract. In the first case the payment being conditional ceases to be a payment when the promissory note cannot be enforced. In the second case, the only result is the security fails but the debt remains. In both these cases it cannot be said that the terms of the contract have been reduced to the form of a promissory note, for the promissory note is only treated as conditional payment or executed by way of collateral security and hence Section 91 of the Evidence Act does not come in the way and it is always open to the promise to sue upon the original cause of action, namely, the advancing of the loan by the promisee, or incurring of the debt by the promisor. The observation of Leach C. J. In AIR 1938 Mad 785 ( FB ) at p. 786, that where a negotiable instrument is executed in respect of an antecedent debt the creditor may sue on the debt and ignore the note would be applicable only to this class of cases and not the first where the debt is completely discharged and the promissory note is intended to substitute the debt.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-106", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "79. Even in a case coming under (b) where the promissory note is simultaneous with the loan, it is still open to the parties to prove that the promissory note was not regarded as the embodiment of the contract but only taken by way of collateral security or by way of conditional payment. Where a promissory note has been executed subsequent to the incurring of the debt or simultaneously, the question still remains whether it was intended by the parties to reduce the terms of the contract into the form of a promissory note, or whether it was intended merely to be a conditional payment or by way of collateral security and that has to be decided with reference to the evidence in each case. \n 80. It was sought to be argued by Sri M. Jagannadha Rao that in every case of a promissory note there is always an implied promise to pay, apart from what is contained in the promissory note and therefore, it must be taken that a promissory note must always be regarded as conditional payment or executed by way of collateral security. At any rate it was contended that there is a presumption that the promissory note was taken by way of conditional payment or by way of collateral security and unless that presumption is rebutted by evidence the plaintiff would be entitled to prove the contract by evidence other than the promissory note. We are not inclined to accept the argument. On a review of all the authorities referred to in the judgments of Obul Reddi and Sastry, JJ., it would appear that there is no presumption either way and in each case it has to be considered on the evidence on record whether the promissory note was executed only by way of conditional payment or by way of collateral security or whether it embodies all the terms of the contract.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-107", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "81. A further question which arises is this-- Suppose the promissory note is not executed by way of conditional payment or as collateral security, but it turns out that it does not contain all the terms of the contract, would it still be open to the plaintiff to fall back on the original consideration ? An example of such a case has already been given, namely, where a person promises to pay a sum of Rs. 500 /- and nothing is mentioned regarding interest. If under the terms of contract the defendant had agreed to pay interest it cannot certainly be said that the promissory note contains all the terms of the contract. In such a case will Section 91 of the Evidence Act operate as a bar to prove the terms of the contract by evidence other than the promissory note ? It was sought to be contended that it is only in cases where the promissory note is executed by way of conditional payment or by way of collateral security that a suit would lie on the original cause of action and the following passage in AIR 1938 Mad 785 ( FB ) Supra, was relied on for this purpose. \n\n \"If the promissory note embodies all the terms of the contract and the instrument is improperly stamped, no suit on the debt will lie. Section 91 Evidence Act and Section 35 Stamp Act bar the way. But if it does not embody all the terms of the contract the true nature of the transaction can be proved ; and where an instrument has been given as a collateral security or by way of conditional payment, a suit on the debt will lie. The fact that the execution of the promissory note is contemporaneous with the borrowing cannot exclude the possibility of the instrument having been given as a collateral security or by way of conditional payment. Whether a suit lies on the debt apart from the instrument therefore depends on the circumstances under which the instrument was executed. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-108", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "I an however, of the view that this passage does not lend support to the argument that the plaintiff can sue on the debt only in cases where the promissory note was executed by way of conditional payment or by way of collateral security. These are only two of the instances referred to, where the promissory note does not embody all the terms of the contract. The general principle as laid down in the decision of the Full Bench is that if the note does not embody all the terms of the contract the true nature of the transaction can be proved. I do not think there is any warrant for restricting the right of the plaintiff to fall back on the original debt only in such cases. The last part of the judgment of Leach, C. J. Also makes this clear, wherein it is stated \"The learned trial Judge did not consider the question whether the promissory note embodied the whole of the terms of the contract between the parties. The case should therefore be remanded to the trial court for further consideration and decision in the light of this judgment. \" \n\n While I agree with the conclusions of the Full Bench of the Madras High Court in AIR 1938 Mad 785 (FB ) (Supra) on this part of the case. I would like to make it clear that my understanding of the decision is that the plaintiff has a right to fall back on the original consideration in all cases where the promissory note does not contain all the terms of the contract and is not restricted merely to a case where the promissory note is executed by way of conditional payment or by way of collateral security.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-109", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "82. Another question which has crept up during the course of the argument is whether the promissory note can be looked into for the purpose of finding out whether it embodies all the terms of the contract or not. As Section 35 says that the promissory note cannot be admitted in evidence for any purpose, it was suggested that it could not be looked into even for the purpose of finding out whether it contained all the terms of the contract or not. It is true that the Privy Council has decided in 73 Ind. App. 28 = AIR 1946 PC 51 that the expression \" for any purpose \" should be given its natural meaning and the document cannot be admitted in evidence for any collateral purpose. This decision has been uniformly followed by all the courts in India including the Supreme Court. But in my view the decision is not authority for the proposition that the document cannot be looked into even for the purpose of finding out whether the terms contained in the promissory note are the same as the terms of the contract between the parties. If this argument is accepted it will be impossible to put into effect Section 91 of the Evidence Act. In order that Sec. 91 may apply , one has to find out whether the terms of the contract have been reduced to the form of writing. Unless we look into that writing, one cannot say if the terms of the contract have been reduced to writing or not. If one has to close ones eyes to the terms of the promissory note, because it is unstamped, then it is impossible to ascertain whether it contains all the terms of the contract or not. The oral evidence or other evidence has to be placed side by side with the document and only then can it be found out whether all terms of the contract are contained in the document.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-110", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "83. Before concluding the discussion on this point reference may be made to the decision of the Privy Council in AIR 1918 PC 146. There it was held that in an action on a bill of exchange or a promissory note against a person whose name properly appears as party to the instrument it is open either by way of claim or defence to show that the signatory was in reality acting for an undisclosed principal. In the course of the judgment they remarked it would have been open to the plaintiffs, had they thought fit to have framed their case in an alternative form, and to have sued both on the hundis and alternatively upon the consideration . But as they found that the plaint did not embrace both these forms of relief and was confined to an action brought upon the hundies themselves, the sole question for decision was whether upon the form of the hundi the first respondent was properly included as a defendant to the suit and proceeded to consider that question. This decision cannot be taken as an authority for the proposition that in every case of a hundi or negotiable instrument a suit can be filed on the original consideration. That would depend upon the terms of the hundi and on the question whether it contained all the terms of the contract or not, as has been pointed out earlier. \n\n 84. Considerable arguments were advanced on the second question as to whether the plaintiff would in any event be entitled to recover the amount under the provisions of Section 70 of the Contract Act or under the theory of \" money had and received. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-111", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "85. In , it was observed, quoting the judgment of the Privy Council in Ramanandi Kuer v. Kaalawati Kuer, 55 Ind App 18 = ( AIR 1928 PC 2 ) that where there is a positive enactment of the Indian Legislature the proper course is to examine the language of that statute and to ascertain its proper meaning uninfluenced by any consideration derived from the previous state of the law or of the English law upon which it may be founded. It is therefore, neither, necessary nor proper to consider the various English decisions on the doctrine of ' unjust enrichment ' or on the theory of ' money had and received ' . It is sufficient to consider the provisions of Section 70 of the Contract Act and see whether the plaintiff can found his claim on those provisions in the circumstances of the case. Section 70 of the Contract Act reads as follows :--\n \"Where a person lawfully does anything for another person or delivers anything to him, not intending to do so gratuitously and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of , or to restore, the thing so done or delivered. \" \n\n It is doubtful whether this provision is applicable to a case where the act is done by one person all the express request of another. In this case, the amount was paid to the promiser at his express request on his executing a promissory note. Section 70 of the Contract Act in such circumstances would have no application.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-112", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "86. Further even if S. 70 of the Contract Act is applicable and the plaintiff is permitted to bring an action for the recovery of the amount paid on foot of Section 70 of the Contract Act there is insuperable difficulty in the way of the plaintiff obtaining a decree. In order to obtain a decree the plaintiff has to prove that the defendant has derived the benefit, in this case that he received the amount of the loan. \n\n 87. No evidence other than the promissory note is admissible to prove that the amount of the loan was received by the promisor, as the amount of the loan is one of the terms of the contract. He cannot prove the same by the production of the promissory note as it is not admissible for any purpose under Section 35 of the Stamp Act ; with the result there is no evidence before the Court as to the amount of the loan received by the defendant. If, on the other hand the promissory note does not contain all the terms of the contract it has already been held that the plaintiff is entitled to sue on the original consideration. In that event there is no need for him to have recourse to Section 70 of the Contract Act. In such a case it does not make any difference whether the plaintiff's right is described as one based upon the original consideration or on the footing that the defendant had received the benefit or derived advantage.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-113", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "88. I must confess that I felt considerable difficulty in arriving at the above conclusion in view of certain decisions of the Supreme Court which were relied on this connection. In ( Supra ) the Supreme Court had to consider a case where a contract was void by reason of its not being in conformity with Section 175 (3)of the Government of India Act . But the party to the contract had done some works and one of the questions was whether if the contract was invalid his claim for compensation for the work done. Fell under Section 70 of the Contract Act. The Supreme Court held that Section 70 was applicable to the facts of that case. One of the contentions urged was that the recognition of the respondent's claim for compensation virtually permits the circumvention of the mandatory provisions of Sections 175 (3)of the Government of India Act. Because the work done was no more than the performance of the contract, which was contrary to the said provisions. If a decree was passed for the compensation it would in substance amount to treating the invalid contract as being valid. This argument was rejected by the Supreme Court which observed the claim for compensation was based not upon the delivery of the goods or doing of any work. But acceptance and enjoyment of the said goods or said work and hence by awarding compensation under Section 79 the contravention of Sec. 175 (3) is not condoned. For the same reason it was submitted that by holding that the plaintiff is entitled to return all the money advanced by him under the inadmissible promissory note. There is no circumvention of the provisions of Section 91 of the Evidence Art or of Sec. 35 of the Stamp Act. As the action is based upon the advantage received by the defendant and not on the promissory note. Though there is considerable force in the contention that the present case is similar to the case considered by the Supreme Court, I am inclined to take the view, though not without hesitation that", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-114", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "case considered by the Supreme Court, I am inclined to take the view, though not without hesitation that the situation is not identical. As has been observed already in the case before the Supreme Court the work was done only under a contract which was void under Section 175 (3) of the Government of India Act. The contract was no doubt not enforceable. But there was nothing preventing the petitioner from proving the fact that he performed the work or that the defendant derived benefit or advantage and claiming compensation on that basis. In the present case. However, the plaintiff is precluded from proving the fact of the loan in view of Section 91 of the Evidence Act read with Section 35 of the Stamp Act. In this connection it was argued on the strength of some cases that the amount of the loan is not a term of the contract. I fail to see how such an argument can be advanced. If the amount of loan itself cannot be treated as a term of the contract. I wonder what else can be regarded as a term of the contract in the case of a promissory note?", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-115", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "89. I may however. State that I am not in agreement with that view expressed by Varadachariar J in AIR 1938 Mad 785 (FB) (Suprs) that \"Sec 70 of the Contract Act is scarcely appropriate to a case of money lent to the defendant and there is no possibility in such a case or event a contemplation of the \"thing delivered.\" Being restored which obviously means in specie; and lending money to the defendant cannot be described\". This is the view of Vaaradachariar H. Only and cannot in any sense be regarded as the view of the Full Bench. There is no reference to S.70 of the Contract Act in the decision of Leach, C. J. No authority is cited by Varadachari, J., in support of the proposition that the expression \"thing delivered\" would only mean \"in specie\" and lending money to the defendant cannot be described as something done for the defendant. On the other hand. In of the Contract Act was made applicable to a case where an amount was paid in pursuance of a contract and the contract was ultimately found unenforceable as it was contrary to Sec. 175 of the Government of India Act. It was held that the plaintiff would be entitled to a refund of the amount though in the particular case they held that he was not entitled to such refund having regard to the evidence in that case. The expression \"thing:\" used in Sec. 70 is of general import and I am unable to see any valid reason why it should not take within its purview \"money\" also.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-116", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "90. It remains only to refer to the decision in . In which Gopal Rao Ekbote. J. (As he then was)observed that the plaintiff can have his money back though the plaintiff can have his money back though the document is inadmissible in evidence on the ground that it is insufficiently stamped. Dealing with the opinion expressed by Varadachariar. J.in AIR 1938 Mad 785 (FB) (Supra) he pointed out that the two decisions of the Privy Council in AIR 1918 P. C. 241 and AIR 1918 P.C. 151. Where not brought to the notice of Varadachariar J. Gopal Rao Ekbote. J. Observed that from these cases it is clear that an action analogous to that for money had and received can be maintained without resort to any theory of implied contract and the plaintiff would be justified in asking his money back from the defendant although the suit promissory note is inadmissible in evidence on the theory of money had and received \n \n\n 91. Before considering these observations it may be pointed out that as far as the first question referred to the Full Bench is concerned. Gopal Rao Ekbote. J. Followed the decision in AIR 1938 Mad 785 (FB) Supra. And held that the said suit based on the debt and the promissory note was sought to be given as collateral security and therefore the allegations had to be enquired into and the court below was in error in deciding the case without recording the evidence of the parties it is only with reference to the second question that Gopal Rao Ekbote, J. took the view that the plaintiff is entitled to claim his money back also on the theory to money had and received.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-117", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "90. AIR 191d8 PC 241 (Supra) was a case from Ceylon. After referring to (1760) 2 Burr. 1005 and (1914)A. C. 398 their Lordships of the Privy Council observed that they where reluctant to deal with the question on the footing of money had and received. As they were of the opinion that the appeal could be disposed of on another ground. I am unable to find anything in the decision of the Privy Council which would cover a case of the right of the person to claim refund of the money which was advanced on foot of an insufficiently stamped promissory note. In AIR 1918 PC 151 the Privy Council had to deal with the question of limitation. Though they observed that the facts of the case would more nearly approach the formula of \"money had and received\" by the defendant for the plaintiff's use they said in view of the course the suit had taken and of the attitude of both sides they ought to deal with the fase on the assumption that the suit would come within Art 97 of the Limitation Act. In this case also. No light is thrown on the question for consideration. I do not think that a reference to the above decisions of the Privy Council would have affected the result of the decision of the Full Bench in AIR 1938 Mad 785 (FB) supra.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-118", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "93. In the result the first question is answered by saying that the plaintiff would be entitled to sue on the original consideration if the promissory note does not contain all the terms of the contract. The plaintiff has to allege and prove that all the terms of the contract are not contained in the promissory note. While agree with the majority view that the decision of the Full Bench in AIR 1938 Mad 785 (FB) (Supra) is correct I am not able to share their view as to the interpretation and scope of that judgment. \n\n 94. The plaintiff will not be entitled to claim compensation under Section 70 of the Contract Act if the promissory note is inadmissible in evidence under section 35 of the stamp Act. Here again I am in agreement with the conclusion of the majority though for some what different reasons which have been set out by me A.D.V. Reddy, J. \n 95. The controversy that arises out of the question referred to us centres solely round the problem of proof relating to claims for monies due under negotiable instrument unstamped or inadequately stamped. Section 35 of the Stamp Act imposes an embargo on the admissibility of such negotiable instruments in evidence for any purpose and further stipulates that no claim can be based on it. Section 91 of the Evidence Act superimposes the additional disability of proving otherwise the terms embodied in the said document as they have been reduced into writing. We have therefore to consider the impact of these provisions on the claims for debts due under negotiable instruments unstamped. Or inadequantely or insufficiently stamped. As in this case we are concerned only with promissory notes. I will confine my remarks to promissory notes.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-119", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Promissory notes are of three kinds:\n 1. promissory notes executed to evidence antecedent debts. Debts incurred anterior in point of time to the execution of the promissory note ;\n 2. Promissory notes executed as a result of an agreement of arrangement between the parties as a collateral security or conditional payment; and\n \n\n 3. Promissory notes executed for monies lent under it. Where the amount lent and the promissory note form part and parcel of the same transaction. \n 96. In the first category of cases. Where there is an antecedent debt either on accounts settled. Goods supplied monies lent or for any other claim where the cause of action is complete in itself there is no dispute that de hors the promissory note . the party can fallback on the original consideration. In the second of the categories, where a promissory note is executed either after the incurring of the debt or even simultaneously with the lending on a specific understanding or agreement that the promissory note is only to serve as a collateral security or as a conditional payment, it is well settled that if the promissory note cannot be proved by reason of the provisions of Section 35 of the Stamp Act and Section 91 of the Evidence Act, the claimant can fall back on the original debt and the passing of the consideration thereunder. In both the cases, however the fact of the execution of the promissory note and the terms contained therein cannot be relied on for any purpose, as the promissory note is defective as it is inadequately stamped and is inadmissible in evidence. The term ' any purpose' excludes even a collateral purpose and evidence aliunde has to be let in regarding the prior debt and the understanding or agreement relating to the promissory note being only a collateral security or a conditional payment.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-120", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "97. What we are concerned with is the third category of promissory notes. Where the lending is under a promissory note. Where the lending and the note form part and parcel of the same transaction and the entire contract is contained wholly in the promissory note. In such a case apart form the promissory note and the terms contained therein, there is no other transaction to evidence the debt and other transaction cannot be proved by reason of the provisions of Section 35 of the Stamp Act and Section 91 of the Evidence Act., the cause of action disappears because they are so inextricably interwined as the substance and its shadow. If the shadow is to be eliminated, the substance has to disappear. There is no factum of loan to be proved independent of the one that arises under the promissory note. There is no promise implied or express independent of the promissory note and no debt incurred dissociated from the one under the promissory note. No doubt, in every loan there is an implied promise to pay. If the loan fails for want of proof, the implied promise goes with it. The benefit had and received under Section 70 of the Contract Act, even if it should include a benefit by way of payment of money also should be proved that when the proof suffer from the infirmity of being hit by the provisions of Section 35 of the Stamp Act and Section 91 of the Evidence Act, there can be no claim based on it. Recognising such claims on the ground of implied promise or on the ground of benefit had any received under Sec. 70 of the Contract Act, amount to ignoring nullifying the effect of the statutory provisions of Section 34\\5 of the Stamp Act and Section 91 of the Evidence Act and amount to an attempt at salving equity by sacrificing law. The impact of the above provisions of the third category of unstamped or inadequately stamped promissory note is to", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-121", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "above provisions of the third category of unstamped or inadequately stamped promissory note is to convert the promissory note into a scrap of waste paper and the lending under it a bad debt.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-122", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "98. The reference to the instruction embodying or not embodying all the terms of the contract in the judgment of Leach. C.J. in ILR (1938) Mad 933 = (AIR 1938 MAD 785) (FB) had led to the contention that in case of the instrument does not contain all the terms of the contract, the promisee will be entitled to sue on the original consideration. A scrutiny of the Judgment shows that the above observations were made only in relation to the category of instruments that were executed as collateral securities or as conditional payments. This is made abudantly clear by the following paragraph contained in the Judgment of the Full Bench at Page 945 :-\n \"In my opinion the law may be stated shortly this way. If the promissory note embodies all the terms of the contract and the instrument is improperly stamped no suit on the debt will lie. Section 91 of the Evidence Act and Section 35 of the Stamped Act bar the way. But if it does not embody all the terms of the contract the true nature of the transaction can be proved and where an instrument has been given as collateral security or by way of conditional security or by the way of conditional payment a suit on the debt will lie. The fact that the execution of the promissory note is contemporaneous with the borrowing cannot exclude the possibility of the instrument having been given as collateral security or by way of conditional payment. Whether a suit lies on the debt apart from the instrument therefore depends on the circumstances under which the instrument was executed\".", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-123", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "99. The Court has necessarily to look into the instrument first to find out whether it constitutes a promissory note as per the provisions of Section 4 of the Negotiable Instruments Act and then find out whether it is properly stamped, to see whether the provisions of Section 35 of the Stamp Act are attracted. If the latter provisions are attracted, the other occasion for the Court to look into it is when oral evidence is sought to be let in to find out whether the instrument contains any of the terms with regard to which such oral evidence is adduced to exclude it if it offends the provisions of Section 91 of the Evidence Act. These are the two occasions when the Court has to took into the instrument and they are purely procedural. \n\n 100. If the promissory not is inadmissible under Section 35 of the Stamp Act and the terms cannot be proved by other evidence as per the provisions of Section 91 of the Evidence Act, in the first of the categories detailed above, where the promissory note is executed to evidence and antecedent debt the promissory note need not be looked into all as independent evidence with regard to an antecedent debt can be let in.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-124", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "101. With regard to the third of the categories, where it is executed for monies lent under it, no further evidence can be let in. If it is hit by the above provisions as all the essential terms that go to make out a promissory note under Section 4 of the Negotiable Instruments Act should be there to constitute a promissory note and any other evidence with regard to a term. I.e. for instance like interest though left out can be of no consequence as the promissory note itself of debt under it cannot be otherwise proved. Where the promissory note contains all the essential terms , the names of the promisor, the promisee, the unconditional undertaking to pay the consideration etc., and if the pronote is note by Section 91 of the Evidence Act even if it did not contain all the terms. The passing of the consideration under the note cannot be proved otherwise and no claim can be based on it. Therefore there is no force in the contention that if all the terms are not contained in the document the party can sue on the original consideration.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-125", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "102. It is only in cases where there is an agreement that the promissory note is executed by way of collateral security or as a conditional payment . The question arises whether the terms which spell out that agreement if contained in the document that is defective, can be looked into. It is permissible to the party to prove other circumstances by leading evidence to show that the promisory note was executed as a collateral security or as a conditional payment but if those terms are contained in the document itself, they will also be hit by the provisions of Act 91 of the Evidence Act . However, if the document that purports to be a promissory note becomes inadmissible as a promissory note the terms contained in it relating to its being executed as a collateral security or as a conditional payment , being in the nature of an agreement, will be saved by the proviso of Section 35 of the Stamp Act and by paying penalty it can be admitted in evidence as an agreement containing the terms. This proof will however be need not for suing on the promissory note as it will be unenforceable but only to establish the agreement and enable the party to sue on the original consideration. \n\n 103. With the above observations, I agree with the Judgment of my learned brother Obul Reddi. J. That the judgment of the Full Bench in I.L.R. (1938) Mad 933 = (AIR 1938 MAD 785) (FB) : lays down the correct law and that no claim can also be based under Section 70 of the Contract Act if the instrument on which a claim is based is hit by the provisions of Section 35 of the Stamp Act and Section 91 of the Evidence Act.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-126", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Venkatarama Sastry, J. \n 104 . I agree with the judgment just delivered by my learned brother Obul Reddi. J on behalf of the Bench. But having regard to the importance of the question and the divergent views expressed by the several High Court in India I propose to add my own reasons :\n 105. Following is the question referred to this Full Bench :-\n \"Whether a plaintiff can lay action for recovery of the amount advanced by him basing on the original cause of action when the Negotiable Instrument evidencing the transaction is inadmissible in evidence under Section 35 of the Stamp Act\". \n\n 106. A negotiable instrument, according to Section 13 of the Negotiable Instruments Act 1881, means a promissory note, bill of exchange or cheque payable either to order or bearer. An instrument according to Section 2 (14) of the Indian Stamp Act, includes every document by which any right or liability is or purports to be created, transferred, limited, extended extinguished or recorded. It is an inclusive definition. There is no doubt that a Negotiable Instrument is an instrument coming within the ambit of this definition. An instrument of the nature of a Negotiable Instrument is liable for stamp duty according to Article 13 (bill of exchange) and Article 49. (Promissory Note). Section 35 of the Stamp Act deals with Instruments not duly stamped and provides as follows :-\n \"No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-127", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Provided that :", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-128", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "(a) any such instrument not being an instrument chargeable with a duty not exceeding ten naya paise only, or a bill of exchange or promissory note shall subject to all just exceptions be admitted in evidence on payment of the duty with which the same is chargeable or in the case of an instrument insufficiently stamped of the amount required to make up such duty together with a penalty of five rupees or when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees of a sum equal to ten times such duty or portion\" 9 As seen from the proviso, there is no scope for paying a penalty in the case of a bill of exchange or a promissory note so as to make it admissible in evidence under Section 42 (2) of the Act. The prohibition enacted by Section 35 makes such an instrument not duly stamped inadmissible in evidence for any purpose. The Privy Council in its decision in AIR 1946 PC 51 says that the words ' for any purpose' should be given their natural meaning and effect and would include a collateral purpose. Hence such an instrument would be inadmissible in evidence whether it is intended to use it as the basis of a claim or for a collateral purpose. There is a difference between a document which is not duly stamped and a document which is not registered. The proviso to Section 49 of the Registration Act makes an unregistered document receivable in evidence of a contract in a suit for specific performance or evidence of part performance of a contract for the purposes of Section 53-A of the Transfer of Property Act or as evidence of any collateral transaction not required to be effected by a registered instrument. But the inhibition imposed under Section 35 is absolute and complete and makes it inadmissible in evidence for any purpose. Some decisions have gone to the length of saying that an instrument which is not duly stamped is a worthless one and nothing more that a waste paper. The principle", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-129", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "instrument which is not duly stamped is a worthless one and nothing more that a waste paper. The principle underlying this prohibition appears to be that promissory notes and bills of exchange are commercial instruments, which are put into circulation in large numbers in the commercial world and as the claims on them would be mostly settled out of court, severe penalties should attach to non-stamping them, or understanding them in order that there may be wholesome check on any tendency to defraud the public Revenue.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-130", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "107. Failure to stamp a Negotiable Instrument properly does not affect the validity of the transaction embodied therein. But renders the document inadmissible in evidence ( Vide Purna Chandra V. Kalipada Roy. AIR 1942 Cal 386). It is unfit to be acted upon by person having authority to receive evidence or by any public offices. When a promissory note is not admissible in evidence on account of Section 35 of the Stamp Act, the question arises as to how to amount due under such a promissory note can be recovered in a court of law. \n\n 108. The terms of contract of loan, which are embodied in the promissory note can be proved only by the production of the promissory note itself, according to Section 91 of the Evidence Act, which enacts the best evidence rule. If the unstamped or improperly stamped promissory note becomes inadmissible in evidence 'for any purpose' on account of the prohibition contained in Section 35 of the Stamp Act then is there any method by which such terms of the contract could be proved? There is the question which we have to answer here :-\n 109. Section 91 excludes also secondary evidence of the contents of the original document if it is unstamped or insufficiently stamped (Vide Muthuswami Mudali v.Verri Chetti . (1907) ILR 30 Mad 382 and Ankur Chunder Roy Chowdhry V.Madhub Chunder Ghose (1874 ) 21 Suth WR 1)", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-131", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "110. \"The rule with regard to writings \" says Sir Richard Couch C.J. in (1873) 11 Beng. LR 405 is that oral proof cannot be substituted for the written evidence of any contract which the parties have put into writings And the reason is that the writing \" is tacitly considered by the parties themselves as the only repository and the appropriate evidence, of their agreement\". Following this decision the Privy Council upheld, in ILR 50 Cal 338 = AIR 1923 PC 50 the objection that oral evidence was not admissible as the memorandum therein constituted the contract between the parties and that Section 91 was a bar. The aforesaid two cases have again been approved and followed by their Lordships of the Supreme Court in . It is also well established that when there is specific provision in the Evidence Act like Section 91, resort cannot be had to equitable principles for the admission of any evidence which is otherwise inadmissible. Thus where a promissory note is not admissible in evidence the creditor cannot prove its terms even by other oral evidence. If there is no independent contract of loan except what is embodied in the promissory note.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-132", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "111. This leads us to the question as to the admissibility of other evidence relating to the debt or original consideration apart from and dehors the promissory note. In the case of a promissory note executed in discharge of an antecedent debt arising out of goods sold or mutual dealings in account or on account of liability incurred prior to and not contemporaneous with the lending of money which is evidenced by the promissory note there arises no difficulty because there exists in all those cases a debt or liability dehors the promissory note. The evidence in proof of such a debt or liability is not shut out by Section 91 of the Evidence Act , since the plaintiff in such a case is not proving the terms of the contract as evidenced by the writing in the promissory note.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-133", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "112. But difficulty has always arisen giving rise to a lot of divergence of judicial opinion in our country, in the case of proof of loans contemporaneous with the execution of the promissory note. The stricter view was that the promissory note represents all the terms of the contract and when the said note becomes inadmissible in evidence the suit should fail altogether. The liberal view was based upon the principles that a promissory note is only a conditional payment or conditional discharge of the debt and when the promissory note becomes inadmissible the suspension of the remedy on the note is removed and therefore the debt as such can be proved. Some cases of this line of reasoning have also put it on the ground of an implied promise in every debt represented by a promissory note, which could be used upon irrespective of the inadmissibility of the promissory note. Some other cases which toe this line of reasoning also base their judgments on the theory of 'Money had and received or by invoking to their aid the provisions of Section 70 of the Indian Contract Act. The third view which takes a via media view is that if the promissory note does not embody all the terms of the contract though no suit on the debt would lie, yet evidence can be let into prove the true nature of the transaction and if the promissory note has been given as a collateral security or by way of conditional payment, a suit is held to lie on the debt. These cases recognise the principle that the fact that the loan and the note are contemporaneous is not conclusive of the non-existence of an obligation apart from the note itself and permit only such evidence as to whether the note was given as a conditional payment or a collateral security both of which postulate a debt or for the conditional discharge of which or for security which the promissory note is taken. This view does not recognise the applicability of theories based upon implied promise or money had and received or Section", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-134", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "view does not recognise the applicability of theories based upon implied promise or money had and received or Section 70 of the Contract Act to such cases.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-135", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "113. Nearly a century ago Sri Richard Couch C.J. and Glover J. have negatived a claim based on unstamped promissory note on the ground that it was inadmissible in evidence and observed:\n \"This instrument clearly comes within these words (of the Stamp Act) and the plaintiff cannot make use of that part of it which states the deposit of the money and say from the deposit there arose a contract on the part of the defendant to repay it because here the parties have made an express contract which has been put in writing. The plaintiff cannot resort to any implied contract; if he recovers at all, it must be on the contract actually made, and he must prove that if it is denied. And he must do it by the production of the writing, which not being stamped, cannot be used in evidence, and the suit must fail\" (the words in brackets are mine). (Vide (1874) 21 Suth WR 1)", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-136", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "114. The earliest of the decisions which stems all the development of the case law on the subject now under discussion is that of Sir Richard Garth C.J. and Mcdonnel J. In (1881) ILR 7 Cal 256, wherein two propositions have been laid down as follows:-\n \"(1) When a cause of action for money is once complete in itself whether for goods sold or for money lend or for any other claim, and the debtor then gives a bill or note to the creditor for payment of the money at future time the creditor if the bill or note is not paid at maturity may always as a rule, sue for the original consideration provided that he has not endorsed or lost or parted with the bill or note under such circumstances as to make the debtor liable upon it to some third person. In such cases the bill or note is said to be taken but the creditor on account of the debt and if it is not paid at maturity the creditor may disregard the bill or note and sue for the original consideration. \n\n (2) But when the original cause of action is the bill or note itself and does not exist independently of it, as for instance when in consideration of A depositing money with B.B contracts by a promissory not to repay it with interest at six month's date, here there is no cause of action for money lent or otherwise than upon the note itself because the deposit is made upon the terms contained in the note and no other. In such a case the note is the only contract between the parties and if for want of a proper stamp or some other reason the note is not admissible in evidence the creditor must lose his money\". \n 115. I shall now deal with the development of case law in the various high Courts on this topic and indicate the divergence of opinion and the scope for reconciliation, if any.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-137", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "116. Taking the decisions of the Madras High Court first, the earliest decision where the second proposition in (1881) ILR 7 Cal 256 was applied was by Sri Arthur Collins C.J. & Parker J. Is (1887) ILR 10 Mad 94 where money was lent in the morning and the promissory note was taken in the evening and it was held that the contract was contemporaneous with the note and that Section 91 of the Evidence Act was a bar to an attempt to prove the original consideration. This decision was followed by Benson & Sundarayyar J.J. 462 by Sadasivayyar and Spencer J.J. in Muthu Sastrigal v. Viswanatha Pandara Sannadhi. ILR 38 Mad 660 = (AIR 1925 Mad 351 by Pillay and Anantakrishnayyar JJ. Gura Sahu v. Krishnamma AIR 1932 Mad 687 by Anantakrishnayyar J. In Alimane Sahiba v. Subbarayudu, AIR 1932 Mmad 693 by Pandalai J. In Chandra Sekaran v. Srinivasa AIR 1933 Mad 71 by Varadacheri and Burn JJ and in Chockalingam Chettiar v. Palaniappa Chettiar ILR 58 Mad 261 = (AIR 1935 Mad 23) The (FB) in Ramaswami Pillai v. Murugaiah Padavachi ILR 59 Mad 268 = (AIR 1936 Mad 179) reviewed all these cases as well as those in which a contrary view was expressed and after referring to the divergence of views in other High Courts Beasely C.J. observes as follows:-", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-138", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "\"So far as the Madras High Court is concerned the preponderance of opinion seems to be to support the respondent's argument. But all the courts take the view that with regard to antecedent debts, the position is that the original debt can be sued upon irrespective of the subsequent document or promissory note and the better opinion with regard to contemporaneous loans and promissory note is the consideration for the loan the debt cannot be proved aliunde. That view in my opinion is clearly the correct view in view of Section 91 Evidence Act\".", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-139", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "xx xx xx xx xx xxxx \"My view, therefore is that in all cases courts must be guided by what appears on the face of the promissory note. If it is expressed in such a way as to leave what was intended by the parties in any way in doubt then the facts must settle the question. If it is clear on the face of the promissory note that it is the contract, then no further evidence can be permitted\". \n\n 117. Even after this pronouncement the authority of the decision in (1877) ILR 10 Mad 94 was again challenged and a Full Bench of five Judges was constituted in 1938 and its decision is in AIR 1938 Mad 785 (FB). This Full Bench upheld the correctness of the decision in (1887)ILR 10 Mad 94 and overruled the two decisions in Gopala Padavachi v. Rajagopala Naidu. AIR 1926 Mad 1148 and Chinnayya v. Srinivasa, AIR 1935 Mad 206 which struck a different note. Sir Lionel Leach C.J. expressed the opinion of the Full Bench in the following words:\n \"In my opinion the law may be shortly stated in this way. If the promissory note embodies all the terms of the contract and the instrument is improperly stamped no suit on the debt will lie Section 91. Evidence Act, and Section 35, Stamp Act bar the way. But if it does not embody all the terms of the contract, the true nature of the transaction can be proved and where an instrument has been given as collateral security or by way of conditional payment. Whether a suit lies on the debt apart from the instrument therefore, depends on he circumstances under which the instrument was executed\". \n\n(Underlining is mine).", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-140", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "(Underlining is mine). \n\n 118. The learned Chief Justice approved five out of six propositions laid down by Page C.N. in the Full Bench decision ....... in ILR 12 Rang 500 = (AIR 1934 Rang 389) but disagreed with the 3rd proposition which ran as follows:\n \"(3) The giving of a negotiable security by a debtor to his creditor operates prima facie \"as a conditional payment only and not as a satisfaction of the debt, unless the parties so regard it\". \n\n 119. After further consideration Leach C.J. observed in regard to this proposition that it must depend upon the facts of the particular case and that there is no presumption that the instrument has been given as conditional payment. Varadachariar J. In his concurring judgment has discussed elaborately the case law, English and Indian, bearing upon the subject and rejected the pleas of conditional discharge, implied promise money had and received, and Section 70 of the Contract Act. \n\n 120. The Full Bench decision can be taken to have settled the law finally so far as the Madras High Court was concerned and has been uniformly followed eversince. The plaintiff therefore in a suit upon a promissory note which is improperly stamped is at liberty to prove the true nature of the transaction. If he is able to establish that the instrument was given as a collateral security or as a conditional payment the suit on the debt can be proved, without any bar under Section 91. Evidence Act.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-141", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "121. The case in Calcutta High Court reveal an approval as well as disapproval of the view expressed in (1881) ILR 7 Cal 256 over the years but each case taking a different view can be explained on some ground or other. In (1896) ILR 23 Cal 851 Petheram C.J., and Rampuri J., invoke the principle of an 'implied promise' in every case where money is lent and in view also of the admission of one loan by the defendant in that case the suit was held to be maintainable as an action for breach of an implied promise or contract independent of the promissory note. The case in (1881) ILR 7 Cal 256 was distinguished on the ground that deposit was not meant to be a loan. The case in (1913) 17 Cal LJ 399 permitted a suit if the debt did not merge in the promissory note. Though a similar view was held in Sudhir Chandra Das v. Govinda Chandra Roy, ILR 45 Cal 538 = (AIR 1918 Cal 688) it related to a Hundi, wherein the borrowing is complete before a direction is given by a hundi to a third party to pay. The suit was on an account between a principal and agent, in Ramendra Mohan v. Keshab Chandra, AIR 1934 Cal 554 where an amendment of plaint was allowed to sue on the basis of debt as per the 1st proposition in (1881) ILR 7 Cal 256. The decisions of Mukerjee J., in Shekh Abdul Rabbani v. Shyam Lal Tapa, (1930) 34 Cal WN 554 and of R.C.Mitter J. In Tarachand Protap Mal v. Tanijuddin Sheikh, 39 Cal 1241 = (AIR 1935 Cal 658);", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-142", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Sheikh, 39 Cal 1241 = (AIR 1935 Cal 658); Indra Chandra Bag v. Hiralal Rong, 40 Cal WN 696 = (AIR 1936 Cal 127) and Mohatabudin Mia v. Mahmmad Najir Jodda (1936) 40 Cal WN 473 were based upon an implied promise in the case of money lent. D.N.Mitter J., held the suit to lie as there was also a claim on the debt in the plaint in Bhushan Chandra v. Kanai Lal, 41 Cal WN 537 = (AIR 1937 Cal 241) Nasim Ali and Biswas JJ. Also relied upon an implied promise in Iswar Sridhar Jick v. Jahorlal, 49 Cal WN 37 = (AIR 1945 Cal 268) but it can be seen from the facts that there was no stamp infirmity and so the question of Section 91. Evidence Act did not arise. The decision of Derbyshire C.J., and Mukherjee J., in Te E.B.Commercial Bank Ltd.m, v. Surendra Naravana Saha (1935) 39 Cal WN 1235 related to a promissory note and a voucher and an amendment was allowed.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-143", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "122. The Allahabad High Court opined, while overruling the decision in Ram Sarup v. Jasodha Kunawar, (1912) ILR 34 All 158 and Chhotu v. Jawahar (1906) ILR 28 All 293 and approving the view of Aikram J., in (1904) ILR 26 All 178, that a plaintiff cannot set up a case independent of the note in view of Section 91 and cannot prove orally the terms of the contract in ILR 53 All 114 = (AIR 1931 All 183(FB). But this view was not accepted in the Full Bench in AIR 1943 All 220 wherein it was held that other evidence to prove the terms of the contract independently of the pronote is admissible that a pronote cannot be said to contain all the terms of the contract of loan and therefore the contract of loan could be proved independently of the note. In one respect it differed from the Full Bench of Madras High Court. It holds that there is a presumption that a pronote is given only as a conditional payment while the Madras view is opposed to it. A Full Bench of Allahabad High Court in Major Mistri v. Binda Debi. AIR 1946 All 126 (FB) also holds a similar view. But in Ramnath v. Bhagwati Prasad, AIR 1946 All 150 a Bench held that where a pronote contained all the terms the plaintiff cannot fall back on the independent cause of action to recover the loan because there is no cause of action independent of and apart from the promissory note. They explained the Full Bench in Sheonath Prasad v. Sarjoo Nonia, AIR 1943 All 220 in Kanhai Lal v. Brij Nanda. it was held by Raghubir Dayal J. (As he then was", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-144", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Nanda. it was held by Raghubir Dayal J. (As he then was ) in the case of a promissory not executed in the following manner:-", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-145", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "\"I have at this time borrowed Rupees 300/- half of which Rs. 150/- in cash according to my needs from you. I shall pay this amount of yours with interest at eight annas per cent per mensem on demand and have therefore written these few sentences by way of a stamped promissory note so that they may be of use in time of need\".", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-146", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "That it included all the substantial terms of the contract of loan and therefore no oral evidence to prove the loan transaction was admissible. His Lordship referred to the Full Bench decision in AIR 1943 All 220 (FB) and yet the refusal of the trial Court to prove the loan transaction was upheld. If according to the Full Bench the contract of loan could be proved this decision strikes a different note. \n\n 123. But in it was held that the promissory note was held to be a collateral security and a suit on the basis of original loan was held maintainable and Section 91 was no bar. \n\n 124. Though Section 91 was held to be a bar for proof about original consideration in Nankhu Singh v. Girja Bux Singh, AIR 1929 Oudh 399 it was held by the Full Bench in AIR 1932 Oudh 235 (FB) that the factuum of loan is not a term of the contract and as such can be proved by evidence aliunde. This theory of the factum as not a term is not accepted by the Allahabad Full Bench, and with respect the latter view is the correct one.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-147", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "125. In Chint Ram v. Shib Devi, AIR 1922 Lah 207 the Madras view was applied and it was held in the case of a hundi the plaintiff had no cause of action independent of the hundi and as the hundi was inadmissible for want of a proper stamp Section 91 was a bar to letting in secondary evidence. A similar view was held in AIR 1927 Lah 89 and in AIR 1934 Lah 606. In , after a review of some of the cases the same view was reiterated. \n 126. In (1900) ILR 24 Bom 360 the Bombay High Court followed the decision in (1930) 34 Cal WN 554 and held that there was an implied contract in every loan which can be proved. In Ranchhod v. Ravji Bhai AIR 1926 Bom 357 this decision was followed, But in AIR 1927 Bom 437 the learned Judge while following the decision in (1909) ILR 24 Bom 360, laid down three pronositions. In Soma Bhai v. Kalyan Bhai, AIR 1938 Bom 286 also Rangnekar J. Followed the principle laid down in (1900) ILR 24 Bom 360).", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-148", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "127. In Mohan v. Ramji AIR 1931 Nag 113 and Lal Bahadur v. Gulam Yasin, AIR 1933 Nag 57 (2) the Nagput J.C.'s Court held that a suit would be on the debt, In Ananda Namdeo v. Pundalik Tukaram, AIR 1936 Nag 225. It was held by Stone C.J. and Niyogi J. At page 227 as follows:-\n \"In every case it becomes a question of fact whether the promissory note was intended to constitute the contract or serve some collateral purpose. In the former case Section 91, Evidence Act would preclude proof of the contract otherwise than by the document itself. If it is inadmissible for any reason, the contract cannot be proved by any extraneous oral evidence. Nor can the money be recovered for the use of the lender a person pays money to another on a contract which he is unable to enforce by reason of any law governing it , he cannot recover it. (See Thomas v. Brown, 1876-1 QBD 714) In the latter case the promissory note is independent of and distinct from the oral agreement and the inadmissibility of the document will not affect the oral contract which may be proved aliunde\".", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-149", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "128. This view was followed in Lalchand v. Pyare Dasarath, , where it was held:\n \"It was next contended that the trial Court also erred in holding that the plaintiff could not be allowed to proved the loan except by producing the pronote. We have briefly stated the case set up in the plaint. The contract of loan was not contemporaneous with the pronote. The contract pleaded contained terms relating to the pledge of diamond and payment of interest. These terms do not find place in the pronote which according to the plaint was executed by the defendants not at the instance of the plaintiff but at the instance of other persons after the defendants had already committed the breach of the original contract by refusing to deliver the diamonds to the plaintiff. On the case pleaded in the plaint it cannot he held that the pronote was intended to constitute the contract or that the original contract of loan merged in or was extinguished by the promissory note. In these circumstances, the original contract of loan could be proved apart from the promissory note and the Court below clearly erred in not permitting the plaintiff to prove the original contract (See AIR 1936 Nag 225). \n\n 129. In Gour Chandra v. Garib Kar, the Orissa High Court held that a promissory note is a conditional payment but if there is an agreement that the loan would not be sued upon then no suit lies.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-150", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "130. In Ram Narain Sahu v. Lachmi Prasad Sahu, AIR 1921 Pat 317 a Bench of Patna High Court held in a case of a hundi that the cause of action was complete following the first proposition in (1881) ILR 7 Cal 256, and held the suit to lie. In Brahmadeo Rai v. Ram Kishun Mahton. AIR 1921 Pat 318 also Section 91 was held to be no bar even in the case of a promissory note. But in Choto Lal v. Gumani, AIR 1926 Pat 432 a suit was held not to lie. The learned Judge followed the decision in Chinnappa Pillai v. M.R.Muthuraman Chettiar. (1911) 9 Mad L.T.281. In Dhaneswar v. Ramrup, AIR 1928 Pat 426 the conflict between these two views was noticed by a Bench which ultimately preferred to follow the principle of an implied promise in every promissory note as laid down in (1896) ILR 23 Cal 851. In Abdul Md Khan v. Mahananda, AIR 1931 Pat 293, this view was held to be correct by another Bench of the same Court. In Domoo Khan v. Agha Arshad, AIR 1933 Pat 575 (FB) the Full Bench decided the case on the basis of the first proposition laid down in (1881) ILR 7 Cal 256 Manohar Lal., J., held in Anuplal Mahto v. Mahesh Jha, AIR 1937 Pat 656 that evidence on original consideration was admissible. In Kesho Das v. Hari Kishundas, AIR 1938 Pat 205 another Bench held that the consistent view in that High Court to be to allow evidence on original consideration or an", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-151", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Bench held that the consistent view in that High Court to be to allow evidence on original consideration or an implied contract to repay. In Ramaswami & S.Prasad JJ. Preferred to lay down the law that a promissory note may be given as conditional payment of collateral security in which case a suit on the debt would lie and that the question depends on each case on the intention of the parties. This accords more with the Madras views.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-152", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "131. In Raghavan v. Varaithu, (1962) 2 Ker LR 1, it was held that if the suit was filed on the basis of a promissory note no decree can be passed on the debt. \n\n 132.  In Gangaram    v.   Keshava  Deo,    Bapna  Ag.  C. J.  &  Ranawat  J. Accepted the principal of an implied contract in every loan after entire case law was reviewed.\n \n\n 133.  In  Champalal  v.  Saligram    Modi &  Chhangani  JJ. Held that where a promissory note is not proved to have been given in absolute discharge of a debt it can be treated as a conditional payment of the debt and a suit on the debt would lie.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-153", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "134. In Dhondi Emki v. Hazari Vittal, AIR 1952 Hyd 137. Saidatali Khan J. Followed the decision in Sadasukh Jankidas v. Sir Kishen Pershad, AIR 1918 PC 146 ; Sarafalli v. Maha Sukhbhai AIR 1933 Bom 476 and Hazi Syed Shah v. Bachi Rajappa, 35 Deccan L. R. 368 and held that if there is a distinct and separate transaction and the promissory note was given as a collateral security, then separate transaction can be proved, and to that effect an amendment also can be allowed, whether the transaction is antecedent or contemporaneous with the promissory note, and section 91 is no bar. In a decision rendered on 22-8-1956 in Brji Raj v. Raja Ram, AIR 1957 Hyd 35 Srinivasachari, J. held that in a loan contemporaneous promissory note there is a presumption of conditional payment. The payee is therefore entitled to prove the existence of an obligation to pay the amount advanced as a loan. The fact that the promissory note is contemporaneous with the loan does not negative in the inference that it was executed as a collateral security or conditional payment. Though the learned Judge refers for another purpose to decisions in S. Krishner v. Meenakshi Iyer, AIR 1933 Mad 781. Venkanna v. Parasuram AIR 1929 Mad 522 he follows AIR 1918 PC 146, and holds that a promissory note is only a conditional payment. It does not appear that the Full Bench decision in AIR 1938 Mad 785 ( FB ) was brought to the notice of the learned Judge.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-154", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "135. Datta J. In Manik Lal v. Dhirendra Chandra, AIR 1957 Tripura 28 followed the Full Bench decisions in AIR 1943 All 220 ( FB ) and AIR 1946 All 126 ( FB ) and held that unless there are circumstances or evidence to show the contrary a promissory note is always given as a conditional payment and hence a suit on the debt would lie. The Full Bench decision in AIR 1938 Mad 785 ( FB ) was not considered in this case also. \n\n 136. In the case before the Full Bench decision in AIR 1934 Rang 389 = ILR 12 Rang 500 ( FB ) the suit was based upon the promissory note or in the alternative for money lent. Page C. J. who spoke for the Full Bench laid down six propositions which, except for the third one, were accepted by the Madras Full Bench in AIR 1938 Mad 785 (FB ) says Page C. J., at page 391 :--\n \"I apprehended that the same principles apply as between borrower and lender and that when a promissory note or bill of exchange is given for a loan prima facie it is given and taken as conditional payment and not in accord and satisfaction, of the debt, if the promissory note or bill of exchange is taken as a conditional payment, and that term is embodied in the document cadit questio, but if it is not therein set out the document does not contain all the terms of the agreement upon which the loan was made, and in my opinion Section 91, Evidence Act does not apply. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-155", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Dealing with the decision in ( 1881 ) ILR 7 Cal 256 the learned Judge says at page 392:\n \"I confess that I do not understand why in the above cases so much significance should have been held to attach to the handing over of the promissory note and the money being part of the same transaction ; and I am of opinion, with all respect, that the fallacy that lies within the above proposition of law is that it does not appear to have been appreciated in those cases that it is not the time when but the terms upon which, the loan was made that matters, and that whether the promissory note or bill of exchange was given at the time when the money was handed over to the borrower or subsequently in either case it is necessary for the court to ascertain the terms of the agreement upon which the loan was made ; the question as to what those terms \" were being a question of fact to be determined according to the particular circumstances obtaining in each case. \" \n\n Stress is therefore laid on the terms of the agreement upon which the loan was made. Evidence is admissible regarding those terms without any inhibition under Section 91 Evidence Act. But for the view that there is a presumption that promissory note is prima facie conditional payment, this view accords with Madras view. The Madras Full Bench also laid down that the terms or the true nature of the transaction may be proved.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-156", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "137. In Naraindas v. Jassomal, AIR 1921 Sind 80 it was held as follows :--\n \"The question whether a loan was given and taken, can in certain cases such as those of collateral security, be distinguished from the question of terms of the loan and its repayment. When it can so distinguished even if the document embodying the terms is inadmissible, the lender may fall back and sue upon the loan itself and prove it by other evidence. An implied contract to repay money lent always arises from the fact that the money is lent. \" \n\n 138. In Lokumal v. Sind Bank Ltd. 57 Ind Cas 386 = ( AIR 1920 Sind 66 ) after a review of the case law a view akin to the Madras was laid down :\n 139. In Chandulal v. Baboolal AIR 1952 Madh Bha 45, Mehta, J., held that where a cause of action for money lent is once complete in itself whether for goods sold or money lent or for any other claim and the debtor then gives a promissory note to the creditor for the payment of money at a future time the creditor may, if the money is not paid on the maturity of the pronote fall back on the original consideration. This is in accordance with the 1st proposition laid down in ( 1881 ) ILR 7 Cal 256, But it is to be noted in this connection that the suit promissory note in this case was executed after settling accounts relating to dealings in silver. Hence it is a clear case of an antecedent debt.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-157", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "140. In R. K. Radhu & Co. v. Mathra Das , AIR 1936 Pash 146 Jolly Officiating C. J. speaking for the F. B. held that where a contract is wholly contained in a pronote, which is inadmissible in evidence the person suing on the pronote is precluded from proving the debt independently of the pronote. Says the learned Judge at page 147 :--\n \" Now where the contract is contained wholly in the pronote, it is clear from the provisions of Section 91, Evidence Act and Illustration (b) thereto that the plaintiff will be precluded from proving the debt alinude ; in the present case even in the amended plaint the suit is framed on the pronote with the more addition of the fact that plaintiff advanced the money and obtained a receipt therefor ; the plaint states that defendant got from plaintiff Rs. 2,000 /- in cash and executed a pronote in plaintiff's favour and also gave a receipt for the amount ; again in para 3 plaintiff sums up his claim as follows Rs. 2,000 /- due on the pronote, Rs. 341 /- as interest and Rs. 180 /- as rent. This would appear to be a clear admission that the contract was in fact contained in the pronote and we find it difficult to regard the pronote as a mere subsidiary contract in respect of interest and time of payment and not in respect of liability for the principal, for the pronote, if admissible would undoubtedly afford a cause of action for both principal and interest. Assuming that the money actually changed hands before the execution of the pronote, the implied contract for repayment would be reduced to writing in the form of the pronote which must then deemed to have been regarded by the parties as the repository of their agreement, and therefore the only evidence thereof under Section 91 Evidence Act. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-158", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "For this proposition the decision in AIR 1927 Bom 437 was followed as laying down the correct rule. It therefore accords with the Madras view. \n\n 141. In T. S. Srinivasa Gowda v. Siddiah, AIR 1971 Mys 144 it was held following the earlier decision of the same High Court in Srinivasa v. Thimmaiah, AIR 1964 Mys 56 that a plaintiff cannot fall back on the original consideration. \n\n 142. Mohd Jamal Saheb v. Munwar Begum, My Lord Gopal Rao Ekbote, J. ( as he then was ) held that the plaintiff can succeed on a non-contractual basis, viz., for money had and received. To that extent the Full Bench view was not followed. \n\n 143. In AIR 1966 J. & K. 127 it has been held by Fazl Ali and Janki Nath Bhat JJ. After review of the case law when the terms of the entire contract between the parties are reduced to the form of a promissory note where it is a contemporaneous lending. Section 91 is a clear bar to any other evidence and the whole suit must fail. This differs from the Madras view.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-159", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "144. From a view of the above authorities it is evident that there are two lines of thought expressed by the different High Courts. The view laid down by the Full Bench of the Madras High Court in AIR 1938 Mad 785 ( FB ) finds acceptance, more or less, generally in the decisions rendered by the Lahore, Punjab, Patna, Kerala, Sind, Peshawar, Jammu Kashmir and Mysore High Courts. The contrary view taken by the other High Courts viz; Calcutta, Allahabad, Oudh, Bombay, Hyderabad, Tripura, Rangoon and Madhya Bharat, is based either more upon the theory of an implied promise in every contemporaneous loan or upon the presumption that a promissory note is only a conditional payment in the case of every loan transaction. This conflict it, appears to me, is irreconcilable at the present moment and it is only an authoritative pronouncement by their Lordships of the Supreme Court that can set at rest or give a quietus to this age-long controversy. \n\n 145. As far as this case is concerned we have to see which view is acceptable as one based upon principle and in tune with the legal provisions arising in this matter.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-160", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "146. As stated supra the provisions of the Evidence Act cannot be departed from in our country by courts to evolve an equitable principle howsoever laudable it may be. ( Vide Maung Kyin v. Ma Shwe Law, ILR 45 Cal 320 = ( AIR 1917 PC 207 ). Hence the bar laid down by S. 91 of the Evidence Act has to be given its fullest effect. If the loan transaction is merely oral no difficulty arises in regard to its proof as any amount of oral evidence can be adduced without any legal bar. The difficulty arises only when such a loan transaction is reduced to the form of a writing or a document like a promissory note. In all such cases Section 91 lays down the best evidence rule namely that no evidence shall be given in proof of the terms of such contract or of such matter except the document itself or secondary evidence of its contents in cases in which such secondary evidence is admissible under the provisions of the Evidence Act. Their Lordships of the Supreme Court have held in Jupudi v. Pulavarthi, as follows :", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-161", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "\"The first limb of Section 35 clearly shuts out from evidence any instrument chargeable with duty unless it is duly stamped. The second limb of it which relates to acting upon the instrument will obviously shut out any secondary evidence of such instrument for following such evidence to be let in when the original admittedly chargeable with duty was not stamped or insufficiently stamped, would be tantamount to the document being acted upon by the person having by law or authority to receive evidence. Proviso (a) is only applicable when the original instrument is actually before the Court of law and the deficiency in stamp with penalty is paid by the party seeking to rely upon the document. Clearly secondary evidence either by way of oral evidence of the contents of the unstamped document or the copy of it covered by Section 63 of the Indian Evidence Act would not fulfil the requirements of the proviso which enjoins upon the authority to receive nothing in evidence except the instrument itself. Section 35 is not concerned with any copy of an instrument and party can only be allowed to relay on a document which is an instrument for the purpose of section 35. ' Instrument ' is defined in section 2 (14) as including every document by which any right or liability is, or purports to be created transferred limited extended, extinguished or recorded. There is no scope for inclusion of a copy of a document as an instrument for the purpose of the Stamp Act. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-162", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "147. Again at page 1077 it is said :--\n \" A we have expressed our view already that Section 35 imposed a bar on the reception of any, but the original instrument and forbade the reception of secondary evidence. \" \n\n 148. There can be no doubt that term of the loan or borrowing is the most important term of the contract while the terms as to rate of interest, duration of the loan or the method of payment etc., are incidental or ancillary terms of such a contract. If the contract of loan is reduced to writing one cannot resort to an implied promise to pay, out of such an express contract, as it would amount to violating or bypassing the strict mandatory provisions of the Evidence Act. The promise to pay whether express or implied is contained in every case of loan or borrowing and once it takes the form of writing both get merged in the document. One cannot be separated from the other as both mean the same thing. If the express promise cannot be proved on account of a legal bar the implied promise contained in that writing cannot also to be proved as the legal bar would equally apply to such proof. By permitting proof of such an implied promise in case of promissory notes executed for contemporaneous borrowing the law enacted in Section 91 would in my opinion be clearly violated.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-163", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "149. It has been held by the Privy Council in ILR 50 Cal 338 = ( AIR 1923 PC 50 ) that document excluded from evidence is nevertheless a written contract and so as the effect of excluding evidence of the same being given. If there is an express promise resort cannot be made to an implied promise. In that case their Lordships held that the creditor could not establish as to the deposit of title deeds. A fortiori the fact of the loan cannot be proved on the basis of an implied promise. The law laid down by this Privy Council decision was also recently approved by their Lordships of the Supreme Court in a decision in .", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-164", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "150. Regarding the theory that a promissory note is a conditional payment, though it may happen in many cases, it cannot be decided as a matter of presumption in every case. It is a matter of allegation in the plaint and proof in each and every case. In the case of a simple loan the lender may lend and the borrower may borrow the money by execution of a promissory note at the time of the borrowing to evidence that loan. In such a case, it cannot be said that debt borrowed is instantaneously repaid by the promissory note. It depends upon the intention of the parties whether they intended to treat the promissory note as a conditional payment or not. In the generality of cases of a simple loan payment by a pronote may not arise on the date of lending itself. The very idea of a loan or borrowing indicates that the borrower is in need of money which he could not secure otherwise than by borrowing it on that day from the lender and the lender may take the pronote as evidence or a voucher for it. But in some cases it may be open to them to agree that the promissory note may be treated as a conditional payment of the debt involved in the borrowing so that in case the promissory note becomes in- admissible in evidence the creditor or lender may fall back upon the original debt or original consideration. That again is a matter for proof by evidence and not a matter of presumption in every case. As laid down in ILR 51 All 530 = ( AIR 1929 All 254 ) from the mere execution of the promissory note it does not necessarily follow that the whole contract between the parties has been reduced to the form of a document. This view which was also held in Chidambaram Chettiar v. Ayyaswami Thevan, ILR 40 Maad 585 = ( AIR 1917 Mad 201 ) and accepted by their Lordships", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-165", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Maad 585 = ( AIR 1917 Mad 201 ) and accepted by their Lordships Leach C. J. and Varadachariar J. In the Full Bench decision in AIR 1938 Mad 785 ( FB ) appears to me to lay down the law correctly. Thus in a case where all the terms of the contract of a loan are not incorporated in the promissory note, the true nature of the transaction may be proved, if there is an alternation and proof about it, and where on such proof it is established that the promissory note was executed as a conditional payment or a collateral security, the claim can be decreed on the basis of the original debt or original consideration.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-166", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "151. Then coming to the theory of ' money had and received ' adopted in some of the decisions this again depends upon the theory of an implied promise to pay. It appears from the discussion in 1914 AC 398, that this theory is applied generally in the case of contracts in rem and not in personam. As this also depends upon the proff of a contract and inasmuch as the bar under Section 91 is to that very proof, a resort to this theory of ' money had and received ' is quite inappropriate and unwarranted in such cases. ( Vide ILR 38 Mad 660 = ( AIR 1914 Mad 657 (2) ).", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-167", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "152. As regards the applicability of Section 70 of the Contract Act to cases of this type it may be noted that Section 70 which appears in Chapter V of the Contract Act relates to certain relations resembling those created by contract and which are not contracts by themselves. It deals with certain obligation imposed by law on the parties concerned and not resulting from any contract express or implied. Such relations though they are commonly known as quasi-contracts the basic element of a contract viz. agreement is entirely lacking in most of them. Hence in the obligations imposed there can be nothing contractual. The promise or the obligation which Section 70 creates is entirely fictitious and is a creating of law. Any action to enforce this obligation is not an action based on a contract. It has been held by lord Gopal Rao Ekbote, J. ( as his Lordships then was ) in N. Kanaka Rao v. Venkata Ramalinga Reddy, that Section 70 cannot be pressed into service and no relief can be granted on the basis of a quantum meruit where there is an express contract. His Lordship has cited the relevant case law and elaborately discussed the question in that decision. Thus where there is an express contract and that contract is not admissible in evidence for any purpose, as in this case. Section 70 cannot come to the rescue of the plaintiff. Failure to stamp the promissory note properly does not affect the validity of the transaction enbodied therein, as stated by me earlier in this judgment.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-168", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "153. The three decisions of the Supreme Court relied upon in this connection in favour of the applicability of Section 70 are in my opinion, clearly distinguishable. In Gajandrakadkar J. Puts the claim not on the basis of a subsisting contract, but on some thing done by the party to the other. It was a case where the plaintiff constructed the warehouse in excess of the stipulated valid contract. The plaintiff could not have compelled the defendant to accept it but since the defendant accepted it and used it, the illustration (a) to Section 70 was held to apply to that case. Their Lordships also negatived the argument that by decreeing the suit claim Section 175 (3) of the Government of India Act was violated by the following words :\n \"Once it is realised that the cause of action for a claim for compensation under Section 70 is based not upon the delivery of the goods or the doing of any work as such but upon the acceptance and enjoyment of the said goods or the said work it would not be difficult to hold that Section 70 does not treat as valid the contravention of Section 175 (3) of the act. \"", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-169", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "154. The case in related to a void contract or a contract which was non est. In also as a result of the contravention of the mandatory provisions of law the contracts therein became nullified and void and it was recognised therein that there was no contract in existence. It was made clear that the juristic basis of obligation was not founded upon any contract or tort but upon the third category of law, namely, quasi contract or restitution. As in the present case before the Full Bench, the existence of the contract or its validity cannot be disputed, the principles of the above three decisions cannot apply therein. Moreover resort to Section 70 in this case also would amount to violating or by-passing the mandatory provisions of Section 91 of the Evidence Act and as such is not permissible. \n\n 155. Since I am of the view that the basic foundations of the contrary view are not legally tenable. I would prefer to hold that the view enunciated in AIR 1938 Mad 785 ( FB ) states the law correctly and has to be followed in these cases as well. My answer therefore to the question posed before this Full Bench is that plaintiff can lay any action for recovery of the amount advanced by him basing on the original cause of action, where the suit negotiable instrument becomes inadmissible on account Section 35 of the Stamp Act, provided that there is an allegation in the plaint and proof in evidence about the fact that the promissory note did not incorporate all the terms of the contract of loan and that it was executed as a conditional payment or a collateral security. \n\n C. R. P. No. 255 of 1965.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-170", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "C. R. P. No. 255 of 1965. \n\n Sambasiva Rao, J.  \n 156. This revision petition has contributed substantially to legal history. From a single Judge it went to a Division Bench and from there it travelled to a Full Bench of seven Judges. It has now come back all the way to me for deciding the case in the light of the opinion expressed by the Full Bench. \n\n 157. A few facts relevant for determination of the case may be briefly stated. The defendant borrowed from the plaintiff a sum of Rs. 1,000 /- on 21-11-1960 and contemporaneously executed a hand letter in favour of the plaintiff . Since it was only a hand letter it was not stamped. The hand letter indicates that the defendant agreed to pay a sum of Rs. 1,000 /- with interest at 12 % per annum on demand. The interest was, however, claimed in the suit only in accordance with the provisions of the Madras Act IV of 1938. \n\n 158. Though the lower Court noticed the decision of a Full Bench consisting of five Judges in AIR 1938 Mad 785 ( FB ), which held that the promissory note embodied all the terms of the contract and the instrument was improperly stamped no suit on the debt will lie and that Section 91 of the Evidence Act and Section 35 of the Indian Stamp Act bar the suit, it preferred to follow the single Judge decision of Ekbote, J., ( as he then was ) in which took a contrary view.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-171", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "160. Now, the Full Bench consisting of seven Judges upheld the view expressed in AIR 1938 Mad 785 ( FB ) and held that Section 70 of the Contract Act cannot be invoked on the theories of implied promise, money had and received, quasi-contract and just and reasonable or unjust enrichment or any other equitable doctrine. It further expressed its disagreement with the views taken by Gopala Rao Ekbote J. in Moahamad Jamal Saheb's case, . \n\n 161. In view of this it must be held that the suit is not maintainable. The lower Court's decree is therefore, set aside. The revision petition is accordingly allowed . But in the light of the lower Court's finding of fact that the defendant had in fact received the amount from the plaintiff. I direct the parties to bear their own costs. \n\n C. R. P. No. 577 of 1965. \n\n 162. The revision petition also comes up before me after the Full Bench of seven Judges expressed their view in regard to the maintainability of a suit on an unstamped or insufficiently stamped document in C. R. P. No. 255/65 and batch dated 3rd October, 1972. The Full Bench of seven Judges affirmed the decision of the Full Bench of the Madras High Court in AIR 1938 Mad 785 (FB ) and held that Section 70 of the Contract Act cannot be invoked on the theories of implied promise, money had and received, quasi-contract and just and reasonable etc., and did not endorse the view expressed by Gopalrao Ekbote, J. in .", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-172", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "163. In the present case the incurring of the loan and the execution of Hundi were contemporaneous. It is also common case that the Hundi was insufficiently stamped. Simply proceeding on the averment in the plaint that the Hundi, though contemporaneously taken, was only in the nature of a collateral security, the lower Court was inclined to decree the suit. It also invoked the principle of money had and received in further support of the decree. There is no discussion and no finding that the execution of the Hundi, though contemporaneous with the incurring of the debt, was quite apart from the actual contract of debt. In the absence of any such finding this revision by the defendant should be allowed in the light of the Full Bench decision in C. R. P. No. 255/65 and batch dated 3-10-1972. \n\n 164. The revision petition is thus allowed. But in view of the finding that the defendant had actually received the money I direct the parties to bear their own costs. \n\n C. R. P. No. 1998 of 1966. \n\n 165. This another revision petition that comes up before me after the Full Bench expressed its opinion on the question of law in C. R. P. No. 255 of 1965 and batch dated 3rd October, 1972.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-173", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "166. In this case the defendant borrowed Rs. 334 /- from the plaintiff and executed a promissory note dated 25th of May, 1964. It is common ground that the promissory note was insufficiently stamped. On this the office took objection that the suit was not maintainable. Then plaintiff amended the plaint to the effect that the debt was incurred in the morning with a promise that it would be returned by the evening, but when the defendant could not keep his word he executed the promissory note. Therefore, the incurring of the debt and the execution of the promissory note were not simultaneous and in fact , the latter was taken as a collateral security. As a finding of fact, on a consideration of the evidence, the lower Court found this part of the plaintiff's case as false and held that the promissory note was contemporaneously executed with the incurring of the debt. Nevertheless, it decreed the suit on the principle that money was had and received by the plaintiff. \n\n 167. In the light of these facts, and following the rule laid down by the Full Bench in C. R. P. No. 255 of 1965 and batch D/- 3-10-1972 it must be held that the suit is not maintainable. \n\n 168. Consequently, the decree of the lower Court is set aside and the revision petition is allowed. In view of the fact that the defendant had received the money. I direct the parties to bear their own costs. \n\n C. R. P. No. 2234 of 1968.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-174", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "C. R. P. No. 2234 of 1968. \n\n 169. This is yet another case which comes up before me after the decision of the Full Bench in C. R. P. No. 255 of 1965 and batch dated 3rd October, 1972. This is a plaintiff's revision petition. The lower Court found, as a fact, that the defendant had borrowed the sum of Rs. 290 /- from the plaintiff. It also held that the execution of the promissory note was contemporaneous with the borrowing. In view of the fact that the promissory note was insufficiently stamped following the decision in AIR 1938 Mad 785 ( FB ) it is dismissed the suit Perumal Chettiar's case, AIR 1938 Mad 785 ( FB ) is now affirmed by the aforesaid Full Bench by its opinion dated 3-10-1972 in C. R. P. No. 255/65. \n\n 170. In view of the facts found by the lower Court and following the opinion of the Full Bench. I dismiss the plaintiff's revision. But in view of the fact that the defendant-respondent had been found to have actually received the money. I direct the parties to bear their own costs. \n\n C. R. P. No. 605 of 1969. \n\n 171. This revision petition is also coming up before me after the Full Bench expressed the opinion in C. R. P. No. 255 of 1965 and batch dated 3rd October, 1972 affirming the view of the Full Bench of the Madras High Court in AIR 1938 Mad 785 = ILR ( 1938 ) Mad 933 ( FB ).", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-175", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "172. This is a plaintiff's revision petition. The suit was on the foot of a promissory note dated 7-6-1965 for Rs. 400 /- to recover a sum of Rs. 456.85 Ps. One of the decrees was that the debt was discharged but the lower Court was not prepared to believe this defence. Al the same it dismissed the suit following Perumal Chettiar's case, AIR 1938 Mad 785: ILR ( 1938 ) Mad 933 ( FB ) on the ground that the promissory note was insufficiently stamped though executed contemporaneously with the incurring of the debt. It is not in doubt that the promissory note is insufficiently stamped and it is contemporaneous with the incurring of the debt. So, following the opinion of the Full Bench dated 3rd Oct. 1972 in C. R. P. No. 255/65 and batch. I dismiss the plaintiff's revision petition. But, in the circumstances of the case I direct the parties to bear their own costs. \n\n C. R. P. No. 2130 of 1969. \n\n 173. This is a revision petition by the second defendant.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-176", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "173. This is a revision petition by the second defendant. \n\n 174. The Small Cause Suit was filed by the plaintiff on the foot of a promissory note dated 28th of April 1966 executed by the 1st defendant in her favour for Rs. 375 /- and the suit was to recover Rs. 437 /-. Defendants 2 and 3 are the sons of the first defendant; but defendants 1 and 3 remained ex-parte and only the second defendant contested the suit. It is true, that the promissory note was not sufficiently stamped. But no objection was taken by the office. The husband of the plaintiff went into the box as P. W.1. During his examination-in-chief, the promissory note was marked as an exhibit and received in evidence without any objection. It was duly endorsed by the presiding officer as required by the Civil Procedure Code. Thus, it became an exhibit and part of the record. It was only during the cross-examination of P. W. 1 that the insufficiency of the stamp on the promissory note was noticed and then objection was raised as to the maintainability of the suit on such promissory note. The lower Court found that the first defendant died, in fact, receive the amount of Rs. 375 /- and also held that Section 35 was only a bar to the admissibility of an unstamped or insufficiently stamped document. But when it was admitted in evidence it cannot afterwards be withdrawn. Consequently, it decreed the suit. Therefore, the second defendant has brought this revision petition. \n\n 175. Section 36 of the Stamp Act provides that:\n \" where an instrument has been admitted in evidence such admission shall not except as provided in Section 61, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped \".", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "0b224756b7bf-177", "Titles": "Lothamasu Sambasiva Rao vs Thadwarthi Balakotiah on 14 November, 1972", "text": "Therefore, in view of the undoubted fact that the promissory note had been admitted in evidence no objection could be raised at any stage in the suit that it was not duly stamped. Section 35 is only a bar to the admissibility of unstamped or insufficiently stamped documents. Since an unstamped document is inadmissible in evidence, the Full Bench in C. R. P. No. 255/65 and batch dated 3-10-1972 took the view that no suit can be laid on such admissible document. But, that principle has no application to the facts of the present case for the reason that the promissory note had already become part of the record as one of the exhibits. Therefore, the principle laid down by the Full Bench has no application. The lower Court is, therefore, right in decreeing the suit when it came to the conclusion that the promissory note was supported by consideration. For this reason the revision petition must be found as having no merits. It is accordingly dismissed with costs. \n\n 176. Order accordingly.", "source": "https://indiankanoon.org/doc/374625/"}
+{"id": "08eb8b47b48e-0", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "THE HON'BLE THE CHIEF JUSTICE SRI PINAKI CHANDRA GHOSE AND THE HON'BLE SRI VILAS V. AFZULPURKAR                \n\nWRIT APPEAL NO.1309 OF 2012      \n\n4-1-2013\n\nK. Raja Rao \n\nA.P. Industrial Development Corporation Limited (State Government Undertaking)\nRep. by its Managing Director Parishrama Bhavan, Fathemaidan Road  Hyderabad and   \nanother\n\nCOUNSEL FOR APPELLANT: Sri E. Manohar, Senior Counsel for Sri V. Kishore", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-1", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "COUNSEL FOR RESPONDENT NO.1: Sri S. Sreenivasa Reddy           COUNSEL FOR RESPONDENT NO.2: G.P. for Revenue <GIST >HEAD NOTE:    \n?CITATIONS:  \n1. AIR 1979 SC 102 \n2. AIR 1971 AP 169. \n3. (2006) 9 SCC 617 \n4. AIR 1999 SC 1305 \n5. APLJ 1984(2) 173\n6. AIR 1933 PC 63 \n7. AIR 1976 SC 1309 8.1993 SUPP.(1) SCC 499  \n9. (1979) 1 SCC 193 \n10. AIR 2006 SC 1874  \n11. 1939 AC 439 \n12. (1918) 2 KB 833 JUDGMENT: (Per the Hon'ble the Chief Justice) This Writ Appeal by the appellant-writ petitioner is directed against the order of the learned Single Judge dated 21.8.2012 in W.P.No.6842 of 2000 dismissing the writ petition filed by the appellant to declare the action of the Mandal Revenue Officer, Khairatabad Mandal - 2nd respondent in initiating proceedings No.A2/39/98 dated 6.1.2000 under the provisions of the A.P. Revenue Recovery Act, 1864 for payment of Rs.56.80 lakhs with interest at 6% p.a. payable to the Andhra Pradesh Industrial Development Corporation Limited, Hyderabad without deciding his liability to the Corporation as arbitrary, illegal and without jurisdiction.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-2", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "2. The parties will be referred to by their status in the writ petition. Brief facts leading to the controversy are:\n(a) M/s Rama Organics Private Limited, Hyderabad (for short 'the Company') dealing in bulk drugs was initially incorporated by three promoter Directors, namely, Mr.P. Seshagiri Rao, Mr. A. Nageswara Rao and Dr. A.K. Chatterjee. Andhra Pradesh Industrial Development Corporation (for short 'the Corporation') sanctioned term loan of Rs.56.80 lakhs to the Company on 13.11.1984 and another term loan of Rs.12.45 lakhs on 26.2.1985. Dr. A.K. Chaterjee as Managing Director of the Company gave personal guarantee to the above loans. On 29.12.1987 the appellant was inducted as Director in place of Dr.A.K. Chatterjee and he executed personal guarantees for the aforesaid loans on 17.8.1988.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-3", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "(b) It appears that the company had failed to discharge the loans, consequently, according to the list of chronological events filed by the petitioner, demand letters were issued by the Corporation for payment of outstanding loan amount before taking action under Section 29 of the State Financial Corporation Act (for short 'the SFC Act') to the principal debtor and the guarantors including the petitioner on 12.1.1989, 8.3.1989, 9.3.1989 and 16.6.1989. But, neither the petitioner nor the Corporation filed those letters. On 6.10.1989 the petitioner resigned as Director and requested to relive him immediately and to take steps to relieve him from all his personal guarantees/undertakings provided to various financial institutions. In the Board meeting of the Company held on 16.10.1989 the resignation of the petitioner was accepted and the Managing Director was requested to relieve him from all his personal guarantees and undertakings. It was also resolved to co- opt Lt. Col. (Retd.) K.S. Rao as a director in the place of the petitioner and resolved that he will furnish all guarantees/undertakings originally furnished by the petitioner to the Corporation and other institutions and that the shares of the value of Rs.4,80,000 of the petitioner be transferred to the Directors subject to the approval of the Corporation and other institutions. According to the petitioner, again on 07/18.10.1989 demand was made for payment of outstanding loan amount from the Company.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-4", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "(c) On 28.3.1990 letter was addressed to the Managing Director of the Company intimating that steps are being taken for recovery of an amount of Rs.75,81,000/- by way of sale of the Unit under Section 29 of the SFC Act as per the proforma of sale notice enclosed thereto. Copy of the said letter was marked to petitioner and other directors except Sri K.S. Rao. By letter dated 16.4.1990 petitioner replied that he is no longer Director of the Company and in his place Sri K.S. Rao was appointed as director. The Corporation issued another demand notice dated 28.5.1992 for Rs.71,27,180/- to the Managing Director of the Company, copy of which was marked to the petitioner. The assets of the company were seized on 3.7.92. Petitioner submitted replies on 13.7.1992 and 17.8.1992 denying his liability and ultimately the assets were sold for consideration of Rs.61.00 lakhs on 29.12.1993. On 25.11.1994, the Corporation relieved Dr. A.K. Chaterjee from his personal guarantee.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-5", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "(d) On 22.3.1996, for the first time, a letter of demand was addressed to the petitioner for payment of Rs. 59.69 lakhs towards principal and Rs. 71.45 lakhs towards interest totaling to Rs.131.14 lakhs and by letter dated 20.5.1996 petitioner denied his liability stating that the Corporation has not taken expeditious steps for sale of the Unit under Section 29 of the SFC Act, pursuant to the notice dated 28.3.1990, therefore, the action to invoke the provisions of the Revenue Recovery Act is time barred and unenforceable. Ultimately, the Corporation addressed letter to the District Collector, Hyderabad on 22.5.1996 to initiate action under Revenue Recovery Act. The Collector by letter dated 4.6.1996 instructed the MRO, Golconda to initiate proceedings under the Revenue Recovery Act. On 15.7.1996 the Mandal Revenue Officer, Golconda issued distraint order to which the petitioner submitted his reply on 16.7.1996. On 28.11.1997 the District Collector was requested to take steps for realization of outstanding amount from the petitioners and others. By letter dated 23.6.1998 the Corporation demanded payment of Rs.77.33 lakhs towards principal and Rs.67.98 towards interest totaling to Rs.135.31 lakhs, failing which it was informed that action will be taken under the Revenue Recovery Act to which the petitioner again disputed his liability by letter dated 17.7.1998. Finally, the Mandal Revenue Officer, Khairatabad issued the impugned notice dated 6.1.2000 for recovery of Rs.56.80 lakhs from the petitioner and other guarantors. Petitioner submitted his reply on 7.1.2000 to the impugned notice. On the above facts, the", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-6", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "7.1.2000 to the impugned notice. On the above facts, the petitioner state that since Dr.A.K. Chaterjee continued as guarantor till 25.11.1994 he is also liable for payment of the dues and no action having been taken against him, the impugned proceedings cannot be sustained. Since he has resigned as director and in his place Sri K.S. Rao has been inducted as director, he has been relieved of his personal guarantee obligations and as such there is no liability on his part to pay any amount. It is further stated that the liability of the petitioner having been crystallized on 28.3.1990 when notice was issued to the borrower for payment of the amount due and to take action under section 29 of SFC Act for sale of the Unit of the Company in the event of failure to pay the amount, the notice dated 22.3.1996 issued to the petitioner calling upon him to pay the amount and contemplating to initiate action under the Revenue Recovery Act in the event of failure to pay the amount is barred by limitation. Consequently, the impugned notice dated 6.1.2000 which was issued nearly four years thereafter is hopelessly barred by limitation and without jurisdiction. It was also contended that since the petitioner has furnished the guarantees in his capacity as Director of the Company the same are co-terminus with the directorship of the company.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-7", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "3. In the counter filed by the Corporation it is stated that Sri K.S. Rao has not executed any guarantee deed in favour of the corporation and only resolution of the Board of Directors of the Company was intimated regarding induction of Lt.Col. K.S. Rao. Since personal guarantees executed by the petitioner is holding the field he is liable for the dues payable by the company. After realization of the amount through sale of assets of the company on 29.12.1998 for sale consideration of Rs.61.00 lakhs, demand notices were issued for payment of the amount due, but the petitioner has not paid the amounts. The Corporation issued notice on 22.3.1996 calling upon the petitioner to pay Rs.131.14 lakhs which was due as on 31.5.1994. Counter denied that the guarantees were furnished by the petitioner in the capacity as director of the company. Counter refutes that the debt was barred by limitation and submitted that no period of limitation has been prescribed for recovery of dues of the Corporation for instituting proceedings under the Revenue Recovery Act. Even otherwise, it was contended that the proceedings under the Revenue Recovery Act were initiated by reason of the letter dated 4.6.1996 of the District Collector, Hyderabad addressed to the Mandal Revenue Officer, Golconda requesting to attach movable and immovable properties of the petitioner and Distraint order dated 15.7.1996 of the Mandal Revenue Officer, Golconda, which culminated into the notice dated 6.1.2000 and as such the proceedings are within limitation. It was further stated that the guarantees were furnished in the personal capacity of the petitioner and the same continues to be in force even if he ceases to be the director. Since the amounts realized through sale of the assets of the company are not sufficient to discharge the amounts payable, it has become necessary to initiate proceedings under the Revenue Recovery Act and as such no interference is warranted with the", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-8", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "has become necessary to initiate proceedings under the Revenue Recovery Act and as such no interference is warranted with the proceedings.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-9", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "4. On behalf of the appellant-petitioner it was argued before the learned single Judge that the guarantee bonds executed by the petitioner are co-terminus with the directorship of the petitioner and the moment he had resigned as director on 16.10.1989, the guarantee bonds shall be deemed to have been revoked. It was also argued that since the personal bonds executed by Dr.A.K. Chaterjee were not revoked by the Corporation till 15.11.1994 and continue to be in force even after the petitioner had resigned as director on 16.10.1989 proceedings ought to have been initiated against Dr.A.K. Chaterjee and no action could have been taken on the personal guarantee bonds executed by the petitioner in place of Dr. A.K. Chaterjee. It was vehemently argued before the learned single Judge that since no proceedings were initiated against the petitioner subsequent to the demand notice dated 28.3.1990, which was denied by the petitioner, the distraint order dated 15.7.1996 is without jurisdiction, even though there was a subsequent demand on 28.5.1992 because the claim of the Corporation was barred by limitation and it cannot be permitted to take recourse to the provisions of the Revenue Recovery Act and reliance was placed on the decision of the Supreme Court in MARGARET LALITA SAMUEL v. INDO COMMERCIAL BANK LTD.1 and a decision of the Division Bench decision of this Court in B.C.MULAJKAR v. STATE2. It was also argued that there was no determination of the liability of the petitioner to the Corporation determined in any of the demands issued to the petitioner including the demands issued under the Revenue Recovery Act and the same is violative of the principles of natural justice.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-10", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "On the other hand, the learned counsel for the respondent argued that proceedings for recovery of the amount due were initiated in the year 1990 by taking recourse to Section 29 of the State Financial Corporations Act, 1951 and as the amounts realized were found to be insufficient to liquidate the liability of the company proceedings came to be initiated against the appellant under the provisions of the Revenue Recovery Act and such proceedings being in continuance of the proceedings under section 29 of the State Financial Corporations Act, the debt is not a time barred debt and the proceedings under the Revenue Recovery Act are thus maintainable. It was argued the moment petitioner executed the guarantee on 17.8.1988 the guarantee executed by Dr.A.K. Chaterjee stood discharged and the bonds executed by the petitioner remains in force till they are revoked or the liability of the company has completely been discharged. Notice dated 6.1.2000 is consequent to the distraint order dated 15.7.1996, since there was no challenge to the distraint order, notice dated 6.1.2000 cannot be found fault with.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-11", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "5. The learned single Judge while holding that the Mandal Revenue Officer is competent to issue the distraint order dated 15.7.1996, on the issue whether the claim of the Corporation is a time barred debt and there is no consistency as to the amount due from the company, held thus:\n \"14. I have gone through various letters emanating from the 1st respondent Corporation. In the letter dated 22.5.1996 the amount due after adjusting the amount realized by sale of the assets of the company has been indicated. Therefore, I am of the view that there is no discrepancy with regard to the amounts due from the company after adjusting the amount realized by way of sale of assets of the company to the loan account. Even otherwise, the 1st respondent Corporation has given an opportunity to the petitioner under letter dated 22.3.1996 to verify the accounts. The petitioner did not choose to avail the same. The petitioner having failed to avail the said opportunity cannot be permitted to contend that there is no consistency with regard to the amount due from the company. The proceedings for realization of the amount due from the company commenced in the year 1990. The mortgaged properties have been sold by taking recourse to Section 29 of the State Financial Corporations Act and after adjusting the sale proceedings to the loan account, proceedings have been initiated for recovering the balance amount by taking recourse to the provisions of the Revenue Recovery Act. It can be said without any controversy that the proceedings have been commenced for realization of the dues by sale of mortgaged properties within limitation. The further proceedings for realization of the balance amount by taking recourse to the Revenue Recovery Act is only continuation of the process of recovery proceedings initiated earlier. Therefore, the contention of the petitioner that the claim of the 1st respondent Corporation against the Company is barred by limitation has no substance.\"", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-12", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "6. Learned counsel for the petitioner while reiterating the contentions urged before the learned single Judge submitted that when the Corporation issued notice dated 28.3.1990 to the principal debtor to take steps under section 29 of the SFC Act for sale of the unit the liability of the petitioner was crystallized and when the petitioner denied his liability, limitation started to run and three year period of limitation expired on 28.3.1993 i.e. long before 22.3.1996 when demand was made and when the Corporation sent requisition to the District Collector on 22.5.1996 to recover the amount from the appellant under A.P. Revenue Recovery Act, therefore, the claim of the Corporation against the petitioner is barred by limitation and such time-barred debt is unenforceable under the provisions of the A.P. Revenue Recovery Act, consequently the impugned notice dated 6.1.2000 issued by the Mandal Revenue Officer is illegal and without jurisdiction. In support his contention; he placed reliance on the decisions of the Supreme Court MAHARASHTRA STATE FINANCIAL CORPORATION v. ASHOK K. AGARWAL AND OTHERS3 and STATE OF KERALA v. V.R. KALLIYANIKUTTY4 and MARGARET LALITA SAMUEL v. INDO COMMERCIAL BANK LTD. (1 supra).", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-13", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "He further submitted that as the amount due was not determined, the 2nd respondent has no jurisdiction to issue the notice under the Revenue Recovery Act as held by this Court in B.C.MULAJKAR v. STATE (2 supra). It was also contended that the learned single Judge failed to consider that since the resignation of the petitioner was accepted by the Board, he is relieved of his obligation as a guarantor. He further submitted that since K.S.Rao became Director and offered guarantee in his place, the deeds of guarantee dated 17.8.1988 executed by the appellant ceased to be operative w.e.f. 6.10.1989 when the petitioner resigned as Director of Company and when it was accepted by the Board of directors in its 33rd Board meeting held on 16.10.1989. \n\n 7. Learned counsel appearing for the Corporation urged the very same submissions advanced before the learned single Judge and submitted that the learned single Judge has rightly held that since the proceedings for realization of the dues by sale of mortgaged properties have been commenced within limitation, the further proceedings for realization of the balance amount by taking recourse to the Revenue Recovery Act is only continuation of the process of recovery proceedings initiated earlier, therefore, the claim is not a time barred debt. He further submitted that when the notice dated 22.3.1996 was issued to the petitioner for recovery of the amounts due by the principal debtor under the Revenue Recovery Act, the debt recoverable from the principal debtor is alive, therefore, the proceedings initiated under the Revenue Recovery Act are within limitation and as such the decisions relied upon by the learned counsel or the petitioner have no application and as such no interference is warranted with the order impugned. He also relied upon the decision of this Court in GODAVARI PLYWOODS LTD. HYDERABAD v. UNION OF INDIA5 and submitted that the writ petition is not maintainable.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-14", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "8. On a careful examination of the pleadings advanced by the parties, the submissions of the learned counsel for both the sides and the order under appeal, the following points arise for consideration:\n1. Whether the debt recoverable from the principal debtor as per the sale notice dated 28.3.1990 issued by the respondent-Corporation under Section 29 of the SFC Act is not alive against the petitioner-guarantor as on 22.3.1996 when the respondent issued notice to the petitioner for recovery of the amount due under the Revenue Recovery Act, if so, the same is barred by limitation and is a time barred debt insofar as the petitioner is concerned? \n\n2. Whether in view of induction of Lt.Col. K.S. Rao in place of the petitioner as Director consequent on his resignation and acceptance by the Board of Directors by the resolution dated 16.10.1989 the petitioner is relieved of his liability to the Corporation and the guarantee is deemed to have been revoked and his liability is co-terminus with the directorship in the Corporation? \n\n3. Whether the Corporation is justified in seeking to recover the amount without determining the liability of the petitioner to the Corporation? \n\n9. Before we deal with the points for consideration, we may examine the liability of a guarantor with reference to the law laid down by the Supreme Court. \n\nThe fundamental principle of law under the Indian Contract Act is that the liability of a surety or a guarantor is co-extensive with that of the principal debtor.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-15", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "B.C. MULAJKAR v. STATE OF ANDHRA PRADESH relied upon by the learned counsel for the petitioner is a case where the appellant therein obtained loans by mortgaging certain movable and immovable properties from the Industrial Trust Fund constituted under the Hyderabad Industrial Trust Fund Rules, 1347 Hizri. In the year 1965, the Government initiated proceedings under the Madras Revenue Recovery Act to recover the dues. It was argued before the learned single Judge that the Industrial Trust Fund Rules under which the appellant therein was granted loan did not provide for invoking the provisions of the Revenue Recovery Act. Learned single Judge rejected the said contention holding that the action of the Government was valid and authorized under the provisions of the Section 52 of Madras Revenue Recovery Act. On appeal, the Division Bench held that even in the absence of a provision in the Industrial Trust Fund Rules, the language in Section 52 of the Act is wide enough to cover all sums due to the Government and that the action of the Government in invoking the provisions of Section 52 of the Act was authorized and valid. In the said case, a contention was also raised by the appellant that the respondents cannot straightaway issue a demand notice and attach or distrain the appellant's properties without first determining the amounts actually due by the appellant and that such a procedure is not warranted by the provisions of Section 52 of the Act and is opposed to the principles of natural justice. The Division Bench accepted the contention and held that even though the provision has been made in the interest of expeditious collection of the amounts due to the Government, Section 52 of the Act has to be interpreted in such a manner so as to accord with the principles of natural justice and that the party sought to be proceeded against should at least have the minimum safeguard of having an opportunity to know the basis and the material on which the liability is sought to be imposed upon and to rebut the same by placing the necessary material in that", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-16", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "the liability is sought to be imposed upon and to rebut the same by placing the necessary material in that behalf before the appropriate authority.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-17", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "10. In MARGARET LALITA SAMUEL v. INDO COMMERCIAL BANK LTD the guarantee was a continuing guarantee at any one time. A contention was raised that each of the debit items in the account constituted a distinct loan and gave raise to separate limitation. The Supreme Court rejected the contention and held thus: \"The guarantee is seen to be a continuing guarantee and the undertaking by the defendant is to pay any amount that may be due by the company at the foot of the general balance of its account or any other account whatever. In the case of such a continuing guarantee, so long as the account is alive account in the sense that it is not settled and there is no refusal on the part of the guarantor to carry out the obligation, we do not see how the period of limitation could be said to have commenced running. Limitation would only run from the date of breach under Article 115 of the schedule to the Limitation Act, 1908.\"", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-18", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "11. In STATE OF KERALA v. V.R. KALLIYANIKUTTY the question that arose for consideration was whether a debt which is barred by the law of limitation can be recovered by resorting to recovery proceedings under Section 71 of the Kerala Revenue Recovery Act, 1968. A Division Bench of the Kerala High Court held that in the absence of any provision in the Kerala Revenue Recovery Act creating a substantive right to recover time-barred debts, the said Act which provides for summary recovery cannot be availed of once the period prescribed for recovery under the Limitation Act has expired. However, a Full Bench of Kerala High Court overruled the said decision. Placing reliance on the words 'amount due' occurring in Section 71 of the Act, it was contended before the Supreme Court by the respondents-institutions that the words 'amount due' encompasses time-barred claims also. It was also contended that the statute of limitation merely bars the remedy without touching the right, therefore, the right to recover the loan would remain even though the remedy by way of a suit would be time-barred. Placing reliance on the decision of the Privy Council in HANSRAJ GUPTA v. DEHRA DUN MUSSOORIE ELECTRIC TRAMPWAY CO. LTD.6 and the decisions in NEW DELHI MUNICIPAL COMMITTEE v. KALU RAM7 and PUNJAB NATIOINAL BANK v. SURENDERA PRASAD SINHA8 the Supreme Court interpreting the words 'amount due' in Section 71 of the Kerala Revenue Recovery Act held thus:", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-19", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "16. There is no question, however, in the present case of any payment voluntarily made by a debtor being adjusted by his creditor against a time- barred debt. The provisions in the present case are statutory provisions for coercive recovery of 'amounts due'. Although the necessity of filing a suit by a creditor is avoided, the extent of the claim which is legally recoverable is not thereby enlarged. Under Section 70(2) of the Kerala Revenue Recovery Act the right of a debtor to file a suit for refund is expressly preserved. Instead of the bank or the financial institution filing a suit which is defended by the debtor, the creditor first recovers and then defends his recovery in a suit filed by the debtor. The rights of the parties are not thereby enlarged. The process of recovery is different. An Act must expressly provide for such enlargement of claims which are legally recoverable, before it can be interpreted as extending to the recovery of those amounts which have ceased to be legally recoverable on the date when recovery proceedings are undertaken. Under the Kerala Revenue Recovery Act such process of recovery would start with a written requisition issued in the prescribed form by the creditor to the Collector of the District as prescribed under Section 69(2) of the said Act. Therefore, all claims which are legally recoverable and are not time-barred on that date can be recovered under the Kerala Revenue Recovery Act.\"", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-20", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "12. From the above, it is clear that all legally recoverable debts which are not time barred as on the date on which requisition under the Revenue Recovery Act was issued to the District Collector can be recovered under the provisions of the Revenue Recovery Act.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-21", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "10. In MAHARASHTRA STATE FINANCIAL CORPORATION v. ASHOK K. AGARWAL AND OTHERS the question that arose for consideration is whether it is Article 136 or Article 137 of the Schedule to the Limitation Act which has application to the proceedings initiated under sections 31, 32 and 31(1)(aa) of the State Financial Corporation Act, 1951. In this case, the Maharashtra State Financial Corporation had sanctioned a loan Rs.5.00 lakhs in favour of a company to which the respondents therein who were directors of the borrower company stood sureties for the loan. When the company failed to repay the loan notice dated 8.3.1983 was issued calling upon the borrower to repay its due. On 25.10.1983 an application under sections 31 and 32 of the State Financial Corporations Act, 1951 was filed by the Corporation for sale of the hypothecated property of the borrower company so that the sale proceeds could be appropriated towards meeting the outstanding liability of the borrower towards the appellant. On 11.6.1990 the attached properties of the borrower company were put to sale. There was shortfall in the amount realized and hence notice dated 27.12.1991 was issued to the respondent sureties claiming Rs.16,79,033/- together with interest. On 2.1.1992 the Corporation filed an application under section 31(1)(aa) for steps for recovery of the amount due. An objection was raised that the application was barred by limitation, which was upheld by the Additional District Judge in view of Article 137 of the Schedule to the Limitation Act which provides that in cases where no period of limitation is specifically prescribed period of limitation would be three years. Learned counsel for the appellant however placing reliance on Article 136 contended that since the said Article prescribes a limitation period of twelve years in cases of execution of", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-22", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "contended that since the said Article prescribes a limitation period of twelve years in cases of execution of decrees and orders passed by Civil Courts, the same should be made applicable to the application filed under section 31 (1)(aa) also which is in the nature of execution proceedings. The Supreme Court following the proposition set out in GUJARAT STATE FINANCIAL CORPN v. NATSON MFG. CO. (P) LTD.9 held that while dealing with an application under Sections 31 and 32 of the SFC Act there is no decree or order of a Civil Court being executed and it is only on the basis of a legal fiction that the proceedings under Section 31 are treated as akin to execution proceedings, therefore, application under sections 31 and 32 of the State Financial Corporation Act is not by way of execution of a decree or order of Civil Court and as such Article 136 has no application. It was held that since the liability of sureties had crystallized on 25.10.1983 when the Corporation had filed the application under sections 31 and 32, the application filed on 2.1.1992 under section 31(1)(aa) for recovery of the amounts due from the sureties is barred by limitation.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-23", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "13. In SYNDICATE BANK v. CHANNAVEERAPPA BELERI AND OTHERS10 the Supreme Court held that the limitation as to guarantor's liability depends on the terms and conditions of contract and limitation starts running only when actually a demand for payment is made and it was refused by guarantors, however, such a demand should not be time-barred against the principal debtor i.e. it should be a live claim and cessation of operation of accounts cannot be treated as refusal to pay by the principal debtor. The appeal by the appellant-bank was directed against the order of the High Court of Karnataka dismissing the suit filed by the bank on the ground of limitation. We may briefly state the facts leading to filing the suit. The suit was filed against the respondents guarantors for recovery of Rs.19,77,478.60 together with interest at 18.5%. The bank extended credit facilities by way of overdraft, goods loans and demand loan and respondents executed guarantee bonds in favour of the bank, personally agreeing and undertaking to pay and satisfy the bank on demand all sums which may be due on account of the credit facilities granted to the company. On account of the company incurring losses, it stopped operations in the accounts of the company with the bank in the middle of 1986. The bank vide letter dated 12.10.1987 demanded the company as principal debtor and the respondents as guarantors for payment of amounts due as on 30.9.1987 within 15 days. The company sent reply dated 31.10.1987 raising various grounds and thereafter the bank sent a formal notice through their counsel on 17.12.1987. The bank initiated proceedings for winding up on 11.10.1988 and on 17.3.1989 the High Court ordered winding up of the company. Thereafter the bank filed the suit on 16.3.1990 against the", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-24", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "the company. Thereafter the bank filed the suit on 16.3.1990 against the guarantors for the amounts demanded in the notice dated 12.10.1987 stating that the cause of action against the guarantors arose on 17.12.987 when the demand was made and on 30.12.1987 when they denied the liability of notice and the statements of account showing the particulars of amount due as on 31.12.1989 were annexed to the plaint.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-25", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "One of the grounds urged by the respondents before the trial Court was that in the absence of renewals or acknowledgment of the guarantee bonds executed by them in the years 1983, 1984 and 1985 the suit filed on 16.3.1990 was barred by limitation. The trial court framed as many as 16 issues including the issue whether the suit was in time. The court answered all the issues in favour of the bank but dismissed the suit on the ground that it was barred by limitation which was upheld by the Karnataka High Court. The trial court held that the accounts of the company with the bank became dormant and inoperative from 1986 and therefore they ceased to be live accounts and that in view of such cessation of operation of the accounts, it should be deemed that the company and consequently the guarantors had refused to discharge their obligation, that once there was such refusal by stopping operation of the accounts the limitation would start to run immediately; that time which begins to run, cannot be stopped; and that the mere fact the demand was made by the bank much later in the year 1987 will not postpone the commencement of running of the period of limitation. The trial court declined to accept the contention that the limitation will start to run only when a notice was issued by the creditor bank demanding payment of the amount from the guarantors and a refusal thereof by the guarantors. It was held that the period of limitation commenced to run from the middle of 1986 when the operation of the accounts was stopped and the suit filed in 1990 beyond three years from the stoppage of operation of a accounts was barred by time. The High Court held that when the guarantee deed provided that the guarantors were liable to pay on demand by the bank, it meant that the amount was payable from the moment of execution of the guarantee and, consequently, no actual demand was necessary to make the amount due under the guarantees. The High Court further held that", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-26", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "no actual demand was necessary to make the amount due under the guarantees. The High Court further held that when the accounts became dormant in the middle of 1986 by non- operation and non-payment it should be deemed that there was a refusal to pay the amount under the guarantees and therefore, the suit filed on 16.3.1990 was barred by limitation being beyond three years. The High Court also held that the decision in Samuel's case will not apply because the Supreme Court had stated that the limitation will not run only if the account was a live account and there was no refusal on the part of the guarantor to carry out the obligations. It was also held that the word 'live' meant that account should be operating and when an account became dormant and inoperative it was not a live account. It was contended before the Supreme Court that the guarantees executed by the respondents were continuing guarantees and that the guarantors had agreed to pay the amount on demand by the bank, therefore, since the demand made by the bank on 12.10.1987 and 17.12.1987 was denied by the respondents by their letters dated 31.10.1987 and 30.12.1987 the suit filed on 16.3.1990 was within limitation. At para 9 of the judgment the Supreme Court held:", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-27", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "9. A guarantor's liability depends upon the terms of his contract. A continuing guarantee is different from an ordinary guarantee. There is also a difference between a guarantee which stipulates that the guarantor is liable to pay only on a demand by the creditor, and a guarantee which does not contain such a condition. Further, depending on the terms of guarantee, the liability of a guarantor may be limited to a particular sum, instead of the liability being to the same extent as that of the principal debtor. The liability to pay may arise, on the principal debtor and guarantor, at the same time or at different points of time. A claim may be even time-barred against the principal debtor, but still enforceable against the guarantor. The parties may agree that the liability of a guarantor shall arise at a later point of time than that of the principal debtor. We have referred to these aspects only to underline the fact that the extent of liability under a guarantee as also the question as to when the liability of a guarantor will arise, would depend purely on the terms of the contract.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-28", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "The Supreme Court referring to Samule's case observed that the Supreme Court also agreed with the view expressed by the Privy Council in WRIT V. NEW ZEALAND FARMERS COOPERATIVE ASSOCIATION OF CANTERBURY LTD.11 and the Court of Appeal in BRADFORD OLD BANK LTD. V. SUTCLIFFE12 that limitation against a guarantor under a continuing guarantee (which specified that the liability of the guarantor is to pay on demand) would not run from the date of each advance, but only run from the time when the balance (payment of which is guaranteed) was constituted and a demand was made for payment thereof. The Supreme Court also refereed to a passage form Paget's Law of Banking which reads thus:\n In Bradford Old Bank Ltd. v. Sutcliffe it was pointed out that the contract of the surety was a collateral, not a direct, one and that in such case demand was necessary to complete a cause of action and set statute running. Moreover, bank guarantees invariably specify that the liability of the surety is to pay on demand, and in this connection the words are not devoid of meaning or effect, even with reference to the statute, as is the case with a promissory note payable on demand, but make the demand a condition precedent to suing the surety, so that the statue does not begin to run till such demand has been made and not complied with.\"", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-29", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "The supreme Court found that Bradford (supra) in turn reiled on Hartland v. Juke {(1863) 1 G and C 667} wherein in the context of a continuing guarantee, the contention that the period of limitation would begin to run as soon as the principal debtor becomes indebted to the Bank was negatived by stating: It was contended before us that the statute began to run from the 31st December, 1855, by reason of the debt of Pound 179 :1\"11 then due to the bank, but no balance was then struck, and certainly no claim was made by the bank upon the defendant's testator (the Guarantor) in respect of that debt; and we think the mere existence of the debt, unaccompanied by any claim from the bank, would not have the effect of making the statute run from that date\".", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-30", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "Distinguishing the Samule's case, the Supreme Court held that the guarantee deeds specifically state that the guarantors agree to pay and satisfy the bank on demand and interest will be payable by the guarantors only from the date of demand. In a case where the guarantee is payable on demand as held in the case of Bradford (supra) and Hartland (supra) the limitation begins to run when the demand is made and the guarantor commits breach by not complying with the demand. In the case before the Supreme Court the guarantee bond states that the guarantors agree to pay and satisfy the bank on demand. It specifically provides that the liability to pay interest would arise upon the guarantor only from the date of demand by the bank. It also provides that the guarantee shall be a continuing guarantee for payment of the ultimate balance to become due to the bank by the borrower. Therefore, the Supreme Court held that the terms of guarantee make it clear that the liability to pay would arise on the guarantors only when a demand was made. Article 55 provides that the time will begin to run when the contract is broken. Even if article 113 is to be applied the time begins to run only when the right to sue accrues. In this case the contract was broken and the right to sue accrued only when a demand for payment was made by the Bank and it was refused by the guarantors. When a demand is made requiring payment within a stipulated period, say 15 days, the breach occurs or right to sue accrues, if payment is not made or is refused within 15 days. If while making the demand for payment, no period is stipulated within which the payment should be made, the breach occurs or right to be sued accrues, when the demand is served on the guarantor. It was also held:", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-31", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "14. We have to, however, enter a caveat here. When the demand is made by the creditor on the guarantor, under a guarantee which requires a demand as a condition precedent for the liability of the guarantor, such demand should be for payment of a sum which is legally due and recoverable from the principal debtor. If the debt had already become time-barred against the principal debtor, the question of creditor demanding payment thereafter, for the first time, against the guarantor would not arise. When the demand is made against the guarantor, if the claim is a live claim (that is a claim which is not barred) against the principal debtor, limitation in respect of the guarantor will run from the date of such demand and refusal/non-compliance. Where guarantor becomes liable in pursuance of a demand validly made in time the creditor can sue the guarantor within three years, even if the claim against the principal debtor gets subsequently time-barred.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-32", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "The Supreme Court held that by no logical process it can be held that ceasing of operation of accounts by the borrower for some reason would amount to a demand by the bank on the guarantor to pay the amount due in the account or refusal by the principal debtor and guarantor to pay the amount due in the accounts. Ultimately, the Supreme Court held that the time began to run not when the operations ceased in the accounts in mid 1986 but on the expiry of 15 days from 12.10.1987 when the demand was made by the Bank and there was refusal to pay by the guarantors, therefore, the suit filed within three years therefrom is within time and accordingly set aside the judgment and decree of the High Court and that of the trial court. \n\n14. On an analysis of the above decisions of the Supreme Court, the following points can be deduced for application:\n1. Under the scheme of Section 52-A of the Revenue Recovery Act without prejudice to any other mode of recovery, which may have been taken or may be taken by banks and other public bodies were also brought on par with land revenue for the purpose of recovery under the Act and thereby all loans and advances granted by the State Government, corporation established by or under State or Central Act or Government Company or any public body notified as such in the Andhra Pradesh Gazette or by any bank was entitled to invoke the provisions of Revenue Recovery Act for recovery of loans with interest including all sums such as rents, margin money or the like.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-33", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "2. The provisions of the Revenue Recovery Act have to be interpreted in such a manner so as to accord with the principles of natural justice and that the party sought to be proceeded against should at least have the minimum safeguard of having an opportunity to know the basis and the material on which the liability is sought to be imposed upon. In other words, a party ought to have an opportunity at such quantification of his dues and such quantified/ascertained sums can be recovered under the Revenue Recovery Act.  \n3. All claims which are legally recoverable and are not time-barred on the date when the process for recovery of the amounts by the sale of movable properties as land revenue was taken up by the District Collector can be recovered under the Revenue Recovery Act. \n4. The liability of the sureties would crystallize when the proceedings under the State Financial Corporation Act would be initiated for sale of properties of the borrower company. \n5. Limitation as to guarantor's liability depends on the terms and conditions of contract and limitation starts running only when actually a demand for payment is made and it was refused by guarantors, however, such a demand should not be time-barred against the principal debtor i.e. it should be a live claim and cessation of operation of accounts cannot be treated as refusal to pay by the principal debtor.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-34", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "6. A continuing guarantee is different from ordinary guarantee. There is difference between a guarantee which stipulates that the guarantor is liable to pay only on a demand by the creditor, and a guarantee which does not contain such a condition. The liability to pay may arise, on the principal debtor and guarantor, at the same time or at different points of time. A claim may be even time-barred against the principal debtor, but still enforceable against the guarantor. The parties may agree that the liability of a guarantor shall arise at a later point of time than that of the principal debtor. A claim may be time-barred against the principal debtor, but still enforceable again the guarantor.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-35", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "7. Limitation against a guarantor under a continuing gurantee (which specified that the liability of the guarantor is pay on demand) would not run from the date of each advance, but only run from the timed when the balance was constituted and a demand was made for payment thereof. \n8. In a case where the guarantor liable to pay on demand the limitation begins to run when the demand is made and the guarantor commits breach by not complying with the demand. \n9. When the demand is made by the creditor on the guarantor, under a guarantee which requires a demand as a condition precedent for the liability of the guarantor, such demand should be for payment of a sum which is legally due and recoverable from the principal debtor. If the debt had already become time- barred against the principal debtor, the question of creditor demanding payment thereafter, for the first time, against the guarantor would not arise. When the demand is made against the guarantor, if the claim is a live claim (that is a claim which is not barred) against the principal debtor, limitation in respect of the guarantor will run from the date of such demand and refusal/non- compliance. Where guarantor becomes liable in pursuance of a demand validly made in time the creditor can sue the guarantor within three years, even if the claim against the principal debtor gets subsequently time-barred. \n\n10. Ceasing of operation of accounts by the borrower for some reason or the other would amount to a demand by the bank on the guarantor to pay the amount due in the account or refusal by the principal debtor and guarantor to pay the amount due in the accounts. \n On the above proposition of law, we proceed to examine the case of the petitioner.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-36", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "15. Point No.1: Though the petitioner has disputed that he has not executed the guarantee deed dated 17.8.1988 for Rs.56.80 lakhs, however, a copy of the said guarantee deed placed on record discloses that the petitioner did execute the deed. The Corporation has not filed any statement of account to indicate when the debt was crystallized. The various letters referred to by the petitioner have also not been placed on record either by the Corporation or the petitioner. The material placed on record discloses that sale notice was issued on 18.10.1989 but a copy of the same has not been placed on record. Be that as it may, the Corporation vide letter dated 28.3.1990 addressed to the Managing Director of the Company intimated that they are initiating proceedings for recovery of an amount of Rs.75,81,100/- by way of sale of the Unit under Section 29 of the SFC Act duly enclosing proforma sale notice. A copy of the said letter was placed on record. Therefore, this can be taken as the date when the debt was crystallized on the guarantors. There is no dispute that the petitioner was inducted as guarantor in place of one Dr. A.K. Chatterjee who was relieved of his liability by the company by letter dated 25.11.1994. Before we examine the liability of the petitioner, it is necessary to refer to the guarantee deeds executed by the petitioner for Rs.56.80 lakhs and Rs.12.45 lakhs dated 17.8.1988, which reads as under:\n AGREEMENT OF GUARANTEE Loan of Rs.56.80 lakhs Sanctioned to M/s. Rama Organics Private Limited - Guarantee - Reg.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-37", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "In consideration of Rs.56.80 lakhs sanctioned to M/s. Rama Organics Private Limited, hereinafter referred to as the Principal Debtors, I Sri K. Raja Rao, S/o Shri. Nagabhushanam aged 38 years R/o. 8-3-678/2, Near LIC Colony, Yellareddyguda, Hyderabad, doth hereby guarantee that the said principal debtors shall pay the amount there under including the interest on due dates and abide by all other terms and conditions contained in the said Deed of Hypothecation/Mortgate and known to me and if the Principal Debtors commit default, the Corporation will be entitled to recover the same from me, the Guarantor herein and from my properties both movable and immovable not withstanding the remedies which the Corporation may have against the Principal Debtors and the properties hypothecated/mortgaged and/or to be hypothecated/mortgaged under the said deed of hypothecation/mortgage. \n I further agree and convenant with the Corporation that the Corporation shall be at liberty without my further assent or knowledge at any time to grant to the Principal Debtors or any person or persons liable with or for him/them any time or indulgence or enter into composition or make any other arrangements with him/them as they think fit without discharging or in any manner affecting my liability under the Guarantee.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-38", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "The Guarantee hereby given shall not be affected by any change in the constitution of the Corporation or the Principal Debtors. \n\n That any account settled between the Corporation and the Principal Debtors mentioned above shall be conclusive evidence against the Guarantors and the amount found to be due shall not be questioned by the Principal Debtors. \n\n The expression guarantor and the Corporation herein before used shall unless such an interpretation is repugnant to the context include in the case of the guarantor, his heirs, executors, administrators and assigns and in the case of the Corporation its successors and assigns. \n\nIN WITNESS WHERE OF, I. K. RAJA RAO have hereunto set my hands at Hyderabad on 17/8/'88.\nGUARANTEE FOR REPAYMENT OF          \nRUPEE TERM LOAN PERSONAL GUARANTEE             \n\nThe Andhra Pradesh Industrial                   Place: Hyderabad \n        Development Corporation Ltd.,                      Date: 17-08-88\n        Parisrama Bhavanam', Basheerbagh,\nHYDERABAD - 500 029.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-39", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "In consideration of Andhra Pradesh Industrial Development Corporation Limited agreeing to our request to grant to M/s. Rama Organics Private Limited (who is hereinafter referred to as the Borrower) accommodation by way of Rupee Term Loan of Rs.12,45,000/- (Rupees Twleve lakhs forty five thousand only) on condition amount others that the repayment of the said loan and service charges be secured by the demand promissory note to be executed by the Borrower in favour of the Corporation and further that the loan should be guaranted by Sri. K. Raja Rao in his personal capacity as regards repayment of principal amount and payment of service charge to the Corporation as per the letter of sanction No.FND/DM/(R & M)/SCA/ROPL/989/85, 26.2.1985 addressed to the borrower Sri K. Raja Rao Here by undertake in his personal capacity to guarantee repayment of the principal and payment of service charge to the Corporation and remaining unpaid on account of the said Rupee Term Loan, until notice in writing that the same is enclosed, is given by the said Corporation to me on the understanding that the said Corporation shall be at liberty to take steps to enforce payment of the said promissory Note at any time after notice in writing, demanding payment there of, posted to me to my usual or last known address and default being made in payment for three days after the posting of such notice. And, I agree that the fact of the said Corporation not taking steps to enforce payment of the said loan or of the said promissory notice until expiry of a period of three days after posting of such notice or otherwise granting time to me shall in no way release me from my liability under the said Promissory Note. And I further agree that it shall not be necessary for the said Corporation to present the said promissory note for payment to the borrower before demanding repayment from me or suing thereon.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-40", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "said promissory note for payment to the borrower before demanding repayment from me or suing thereon.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-41", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "I further agree that the said Soft Loan shall be made up with service charge in accordance with the practice of the said Corporation and that the service charge payable under the said Promissory Note shall be applicable to the payment and satisfaction of the service charge accruing upon as much of the moneys becoming payable to the said Corporation in respect of the said demand loan as is secured by the said promissory Note. \n\n I further agree that no failure in the observance or performance of any of the stipulations or terms of said document and no default of the said corporation in requiring or enforcing the observance of performance of any of the said stipulations or terms shall have the effect of releasing me from the liabilities or of prejudicing the said Corporations rights or remedies against me under the said Promissory Note. \n I agree that the said Corporation shall be at liberty to take other securities for the said loan account or any part there of and to release or forbear to enforce all or any of its remedies upon or under such securities any collateral security and that no such release of forbearance, as aforesaid shall have the effect of releasing me from my liability or of prejudicing the said Corporation's rights and remedies against me and that I shall have no right to the benefit of any other security that may be held by the said Corporation until the claim of the said Corporation against the Borrower in respect of the said Soft Loan and of all (of any) other claims of the Corporation against the Borrower or any other account whatsoever shall had been fully satisfied and then in so far only, as such security shall not have been exhausted for the purpose of realizing the amount of the said Corporation's claims and (if any) entitled to the benefit of such securities respectively.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-42", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "I agree that if the Borrower shall become insolvent bankrupt or make an agreement or composition with creditors, the Corporation may (not withstanding payment to the said Corporation by me or any other person of the whole or any part of the amount hereby secured) rank as creditors and proceed against the estate of the BORROWER for full amount of all the said Corporation's claims against the Borrower or agree to and accept any composition in respect there of and the said Corporation may receive and retain the whole of the dividends composition or other payments there of until all the said Corporation's claims are fully satisfied and I will not, by paying off the amount payable by me or any part there of or otherwise prove or claim against the estate of the Borrower have been satisfied and the said Corporation may enforce and recover payment from me of the full amount payable by me not withstanding any such proof of composition as aforesaid. \n\nI further agree that any other Promissory Note or Notes that may thereafter be given by the Borrower in renewal of or substitution for the said Promissory Note or any renewal there of shall be held by the said Corporation upon and subject to the same terms and conditions as are here in expressed and contained with reference to the said Promissory Note. \n\nI further agree that the corporation shall be at liberty to sue me in respect of such liability and to proceed to judgment and execution at the option of the Corporation until its claim is fully satisfied. \n\nThe expression 'BORROWER' AND THE Corporation here in before used shall unless such an interpretation is repugnant to the context include in the case of the borrower, his heirs, executors, administrators and assigns and in case of the corporation its successors and assigns. \n\nI witness where of I have hereunto set my hands at Hyderabad on 17-8-88. \n\nSd/- K. Raja Rao.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-43", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "Sd/- K. Raja Rao. \n\n 16. The guarantee deed executed for term loan of Rs.56.80 lakhs would show that it is a simple deed of guarantee and the petitioner has guaranteed for repayment of the amount of Rs.56.80 lakhs sanctioned to the Company on 13.11.1984 including the interest on due dates in his personal capacity and would abide by all terms and conditions contained in the deed of Hypothecation/Mortgage and if the Principal Debtors commit default, the Corporation was given the liberty to recover the same from the petitioner from his movable and immovable properties notwithstanding the remedies which the Corporation may have against the Principal Debtors and the properties hypothecated/mortgaged and/or to be hypothecated/mortgaged under the said deed of hypothecation/mortgage. Therefore, notwithstanding the remedies available to the Corporation against the Company, the Corporation has the authority to demand and proceed with the guarantor when the debt was crystallized.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-44", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "17. The second guarantee deed relates to Term Loan of Rs.12.45 lakhs sanctioned to the Company on 26.2.1985. Unlike the deed of guarantee for Rs.56.80 lakhs, this deed is exhaustive. Repayment of this loan amount was secured by way of demand promissory note to be executed by the principal debtor in favour of Corporation for which the petitioner guaranteed the same in his personal capacity. The deed stipulates that the Corporation shall be at liberty to take steps to enforce payment of the promissory note at any time after notice in writing, demanding payment thereof was issued to the petitioner to his usual or last known address when default was made in payment within three days after the posting of such notice. Further, the Corporation not taking steps to enforce payment of the loan or of the promissory note until expiry of a period of three days after posting of such notice or otherwise granting time to the petitioner shall in no way release him from his liability under the promissory note. The Corporation shall also have the liberty to take other securities for the loan account or any part thereof and to release or forbear to enforce all or any of its remedies upon or under such securities any collateral security. However, no such release of forbearance shall have the effect of releasing him from his liability or of prejudicing the right of Corporation and remedies against him and he shall have no right to the benefit of any other security that may be held by the said Corporation until the claim of the said Corporation against the borrower in respect of the said soft loan and of all (of any) other claims of the Corporation against the borrower or any other account whatsoever shall had been fully satisfied and then in so far only, as such security shall not have been exhausted for the purpose of realizing the amount of the Corporation's claims and (if any) entitled to the benefit of such securities respectively. Therefore, the movables and immovable given as security by the petitioner are", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-45", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "of such securities respectively. Therefore, the movables and immovable given as security by the petitioner are not to be released until the claim of Corporation against the Company is exhausted in respect of the existing term loan and all other claims of Corporation against the Company or any other account whatsoever had been fully satisfied. So, not only against the term loan of Rs.12.45 lakhs the Company has charge over the movables and immovable property given as security it has charge also against any other claim of the Corporation against the principal debtor or amount due under any other account to the Corporation. This deed of guarantee, therefore, gives right to the Corporation to proceed against the movables and immovable properties given as security even in respect of the loan covered under the first deed of guarantee also.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-46", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "In our view, the deeds of guarantees are not continuing guarantees but are only in the nature where payments are required to be made on demand when the principal debtor commits default under the first deed of guarantee for Rs.56.80 lakhs and within three days on issuing a notice of demand in respect of the second deed of guarantee for Rs.12.45 lakhs. Even in respect of a continuing guarantee also, there must be a demand from the creditor. \n\n18. Admittedly, the debt against the guarantors was crystallized when the Corporation issued sale notice under Section 29 SFC Act on 28.3.1990 even if we ignore the sale notice dated 18.10.1989 and other notices which were not placed on record. Though under the first deed of guarantee the Corporation has the option to proceed against the guarantor notwithstanding the remedies available to it against the principal debtor, it has not chosen to do so but inclined to proceed against the principal debtor only at the first instance. It may be noted herein that though two separate guarantee deeds were executed for the two different loans, the Corporation at no point of time has chosen to make demands independently, but opted to make demand consolidating the loans together. The letter dated 28.3.1990 enclosing the proforma sale notice was addressed to the principal borrower and only copies of the same were furnished to the guarantors. The said letter reads as under:By Regd. Post Ack due  \nNo. SDM(Mon)ICS/ROPL/511/89                                     Date: 28-3-90\n\nThe Managing Director,\nRama Organics Private Ltd.,\n8-3-222/6, Yousufguda Road, \nSrinagar Colony,\nHyderabad - 500 873. \n\nDear Sir,", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-47", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "Dear Sir,\n\nSub:- Your loan account with us - Defaults - Action for recovery of outstanding amounts - Action under Section-29 of SFC's Act - Reg., Ref:- 1) Our letter No.SDM(Mon).ICS/RCPL/ 7020/88, dt.12-1-90. \n 2) Our letter No.SDM (Mon) AFP/ ROPL/ 611/88, dt.8-2-89. \n\n 3) Our letter No.SDM (Mon)/ ROPL/ 8281/89, dt.9-3-89. \n\n4) Our letter No.DCM (M&A) /ROPL /1935/89, dt:16-6-89. \n With reference to the above, we find that your account continues to be irregular inspite of several concessions shown and letter reminders and even notices issued to you, an amount of Rs.37,97,000/- (Rupees Thirty seven lakhs ninety seven thousands only) is outstanding towards interest against term loan. \n\n In view of the above, we are taking steps for recovery of an amount of Rs.75,81,000/- (Rupees Seventy five lakhs eighty one thousands only). This amount includes outstanding term loan amount plus interest amount, which is outstanding in your account as on 28.3.'90 and other amounts debitable to the account by sale of your unit under section 29 of the SFC Act, 1951, by advertisement in the newspapers, if necessary, as per the proforma enclosed with appropriate variations.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-48", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "Please note that if the sale does not materialize or the proceeds thereof are not sufficient, we will proceed against you jointly and severally for the recovery of outstanding or the shortfall as the case may be under the other provisions of SFC's Act and other Laws at your cost and deeds. However, if the amounts are paid on or before 15 days from the ate of this notice, the proposed action will be dropped. \n\n Thanking you, Yours faithfully, for A.P.I.D.C. Limited, Sd/- X X X (T. RAMGOPAL) GENRAL MANAGER,MONITORING & RECOVERIES Encl: Sale Notice Proforma. \n\nCopy to:\n1)Sri P. Seshagiri Rao, H.No.8-3-222/6, Yoursufguda, Srinagar Colony, Hyderabad. \n2)Sri A. Nageshwara Rao, 6-3-668/10/4, Durganagar Colony, Panjagutta, Hyderabad. \n3)Sri K. Raja Rao, 8-3-678/2, Near LIC Colony, Yellareddyguda, Hyderabad. \n4)The Managing Director, A.P. State Financial Corporation, Chirag Ali Lane, Hyderabad. \n5)The Manager, \n        State Bank of India,\n        Narayanguda Branch,  \n        Hyderabad.    \"", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-49", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "19. The letter dated 28.5.1992 together with the sale notice intimating that steps will be taken under Section 29 of the SFC Act was also addressed to the Managing Director of the Company and only a copy of the same was sent to the petitioner and not communicated to other guarantors. The said letter reads as under:\nBy Regd. Post Ack due.  \nThe Managing Director D/28.5.1992 M/s. Rama Organics Pvt., Ltd., No.8-3-222/6, Yousufguda Road, Srinagar Colony, HYDERABAD - 500 873.    \nDear Sir, Sub:- Your Loan Account with us - Defaults - action for recovery of outstanding amounts under Sec.29 of SFC's Act - Reg. \n With reference to the above, we find that your account continue to be irregular inspite of several reminders and even Notices issued to you. An amount of Rs.51,96,869/- (Rupees fifty one lakhs ninety six thousand eight hundred and sixty nine only) is due as on 28-2-1992 towards Term Loan instalments/interest. \n\n In view of the above, we are taking steps for the recovery of an amount of Rs.71,27.180/- which is outstanding in your account as on 28-2-1992 and other amounts debitable to the account by sale of your Unit under Section-29 of the State Financial Corporations Act, 1951, by advertisement in the newspapers, if necessary, as per the proforma enclosed with appropriate variations. \n\n Please note that if the sale does materialize and the proceeds thereof are not sufficient, we will proceed against you jointly and severally for the recovery of outstanding or the shortfall as the case may be under the other provisions of SFCs Act and other Laws at your cost and deeds.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-50", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "However, if the amounts are paid on or before 15-6-1992 proposed action will be dropped. \n\n Thanking you, Yours faithfully for A P I D C LIMITED S V REDDY GENERAL MANAGER (M&R) Encl: Sale Notice proforma Copy to : Shri K. Raja Rao S/o Shri Nagabhushanam No.8-3-678/2, Near LTC Colony, Yellareddyguda, HYDERABAD - 500 873.\"    \n20. As already stated notice was issued on 18.10.1989 for sale of the assets of the company under section 29 of the SFC Act, again notice was issued on 28.3.1990 and another notice was issued on 28.5.1992. It is not clear from the material placed on record what steps the Corporation had taken pursuant to the notice dated 18.10.1989 and 28.3.1990 as it could secure the amount to the extent of Rs.61.00 lakhs by sale only on 29.12.1993. Even after this also there was no demand by the Corporation demanding payment of the balance amount. It was only on 22.3.1996 for the first time demand was made by the Company demanding the petitioner to pay the arrears to the tune of Rs.131.14 and to recover the same under the Revenue Recovery Act. The said demand reads as under. \n\nBy Regd. Post Ack due.  \nRef.No.ED(P)/RRD/ROL/466/96                                dt:22-3-1996.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-51", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "Mr. Kodali Raja Rao\nS/o K. Nagabhushnam   \nH.No.8-3-678/2, (8-3-678/2),\nYellareddiguda\nNear LIC Colony,\nHyderabad - 500 016. \n\n Sub:- APIDC - Recovery of over dues under Revenue Recovery Act from the Guarantor of M/s Rama Organics (P) Lte - Reg. \n Ref:- Your agreement of guarantee dt.17-8-1988. \n\nThe APIDC Limited has advanced a loan of Rs.56.80 lakhs to M/s. Rama Organics (P) Limited situated at Bollaram (V) Jinnaram (M), Medak District. While releasing the earlier guarantors you have undertaken guarantee on 17-8-1988 to the effect that if the principal debtor commits default in repayment of the loan, the Corporation will be entitled to recover the same from your persons and property both movable and immovable notwithstanding remedies which the Corporation may have against the Principal debtor. \n\nM/s. Rama Organics (P) Ltd has committed default in repayment of loan instalments. Hence the APSFC which has also financed the unit has seized it U/s.29 of SFCs Act and disposed off to recover the dues of Financial Institutions. After adjustment of Rs.50.00 lakhs sale proceeds received towards the share of APIDC the company is in arrears of following amounts to the APIDC.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-52", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "Principal               -       Rs.     59.69 lakhs\n        Interest                -       Rs.     71.45 lakhs\n                                        ---------------------\n        Total                   -       Rs.    131.14 lakhs\n                                        ---------------------\nThe Government of A.P., vide notification No.80 published in the A.P.Gazette No.28A dated 11-8-1988 have declared the loans and advances and other sums due to the APIDC to be recovered as arrears of land Revenue U/s.58 A of A.P. Revenue Recovery Act. The Corporation has decided to initiate action under R.R.Act against the guarantors for recovery of above dues. You are therefore hereby called up on to pay the above stated amount at an early date. \n\nYou are further informed that if you are disputing the correctness of the amount, you must state the reasons and the basis on which you are disputing the correctness of accounts. Further, if you wish to verify the accounts of the corporation you may do so within 15 days from the date of receipt of this notice. \n\nYou are hereby informed that if no reply is received within the above stipulated period, it will be deemed that you are not disputing the facts stated above and further action as per the rules will be taken for realization of dues.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-53", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "for A.P. INDUSTRIAL DEVELOPMENT CORPORATION LTD, Sd/- x x x EXECUTIVE DIRECTOR.\"     \nFrom a perusal of the above letter, it is clear that for the first time a demand was made against the petitioner and no time was prescribed for payment of the amount and straightaway the Corporation was inclined to initiate proceedings under the Revenue Recovery Act. \n21. To the above demand, the petitioner denied his liability by letter dated 20.5.1996. It would be appropriate to quote the letter, which reads thus:\n \" K. Raja Rao B.Tech(CPE) May, 20, 1996 To The Executive Director, A.P.Industrial Development Corporation Ltd., Parishram Bhavan, Basheerbagh, Hyderabad. \nSir, I have received your letter No.ED(T)RRD/RDL/466/96 dated 22-03-1996 on 22- 04-1996 at your office and I am herewith submitting my reply to your notices. \n\n1. The allegations made in your notice are distortion of facts. I have joined as a Director of M/s. Rama Organics Pvt., Ltd., in place of Dr.A.K.Chatterje. At the time of joining as Director in 1988 I have given a personal guarantee on 17-08-1988 to you. The Directorship of Rama Organics Pvt., Ltd., and surety ship are co-terminus.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-54", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "2. Long after the account became sticky the unit was auctioned by S.E.C under Section 29 during the end of 1993. Subsequently, you have sent a notice to Dr. A.K. Chatterjee on 29-07-1994 as a Guarantor for recovery of the balance amount and you have choses to release Dr. A.K. Chatterjee from the suretyship vide your Letter No.GM(LHA)/RoPL/APIDC/4826/94 dated 25-11-1994, for which the reasons are best known to you. Dr. A.K. Chatterjee was released on 25-11-1994 from the suretyship. On 16-10-1989 I have retired from the Directorship and relieved from my personal guarantees by the Board and the same was informed to you by my letter dated 16-04-1990 informing you that I am no longer concerned with the Directorship and suretyship by the M.s Rama Organics Pvt. Ltd.,. The Registrar of Companies was also informed. As already stated above I ceased to be a guarantor from 16-10-1989 itself. I have been writing letters to you to that effect, denying my liability. In my place Col. K.S. Rao (Retired) has been inducted as Director and he also executed documents as Surety in my place. Instead of pursuing the remedies against Col. K.S.Rao (Retired) you have chosen to issue notice to me. By virtue of being a Director, a person become surety. Once a person retires as Director he ceases to be surety. More over, as long as Dr. A.K. Chatterjee continued as Guarantor till he was released, the question of my self becoming guarantor does not arise i.e., till 25th November, 1994. According to your conduct I am nothing to", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-55", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "till 25th November, 1994. According to your conduct I am nothing to do with suretyship. Hence, it is not permissible under law to reply on the surety bond executed by me in August, 1988. It is nominal sham and un enforceable.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-56", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "3. You have vitiated the terms of the surety bonds executed by me. As the State Government undertaking established for the growth of Industries, you have to act in accordance with the terms of surety bond. \n\n4. You have kept myself in utter darkside by directly dealing with the company M/s Rama Organics Pvt. Ltd., quite prejudicial to my interest. \n\n5. Even assuming without admitting that I am still a guarantor to M/s. Rama Organics Pvt., Ltd., even after my retirement as director, your claim against myself is hopelessly time barred. Suffice it to say that the account of M/s Rama Organics Pvt. Ltd., has turned out to be sticky, irregular and out of order in 1988 itself. M/s Rama Organics Pvt. Ltd., has become a chronic defaulter in making payment to you in 1989 itself. Nothing prevented you to pursue against the guarantors in 1989 itself. All the while you have maintained stoic silence. Long after a period of six years, you have chosen to issue a notice calling upon to pay the outstanding dues even though you have recalled the loan on 28-03- 1990 itself. \n\n6. You have issued a notice on 28-03-1990 to M/s Rama Organics Pvt. Ltd., that Rs. 75,81,000/- was the outstanding dues as on 28-03-1990 and that you would be taking steps for recovery by way of sale under Section 29 of the State Financial Corporation Act, 1951. I am in no way liable to pay any amount to you. Your claim against me is untenable and not maintainable in Court of law.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-57", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "7. Except thrusting the company that you would take steps for recover of the amounts through your notice dated 28-03-1990 and another letter dated 28-05- 1992, you have neither taken steps under Section 29 of SFC Act, not filed any Civil Suit. \n\n8. Now in your notice dated 22-03-1996 you have chosen to say AP State Financial Corporation has sold to unit and Rs.50.00 lakhs has been paid to you. It is a violation of terms of survey bond that there is no whisper about the sale conducted by SFC in those notices. Now, for the first time you have chosen to say SFC sold the unit. \n\n9, Needless to state that having issued recall notice on 28-03-1990 and 28- 05-1992 you have chosen to threaten me after adjusting payment made by SFC. It Is a clear violation of law. Your notice is silent about your earlier sale notices. Hence, it is crystal clear that from 28-03-1990 you have not taken any steps. For the first time you have chosen to issue notice to me stating that I am a guarantor, the ealier notices issued to the Rama Organics Pvt., Ltd., and copy was marked to me.  \n10. I further state that invoking revenue recovery act is opposed to law you can not enforce a claim against me which is hopelessly time barred and un- enforceable. Unless and until the claim is proved and to be valid and to be intimate within three years from the date of recall of loan against the main borrowers namely M/s. Rama Organics Pvt., Ltd., you can't claim any amount by revoking revenue recovery Act. \n\n I hereby request you to withdraw the notice and advise desist from filing any claim either under the revenue recovery act or in any civil court.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-58", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "Yours faithfully, Sd/- xx xx K. Raja Rao. \n\n22. In his reply the petitioner has pointed out about the failure of the Corporation to take expeditious steps for recovery of the amounts pursuant to the letter dated 28.3.1990 and 28.5.1992 when the company was found to be irregular in payment. It was clearly pointed out in the reply that since no steps have been taken under the Revenue Recovery Act from 28.3.1990 when the liability was crystallized, the letter dated 22.3.1996 seeking to initiate the proceedings under the Revenue Recovery is without jurisdiction, the liability being time barred and unenforceable.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-59", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "Under the first deed of guarantee, though the Corporation has the option to proceed against the petitioner when the principal borrower has committed default as also to make a demand under the said deed of guarantee, it has not chosen to do so, but only proceeded against the borrower under section 29 of the SFC Act. On 22.5.1996 the Corporation addressed letter to the District Collector, Hyderabad to initiate action under the Revenue recovery Act and on 15.7.1996 the Mandal Revenue Officer, Golconda issued distraint warrant, but, it appears that no steps have been taken and again notice was given on 23.6.1998 to the petitioner for payment of Rs.135.33 lakhs and thereafter no steps appears to have been taken and finally the impugned notice dated 6.1.2000 was issued by the 2nd respondent. From the above, it is clear that though the Corporation issued notices to the principal debtor from time to time for sale of the Unit of the Company no concrete steps have been taken for realization of the debt due by sale of the Unit of the Company and it could realize the debts to the extent of Rs.61.00 lakhs only on 29.12.1993. Nothing prevented the Corporation to proceed against the guarantors for realization of the debt due simultaneously when the proceedings under section 29 SFC Act are taken up against the Company for sale of the Unit by issuing a demand for payment of the amount due. It failed to initiate the steps for realization of the debt from the guarantor within the period of limitation of three years ie from 28.3.1990 when the liability of the petitioner was crystallized. Even if we take the letter dated 28.5.1992 into consideration as the date when the debt was crystallized the demand made against the petitioner on 22.3.1996 is clearly time barred. Article 137 of the Limitation Act provides", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-60", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "is clearly time barred. Article 137 of the Limitation Act provides that any other application for which no period of limitation is provided elsewhere in the Act, it provides that the period of limitation begins to run when the right to apply accrues. The Supreme Court in MAHARASHTRA STATE FINANCIAL CORPORATION v. ASHOK K. AGARWAL AND OTHERS held that the liability of the sureties would crystallize when the proceedings under the State Financial Corporation Act would be initiated for sale of properties of the borrower company. Therefore, whether we take the date of crystallization of debt as 28.3.1990 or 28.5.1992 the letter of demand issued to the petitioner on 22.3.1996 is clearly beyond the period of limitation.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-61", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "23. It appears that subsequent to the notice dated 28.3.1990 no steps have been taken for recovery of the amount due by sale of the unit of the Company because again on 28.5.1992 another sale notice was issued for Rs.71,27,180/-. From this it is evident that some amount has been paid to the Company, but the respondents have not placed any material on record evidencing the same. Be that as it may, even assuming that there was some payment made subsequent to 28.3.1990 to the principal debtor and the latter notice dated 28.3.1992 can be treated as the date when the liability of the guarantor was crystallized, even then the notice dated 22.3.1996 seeking to recover the amount due from the petitioner is beyond the period of limitation of three years as no steps have been taken for recovery of the amount from the petitioner within the period of limitation. Right to sue or to initiate proceedings under the Revenue Recovery Act against the guarantor would be alive for a period of three years from 28.3.1990 i.e. upto 28.3.1993 or 28.3.1995 if we take 28.3.1992 as the date when the liability of the petitioner had crystallized. In any event, the notice dated 22.3.1996 seeking to recover the amount from the petitioner under the provisions of the Revenue Recovery Act is beyond the period of limitation and hence cannot be sustained. Even if the letter dated 28.3.1990 is treated as a demand against the petitioner even then the proceedings sought to be initiated by the Collector on 4.6.1996 are beyond the period of limitation.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-62", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "24. Further, it is only subsequent to 28.5.1992, the unit of the Company was seized on 9.7.1993 and unit was sold out on 29.12.1993. At least after this the respondents should have diligent enough and taken appropriate steps for recovery of the amount from the petitioner, but had slept over the matter and had chosen to issue notice under the Revenue Recovery Act only on 22.3.1996 by which time the right of the Corporation to sue or to initiate proceedings under the Revenue Recovery Act had extinguished. It is only subsequent to 22.3.1996, the letter dated 22.5.1996 was addressed to the District Collector, Hyderrabad to initiate proceedings under the Revenue Recovery Act and therefore the Collector on 4.6.1996 addressed the Mandal Revenue Officer, Golconda to proceed with the matter by attaching the properties of the petitioner and subsequently distraint order has been issued by the Mandal Revenue Officer on 15.7.1996 and after a lapse of more than three years the impugned notice dated 6.1.2000 was issued. All these facts would clearly go to show that as on 22.3.1996 the proceedings sought to be initiated against the practitioner under the Revenue Recovery Act are beyond the period of limitation as no amount of debt legally recoverable from the petitioner is alive as on that date and hence all the subsequent proceedings initiated under the Revenue Recovery Act are void ab initio and cannot be sustained in law. The amount sought to be recovered from the petitioner as on 22.3.1996 is a time barred debt and is unenforceable under the provisions of the Revenue Recovery Act, therefore, the impugned notice is without jurisdiction. The contention of the respondent that since recovery was made on 27.12.1998 by sale of the unit of the Company and since by that time the recovery", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-63", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "by sale of the unit of the Company and since by that time the recovery proceedings were already initiated by issuing a distraint warrant on 15.7.12996, the notice dated 2.1.2000 is within the period of limitation has no merit. In the light of the law laid down by the Supreme Court, as analyzed above, since the liability of the petitioner was crystallized on 28.3.1990, it is not permissible to hold that the proceedings initiated by the Mandal Revenue Officer, Golconda on 4.6.1996 are within the period of limitation.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-64", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "25. The learned counsel for the Corporation has not placed before us any provision which empowered the Corporation for enlargement of a claim which was legally recoverable but was ceased to be legally recoverable on the date when recovery proceedings are undertaken. The Supreme Court in STATE OF KERALA v. V.R. KALLIYANIKUTT categorically held that all claims which are legally recoverable and are not time-barred on the date when the process for recovery of the amounts by the sale of movable or immovable properties as land revenue was taken up by the District Collector can be recovered under the Revenue Recovery Act. In the instant case, the process for recovery of the amounts by the sale of immovable properties as land revenue was initiated by the Corporation on 22.5.1996 by addressing a letter to the District Collector and the Collector in turn taken up the proceedings by directing the MRO, Golconda to initiate proceedings under the Revenue Recovery Act by letter dated 4.6.1996. Since the debt sought to be recovered by the Corporation is a time barred debt as on 22.5.1996 or 4.6.1996 the proceedings taken up under Section 52-A of the Land Revenue Recovery Act cannot be sustained, consequently the distraint warrant dated 15.7.1996 and the impugned notice dated 6.1.2000 cannot also be sustained.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-65", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "26. The contention that the proceedings under the Revenue Recovery Act were initiated by reason of the letter dated 4.6.1996 of the District Collector and distraint order dated 15.7.1996 which culminated into the notice dated 6.1.2000 and as such the proceedings are within limitation has no merit. The Supreme Court held that the liability of the sureties would crystallize when the proceedings under the SFC Act would be initiated for sale of properties of the borrower company. As already noticed, in the instant case, the proceedings for the sale of the unit of the borrower company were initiated on 28.3.1990 on which date the liability has been crystallized whereas the proceedings by the Collector under the Revenue Recovery Act were initiated on 4.6.1996. Therefore, when the initiation of the proceedings on 4.6.1996 are itself are barred by limitation, the impugned notice dated 6.1.2000 cannot be sustained. It appears that the authorities of the Corporation have not properly pursued for recovery of the debt and allowed the debt to be time barred. The learned single Judge has not taken into consideration the decisions of the Supreme Court and applied to the case. It may be that the proceedings under Section 29 of SFC Act have been commenced for realization of the dues by sale of mortgaged properties of the principal debtor within the period of limitation, but the learned single Judge failed to note that the proceedings initiated under the Revenue Recovery by reason of the letter dated 22.3.1996 against the petitioner were time barred and without jurisdiction. The liability of the guarantor having been crystallized on 28.3.1990, proceedings under the Revenue Recovery ought to have been commenced within the period of three years therefrom. Therefore, the finding of the learned single Judge that the proceedings for realization of the debt having been commenced for realization of the dues by sale of mortgaged", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-66", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "proceedings for realization of the debt having been commenced for realization of the dues by sale of mortgaged properties within limitation, the further proceedings for realization of the balance amount by taking recourse to the Revenue Recovery Act is continuation of the process of recovery proceedings initiated earlier is not correct. Recovery proceedings from the principal borrower initiated under Section 29 of the SFC Act and the proceedings under the Revenue Recovery Act from the guarantor are different and would commence on different dates. The Supreme Court held that the liability of the surety would crystallize when the proceedings under the SFC Act would be initiated for sale of properties of the borrower. It is not that the Corporation is prevented from proceeding against the petitioner simultaneously or independently by initiating the proceedings under the Revenue Recovery Act or by filing a civil suit within the period of limitation. Having failed to do so, the Corporation cannot proceed under the Revenue Recovery Act for recovery of a time barred debt which is legally unenforceable.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-67", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "27. The contention of the Corporation that no period of limitation has been prescribed for recovery of the dues of the Corporation for instituting the proceedings under the Revenue Recovery Act has also no merit. Section 52-A of the Revenue Recovery Act only equates the debts of the banks, Governmental corporations, as stated above, as akin to land revenue and are recoverable on par with land revenue. Thus, the recovery of land revenue as well as the dues falling under Section 52-A of the Revenue Recovery Act stand on the same footing and can be recovered only in accordance with the provisions of the Limitation Act, as has already been held by the Supreme Court in STATE OF KERALA v. V.R. KALLIYANIKUTTY.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-68", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "28. Another contention advanced on behalf of the respondent- Corporation is that as on 22.3.1996 the debt recoverable against the principal debtor is alive, therefore, the proceedings initiated against the petitioner under Revenue Recovery Act are in continuation of the same and thus within the period of limitation. There is no merit in the contention. It may be that the debt against the principal debtor may be alive as the same were initiated against him within the period of limitation, but since the respondent failed to initiate the proceedings against the guarantor within the period of limitation the liability against him having been crystallized on 28.3.1990, the proceedings initiated against the petitioner under the Revenue Recovery Act are barred by limitation and without jurisdiction. As already stated the Supreme Court in MAHARASHTRA STATE FINANCIAL CORPORATION v. ASHOK K. AGARWAL AND OTHERS categorically held that the liability of guarantor would crystallize when the proceedings under the SFC Act are initiated for sale of the properties of the borrower. The properties of the borrower herein were sought to be proceeded for sale under Section 29 of the SFC Act on 28.3.1990. Therefore, the limitation against the guarantor start to run from 28.3.1990 and would expire by 28.3.1993, hence the proceedings sought to be initiated under the Revenue Recovery Act by letter dated 22.3.1996 of the respondent is without jurisdiction.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-69", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "29. In GODAVARI PLYWOODS LTD. HYDERABAD v. UNION OF INDIA on which reliance has been placed by the learned counsel for the respondent, Section 11-B of the Central Excise and Salt Act which was introduced by Amendment Act 25 of 1978 providing for refund of excise fell for consideration. Under the amended Section 11-B of the said Act refund of excise duty can be sought for within a period of six months. The question is whether High Court can grant refund beyond six months and upto three years as per the limitation provided under the Limitation Act. This Court on an analysis of the settled position of law held that the technical rules of the procedure like limitation though has no application in its direct sense, the prescription of limitation for suit provided under the Limitation Act, 1963 has been adopted as sound principle as analogy to grant relief under Article 226. The extent and manner of interference is for the Court to decide depending on the facts and circumstances of each case and held that no relief can be granted contrary to the amended law. In our view this decision has no application to the facts on hand. The question that arose for consideration herein is whether the proceedings initiated under the Revenue Recovery Act are within the period of limitation, as such, the question of maintainability does not arise. \n\n In the light of the discussion made above, Point No.1 is answered in the affirmative.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-70", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "30. Point No.2: The petitioner resigned as Director of the Company on 6.10.1989 and requested to relieve him immediately and also requested to take steps to relieve him from all his personal guarantee/undertakings provided to various financial institutions. In the Board meeting of the Company held on 16.10.1989 the request of the petitioner was accepted and a resolution was passed by the Board that he will be relieved from all guarantees/undertakings furnished to APIDC, IDBI, SFC, Bankers subject to the approval of the financial institutions. The Managing Director was authorized to take necessary steps to relieve him immediately from all his personal guarantees/undertakings with all institutions by providing suitable guarantees undertakings to them and the Executive Director Sri A. Nageswara Rao was authorized to file Form No.32 before the Registrar of Companies. In the place of the petitioner one Lt. Col (Retd.) K.S. Rao was inducted as a director of the Company and to furnish all the guarantees /undertakings to the financial institutions, Bankers which were earlier furnished by the petitioner herein and the Executive director was authorized to file Form kNo.32 before the Registrar of Companies. A resolution was also passed for transfer of shares valuing Rs.4,80,000/- from the petitioner to other directors and the newly inducted director K.S.Rao subject to the approval of APIDC/IDBI. But, it appears that no action has been taken by the Corporation to relieve the petitioner from all his personal guarantees/undertakings given by him to the financial institutions/bankers. No material has been placed on record to that effect. No material has also been placed on record whether any guarantee deeds were executed by the newly inducted director Lt. Col. K.S. Rao like the petitioner herein. In the absence of the same, it would be difficult to conclude that the petitioner", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-71", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "the petitioner herein. In the absence of the same, it would be difficult to conclude that the petitioner has been relieved of his liability to the Corporation basing on the resolution of the Board of the Company. It may, however, be noted that the resolution of the Board of Directors is not final as the resolution of the Company to relieve the petitioner from his liability is subject to the approval of the financial institutions.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-72", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "31. However, by letter dated 25.11.1994, the Corporation relieved Dr.A.K. Chatterjee in whose place the petitioner was inducted as Director earlier from the guarantee obligations executed by him in favour of the Corporation for the loan extended to the Company on the ground that the petitioner has executed his personal guarantee in favour of the Corporation for the loans extended to M/s Rama Organics Pvt. Ltd. Interestingly, such a letter relieving the petitioner from his liability to the Corporation was not issued by the Corporation though in fact a resolution was passed by the Board of Directors in their meeting held on 16.10.1989 to relieve him from the liability. Probably, this may be because Lt. Col. K.S. Rao who was inducted as director in place of the petitioner might have not furnished any deed of guarantee in favour of the Corporation. As already stated no material has been placed on record by the petitioner to show that in fact Sri K.S. Rao has furnished deed of guarantee but the Corporation has failed to relieve him of the liability. So long as the petitioner is not relieved of his personal liability to the Corporation, the petitioner cannot be said to be absolved of his liability to the Corporation. It is not for this Court to examine for what reasons the Company has not obtained guarantee deeds from the newly inducted director Lt. Col. K.S. Rao though such deed of guarantees were obtained from the petitioner when he was inducted as director in the place of Dr.A.K. Chatterjee. If he had any grievance in this regard, he should have taken appropriate proceedings before the appropriate forum to relieve him from his personal guarantee given to the Corporation. Having not done so, the petitioner cannot be permitted to contend that in view of induction of Col.K.S.Rao in his place and on his resignation having been accepted by the Board of directors by the resolution dated 16.101989 he is relieved of his liability to the Corporation.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-73", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "directors by the resolution dated 16.101989 he is relieved of his liability to the Corporation. Similarly, the contention of the petitioner that till Dr. A.K. Chatterjee is relieved on 25.11.1994 he is not liable for payment of the amount due cannot also be accepted. Once the petitioner has executed guarantee deeds on his induction in place of Dr. Chatterjee and holding the field, it is only the petitioner who is liable for the amount till he is relieved of his liability and it cannot be said that the guarantee deeds are deemed to have been revoked consequent on the acceptance of the resignation. Further, no action has been taken by the petitioner after Dr.A.K. Chatterjee was relieved of his liability. If the petitioner really believes that Dr.A.K. Chatterjee is also liable till he was relieved of the liability he ought to have taken appropriate steps claiming that relieving of Dr.A.K. Chatteriee is not in accordance with law or the terms and conditions of the guarantee or any other provision of law.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-74", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "32. The contention of the petitioner that since the guarantee was furnished by him as a guarantor the same is co-terminus with the directorship has also no merit. The guarantee being personal in nature, his liability to pay the amount continues notwithstanding with the termination of his directorship with the Company. Further, there is nothing in the deed of guarantee that though it was executed in the personal capacity of the petitioner the same would stand terminated on the termination or resignation of the petitioner as director of the Company.  \n We answer the point No.2 accordingly against the petitioner.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-75", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "33. Point No.3: We have earlier taken note that this Court in B.C. MULAJKAR v. STATE OF ANDRA PRADESH held that the provisions of the Revenue Recovery have to be interpreted in such a manner so as to accord with the principles of natural justice and that the party sought to be proceeded against should at least have the minimum safeguard of having an opportunity to know the basis and the material on which the liability is sought to be imposed upon and to rebut the same by placing necessary material in that behalf. As rightly pointed out by the learned counsel for the petitioner none of the letters sent to the petitioner indicated what are the dates on which the Company has committed default in payment of the amount due to the Corporation, on what dates payments were made, what was the amount due towards principal and interest from to time to time etc. The various letters placed on record show different amounts and it is not clear from those on what dates the Company paid the amounts to the Corporation. The letter dated 22.3.1996 has merely indicated that an amount of Rs.59.69 lakhs is due towards principal and Rs.71.45 lakhs towards interest totaling to Rs.131.14. There are no details as to how the said amounts were arrived at. Therefore, there was no proper determination of the liability of the petitioner. The learned single Judge in his order referred to the letter dated 22.3.1996 of the Corporation permitting the petitioner to verify the accounts of the Corporation but the petitioner has failed to do so. In our view, mere verification of the accounts of the Corporation would not be enough to arrive at the liability. The Corporation was under an obligation to determine the liability of the petitioner duly stating the amounts paid by the Company towards principal and interest from time to time and the balance due as on a particular date. The Corporation has not furnished such statement of details in any of the letters communicated to the petitioner. In the", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-76", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "Corporation has not furnished such statement of details in any of the letters communicated to the petitioner. In the absence of the same, it would be difficult for the petitioner to know exactly what the amount due was on a particular date and whether the amount sought to be recovered was legally recoverable date and not a time barred debt. Even the proceedings initiated under the Revenue Recovery Act have not indicated the details determining the liability of the petitioner. Therefore, no opportunity was afforded to the petitioner to know the basis and the material on which the liability is sought to be imposed upon him and to rebut the same by placing necessary material in that behalf before the concerned authority. We are, therefore, of the view that there was no proper determination of the liability of the petitioner to the Corporation and he was deprived of an opportunity to rebut his liability in full and to what extent the Corporation is justified in making him liable for the amount unpaid by the Company by virtue of the deed of guarantees executed by him. Therefore, this point is answered in favour of the petitioner.", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "08eb8b47b48e-77", "Titles": "K. Raja Rao vs A.P. Industrial Development ... on 4 January, 2013", "text": "33. Though we have held under Point No.2 that the petitioner is not relieved of his liability to the Corporation, in view of our finding on Point No.1 that there was no legally enforceable debt which can be recovered from the petitioner as on the date notice was issued to the petitioner on 22.3.1996 or even on 4.6.1996 when the proceedings were initiated by the District Collector under the Revenue Recovery Act and the finding on Point No.3 that there was no proper determination of liability of the petitioner to the Corporation, the Writ Petition is liable to be allowed and the proceedings initiated under the Revenue Recovery Act are liable to be set aside as without jurisdiction. \n\n34. In the result, the Writ Appeal is allowed. The order of the learned single Judge is set aside. Consequently, the Writ Petition is allowed. The distraint warrant dated 15.7.1996 of the Mandal Revenue Officer, Golconda and the consequential notice dated 6.1.2000 are set aside. There shall be no order as to costs. \n\nPINAKI CHANDRA GHOSE, CJ VILAS V. AFZULPURKAR, J January 4th , 2013", "source": "https://indiankanoon.org/doc/88660185/"}
+{"id": "45a88c1410c0-0", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "JUDGMENT Satyanarayana Raju, J.   \n (1)     This appeal is against the judgement and decree of the court of the Subordinate Judge, Amalapuram, in O. S. No. 44 of 1953, and  relates to the succession to the immovable properties of late Kesapragada Bhaskararao, a Brahmin Karnam, who died on the 29th November,  1903, without issue, but leaving a widow. \n\n \n\n      (2)  The suit was instituted on the 15th  April 1953, by Voleti Venkata Ramarao, the adopted son of the step-sister of  Bhaskara Rao for the recovery of possession of the properties mentioned in the plaint A and B schedules and for future profits. \n\n \n\n      (3)  The following  genealogical table will be useful in explaining the relationship of the parties to this litigation: \n  KESAPRAGADE VENKANNA\n\n-------------------------------------------------------------------------------------------------------------\n\n                             Perraju\n                                                                       China Subbarayudu\n\n              -------------------------------------                  -----------------------------------------------\n\n    Venkayya                       Veeraju=Mahalakshma        Ramayya      Perraju      Gopalam   Subbarao\n\n                                                             (died)\n                          (died)                              (died)        (died)\n\n            ----------------------------------\n\n    Vedamma (1st wife)        Kantamma (2nd wife) (died in 1940)\n\n     Kamamma (wife of          Bhaskararao (1st  male-holder)\n\n           China  Venkatarao              (died on 29-11-1903) Seshamma (died on 2-10-1952)\n\n            died in 1945)", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-1", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "died in 1945)\n\n    Venkataramarao (Plff).   Rajeswararao (alleged adoped son) (died in 1950)\n\n                                                Bhaskararao (alleged adopted son) (1st defendant).  \n\n \n\n      The case of the contesting defendants  is that pursuant to an authority conferred by the late Bhaskararao in a document executed  by him on the day of his death,  Seshamma, his widow, adopted one Rajeswararao, her sister's son.  In or about May, 1904.  Rajeswararao died in 1950.  It is said that  adopted the present 1st defendant.  Seshamma died on the 2nd October, 1952. \n\n \n\n      (4)  The plaintiff contended that the late Bhaskara Rao had made no will; that Seshamma did not in fact, adopt Rajeswararao; and that even if the adoption was true, it was invalid inasmuch as Seshamma had not attained the age of discretion on the date of the alleged adoption.           \n\n \n\n      (5)  After a consideration of the voluminous oral and documentary evidence adduced by the parties, the trial court found against the plaintiff on all these points and dismissed the suit.  In this appeal the plaintiff challenges the correctness of the findings reached by the lower court. \n\n \n\n       (6)  The substantial questions arising for determination in this appeal are:- \n\n   \n\n      1.  Whether the will is true, valid and binding on the plaintiff? \n\n \n\n      2.  Whether the adoption of the late Rajeswararao by Seshamma is true and whether the said adoption is valid?", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-2", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "We will now consider these questions seriatim.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-3", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(7) The first of the questions is whether the will, said to have been executed on the 29th November, 1903, by Bhaskararao is or is not a genning will. It provisions are substantially these: After his death, his widow, Seshamma, should adopt a boy of her choice whenever desired by her, for the perpetuation of his family line and for enjoying as his Karta after his lifetime all his movable and immovable properties. By the second clause of the will it was provided that in case any misunderstandings arose between his wife, the boy to be adopted by his and his mother, all the movable and immovable properties, lands and the house possessed by him, should be divided into four equal shares by metes and bounds and three such shares should be enjoyed by his wife and the adopted son and the fourth share by his mother freely throughout her lifetime as she pleased and after her lilfetime, the share enjoyed by her should pass either to his adopted son, or to his wife, if his wife had not adopted anybody by that time Clause 3 of the will provides that out of his property four acres of land should be separated and given to his sister Kamappa, after his lifetime. Clause 4 provided that his wife, Seshamma should continue to pay the maintenance amounts to his junior maternal aunt and father's step mother as was being done by him till then. Clause 5 provided for the payment of taxes by the respective individuals on their respective lands. \n (8) Clause 6 reads:", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-4", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(8) Clause 6 reads: \n \"It is also provided that the outstandings due by me shall be discharged form the said immovable property belonging to me. It is provided that in addition to the said four acres to be given out of their inam land to my sister, Voleti Kamappa, as mentioned in the said third paragraph, another four acres of Inam land shall be added and given so that she shall be in enjoyment of Ac. 8.00 cents (either acres) of 'Dampa' Inam land, in all as she pleases and that she will get the same separated after my lifetime. The said Kamappa hereself shall pay the taxes payable on this to the Government, get it entered in names and be in enjoyment of it. Till my wife attains majority, my mother will be her guardian. All the above terms shall take effect after my lifetime\". \n (9) The document was signed by Bhaskararao and was attested by eleven witnesses, five of whom belonged to the Kesapragada family. The scribe of the document was Vakkalanka Bhaskararao. The will was presented for registration on the 4th December 1903, by Kesapragada Kantamma, the mother of the deceased and guardian of Seshamma. It was published in the District Gazette and in the village to the effect that if there were any persons objecting to the registration of the will, they should appear on the date of the enquiry with evidence and documents.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-5", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(10) Kesaparagada China Subbarayudu, the paternal grand uncle of Bjaskararao, filed a petition on the 15th January 1904, contending the Bhaskararao did not execute the will prior to his death. The registration officer duly made an enquiry at which the presentant and the objector were represented by their respective counsel. Seven out of the 11 attesting witnesses and the scribe were examined at the enquiry. Five attesting witnesses had seen the testator sign the document, and three of them stated at the enquiry by the registration officer that they were asked by the testator to attest the will. China Subbarayudu, who objected to the registration of the will, cross-examined the witnesses. Though several adjourments were granted to him to produce his witnesses, he eventually did not produce anay evidence. On a consideration of the evidence adduced before him and all the circumstances of the case, the registration officer felt satisfied that the testator executed the will while he was in a sound disposing state of mind. He made the following endorsement on the document: (1) that he was satisfied that in accordance with the evidence of the witnesses who had signed the document, that the testator executed the will; (2) that the testator died subsequently; (3) that the person who presented the will for registration was empowered to present it as per S. 40 of the Registration Act. \n (11) Pursuant to the authority conferred on her by this will, Seshamma adopted Rajeswararao, her sister's son, in or about May 1904. We shall presently consider the evidence bearing on the factum of adoption; but before doing so, it is necessary to deal with the evidence bearing on the truth of the will.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-6", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(12) We have already mentioned the fact that Bhaskararao was during his lifetime holding the office of karnam of the village of Annampalli. After his adoption, Rajeswararao was registered as the office-holder. China Subbarayudu preferred objections to the appointment of Rajeswararao as the karanm before the Sub-Collector, Godavari. The Sub-Collector rejected the objections of China Subbarayudu and confirmed the appointment of Rajeswararao. On the 7th November, 1906, China Subbarayudu as father and guardian of his minor son, Venkata Surya Gopalam filed a summary suit before the Sub-Collector, Godavari for setting aside the said order of appointment. \n While the summary suit was pending, China Subbarayudu and his undivided sons, Ramayya, Perraju, Venkata Surya Gopala, and Venkata Subbarao executed a release deed Ex. B.6 dated the 25th March 1907, in favour of Rajeswararao and his adopitve mother, Seshamma, represented by their guardian, Kantamma. Under this registered deed of release, China Subbarayudu and his sons gave up their contention that the will was not genuine and agreed that the adoption of Rajeswararao made by Seshamma was valid. Rajeswararao and his adoptive mother, Seshamma, represented by their guardian, Kantamma, on the same day executed A.-7 conveying absolutely in favour of China Subbarayudu and his sons land of an extent of Ac. 16-29 cents described in the schedule appended to the deed.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-7", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(13) It may be mentioned here that under the will executed by Bhaskararao, an extent of 8 acres of wet land was bequeathed to the plaintiff's adoptive mother, Kamappa executed a deed of settlement, Ex. B. 3 in favour of the plaintiff's three sons and daughter, three of whom, being minors, were represented by theri father, the plaintiff. Under this document, Kamappa settled the vested remainder in an extent of Ac. 12-50 cents, including the 8 acres of land bequeathed to her by her step brother under the disputed will. \n (14) All the attesting witnesses and the seribe of the will are now dead. The defendants, however, examined Mamidipalli Lakshminarayana Charanulu as D. W. 2, who, was 76 years old at the time he gave evidence. One of the attestors of the will, Mamidipalli Ramayya, was his paternal uncle. He identified Kantamma before the Registrar at the time of registration. He stated that he was present when the will was executed by the late Bhaskararao and that the executant was in a sound disposing state of mind at the time. D. W. 3 is another witness examined by the contesting defendants. He was also 76 years old on the date of his deposition. He stated that he and Bhaskararao were classmates in the village school, that Bhaskararao executed a will, that his father attested the will and that at the time of its registration, Bhaskararao was in a sound state of mind. While according to D. W. 2, the will was written at about 4 or 5 p.m., D. W. 3 stated that it was executed at about 10 in the morning.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-8", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(15) It is contended by Mr. Sankara Sastri that the evidence of D. Ws. 2 and 3 should not have been accepted, that both of them were interested--D. W. 2 being the brother of the 15th defendant and D. W. 3 being a defendant (73rd defendant ) -- and that both of them had not attested the will. It is stated that there are material discreparcies and gross divergence between their versions. The discrepancies are of an immaterial character which might be ascribed to the lapse of memory on the part of those witnesses. They were giving evidence after the lapse of over half a century. The fact remains that D. W. 2 was aged about 27 years on the date of the will and he played a prominent part in the registration of the document. D. Ws. 2nd 3 gave straightforward evidence and the learned trial judge has no hesitation in accepting their testimony.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-9", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(16) Learned counsel for the plaintiff relied upon the non-production of the will as a strong suspicious circumstance against its truth. It was also urged that there being no proof that the original had been destroyed or lost, secondary evidence of its contents could not be adduced. It may be remembered that Ex. B. 9, the registration copy of the will, was obtained as early as 14th December 1906, though the other certified copy, Ex. B. 1, was obtained in 1954. We find that Ex. B. 9 was marked by consent. Assuming that it is open to the plaintiff to raise this objection, even though the document was marked by consent, we have the evidence of D. W. 2 who stated that the original will was lost even by the time of the adoption. It may be noted that the challenge about the due execution of the will is made after the death of Rajeswararao and his adoptive mother Seshamma. Kanthamma is no more. Therefore, all the persons who were connected with the document are no longer available. The 1st defendant is a minor. The challenge from the reversioner, Subbarayudu, was settled in 1907 by the execution of Ex. B. 6, and Ex. A-7, its counterpart, and possibly there was no further apprehension that the will would be assailed at a further date It is, however, urged that there is a recital in Ex. A-11, dated 17th November, 1911, that all the records were handed over by Kantamma to her daughter-in-law; but it is worthy of note that there is no specific mention of the original will having been delivered to Seshamma. There is credible evidence that the original was lost. In the circumstances, we are of opinion that it was within the competence of the trial Judge to receive Ex. B. 9", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-10", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "of opinion that it was within the competence of the trial Judge to receive Ex. B. 9 in evidence. We may also observe that there was no motive in withholding the original of the will.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-11", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(17) It was then contended that the 1st defendant ought to have produced in evidence the depositions of those attestors and the scribe of the will who were examined before the registration officer. \n (18) Under Sec. 40(1), the testator, or after his death any person claiming as executor or otherwise under a will may present it to any Registrar or Sub-Registrar for registration. Sec. 41(1) provides that a will or an authority to adopt, presented for registration by the testator or donor, may be registered in the same manner as any other document. Under sub-s. 2 of S. 41, a will or authority to adopt presented for registration by any other person entitled to present it shall be registered if the registering officer is satisfied (a) that the will or authority was executed by the testator or donor as the case may be; (b) that the testator or donor is dead; and (c) that the person presenting the will or authority is under Sec. 40, entitled to present the same.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-12", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(19) As already noted, the endorsement on Ex. B-1 made by the registration officer is in the terms of Sec. 40(2). Under Sec. 60, the certificate of registration is to be endorsed after the provisions of Secs. 34, 35, 58 and 59 have been complied with. Sub-s. (2) of Sec. 60 provides that such certificate shall, and shall then be admissible for the purpose of proving that the document has been duly registered in the manner provided by the Act, and that the facts mentioned in the endorsements referred to in Sec.59 have occurred as therein mentioned. The fact that a document has endorsed on it a certificate of registration is prima-facie evidence that the requirements of the Act have been complied with, and after such endorsement, the burden of proving any act or omission which would invalidate the registration rests on the person who challenges the registration. while it is, no doubt, true that mere registration is not in itself proof of the due execution of a document, the certificate endorsed by the registration officer on the document is admissible to prove that the executant was of sound mind.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-13", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(20) There is, as a matter of law, a presumption that the registration proceedings are regular and are honestly carried out. As pointed out by their Lordships of the Privy Council in Munnalal v. Mt. Kashibai, AIR 1947 PC 15 a party setting up a will is required to prove that the testator was of sound disposing mind when he made his will but, in the absence of any evidence as to the state of the testator's mind, proof that he had executed a will rational in character in the presence of witnesses must lead to a presumption that he had was of sound mind and understood what he was about. This presumption can be justified under the express provisions of Sec. 90, since a will cannot be said to be duly executed by a person who was not competent to execute it; and the presumption can be fortified under the more general provisions of Sec. 114, since it is likely that a man who performs a solemn and rational act in the presence of witnesses is sane and understands what he is about. \n (21) There is no evidence whatsover that Bhaskararao was not in a perfectly normal state. The contention that there is no presumption that the testator, when he made the will, was of sound disposing mind, if accepted, would render it impossible, in most cases, to prove ancient documents. \n (22) It is then urged that while Bhaskararao normally signed his name along with his surname, his purported signature in the will does not contain the surname. This point was specifically raised before the registration officer almost immediately after the execution of the document. Letters were filed by the mother of the testator before the Sub- registrar which did not contain Bhaskararao's signature with the surname and the Sub Register was satisfied that Bhaskararao was in habit of signing his name without the surname.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-14", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(23) It is then said that a will is a formal document and the surname would not normally be omitted. for from this being a suspicious circumstance, it invests the document with an impress of truth because if the document had been fabricated, the persons responsible would have certainly seen to it that the signature bore the surname as well. \n (24) The further comment made is that China Subbarayudu was not invited to attest the will. From a narration of the facts already made, it is clear that China Subbarayudu even if he were invited would not have attested the will because it would have adversely affected his interests. Subbarayudu not having been invited to attest the will is a most natural circumstance.  \n (25) We may state that the mother-in-law Kantamma, a propounded the will whereunder her daughter-in-law was authroised to adopt. This is an important circumstance bearing on the genuineness of the will. The dispositions under the will are reasonable, natural and proper in their terms. The testator provided for the continuance of the maintenance of the persons who were till then being maintained by him. He provided that his mother should have a life interest in a 1/4th of his sestet. What is more, the testator gave 8 acres to his stepsister the adoptive mother of the plaintiff. \n (26) It has been pointed out by the Privy Council in Jagrani Kunwar v. Durga Prasad ILR 36 All 93 (PC) that in the case of a will reasonable, natural and proper in its terms, it is not in accordance with sound rules of construction to apply to it those canons which demand a rigorous scrutiny of documents of which, the opposite can be said, namely, that they are unnatural, unreasonable or tinged with impropriety.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-15", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(27) Ex facie the will was duly executed and property attested. The agnatic relations of Bhaskararao agreed to the will, and five of his blood relations actually attested it. The execution of this Will is not only not improbable but also probable. As has been pointed out by Lord Watson in Chotey Narain Singh v. Ratan Koer, ILR 22 Cal 519 (PC), in order to prevail against such evidence as has been adduced in the case, an improbability must be clear and cogent and it must approach very nearly to, if does not altogether, constitute, an impossibility. \n (28) On a consideration of the evidence and the material circumstances of the case, we are satisfied that the will was duly executed by Bhaskararao when he was in a sound disposing state of mind and that it is valid and binding.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-16", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(29) The next of the questions which arises for decision is with regard to the factum and valldity of the adoption of Rajeswararao. It is difficult to contend that no adoption was in fact made. It was an adoption perfectly suitable in all respects and it was acted upon for a long period of nearly fifty years. When there is lapse of such a long period of time between the adoption and its being questioned. That apart, we have fortunately in this case the evidence of a witness who says that he saw the performance of the ceremony of adoption. The witness examined in support of the factum of adoption is D. W. 2. The age of this witness is given as 76 years. He is a resident of the village of Annampalli where the parties live. At the material time he lived in a house of Bhasakararao. He is a purohit of the family and well-versed in the Vedas. He stated that he officiated at the time of the adoption of Rajesararao which, according to him, was performed in the month of Vysyakah in the year Krodhi. He spoke to the fact of the father of the boy having given him in adoption and to Seshamma having received the boy, and he also stated that the ceremony of Dattahomam was duly performed. The testimony of this witness was unreservedly accepted by the loower court and we think, rightly.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-17", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "Apart from the evidence of this witness, there is the fact that the adoption of Bhaskararao was acquiesced in and recognised for a number of years by Seshamma who made the adoption. There is also long course of recognition on the part of persons who would be expected to know the fact and who are best acquainted with the circumstances. All this gives rise to the inference that the conditions relating to the adoption were fulfilled. We are in agreement with the conclusion reached by the court below that the adoption was in fact made. \n (30) The fact that there was an adoption and that the requisite ceremonies were performed having been found in the affirmative, we will now address ourselves to the question as to the validity of the adoption. The ground on which the validity of the adoption has been sought to be attacked is that at the time of the adoption, Seshamma, the widow of Bhaskararao, was only about 10 or 11 years old, and, therefore, not capable of forming a proper judgement about the act of adoption with regard to her own interests and the estate. On the evidence adduced before him, the learned trail judge has come to the conclusion that Seshamma was at the time of the adoption about 14 years of age and was capable of forming a proper judgement about the act of adoption.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-18", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(31) We have no precise evidence as to the age of Seshamma at the time of the adoption. In Ex. A-2, an extract from the register of deaths, the date of Seshamma death is shown as the 2nd October, 1952, and her age then as 62 years. If this was her correct age in 1952, she should have been born in the year 1890, which means that she was aged about 14 years, at the time of the adoption, which was in May 1904. The plaintiff, however, relied upon certain documents, to which a reference may now be made. In Ex. A-7, dated 25th March, 1907, which is a registration extract of the conveyance executed by Rajeswararao and his adoptive mother, Seshamma, in favour of Chinna Subbarayudu and his undivided sons, both Rajeswararao and Sehsamma were described as minors, represented by their guardian Kantamma, mother of Bhaskararao. Ex. B-5, dated 2nd May, 1907, which is a deed of mortgage, contains a similar description .", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-19", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "In Ex. B-110, a deed of sale dated 25th April 1909, the vendors, Rajeswararao and his adoptive mother Seshamma, were both shown as minors represented by guardian, Kantamma, mother of Bhaskararao. This description of Rajeswararao and Seshamma, both as minors by their guardian Kantamma, is found in Ex. B-7, dated 1st November, 1911; Ex. B-22 dated 15th November, 1911; Ex.A-11 the release deed dated 17th November 1911; as also in the sale deed, Ex. A-12, of the same date. We may, however, note that a contrary description appears from Ex. B-138, which is a registered lease deed, dated 9th August 1910. This was executed by Seshamma as the guardian of her minor adopted son, Rajeswararao. If the recital in this document is to be accepted as correct, she was a major, that is, she must have completed the age of 18 years even in 1910; whereas the other documents, already referred to, show her as a minor even in 1911. In the plaint the age of Seshamma at about the time of the adoption was given as 10 years; and in the written statements, she was shown as being 15 to 16 years of age at the time of the adoption.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-20", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "From the evidence of D. W. 2 it would appear that Bhaskara Rao was married in or about 189 when he was about 17 or 18 years old, and Seshamma was then said to be aged 11 or 12 years D. W. 2 deposed that Seshamma joined her husbad about 7 or 8 month after her marriage and that she was living with her husband till his death in 1903. In cross-examination D. W. 2 stated that Seshamma was present at the time of the execution of the will and that she was then aged 13 or 14 years. This statement of D. W. 2 would fix the age of Seshamma at best at about 15 years at the time of the adoption. D. W. 3 has stated that Bhaskara Rao married Seshamma when she was 12 or 13 years old and that she joined her husband six months after the marriage and lived with him till he died in November 1903. According to D. W. 3, Bhaskararao died 4 years after his marriage, which would mean that Seshamma must have been aged about 16 or 17 years at the time of the adoption. D. W. 3, when cross-examined, stated that at the time of the marriage, Bhaskararao was aged about 14 or 15 years and that he does not know if Seshamma had attained puberty by the date of the marriage. D. w. 5 has stated that when he was married in 1912, Seshamma was aged about 28 years. His evidence would fix her age at about 17 years in or about 1903. Seshamma must have been undoubtedly a minor as she was under the age of 18 on the date of the adoption, if minority is to be determined with reference to", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-21", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "age of 18 on the date of the adoption, if minority is to be determined with reference to the India Majority Act (IX of 1875).", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-22", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(32) Section 2 of that Act, however, contained exceptions. The section enacts: \n \"Nothing herein contained shall affect--(a) the capacity of any person to act in the following matters (Namely) .........marriage, dower, divorce and adoption\". \n (33) In respect of adoption, therefore, the capacity of a person to act is not to be determined with reference to the age of majority fixed by the India Majority Act. \n (34) In a recent decision Aravamudha Iyengar v. Ramaswami Bhattar, a Division Bench of the Madras High Court, consisting of Satyanarayana Rao and Rajagopalan JJ. have held that where the adoption is made by a widow either under the authority of her husband or after obtining the assent of sapindas, the act can be done and the authority can be given only if the person had attained majority and that in such a case, the test of mere ceremonial competence as well as the test of leaving the decision as to the capacity of the person to be decided on the facts of each case, cannot be accepted.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-23", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(35) In the above decision, the facts were these: One Kuppa Bhattar had a son, Krishana Bhattar, and a daughter, Ponnammal. Krishan Bhattar was married to Rukmini Ammal. He was born on the 3rd December, 1887, but died on the 6th June 1901. On the date when he died, he executed what purports to be a will but what was in fact an authority to adopt. On the 22nd March, 1940, Rukmini Ammal adopted the 1st defendant purporting to act on the authority conferred on her by her husband under the said document. The trial judge found that the factum of adoption was established and that Krishna Bhattar executed that will with full knowledge of its contents and that it was genuine. He, however, declared the adoption was established and that Krishna Bhattar was a minor and was not competent to confer an authority to adopt on his widow. The question which arose for consideration by the High Court was whether the authority conferred by Krishna Bhattar, a boy below 14 years of age at the time, was valid. It was held that as the authority to adopt was given by a boy when he was below 14 years of age, it was invalid and that the adoption by his widow in pursuance of the authority was also invalid.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-24", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(36) From an analysis of the facts of the case, it is manifest that Krishna Bhattur was below 14 years of age when he gave the authority to adopt to his wife , Rukmmi Ammal. After the death of Krishna Bhattar, there was an attempt to settle the dispute between the then reversioner and Rukmini Ammal. The parties entered into an unregistered family settlement deed though subsequently the terms of that settlement were not carried into effect and the settlement did not become effective . Rukmini Ammal adopted the 1st defendant purporting to act under the authority conferred by her husband under the terms of the will executed by him on the date on which he died. \n It is, therefore, clear that on the date of the adoption Rukmini Ammal was a major. She was 40 years of age. The only question therefore, that arose for consideration in the case before the learned Judges of the Division Bench was whether the authority of Krishna Bhattar, a boy below 14 years of age, at the time was valid. This again was answered in the negative. But after a review of the Hindu Law comes to an end on the completion of the sixteenth year and that the rule would apply to males and females, to the act of adoption as well as to an authority empowering the widow to make an adoption, and that if the person is below the age of majority recognised and established by Hindu Law, the adoption will be invalid.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-25", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(37) The learned Advocate for the appellant has strongly relied upon this decision for the contention that the adoption made by Seshamma, who had not completed her 16th year of age on the date of the respondents has, however contended that the principle of the decision must be restricted to the case of a male giving an authority to his wife to make an adoption and cannot be extended to the case of a female making the adoption pursuant to the power given by her husband. Counsel for both sides have stated that they were not in a position to cite any particular text on the Smrithis or commentaries or other sources of Hindu Law imposing a disqualification on a female, less than 16 years of age, for making an adoption in pursuance of an express power given by her husband. The extension of the embargo to females, it is contended, can only be by way of analogy. In this connection reliance was placed upon the decision of House of Lords in Quinn v. Leatham, (1901) AC 495 at p. 506 where Lord Halsbury observed as follows: \n \".....there are two observations of a general character which I wish to make and one is to repeat which I have very often said before that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it.\"", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-26", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(38) After a careful consideration of the decision in we are unable to say that the contention of the learned counsel for the respondent is ill-founded especially as an earlier Bench decision of the Madras High Court in Abayammal Ammal v. Rajarathna Ayyar, AIR 1927 Mad 1095 (to which reference will be made later), which is directly in point, does not seem to have been brought to the notice of the learned Judges. \n (39) The learned trial judge had held that Bhaskararao directed his wife to adopt her sister's son and that, therefore, the decision of the Calcutta High Court in Mondakini Dasi v. Adinath Dey, ILR 18 Cal 69 would be really in point. In that decision the person who gave the authority to adopt was a man of full age but the person who exercised that authority that is the widow, was a minor within the meaning of the Indian Majority Act. In fact, she was about eleven of twelve years old. In upholding the adoption, the learned Judges laid emphasis on the fact that the boy taken in adoption was definitely named in the authority given by the husband as the person to be adopted and that therefore the minority of the widow, who exercised the authority, could not affect the legality of the adoption. The learned Judges cited with approval the decision in Macnaghten's Precedents of Hindu Law, in which the Pandit's opinion was to the effect that the adoption by the widow, in pursuance of the express permission of her husband, was a perfectly valid adoption.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-27", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(40) Learned counsel for the respondents urged that the instant case falls within the scope of the principle laid down in ILR 18 Cal 69. But the lower court found on a review of the evidence of D. Ws. 2 and 3, that contemporaneously with the execution of the original of Ex. B. 1, Bhaskararao gave an oral direction to his wife to adopt her sister's son, Rajeswararao. We find, however, that the will itself does not contain any such direction. Apart from the admissibility or otherwise of the oral evidence, which seeks to add to the terms of the will, we find that if in fact, Bhaskararao gave such a direction, it would have been specifically mentioned in the will itself. On a consideration of the probabilities, it seems to us that no such direction was given by the husband in fact specified the boy to be adopted and it was therefore, held that there was nothing further to be done by the widow which required the exercise of her judgment but she had only to carry out her husband's wishes by making the adoption. This decision was noticed by the learned Judge who decided the Madras case in , and we find that they did not dissent from the view taken in the Calcutta case, for they observed that the Calcutta decision. \n \"May perhaps be supported on the ground that, though the widow making the adoption was only eleven or twelve years old, no exercise of discretion on her part was required in the circumstances of the case.\"", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-28", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(41) Now in a case decided by another Division Bench of the Madras High Court, consisting of Coutts-Trotter C. J., and Srinivasa Aiyangar J., in AIR 1927 Mad 1095, the validity of an adoption was attacked on the ground that at the time of the adoption the adoptive mother was only about 12 I/2 years old and, therefore not capable of forming a proper judgment about the act of adoption with regard to her own interests and the estate. As in this case, there also the adoption was made (questioned?) after a long lapse of time. It was found that the adoptive mother, though about 12 1/2 years old at the time of the adoption, was a person fairly well educated even at that time and capable of forming an opinion with regard to the intended act, and that the adoption had been practically acquiesced in and treated as valid from that time and everybody concerned had agreed in treating the adoption as valid. It was also found that there was no evidence let in on behalf of the appellants to show that the girl when making the adoption was not qualified to do the act.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-29", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "The learned Judges held that having regard to the circumstance that the adoption came to be questioned after so many years it was impossible to expect anything more than the kind of evidence that had been let in on behalf of the plaintiff. It was further observed that girls of 12, at least many of them, were precocious and having regard to the evidence adduced, it was impossible to say that it had not been satisfactorily established that the girl was incapable of taking the boy in adoption, and that as regards the boy himself that was taken in adoption he was her younger brother and the evidence was that he was chosen by th girl herself. On these facts the learned facts. the learned Judges held that the adoption, he was valid. This decision was not brought to the notice of the learned Judges held that the adoption, was valid. This decision was not brought to the notice of the learned Judges who decided the case in .", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-30", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(42) As has been already stated, in the present case, there is no precise evidence as to the age of Seshamma at the date of the adoption. Some of the documents show her as a minor in 1911. A registered lease deed executed in favour of the adopted son on 1910 however shows her as having been a major even in that year. Evidence has been adduced that she was married in 1898 when she was 11 or 12 years old. There is also evidence that she was leading a conjugal life. If she was leading a married life, it is impossible to conclude that she was only 11 or 12 years old. For a long ,number of years Rajeswararao was recongnised by every member of the family as the adopted son of Bhaskararao. He was registered as Karnam . It is admitted by the plaintiff himself that Rajeswararao was the karnam till his death. We find that under Ex. B. 12, dated 19th November 1937, the plaintiff's mother, Kamamma herself obtained a sale deed from Rajeswararao wherein he was described as the adopted son of Bhaskararao.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-31", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(43) In Rajendro Narth v. Jogendro Nath, 14 Moo Ind App 67 (PC), the Judicial Committee has to deal with the validity of a will under which an adoption was made and acquiesced in by the family for twenty seven years, when a suit was brought by one of the testator's heirs claiming the estate on the ground that the adoption was invalid. Their Lordships held that, although the defendant was bound to prove his title as adopted son, every allowance for the absence of evidence to prove such fact was to be favourably entertained, and that the case was analogous to that in which the legitimacy of a person in possession had been acquiesced in for a considerable time and afterwards impeached by a party who had the right to question the legitimacy, where the defendant, in order to defend his status is allowed to invoke against the claimant every presumntion which arises form long recognition of his family, and that the case of a Hindu, long recognised as an adopted son, raised even a stronger presumption in favour of the validity of his adoption, arising from the possibility of the loss of his rights in his own family by being adopted in another family.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-32", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "(44) In another case, Venkata Seetharama Chandra Row v. Kachumarthi Raju, AIR 1925 PC 201, the authority of a widow to make an adoption, which was in fact made 42 years before suit, was questioned by a reversionary heir, and their Lordships, after referring to a variety of considerations, -- the transfer of the adopted son from his natural home to his adopted home; his recognition after inquiry, by the legal authorities; proceedings in which the plaintiff himself had acknowledged the adopted boy's right; the dilatoriness of the plaintiff in preferring his claim-- expressed of the view that the burden resting upon any litigant who disputed such a claim was indeed of the heaviest order. \n (45) In the present case, in numerous transaction and over a long period of time, Rajeswararao was treated as an adopted son, and having regard to the long lapse of time between the adoption and its being questioned, a strong presumption must be made in favour of the validity of Rajeswararao's adoption. There is no positive proof adduced by the plaintiff with regard to the precise age of Seshamma when the adoption took place. He could have proved that fact beyond all doubt by the production of a certified copy of her date of birth, and the plaintiff made no attempt to do so. There is no explanation by the plaintiff for the long inaction on his part in questioning the status of Rajeswararao as the adopted son.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "45a88c1410c0-33", "Titles": "Voleti Venkata Rama Rao vs Kasapragada Bhaskararao And Ors. on 29 November, 1960", "text": "It is no doubt, true that the Hindu Law of Inheritance (Amendment) Act (II of 1929) altered the order in which certain heirs of a Hindu male dying intestate are entitled to succeed to his estate, and it was only pursuant to that Act, that the plaintiff's mother, a step-sister of the late Bhaskararao, became entitled to rank in the order of succession next after a father's father and before a father's brother. The plaintiff's mother died in 1945. For a period of about 15 years, therefore, the plaintiff's mother who could have questioned the status of Rajeswararao as the adopted son, did not do so. Even after his mother's death, the plaintiff did not choose to question the adoption for about eight years. The explanation offered by him is that he wanted to claim the properties by him is eight years. To explanation offered by him is that he wanted to claim the properties after the death of Seshamma, the widow of Bhaskararao, which event happened in 1952. Having regard to all the circumstances of the case, it is pretty evident that the long delay, not satisfactorily explained. In the plaintiff's preferring this claim itself raises a strong presumption in favour of the validity of the adoption. \n (46) For all the above reasons, this appeal must fail and is dismissed with costs. \n (47) Appeal dismissed.", "source": "https://indiankanoon.org/doc/1493535/"}
+{"id": "40e56e76310a-0", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "ORDER Krishna Rao, J.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-1", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "1. This is a batch of 21 applications made under Order I Rule 10, Order XXII Rule 10 and Section 151, C. P. C. by the same two petitioners for adding them as parties in C. S. No. 14 of 1958 on the ground that they have purchased the right, title and interest in the suit properties from the particular defendant mentioned in each application. The defendants concerned as the vendors arc defendants Nos. 35, 50, 91, 21, 100, 10, 92, 13, 24, 12, 25, 9, 40, 132, 131, 26, 14, 29, 3, 2 and 4 respectively C. S. No. 14 of 1958 is a suit brought by Dildar-Un-Nissu Begum for partition of the maleruka properties left by Nawab Kurshid Jah who died in 1302 The defendants arc her co-heirs and their legal representatives and alienees pendente lite except defendant No 43, the Jagir Administrator and defendants Nos 53 and 55, the States of Andhra Pradesh and of Mysore respectively. Defendant No 38, who was one of the co-heirs, was transposed as plaintiff No. 2 on 4-10-1958. Most of the parties entered into a compromise on 16-8-1961 and the suit was contested only by defendants 2 to 4, 10, 39, 47, 94 and 98. A receiver for the suit properties was appointed by this Court on 24-8-1962 and a preliminary decree for partition was made on 28-6-1963. Under the preliminary decree, each of the sharers was given a specified share in the suit properties and a commissioner was appointed to effect the partition.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-2", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "was given a specified share in the suit properties and a commissioner was appointed to effect the partition. The suit is pending for the passing of the final decree.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-3", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "The petitioners have purchased the entire share of the particular defendant mentioned in each application under registered sale deeds on various dates between 27-4-1964 and 1-8-1984, The vendor concerned in each application or his legal representatives have filed counters admitting the sale and the execution of the sale deed in favour of the petitioners and (except defendant No. 24) also supporting the prayer for impleading the petitioners. Notices of the applications were given to all the other parties to the suit. Defendant No. 39 filed counters on 22-9-1964 and 8-12-1964 opposing the applications and defendant No 140, who had purchased some of the suit properties on 24-7-1958 from defendant No. 10, filed a counter opposing Application No. 157 of 1964. The remaining parties to the suit did not file counters But after the hearing of all the applications was closed on 18-6-1965 and the orders were reserved, defendant No. 24 filed Application No. 113 of 1965 on 16-7-1965 and defendant No. 26 filed Application No. 115 of 1965 on 3-8-66 impugning the sale deeds though they admitted having executed them and asking for the dismissal of Applications Nos. 182 of 1964 and 331 of 1964 respectively. Similarly, defendant No. 25 has filed Application No 134 of 1966 yesterday for the dismissal of Application No. 164 of 1964.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-4", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "2. It may be mentioned at this stage that the same two petitioners filed ten other similar applications, bearing Nos. 148 of 1964 etc., in respect of their purchases of the shares of certain other defendants in the suit properties. The first petitioner holds a general power of attorney which was executed in his favour by H.E.H. The Nizam of Hyderabad on 17-11-1962 and the 2nd petitioner is a son-in-law of H.E.H. The Nizam In pursuance of an order made by this Court on 20-8-1964, the 1st petitioner filed a memorandum disclosing that he made the purchases from the various defendants, who were the vendors in Applications Nos 146 to 167 of 1964, for and on behalf of H.E.H. The Nizam. Thereafter the ten applications hearing Nos. 148 to 151, 153. 154, 159, 161, 165 and 166 of 1964 were allowed on 11-9-1964, with the result that the petitioners have already been impleaded as defendants Nos. 156 and 157 Defendant No 39, who did not file any counters to those applications, filed the aforesaid counters subsequently, formulating his objections to the present batch of applications.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-5", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "3. The contentions of Sri K.A. Noori Azad, the learned advocate for defendant No. 39 are (1) As the 1st petitioner, who is one of the two joint vendees in all the sale deeds, made the purchases on behalf of H.E.H., The Nizam, the provisions of Section 87-B C.P.C. are attracted and deprive this Court of jurisdiction to implead him in the absence of the consent of the Central Government. (2) The applications arc not maintainable either under Order 1 Rule 10 or under Order XXII Rule 10. C.P.C. (3) The sale transactions arc not permissible under the Mohammadan Law and are champertous and void under Section 23 of the Contract Act. (4) The sale transactions violate the injunctions issued during the suit as welt as Clause 21 of the compromise. (5) As the suit properties are in the possession of a receiver appointed by this Court, the sale transactions amount to a contempt of this Court. \n 4. The first contention raises the question whether the 1st petitioner is personally entitled to enforce the sales. All the sale deeds are in similar terms their material portion being at follows: \n This Deed of Sale made this day of 1964.  \n For Rs.....", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-6", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "In favour of  \n  (1) Khan Bahadur            Hereinafter referred\nSri C.B. Taraporwala,        to as \"Vendees\"\nconstituted Attorney &       which term shall\nFinancial Adviser to         include their heirs,\nH. E. H. The Nizam           assigns and legal ra-\nof Hyderabad.              presentatives. \n          and \n (2) Nawab Kazim\n Nawaz Judge Bahadur,\n s/o the late Nawab\n Sajid Yar Jung Bahadur. \n \n\n Both are residents of Hyderabad.  \n  \n By   Hereinatfer    referred\n1.  to as the vendor Ven-\nS/o   dors which term shall\n2.  include his, her or their\nS/o             heirs, assigns and legal\n  representatives.\n * * * * *  \n \n\n (11) And Whereas, must of the major and minor sharers of this estate had approached the Vendees and requested them to purchase the schedule properties and all other properties belonging to the estate of Nawab Khurshid Jah Paigah, and to relieve them of this wasteful litigation etc., so that a serious and grave hardship which they are subjected to, in their daily life, may be relieved: \n (12) And Whereas, the Vendees after some deliberation, agreed to purchase the schedule property, in moieties and parts, for a reasonable and appropriate market value; \n* * * * *", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-7", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "16. And Whereas the Vendor/Vendors agreed to sell and the Vendees agree to purchase the undivided share of the Vendor/Vendors in Schedule prperty which is ..... share out of a total denomination of 38, 70, 720 shares, Now this deed of sale witnesseth as follows:  \n (a) In consideration of..... the receipt of which is hereby acknowledged by the Vendor/Vendors, and the balance of Rs. is to be paid after the Vendees are brought on record in C.S 14/58, L.P.A and other proceedings or by post-dated cheque No. for Rs. on the above Bank, the Vendor /Vendors hereby transfer  \n \n\n (c) The Vendees henceforth shall have the full and absolute power to take possession of the schedule properties sold hereby either through Court by impleading themselves as parties in C.S. No. 14/58 or by any other convenient and legal arrangement with the authorities, Receiver or Commissioner in C. S. \n\n14/58 or by any such legal and proper methods as would suit them best. The physical posses sion held by the sharers in some of the Sche dule properties will be delivered by them with in three months from this date. In other cases of possession through tenants, the Vendees are entitled to take possession immediately. \n* * * * *", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-8", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "(g) The vendees shall henceforth implead themseleves as parties in place of the vendor/ vendors in C. S. 14/58 and L. P. A. and take out all necessary steps in the litigation as would suit the vendees best. The vendees shall be entitled to effect mutations in all departments and to enjoy all the properties conveyed here by with full and absolute rights.  \n In witness whereof, the vendor/vendors has/ have signed this deed of sale on the date aforementioned in the presence of. \nWitnesses : Vendors :\n1. 1. \n\n2. 2.  \n In all the applications the aforesaid vendees figure as the petitioners. As it is conceded that the 1st petitioner made all the purchases for and on behalf of H. E. H. the Nizam, who is the ex-Ruler of the State of Hyderabad, Sri K.A. Noori Azad argues that the real 1st petitioner is H. E. H., the Nizam and that the consent of the Central Government is necessary under Section 87-B read with Section 86 (1), C. p. C. \n 5. The answer to the point turns on Section 230 of the Contract Act which reads : \n \"In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. \n Such a contract shall be presumed to exist in the following cases :   \n* * * * * \n \n\n (3)    Where  the  principal,  though  disclosed, cannot be sued.\"", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-9", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "If there is a contract to that effect an agent may personally enforce the contract entered into by him on behalf of his principal. Here, there is no mention of H. E. H. The Nizam at all throughout the sale-deeds except in the description of the 1st vendee. Khan Bahadur Sri C. B. Taraporwala. On the other hand, there is a specific provision in Clause 16 (g) that the vendees will implead themselves in C. S. No. 14/58 and this is exactly the object of the applications All the vendors except defendant No 24 have unequivocally stated in their counters that they have no objection to the petitioners being impleaded. Only defendant No. 24, who is the vendor concerned in Application No. 162 of 1964, has confined himself in his counter to admitting the sale and has stated nothing about the petitioners being impleaded The form in which these sale-deeds have been drawn up shows that the petitioners were personally treated as the vendees to whom the legal title passed. In Clause 16 (g) there is a contract to the effect that the two petitioners as such may enforce the sales. The intention of the parties will be ascertained not only from the form of the contract but also from the surrounding circumstances. If the intention here was to transfer the legal title to H. E. H. the Nizam, the vendors would have had to seek the consent of the Central Government in order to sue him for any relief such as for the balance of the consideration. They would have naturally preferred to transfer the legal title to the 1st petitioner. Sri C.B. Taraporwala, rather than to H. E. H., the Nizam. In my opinion, there was clearly a contract entitling the 1st petitioner to enforce the sales.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-10", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "6. In H. O. Brandt & Co. v. H.N. Morris and Co.; (1917) 2 K B 784, a suit for damages for non-delivery was brought by H. O. Brandt & Co. The bought note addressed to the defendants was headed as \"From Messrs. H. O. Brandt & Co., 63, Granby Row, Manchester. For and on behalf of Messrs. Sayles Bleacheries, Saylesville, Rhode Island, U. S. A.\" The majority of the Bench consisting of Viscount Reading, C. J. and Scrutton, I,. 3., held that H. O. Brandt & Co. were the contracting parties and were entitled to sue upon the contract. The mention of Messrs Sayles Bleacheries was held to be intended for making known the destination of the goods. \n 7. In Agacio v. Forbes, (1861) 14 Moore, P.C. 160, the agreement to pay money was inform with the plaintiff, Agacio, although it was for the benefit of his firm to whom the debt was due and the firm also might have been entitled In sue upon it. The Judicial Committee reversed the decision of the Supreme Court of Hong Kong and held that Agacio was competent to sue upon the agreement in his own name.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-11", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "8. The fact that Sri C.B. Taraporwala was the Attorney and Financial Adviser to H. E. H. the Nizam and described himself as such in the sale deed would not militate against the parlies having intended the legal title to be transferred to him As he states that he made the purchases for and on behalf of H. E. H., the Nizam, the latter would be the beneficial owner although the legal title vests in the former. It is settled in GUR Narayan v Sheolal Singh, AIR 1918 PC 140 that a benamindar can sue in his own name without making the beneficial owner a party. This authority was followed in Narendra Nath v. Midnapore Zamindary Co. Calcutta AIR 1940 Cal 115 and Raj Narain v Ahmadi Jan, AIR 1941 All 81 Hence there can be no objection to the 1st petitioner seeking to be impleaded in his own name although he made the purchases on behalf of H. E. H. the Nizam.  \n 9. Sri A. Bhujanga Rao, the learned Counsel for defendant No. 16, has raised a point that the power of attorney dated 17-11-1962 in favour of the 1st petitioner does not specifically authorise him to obtain sale-deeds and sue in his own name. A perusal of the power of attorney shows that it empowers the 1st petitioner to transact almost all financial affairs on behalf of H. E. H. the Nizam. Clause 14 authorises the 1st petitioner. \n \" To purchase or take on lease or otherwise any lands, houses, tenements or chattels as he ray said Attorney may think desirable for my purpose and to do and execute all acts, deeds, and things for effecting and completing such purchases. \"", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-12", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "Clause 5 authorises the 1st petitioner \" to commence any action or proceeding in any Court of Justice .... for the recovery of any . . . property.\" No doubt, as pointed out by Sri A. Bhimjanga Rao, a power of attorney is construed strictly -- Mulla's Contract Act, Eighth Edition (1957), at page 628. The rules for the construction of powers of attorney are stated In Bowstead's Law of Agency, Eleventh Edition (1951). at page 49 thus : \n (1) The operative part of the deed is controlled by the recitals where there is ambiguity. \n (2) Where authority is given to do particular acts, followed by general words, the general words are restricted to what is necessary for the proper performance of the particular acts. \n (3) General words do not confer general powers, but are limited to the purpose for which the authority is given, and are construed as enlarging the special powers only when necessary for that purpose. \n (4) The deed must be construed so as to include all incidental powers necessary for its effective execution.  \n There is nothing in the power of attorney here, which may be construed as preventing the 1st petitioner from obtaining sale-deeds and commencing proceedings in his own name, though on behalf of H E H the Nizam. On the other hand, this power may be inferred as an incidental power necessary for the executiou of the large variety of transactions authorised by the instrument. It follows that no inference can be drawn from the power of attorney that the 1st petitioner would not have intended to obtain the legal title in himself.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-13", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "10. Although Ibis is sufficient to negative the first contention aforesaid of Sri K.A. Noori Azad, I shall also deal with the contention of the assumption that H. E. H. the Nizam is in reality, though not in form, the 1st petitioner, because elaborate arguments were advanced on that footing. The position taken by Sri V. K. Vaidya is : (1) Sub-section (1) of Section 86. C. P. C., does not apply because this is not a case where H. E. H. the Nizam is being sued (2) Even if Sub-section (1) of Section 86 C. P. C., applies, the privilege accorded thereunder is waived by H. E. H. the Nizam and any further statement to that effect will, if necessarv be filed. \n 11. It appears to me that the latter point may be briefly disposed of, although a large number of decisions were cited by both sides. Articles III and IV of H. E. H. the Nizam's Agreement of Accession dated 25.1.1950, a copy of which in the printed while paper (Appendix VII at page 884) was produced by Sri V.K. Vaidya in response to Application No. 382 of 1964 read thus : \nARTICLE III. \n \" His Exalted Highness the Nizam of Hyderabad and the members of his family shall be entitled to all the personal privileges, dignities and titles enjoyed by them whether within or outside the territories of the State Immediately before the fifteenth day of August 1947.\" \nARTICLE IV.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-14", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "ARTICLE IV. \n The Government of India guarantees the sucession according to law and custom to the Gaddi of the State and to the personal rights, privileges, dignities and titles of His Exalted Highness the Nizam of Hyderabad. \n The relevant personal privilege as it existed before 16-8-1947 depends on Section 86, C. P. C. prior to its amendment by Act II of 1951. The earlier conflict of views on the question whether the privilege could be waived was set at rest by the decision of the Judicial Committee of the Privy Council in Gaekwar Baroda State Ry. v. Hafiz Habib-Ul-Haq. AIR 1938 PC 165. Sir Lancelot Sanderson held that the provisions of Section 80, C. P. C., are statutory and imperative, and having regard to the public purposes which they served, they cannot be waived.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-15", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "12. The subsequent amendment by Act II of 1951 has introduced Clause (d) in Section 86 (2), which proceeds on the footing that the privilege can be expressly or impliedly waived. But the intention of Articles III and IV of the Agreement of Accession was to preserve the personal privileges as they existed before 158 1947. It was settled by AIR 1938 PC 165 that the privilege could not be waived No doubt, Section 87-B, C. P. C., which was added by Act II of 1951, is \"intended substantially to save the Rulers of former Indian States from harassment : Tokendra Bir Singh v. Govt. of India, AIR 1904 SC 1663 (1666). But that would be a matter for the consideration of only the Control Government, when its sanction under Section 86 (1) is requested : Narottam Kishore v. Union of India, . It is also true that under the English Law, such a privilege is capable of being waived expressly or by submission to Court's jurisdiction. But there would be no justification for engrafting that principle upon the Indian statute, if the language of statutory provision is capable of only one construction: Indrajit-singhji v. Rajendrasinghji, AIR 1956 Bom 45 (47) and Usmanali Khan v. Sagarmal, AIR 1962 Madh Pra 320 (327). For the reasons already staled. I am of opinion that the privilege conferred by Sub-section (1) of Section 86. C. P. C. cannot be waived.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-16", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "13. There is however more force in Sri V. K. Vaidya's submission that even if H. E. H. the Nizam is held to be the real party, he is not being sued within the meaning of Sub-section (1) of Section 86. C. P. C. As observed; in Loke Nath v. Radha Gohinda, AIR 1926 Cal 184. \" in a suit for partition, the position of the parties is not that of the plaintiffs and defendants as in other suits; for in a partition suit, or in a suit for administration, or in a suit of a similar nature, every party stands in a position of a plaintiff with reference to another and that of the defendant with reference to some other\". In the present case, all the vendors have obtained shares in the suit properties under the preliminary decree and these shares have been conveyed under the sale-deeds. The intention of the applications and the effect of allowing them will only be to enforce rights to property acquired under the sale-deeds. It is not any right to relief against the person or file property of H. E. H. the Nizam that would be litigaled, in which event alone, it could be said that the Ruler being sued within the meaning of Sub-section (1) of Section 86, C. P. C. Although arrayed as defendants 156 and 157, the petitioners could equally be regarded as plaintiffs, just like defendant No. 38. after transposition. As it cannot be said that the purchasers under the sale-deeds are being sued, the provisions of Sub-section (1) of Section 86. C. P. C., do not apply to the situation.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-17", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "14. It is difficult to appreciate the contention that the applications are not maintainable even under Order 1, Rule 10 (2), C. P. In Razia Begum v. Sahebzadi Anwar Begum AIR 1958 SC 886, the plainfiff filed the suit for a declaration that she is the legally wedded wife of the defendant. It was held that another wife of the defendant and their son would be bound by the declaration by virtue of Section 43 of the Specific Relief Act and that they were therefore rightly joined as additional defendants on their application under Order 1, Rule 10, C. P. C., though it was opposed by the plaintiff. R. P. Sinha, J. (as he then was) applied the principle lhat persons who would be bound by the judgment to be given in the action may be properly impleaded. The same view was taken by Umamaheswaram, J in Narasimha Raju v. Yellamanda, AIR 1960 Andh Pra 32, when he referred with approval the observation of Oldfield, J. in Rajaratnam Iyer v. Kalasyasundaram Iyer, AIR 1923 Mad 521 that \"it would be strange if a person who would be represented by a parly on the record and bound bv the decision against that party is to be debarred from himself appearing to protect his interests.\" In the present case, it is nol disputed that, under the doctrine of lis pendens the petitioners as alienees pendente lite would be bound bv the final decree to be passed in the suit. It follows that there can be no possible doubt as to the maintainability of the application under Order 1. Rule 10. C. P. C.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-18", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "15. The next aspect of the controversy for consideration is whether Order XXII, Rule 10 C. P. C., also applies. The relevant portion of the Rule is in the following terms : \n \"(1) In other cases of an assignment, creation or devolution of any interest during the pendency of a suit, the suit may, by leave of the Court be continued by or against the person to or upon whom such interest has come or devolved.\"", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-19", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "It was observed by Lord Phillimore in Manindra Chandra v. Ram Kumar AIR 1922 PC 304, (306) (Col 2) that Order XXII contemplates only cases of devolution of interest from some original parly to the suit, whether plaintiff or defendant, upon someone else. The provision in Rule 10 is an enabling one -- Somulu v. Appalanaidu, AIR 1958 Andh Pra 507 The object of the rule is to enable the continuation of the suit where the interests of a party on record devolves on some other person. As observed by Lord Porter in Monghibai v. Cooverji Umersey. AIR 1939 PC 170 (173). \"parties who have assigned the whole of their interest pendciite lite cannot ask for judgment in respect of an interest which is no longer theirs\"'. The expression \"by leave of the Court\"1 vests the Court with a discretion in the mailer which is to be judicially exercised. The mere fuel that an assignment is disputed is no ground for refusing leave -- Wright Neville v. Freser, AIR 1944 Nag 137 and Nanjammal v. Eswaramurthi, AIR 1954 Mad 592 (594). In the present case, it is not disputed that the sale transaction in favour of the applicants came into existence during the pendency of the suil. All the sale transactions are udmitted bv the respective vendors The applicants have also filed all the sale-deeds except in Application No. 167 of 1964 where it was stated by Shri V.K. Vaidya that the sale-deed has not been returned by the registering officer The entire right, title and interest of the vendor to a share in the suit properties has been conveyed under each sale-deed. It has to be borne in mind that the vendors, who are no longer interested in the properties to be allotted to", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-20", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "be borne in mind that the vendors, who are no longer interested in the properties to be allotted to their shares, may not object to any disadvantageous or prejudicial allotment of properties to their share.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-21", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "Sri K.A. Noori Azad has urged that defendant No. 39 disputes the right of defendants 1, 40 and 50 to any share, that the vendors would be liable for damages caused by them to the suil properlies in their possession which is expressly provided for in the case of some of the defendants in Clause 28 of the preliminary decree and that defendant No. 39 may also become entitled to costs against the vendors in the appeal preferred by him. But defendant No. 39 would not be prejudiced in this respect if the vendors are retained as defendants and the applicants arc merely added as parties. It is not necessary lhat in all cases, a party impleaded under Order XXII, Rule 10 C. P. C., should be substituted for the original parly There are precedents for both the transferor and the transfereee being parties on record -- Commercial Rank of India Ltd. v. Sarju Saheb J. ILR 24 Mad 252. Veeraraghava Reddi v. Subba Reddi, ILR 43 Mad 37: (AIR 1920 Mad 391) (SB) and Shantil Lal v. Mukat Lal, 1944 42 All LJ 351: ILR 1944 All 350. In Shanmugam v. Radhakrishna Sarma , it was held by a Division Bench of the Madras High Court that Order XXII, Rule 10. C. P. C., applies to cases of devolution of inleresl by assignment. The observation in Kaliaperumal v Ramchandra. AIR 1927 Mad 693 of Ramesam, J. sitting singly that \"order 22 of the Civil Procedure Code deals with devolution of interest by the operation of law and not by act of parties '' cannot therefore., be regarded as good law. It follows that the applications are", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-22", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "by act of parties '' cannot therefore., be regarded as good law. It follows that the applications are also maintainable under Order XXII, Rule 10, C.P.C The applicants, who have been already impleaded as defendants Nos. 156 and 157 would be entitled under Order XXII, Rule 10 C. P. C., to represent the interest of the vendors concerned in the present applications.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-23", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "16. The next contention that arises for consideration is whether the sale transactions are opposed to the Mohammadan Law or are champertous and void under Section 23 of the Contract Act. Under the Mohammadan Law, the heirs succeed to the estate as tenants in common in specific shares and any heir may even before the distribution of the estate transfer his own share. (Mulla's Mohammadan Law.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-24", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "Fourteenth Edition (1955), Sections 41-42 at pages 32 and 33) Khatoon Bihi v. Abdul Wahab, AIR 1939 Mad 306. There is also nothing in the Mohammadan Law against the transferee's right to possession under Section 44 of the Transfer of Property Act. Transfers by one co-heir of a deceased Mohammadan have been enforced or recognised in numerous reported cases, as for instance Chandra Shekhar v. Abidalli, (AIR 1925 Nag 68), Md. Afzal Khan v.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-25", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "Abdul Rahman AIR 1032 PC 235, Jan Mohammad v. Karm Chand, (AIR 1947 PC 99), Ghumanmal Lokumal v. Faiz Mohammad Haji Khan, (AIR 1948 Sindh 83), Sri K.A. Noori Azad has not been able to cite any authority for his contention that the transfers in question are opposed to Mohammadan Law and this contention must be negatived. The recitals in the sale-deeds show that as the vendors were in distressed circumstances, they contracted the sales of their shares of the suit properties. The cases of Ananda v. Laxman, AIR 1920 Nag 274 (1) and Seshayya v. Subbayya, AIR 1924 Mad 877 cited by Sri K.A. Noori Azad relate to agreements for financing litigation and have no hearing on the facts here. I see no basis of fact for the contention that the sale transactions were champertous.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-26", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "17. The remaining two contentions of Sri K.A. Noori Azad are not material to the decision of these applications because even if the injunctions issued during the suit have been disobeyed and the sales in favour of the petitioners affect the Receiver's possession, they would constitute only grounds for committing the defendants concerned for contempt of the Court and not for refusing to implead the petitioners as transferees of the interest of the vendor defendants. It appears that in Application No. 290 of 1958 while the suit was before the Additional Judge of the city civil Court, an interim injunction was ordered on 1-10-1955 restraining all the defendants from alienating, encumbering or damaging or wasting the properties of the suit estate in their possession. On 16-11-1962, the injunction was made absolute by this Court. Again in Application No. 127 of 1959 a temporary injunction was issued by this Court on 13-4-1959 against defendants 7, 10, 12 to 14, 18, 22, 21, 25 and 40 restraining them from alienating or selling the property described in the application and the affidavit filed. Further under Clause (21) of the compromise dated 16-8-1961, all the parlies thereto agreed not to transfer, alienate or otherwise encumber the properties in their possession but of the properties mentioned in schedules IV and IV-A.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-27", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "18. Notwithstanding the injunctions, however, several of the defendants effected sales of various properties and the purchasers were impleaded as defendants on applications made by them, mostly under Order 1, Rule 10, C. P. C., and a few also under order XXII, Rule 10 C.P.C. The alienations effected prior to the preliminary decree were discussed under issues 41 and 49 of this Court's judgment, dated 28-6-1963. Generally speaking, in respect of such of the alienations as were proved, the judgment directed that the equities be worked out during the partition to be made.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-28", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "19. The question of the effect on an alienation made in disobdience to a temporary injunction was discussed bv a Division Bench of this Court in Subrahmanyam v. Narasimhaiah (1963) 1 Andh WR 135. His Lordship Chandra Reddy, C. J., referred to the provisions of order XXXIX which authorises the issue of temporary injunctions and to cases decided by the Allahabad and Madras High Courts. He pointed out that whereas Section 64, C. P. C. invalidated transfer of any property which is subject to any attachment, order XXXIX. C. P. C., provides only for the punishment of the wrong-doer in Rule 2 (3). He held that the transaction in disobedience to an injunction would only be vitiated by an irregularity and would not be illegal or void though the consequences may be different if it is established that the transferor and the transferee acted in collusion and with a view to disobey the orders of the Court. In this view, he held that the transfer in question there by way of a lease was not a nullity. In the present case also, there is not even an allegation that the sales to the applicants were made with a view to disobey the injunctions.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-29", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "The recitals in the sale-deeds show that owing to the pendency of the litigation for a long time, the vendors were in distressed circumstances and therefore effected the sales. There was a similar allegation by D-42 when he applied in Application No. 101 of 1964 to accept the offer of the present petitioners to buy the entire suit properties for a sum of 39 lakhs of rupees. That application was closed on 12-6-1964 on the ground that it was represented that the suit properlies were worth a core of rupees and that a joint application on behalf of all the sharers was necessary in order to consider the matter. The existence of the temporary injunctions was not regarded as a ground for refusing to recognise the alienations either in the earlier applications by the alienees for impleading them or in the judgment in the suit, dated 28-6-1963. The temporary injunctions appear to have been issued with a view to prevent any possible loss to the parties to the suit. But, it is not shown that the sale transactions in favour of the petitioners, which have been supported by the respective vendors, would result in a loss to the other parties. For the purpose of the present applications, I see no force in the contention that the two temporary injunctions issued by this Court were disobeyed. \n 20. The position is similar under Clause (21) of the compromise. The clause expressly provided : \n \"If the parties damage or alienate or encumber the properties in their possession the loss caused to the properties shall be recovered by the Receiver-cum-Commissioner from the Sharai shares payable to them.\" \n If any loss to the other parties is ultimately established, it will undoubtedly be taken into account in the final decree to be passed.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-30", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "21. Turning to the contention based on the possession of the Receiver, the law was explained in Kanhaiyalal v. D.R. Banaji . : \n \"It is also settled law that proceedings taken in respect of a property which is in the possession and management of a Receiver appointed by Court under Order 40, Rule 1 of the Code of Civil Procedure, without the leave of that Court, are illegal in the sense that the party proceeding against the property without the leave of the Court concerned, is liable to be committed for contempt of the Court, and that the proceedings so held, do not affect the interest in the hands of the Receiver who holds the property for the benefit of the party who, ultimately, may be adjudged by the Court to be entilled to the same. The learned Counsel for the respondent was not able to bring to our notice any ruling of any Court in India, holding, that a sale held without notice to the Receiver or without the leave of the Court appointing the Receiver in respect of the property, is void ab initio. In the instant case, we do not think it necessary to go into the question raised by the learned Counsel for the respondents that a sale of a property in the hands of the Court through its Receiver, without the leave of the Court, is a nullity The American Courts appear to have taken the view that such a sale is void. In our opinion, il is enough to point out that the High Court took the view that the sale was voidable and could be declared illegal in a proper proceeding or by suit We shall assume for the purposes of this case and such a sale is only voidable and not void ab initio. \"", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-31", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "Here there is no question of the petitioners and their vendors having taken independent legal proceedings without the leave of this Court. Shri K.A. Noori Azad has drawn my attention to Clause 16 (c) in the sale-deeds which provides : \n \" The sendees henceforth shall have the full and absolute power to take possession of the schedule properties sold hereby either through Court by impleading themselves as parties in C. S. No 14/58 or by any other convenient and legal arrangement with the authorities. Receiver or Commissioner in C. S. 14/58 or by any such legal and proper methods as would suit them best. The physical possession held by the sharers in some of the schedule properties will be delivered by them within three months from this date. In other cases of possession through tenants, the vendees are entitled to take possession immediately.\" \n He urges that the last two sentences quoted empower the vendees to take possession without reference to the Receiver. But the first sentence quoted makes it clear that the petitioners were to take possession by legal arrangement with the Receiver and subject themselves to the orders of this Court. There is no complaint by the Receiver, who is the 3rd respondent to these applications, that his possession and management of the suit properties has been disturbed by the petitioners. It follows that the objection based on the Receiver's possession of the suit properties has no substance.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-32", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "22. I have now to consider Applications Nos. 113. 115 and 134 of 1965 filed by defendants NOS. 24, 2fi and 25 respectively. Defendant No 24 had filed a counter, dated 28-7-64 in Application No 162 of 1904 setting out that he was an unemloved Graduate in financial embarrassment and admitting that he sold his share of the suit properties under a registered deed executed by him in favour of the petitioners. Subsequently in connection with Application No 30 of 1965, he had filed another counter affidavit dated 8-3-1005 admitting the sale. But in his affidavit, dated 16-7-1965 in support of Application No 113 of 1965, he says that Khan Bahadur C. B. Taraporewala and Nawab Kazim Nawah Jung practised a fraud upon him by promising to provide him with residence and life long financial aid of Rs. 100 per month, that a kind of drink was administered to him and that he executed the sale-deed without reading and understanding it. These allegations of fraud are emphatically denied in the counter filed by Nawah Kazim Nawaz Jung No in-dependent evidence bv way of third party affidavits has been filed in support of the belated charge of fraud and I see no reason to believe it.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-33", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "23. In his reply affidavit, defendant No. 24 has taken an additional point that the sale includes agricultural lands and is therefore void. This ground of attack has reference to Section 47 (1) of the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act (XXI of 1950) which provides that no permanent alienation and no other transfer of agricultural land shall be valid unless it has been made with the previous sanction of the Tahsildar. But the share of the defendanl No 25 transferred under the sale-deed covers other properties besides agricultural land and would be valid so far as the other properties such as buildings and sites, jewellery and other moveable properties are concerned. The sale contracts are severable in this respect and cannot be said to be altogether void merely because they included agricultural lands. \n 24. The learned counsel has called in aid Section 23 of the Contract Act which declares :\n \"The consideration or object of an agreement is lawful, unless : \n It is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. \n In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. \"", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-34", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "He urges that the sale, if permitted, would defeat the provisions of Section 47 of the Andhra Pradesh Act XXI of 1950 that would be so only so far as agricultural lands are concerned in the absence of the sanction of the Tahsildar. It follows that defendant No. 25 continues to retain interest in his share of the agricultural lands and that he must remain as a party to the suit. But the petitioners may be properly impleaded as additional defendants inasmuch as there is a valid assignment of his share of other properties to them. \n 25. Defendant No. 26 had also filed a counter, dated 1-9-1964 in Application No 331/ 64 admitting the sale by her and agreeing to the petitioners being impleaded. In her affidavit dated 2-8-1965 in support of Application No. 115 of 1965, however, she states that she is an illiterate pardanashin lady, that the 2nd petitioner promised to pay her the balance of proper price besides Rs. 100 per month from the Nizam's Trust after the litigation ended and that she has now come to know that these promises were not included in the sale-deed, She further stales that her counter filed in support of Application No. 331/64 was obtained by-fraud and coercion, although she has mentioned no facts relating to coercion These charges are emphatically denied in the counter affidavit of the 2nd respondent according to whom defendant No. 26 is only attempting to extract money by black-mailing. In the absence of any independent evidence worthy of credit, I see no reason to believe these belated charges.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-35", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "26. In her reply affidavit, dated 13-8-1965, she has also raised the point under Section 47 of the Andhra Pradesh Act XXI of 1950, which I have dealt with in connection with defendant No. 26. Shri A. Krishnaiah, the learned counsel for defendant No. 26, has relied on Waman Shriniwas Kini v. Ratilal Bhagwandas & Co. and Raghavachari v. Ramakrishna Reddy, 1965 2 Andh W R 61 in support of his submission that the entire sale transaction is void. In , a sub-letting, even with the consent of the landlord, was held to be illegal and to make the tenant liable for eviction This depended on Section 15 of the Bombay Hotel and Lodging House Rates Control Act (LVII of 1947) which reads: \n \"Notwithstanding anything contained in any law it shall not be lawful after the coming into operation of this Act for any tenant to sublet the whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein: \n Provided that the (State) Government may, by notification in the Official Gazette, permit in any area the transfer of interest in premises held under such leases or class of leases and to such extent as may be specified in the notification\".  \n The language of Section 47 (1) of the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act (XXI of 1950) is different, being as follows: \n \"Notwithstanding anything contained in any other law for the time being in force or in any decree or order of a Court, no permanent alienation and no other transfer of agricultural land shall be valid unless it has been made with the previous sanction of the Tahsildar.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-36", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "Provided that the Tahsildar may declare a permanent alienation or any other transfer of agricultural land to be valid if the permanent alienation or transfer took place before the commencement of the Hyderabad Tenancy and Agricultural Lands (Amendment) Act, 1954 and possession of the land transferred was given to the vendee before such commencement if application for sanction is made within one year after such commencement.\"", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-37", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "It will be seen that whereas Section 15 of the Bombay Act makes the sub-letting by any tenant unlawful, Section 17 of the Andhra Pradesh Act renders the transaction invalid. Sub-letting is prohibited by the aforesaid Section 15 of the Bombay Act, whereas there is only a restriction on permanent alienation or other transfer by Section 47 of the Andhra Pradesh Act. Therefore, il cannot be said, as in the case of contract of sub-letting prohibited by Section 15 of the Bombay Act, that the petitioners are precluded altogether from relying on the sale transactions in their favour. The decision in Sannamma v Radhabhayi, AIR 1918 Mad 123(FB), relates to the sale of an unenfranchised inam land before it was enfranchised and does not support the proposition of Sri A. Krishnaiah that the entire sale, even of properties other than agricultural lands, would be void. No doubt in 1965-2 Andh Pra W. R. 61 my learned brother, Gopal Rao Ekbute, J. sitting singly held that even an agreement of sale of agricultural land without the previous permission under Section 47 of the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act (XXI of 1950) would be void us being opposed to the law. The decision rendered by me earlier, Ramulu v. Anantharamulu , in which I held afler a consideration of the authorities that such agreements to sell agricultural lands are valid and can be specifically enforced, was not cited before Gopal Rao Ekbote. J.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-38", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "Chandrasekhara Sastry, J., in his judgment, dated 21-7-1964 in C. R. P. No 2046 of 1963 (A.P ) also look the view that agreements to sell agricultural lands are valid and can be specifically enforced No doubt if even an agreement to sell agricultural lands is void without the previous sanction of the Tahsildar, it might lend support to Sri A. Krishnaiah's contention that a sale in non-compliance of Section 47 would also be altogether void. But for the reasons already given in my judgment in , I am unable to subscribe to the view that such an agreement to sell is void. \n 27. Shri V. V. Vankateswarlu, the learned counsel for the peiitloners, has also pointed out that under Clause 16 (b) of the sale-deeds, the vendor has agreed to make all the applications necessary to implement the sale. He urges that the contracts are executory in this respect. But I find it difficult to hold that this makes any difference, because under Section 49 of the Andhra Pradesh Act XXI of 1950, the Tahsildar would have no power to sanction the sale in favour of the petitioner inasmuch as they are not agriculturists by profession either presently or prospectively. However, there is more force in Sri V. Venkateswarlu's submission that the question of the transfer of Agricultural lands would arise only if and when they are allotted to their vendors' shares in the final decree. It may be possible for the petitioners to work out the equities in their favour by obtaining allotment of agricultural lands to other sharers to whom the restrictions in Andhra Pradesh Act XXI of 1950 do not apply.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-39", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "28. It follows that the sales in favour of the petitioners cannot be held to be void so as to disentitle them to be recognised as assignees of the interests of their vendors for the purpose of Order XXII, Rule 10, C. P. C. \n 29. Defendant No. 25 had filed a counter, dated 14-8-1964 in Application No. 164 of 1964 admitting that he executed the sale-deed in favour of the petitioners and received the consideration therefor and supporting the request of the petitioners to be impleaded. But in his affidavit, dated 26-8-1965 in suport of Application No. 134 of 1965 he states in great detail that he was induced to execute the sale-deed and to file the previous counter by various false promises on the part of the petitioners during the negotiations for the sale and subsequently. On these grounds, he now urges that the petitioners ought not to be impleaded. Shri V. Venkateswarlu for the petitioners states that they deny all these charges. I do not consider that the matter needs to be adjourned to enable him [o file a counter As in the other two applications, the belated charges depend only on the affidavit of defendant No. 25 himself and it is difficult to accept them. Even if he was induced by the various unperformed promises that he has mentioned, the fact remains that he has executed the sale-deed under which there is a completed transfer of his share to the petitioners. \n 30. It follows that Applications Nos. 113, 115 and 134 of 1965 have no substance and must be dismissed This will not however, preclude them from raising such contentions as are legally open to them in adjusting the equities at the time of the final decree.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "40e56e76310a-40", "Titles": "Khan Bahadur C.B. Taraporwala And ... vs Kazim Ali Pasha And Ors. on 27 August, 1965", "text": "31. All the twenty-one applications by the petitioners are allowed and they will be on record under Order 1, Rule 10 and Order XXII, Rule 10, C. P. C., in respect of all their vendor-\ndefendants concerned in these applications. Defendant No. 39 will pay a consolidated amount of Rs. 150 to the petitioners as costs in these applications.", "source": "https://indiankanoon.org/doc/1086828/"}
+{"id": "10234309ed7e-0", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "JUDGMENT Kondaiah, J. \n 1. This appeal by defendants 3 and 4 in O.S.No. 49 of 1964 on the file of the Court of the Subordinate Judge. Guntur is directed against the judgment and decree granted in favour of the Andhra Bank Ltd., Guntur the 1st respondent herein, for recovery of Rs. 2,57,625.47 paise from the defendants. \n\n 2. The 2nd defendant the father of the defendants 3 and 4 opened various accounts such as open cash amount credit Key Cash Credit. Clean Overdraft Packing Credit and Secured Overdraft Account in the plaintiff-bank early in 1962 and was having credit facilities for carrying on his tobacco trade. He was receiving several amounts under various accounts creating security on goods on hand or on stocks reaching his godowns from day to day. Prior to opening the accounts in the plaintiff-bank he was having credit facilities from the Indian Bank Guntur wherefrom he had borrowed Rs.75,000/- on an equitable mortgage by deposit of title deeds. According to the plaintiff-bank the 2nd defendant requested for a loan of Rs.75,000/- for paying the same to the Indian Bank and created on equitable mortgage by deposit of title deeds as collateral security for due discharge of the then advanced money as well as the outstanding other dues under various accounts and such future advances as might be made by the plaintiff on such security.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-1", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "The amount of Rs.75,000/- was paid by the plaintiff to the Indian Bank on 17-7-1962 as evidenced by Ex. A-21 and the voucher Ex. A-22. An equitable mortgage by deposit of title deeds was created in favour of the bank on 18-7-1962. Promissory notes also have been executed by the 2nd defendant in favour of the plaintiff in respect of the amounts borrowed on other accounts. The 2nd defendant was adjudged insolvent on August 28, 1963. The present suit by the 1st respondent was filed on April 10, 1964 for recovery of the amount due on various accounts referred to earlier. \n\n 3. The 2nd defendant and defendant 3 and 4 have filed separate written statements. The 1st defendant was set ex parte. \n\n 4. The defence set up by the 2nd defendant was that the did not approach the plaintiff-bank, but the latter had requested him to open several accounts for its own benefit that he did not create an equitable mortgage by deposit of title deeds on 18-7-1962 that he being ignorant of English language and due to the confidence reposed by him in the plaintiff-bank's employees had simply signed some documents given to him without knowing the contents thereof and the various types of securities given by him would amply safeguard the amounts due to the plaintiff and the suit must be dismissed as frivolous.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-2", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "5. In the written statement filed on behalf of the defendants 3 and 4 it was alleged that they have been divided form the 2nd defendant and they are not undivided with their father as alleged in the plaint. The 2nd defendant was leading a reckless life gambling, drinking, and debauching and beating them and their mother cruelly and the debts created by the 2nd defendants in tobacco business and for other purposes are avyavaharika in nature and not binding on them. The 2nd defendant did not deposit the title deeds to create a mortgage as set up by the plaintiff and there was no need to mortgage the immovable properties of the family and hence the suit should be dismissed. \n\n 6. The trial Court framed the following issues :\n \"1. Whether the suit mortgage is true supported by consideration valid and binding on defendants 3 and 4 ? \n\n 2. Whether the same is not binding on 2nd defendant for the reasons mentioned by him in his written statement and whether the defendant no. 2 can plead against the suit claim in the absence of such a plea from 1st defendant ? \n\n 3. To what relief ?\" \n 7. The plaintiff examined P.Ws 1 and 2 the agents of the plaintiff-bank at Guntur during the relevant period, and filed Exx. A-1 to A-51 in support of its case. None has been examined on behalf of the defendants 2 to 4 nor any document filed in support of their defence.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-3", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "8. The trial Court on a consideration of the entire material on record, accepted the plaintiff's case and found that the suit mortgage is true, supported by consideration valid and binding on the defendants 2 to 4 and passed a preliminary decree for the amount prayed for with interest at 11 1/2 % per annum from the date of the suit till date of redemption and with future interest at 6% till date of realisation. \n\n 9. Pending the trial of the suit, a sum of Rs. 1,18,170.84 was recovered by sale of tobacco belonging to the 2nd defendant and the sale proceeds have been deposited in the court. The Court declared that the plaintiff was entitled to and shall appropriate the amount in Court deposit towards the decretal amount and for the balance with in 4 months time granted for redemption. Hence this appeal by the defendants 3 and 4. \n\n 10. Mr. Ananta Banu the learned counsel for the appellants raised the following contentions : (1) There was no valid mortgage by deposit of title deeds on 18-7-1962 created by the 2nd defendant in favour of the plaintiff bank. \n\n (2) Even if there was valid mortgaged the amount borrowed thereunder was only Rs.75,000/- and hence the plaintiff can have a decree only for a sum of Rs.75,000/- and interest at 6% thereon but not for an amount more than that. \n\n (3) The appellants were divided sons of the second defendant on the date of the plaint and hence the 2nd defendant or the 1st defendant - Official Receiver had nor right to sell their interests in the suit properties.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-4", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "(4) The amount of debt sought to be recovered by the plaintiff herein is an avyavaharika debt incurred by the 2nd defendant and hence it is not binding on the defendants 3 and 4. \n\n 11. Sri C.V. Narasimha Rao the learned counsel for the plaintiff-bank resisted the claim of the appellants contending inter alia that a valid equitable mortgage by deposit of title deeds had been created by the 2nd defendant in favour of his client on 18-7-1962 as security for the amount borrowed by him under various accounts till that day and for any future borrowals and the debt due by the 2nd defendant to the plaintiff is not an avyavaharika debt but is incurred for the purpose of carrying on family trade and the same is binding on the defendant s 3 and 4 and there is no merit in this appeal. \n\n 12. Upon the respective contentions and the material evidence on record the following questions arise for decision :\n 1. Whether the transactions in question amount to a valid equitable mortgage by deposit of title deeds on 18-7-1962 ? \n 2. If answer to question No. 1 is found to be in the affirmative, whether the mortgage was only for Rs.75,000/- borrowed on 18-7-1962 and the interest thereon as contended by the appellants, or for the entire amount due and payable by the 2nd defendant to the plaintiff under the various accounts opened by him on the date of the plaint ? \n\n 3. Whether the defendants 3 and 4 were divided or undivided from their father on the date of the plaint and whether the debt due by the 2nd defendant to the plaintiff is avyavaharika in nature or binding on them ?", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-5", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "4. What is the rate of interest that is payable on the amount due and payable by the defendants ? \n 13. We shall first take up question No. 1. The 2nd defendant who was dealing in tobacco and exporting the same to foreign countries had approached P.W.1 the then agent of the plaintiff-bank at Guntur for borrowal facilities and for further accommodation as evidenced by several documents and in particular Exs. A-1, A-2 and A-3 filed by the plaintiff. He had opened Key Cash Credit Nos. 1 and 2 accounts and Clean Overdraft No.1 accounts and Clean Overdraft No.1 account with he plaintiff-bank. A Secured Overdraft Account as seen from Ex. A-5 was opened after deposit of title deeds. According to P.W.1 after receipt of the letter of sanction Ex.A-3 in respect of secured overdraft, the 2nd defendant was asked to produce title deeds which were the Indian Bank till then. At the request of the 2nd defendant a sum of Rs.75,000/- was sent to the Indian Bank under Ex. A-21 and the receipt Ex. A-22 obtained in favour of the 2nd defendant in full settlement of its account on 18-7-1962 from the Indian Bank. The Indian Bank sent a letter Ex. A -23 showing the particulars of appropriation against the account of the 2nd defendant and returned the original mortgage bond executed by the 2nd defendant in favour of the Indian Bank after making endorsement of payment in full.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-6", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "All the title deeds along with the mortgage bond have been returned by the Indian Bank as seen from Exs. A-26 to A-29. The title deeds have been deposited with the plaintiff-bank and Ex.A-33 a memorandum of deposit of title deeds was executed and signed by the 2nd defendant in the presence of P.W.1. Except the evidence of P.W.1 and the documents referred to earlier filed by the plaintiff there is no record, we are in entire agreement with the view taken by the trial court that the 2nd defendant has executed Ex. A-33, a memorandum evidencing the deposit of title deeds with the plaintiff-bank specified therein as security for the amount borrowed by the 2nd requested P.W.1 to pay the sum of Rs. 75,000/- towards the debt due by him to the Indian Bank, Pursuant to which the said amount has in fact been paid. The original title deeds belonging to the 2nd defendant have been sent by the Indian Bank to the Plaintiff-bank subsequent to the discharge of their debt.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-7", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "14. We are unable to agree with the submission of Mr. Ananta Babu that there was no valid equitable mortgage by deposit of title deeds in the instant case. Section 58 (f) of the Transfer of Property Act requires for creation of a mortgage by deposit of title deeds the delivery of title deeds in respect of immovable property by a person in any notified town to a creditor or his agent with intent to create a security thereon. The essential ingredients of an equitable mortgage by deposit of title deeds are (I) existence of a debt (ii) deposit of title deeds in respect of immovable property and (iii) intention that the title deeds shall be security for the debt. The delivery or deposit of title deeds may be physical or constructive. The essence of a mortgage by deposit of title deeds is the actual handing over of the documents of title in respect of immovable property by a borrower or his agent to the lender. It is the substance of the entire transaction but not its form that really matters to infer intention of the contracting parties. See Rachpal v. Bhagwandas and Union Bank of India Ltd., v. M/s L.Sonaram", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-8", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "15. The submission of Mr. Ananta Babu that the deposit of title deeds in order to constitute a valid equitable mortgage within the meaning of Section 58 (f) of the Transfer of Property Act should be made physically by the borrower himself cannot be acceded to. True as contended by the learned counsel there is no physical handing over of the documents of title in the present case by the 2nd defendant to P.W.1 the agent of the plaintiff but the documents of title till then deposited with the Indian Bank have been on the authorisation given by the 2nd defendant, sent by the Indian Bank to the plaintiff-bank after discharging their debt. The documents of title have been brought to the custody of the plaintiff-bank from the Indian Bank must be construed to he the agent of the 2nd defendant in handing over the title deeds to the plaintiff-bank. That apart the 2nd defendant himself has executed Ex. A-33 specifically mentioning that the documents of title have been deposited with the plaintiff-bank towards the amounts borrowed by him. On these facts we have no hesitation to hold that there was a valid deposit of title deeds by the 2nd defendant to the plaintiff bank so as to create an equitable mortgage.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-9", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "16. We shall now turn to the question what was the amount of consideration for the equitable mortgage by deposit of title deeds created by the 2nd defendant in favour of the plaintiff on 18-7-1962. We are not impressed with the submission of the learned counsel for the plaintiff that the 2nd defendant having failed to examine himself has not discharged the initial burden of proving that the security was only limited To Rs.75,000/- Though no evidence has been let in on behalf of the defendants the evidence adduced by the plaintiffs can certainly be looked into in order to decide this point. Reference in this regard may be made to Exs. A-3, A-21 and A-30 which are relevant and material and to Exs. B-3, and B-4 which are sought to be admitted as additional evidence.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-10", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "17. Ex. A-3 dated June 8, 1962 is a letter of the Assistant General Manager of the Andhra Bank Ltd., at Central Office, Masulipatnam sanctioning the facility of secured overdraft upto a limit of Rs.75,000/- to the 2nd defendant on the proposal for credit facilities made by the plaintiff on 19-4-1962 in respect of the account of the 2nd defendant. Therein it was specifically mentioned as follows :-\n \"Nature of facility : Secured Overdraft. Limit sanctioned :- Rs.75,000/- (Rupees Seventy five thousand) Duration and Interest : 1 year at 10% p.a. Name of Co-obligant/Guarantor : Security and margin : Mortgage by deposit of title deeds relating to his land and godowns at Uppalapadu and Guntur worth about Rs. 1,50,000/- \" \n The next document that is material is Ex. A-21 a letter dated 17.7.1962 written by the 2nd defendant in favour of P.W. 1 which reads thus :\n \"I have created a mortgage for Rs, 75,000/- in your favour by offering the following properties shown below as security for the advances to be made in future. These properties were under mortgage to the Indian Bank Ltd., Guntur for a loan taken against them. So I request you to remit Rs. 75,000/- to the Indian Bank Ltd., Guntur and clear the balance due to them and take the document under mortgage with you for you\"", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-11", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "The amount of Rs. 75,000/- referred to in Ex. A-21 had in fact been paid by the plaintiff to the Indian Bank Ex. A-30 is a promissory note executed by the 2nd defendant on July 19, 1962 for the sum of Rs. 75,000/- in favour of the plaintiff-bank. The recitals in Exs. A-3 and A-21 would amply support the plea of the appellants in this regard. That apart P.W.1 has admitted in his cross-examination as follows :", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-12", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "\"The secured overdraft against deposit of title deeds is for Rs. 75,000/- Ex. A-3 is the letter of sanction for this loan \" (p. 11 of the appellants ' printed papers lines 12 to 15) \n\n \n\n xx     xx     xxx\n\n \n\n \"We sent a cheque for Rs. 75,000/- to the Indian Bank on 17-7-1962 asking an endorsement as realised on 18-7-1962. We paid Rs. 75,000/- earlier that Ex. A-33. On 17-7-1962 there was no mortgage. But there is only a promise ..... Ex. A-33 is only for Rs. 75,000/- loan. The amount due by April 9, 1964 was Rs. 88,811.37 paise\"", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-13", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "The aforesaid admission of P.W.1 that the secured overdraft against deposit of tittle deeds is only for Rs. 75,000/- as evidenced by Ex. A-3 that the title deeds were deposited on 18-7-1962 and that Ex. A-33 was executed on 19-7-1962 would clearly establish that the amount secured under the equitable mortgage by deposit of title deeds was only Rupees 75,000/- The document on which much reliance has been placed by the plaintiff's learned counsel is Ex. A-33 an unstamped and unregistered memorandum the material portion of which is as follows :-\n \"I/We write to put on record that as already agreed upon I/We on 18-7-1962 deposited with you at Guntur the following documents of title to immovable property with intent to secure the repayment to the Bank of moneys that ore now due or shall from time to time or at any time be due from Pentala Kotaiah or me/us either solely or jointly with any other person or persons to the Bank whether on balance of account or by discount or otherwise in respect of Bills of Exchange. Promissory Notes, Cheques and other negotiable instruments or in any manner whatsoever and including interest commission and other banking charges and any law costs incurred in connection thereto. \n \n\n List of documents \n\n \n\n xx   xxx     xxx", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-14", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "List of documents \n\n \n\n xx   xxx     xxx\n\n \n\n True as contended by the plaintiff it was stated therein that the documents of title specified therein have been deposited to secure repayment to the bank of moneys then due or shall from time to time or at any time be due from the 2nd defendant either solely or jointly with any other person on any account or on a negotiable instrument. This was only a printed form that was being used the plaintiff-bank. Ex. A-33 must be construed in the light of the contents of Ex. A 3 the very sanction letter. The contract relating to the deposit of title deeds amounting to creation of mortgage within the meaning of Section 58 (f) of the Transfer of Property Act was complete by 18-7-1962 itself. Ex. A-33 reads as memorandum. \"Memorandum\" as per Oxford Dictionary means \"note to help the memory\" record of events etc for future use documents recording terms of contract etc\" (The Concise Oxford Dictionary. P. 744). \n\n A memorandum containing record of particulars of deeds deposited as security, does not require registration. See Sundarachariar v. Narayan Ayyar, AIR 1931 PC 36. The submission of Sri Narasimha Rao that a memorandum creates liability relating to future transactions without the requisite particulars such as the quantum of amount, rate of interest, conditions of repayment etc. Cannot be acceded to. Where a document has been executed, the intention of the parties must be gathered from the very recitals and terms thereof. See Chunghum Jha v. Ebadat Ali, . Memorandum is only evidentiary but not operative of the transaction and binding on the parties. Ex. A-33 only specifies the title deeds and it is only a memorandum under which the terms of the mortgage cannot be spelt out.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-15", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "On a proper construction of the recitals in Ex. A-33 and from the surrounding circumstances, we are unable to infer that the parties intended to create an equitable mortgage on the terms specified therein ( Ex. A-33 ). It is only admissible for collateral purposes and does not require registration. If it has to be relied upon to enlarge the ambit of the liability beyond registration. Suffice it to refer to a recent decision of the Supreme Court in Veeramachineni Gangadhara Rao v. The Andhra Bank Ltd., wherein the same form of Ex. A-33 was construed to be only a mere memorandum evidencing the deposit of title deeds in pursuance of an earlier contract. It was held therein that it did not require registration and it could not be considered as a contract entered into between the parties. It was further ruled :\n \" If the parties intended that it should embody the contract between them it would have necessary to register the same under Section 17 of the Registration Act, 1908. \" \n After referring to the decision of the Supreme Court in , it was observed by the learned Judge, Hegde, J., who spoke for the Court, thus :\n \"............ The crucial question is : Did the parties intend to reduce their bargain regarding the deposit of title deeds to the form of a document ? If so, the document requires registration. If on the other hand its proper construction and the surrounding circumstances lead to the conclusion that the parties did not intend to do so, then there being no express bargain, the contract to create the mortgage arises by implication of the law from the deposit itself with the requisite intention, and the document being merely evidential does not require registration. \"", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-16", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "In this view, the execution of Ex. A-33 by the 2nd defendant does not advance the plea of the plaintiff that the equitable mortgage was not for Rs. 75,000 /- only but for securing the repayment of all the debts taken by then and to be received in future by the 2nd defendant. Nor are we impressed with the submission of Sri Narasimha Rao that the very intendment and object of the 2nd defendant in changing the deposit of title deeds from the Indian Bank to the Andhra Bank was to accommodate further amounts. In other words, it was argued that there was already a loan of Rs. 75,000 /- from the Indian Bank by deposit of title deeds and there was no necessity for the 2nd defendant to change the same to the Andhra Bank if the intention was not to have accommodation for further amounts. True, as stated by the learned counsel, the 2nd defendant was by 18-7-1962 a customer of the plaintiff-bank and he was having transactions and had limits on various accounts by then.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-17", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "Still we cannot infer something which is not there in Ex. A-3 the very sanction letter, Sri Narasimha Rao relied upon the words \" security for the advances already made and for the advances to be made in future \" used in Ex. A-21 in support of the plea that the security was for all the amounts due and payable by the 2nd defendant. In other judgment, Ex. A-21 must be read with Exts. A-3 and A-33 and the evidence of P. W. 1. When so read, the only inference we can safely draw is that the scope and extent of the security is only for Rs. 75,000 /- but not more.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-18", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "18. It was next contended by Mr. Narasimha Rao that the plaintiff is, in any event, entitled to have a decree for the balance of amount due and payable by the 2nd defendant, against the defendants 3 and 4 who claim to be divided from their father. We may recapitulate the material facts to appreciate the scope of this contention. The 2nd defendant was adjudged insolvent on 28-8-1963. The defendants 3 and 4 filed O. P. No. 26/64 on the file of the Sub-Court, Bapatla in forma pauperis for partition and separate possession of their two thirds share on December 20, 1963. The O. P. was numbered as O. S. No. 69/64 on 14-9-1964 and the suit was decreed on November 28, 1964. The present suit was filed on April 10, 1964. The defendants 3 and 4 by their categorical declaration in the O. P. and the plaint filed on 20-12-1963 became divided in status as the decree passed in O. S. No. 69/64 on 28-11-1964 would take effect from the date of the plaint, I. E., 20-12-1963. Hence, it must be held that the defendants 3 and 4 are divided sons of the 2nd defendant on the date of the plaint in the present suit.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-19", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "19. The contention of the appellants that the debt due by their father to the plaintiff is an avyavaharika one and not binding on them, cannot be acceded to. Firstly, there was no evidence on record in support of such a plea. Secondly, the 2nd defendant was admittedly doing tobacco business for several years prior to the transactions with the plaintiff bank in the year 1962. Hence, the burden is on the appellants to establish their plea that the debt in question is an avyavaharika debt. As there is not even an iota of evidence in support of their plea, this cannot be given effect to. Hence we must hold that the debt due and payable by the 2nd defendant to the plaintiff is not an avyavaharika debt. The debt was admittedly a pre-partition one and is binding on the defendants 3 and 4. \n\n That apart, the truth and genuineness of the debt due and payable by the 2nd defendant to the plaintiff are not challenged before us. The debt was incurred by the 2nd defendant in his capacity as father and manager of the joint family consisting of himself and his sons, the appellants herein. The specific case set up by the plaintiff, as disclosed by the several allegations in the plaint, is that the suit debt was contracted by the 2nd defendant, the manager of the joint family, for carrying on family business and to discharge antecedent debts. Admittedly the 2nd defendant was having extensive trade in tobacco and he was exporting tobacco to foreign countries. He had dealings with the Indian Bank, Guntur under various accounts for several years prior to 1962 when he opened the accounts with the plaintiff.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-20", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "This allegation was not even denied either by the 2nd defendant or the defendants 3 and 4 in their written statements. Nor is there any evidence adduced by the defendants that the business carried on by the 2nd defendant was not family business and on that ground the debt, even if found to be true, is not binding on them. The learned trial Judge has arrived at a conclusion that the mortgaged property belongs to the joint family of the defendants 2 to 4 and the mortgage was created by the 2nd defendant who is no other than the father of defendants 3 and 4 and manager of the family, for the benefit of the family. For these reasons, it must be held that the debt due to the plaintiff is binding on the defendants 2 to 4. \n\n 20. This brings us to consider the question whether the suit against the defendants 2 to 4 without the leave of the insolvency Court for obtaining a decree for the amounts due to the plaintiff and not covered by the mortgage, is or is not maintainable. Admittedly, the suit, in so far as it relates to the recovery of the secured debt is concerned, is maintainable notwithstanding the adjudication of the 2nd defendant as insolvent. The amount of debt under the mortgage by deposit of title deeds due and payable by the defendants 2 to 4 on the date of the suit was Rs. 88,811-37 p. Pending the suit a sum of Rs. 1,18,170-89 p. Recovered by sale of tobacco belonging to the defendants was in court deposit. The trial Court has declared the right of the plaintiff to appropriate the amount in deposit to the credit of the suit towards the amount due under the preliminary decree and seek a final decree only for the balance.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-21", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "The appellants have not challenged this portion of the judgment and decree of the trial Court relating to the appropriation of the amount in court deposit by the plaintiff, not any ground has been taken in the memorandum of grounds of this appeal. Hence the appeal itself is confined only to Rs. 2,12,826-23 which has been arrived at after deducting Rs. 1,18,170-84 p. From the decretal amount of Rs. 3,30,997-07 p ( Rs. 2,57,625-47 principal plus Rupees 73,371-60 interest from the date of suit till the date of preliminary decree ). In view of our finding that the quantum of consideration for the mortgage by deposit of title deeds was only Rs. 75,000 /- the amount due in that account by the date of the plaint came to only Rs. 88,811-37 p. Therefore the question relating to the maintainability of the suit without obtaining the permission of the Insolvency Court is relevant only in respect of the amount not covered by the sum due and payable on the foot of the suit mortgage ; viz., Rs. 50,643-26 p. \n\n 21. The contention of Mr. Ananta Babu that the present suit to recover any amount other than the sum covered by the suit mortgage is not maintainable for failure to obtain the leave if the Insolvency Court, as required by Section 28 (2) of the Provincial Insolvency Act, 1920 ( hereinafter referred to as the Insolvency Act ) is sought to be supported by the decision of the Division Bench of the Madras High Court in Tatavarthi Nagpotharao v. Pulipati Subbarao, ( 1942 ) 1 Mad LJ 177 = ( AIR 1942 Mad 360 ).", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-22", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "22. Sri Narasimha Rao, the learned counsel for the respondent-bank maintained that the suit is competent to recover also the amount not covered by the suit mortgage and placed reliance upon the decisions of the Madras High Court in Chinna Veeraiah v. Gurivi Reddy, AIR 1934 Mad 223 = ( 66 Mad LJ 277 ). Arunachalam Chettiar v. Subaratnam Chettiar, AIR 1939 Mad 572 and Thadi Murali Mohan Reddy v. Chinta Brahmayya ( 1942 ) 1 Mad LJ 173 = ( AIR 1942 Mad 327 ) in support of his plea. \n\n 23. Before examining the cases cited at the bar, it is useful to refer to Section 28 (2) of the Insolvency Act, which reads as follows :\n \" 28. Effect of an order of adjudication.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-23", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "(1) xx xx xx xx xx xx xx (2) On the making of an order of adjudication, the whole of the property of the insolvent shall vest in the Court or in a receiver as hereinafter provided, and shall become divisible among the creditors and thereafter, except as provided by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable under this Act shall during the pendency of the insolvency proceedings have any remedy against the property of the insolvent in respect of the debt, or commence any suit or other legal proceeding, except with the leave of the Court and on such terms as the Court may impose. \" \n The intendment and purpose of Section 28 (2) is broadly two-fold (i) to make the entire estate of the insolvent vest I the Court or in a receiver the moment an order of adjudication is made and to make it available for distribution among the body of creditors, and (ii) to prohibit any creditor of the insolvent from proceeding against his property in respect of his debt or commence any suit or other legal proceeding without the leave of the Insolvency Court during the pendency of the insolvency proceedings. The vesting of the estate of the insolvent in the receiver or Court which is contemplated under Section 28 (2) of the Insolvency Act is automatic. From that moment it is the Insolvency Court or the receiver, but not the insolvent, that is competent to represent the latter's estate.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-24", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "The use of the words \" no creditor..............shall................have any remedy against the property of the insolvent in respect of the debt \" in S. 28 (2) makes it abundantly clear that the prohibition or bar contemplated thereunder is only in respect of the property of the insolvent but not the property of persons other than the insolvent. In other words, the proceedings to recover the debt of any one other than the insolvent are not barred. Hence, a creditor is competent to proceed against the insolvent's sons' share in the family property for the recovery of the debt due and payable by him ( son ) without the leave of the insolvency Court. See Gopalakrishnayya v. Gopalan, ILR 51 Mad 342 = ( AIR 1928 Mad 479 (1) ) and Manickam Pillai v. Vallayya Naicken, A. A. O. No. 253 of 1936 Madras High Court. \n\n It is well settled that on the adjudication of a Hindu father, the share of the insolvent's son will not vest in the official receiver. The share of the insolvent's son in the property cannot be termed to be the property of the insolvent within the meaning of Section 28 (2) of the Insolvency Act. Equally settled is the law that the power of the Hindu father to sell his son's interest for discharging his lawful debts vests in the official receiver after the adjudication of the Hindu father as insolvent. That power, no doubt, does not extend to the discharge of avyavaharika debts. The liability is also only to the extent of the son's share in the family property. There can be no personal liability fastened to the son. This power can be exercised by the official receiver before it comes to an end.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-25", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "The moment the son divides from his father or files a suit for partition expressing his intention to divide this power of the father or that of the official receiver consequent on the father's adjudication ceases as there was severance of interest between the father and the son. The official receiver, in whom the power of the insolvent father or manager to dispose of the shares of the sons or other members of the family of the insolvent in the family property to satisfy his legal and binding debts is vested, may or may not exercise that power for the benefit of the general body of the creditors. However, he cannot seek to exercise such power when any creditor of the insolvent's sons or other members of the family proceeds or attaches their shares for the debts due and payable by them. \n\n 24. We shall now turn to the cases cited across the bar.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-26", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "25 .In Chinna Veeraiah v. Gurivi Reddy, AIR 1934 Mad 223 at p. 224, a creditor's suit on the foot of a promissory note executed by the manager of a joint family who was adjudged insolvent, was decreed against his sons and other members of his family. The suit was, however, dismissed against the insolvent and official receiver as unsuatainable on the ground that the debt against them was one provable in insolvency for which no suit could be maintained. That decree of the trial Court was affirmed in appeal. In second appeal, the contention of the sons and the brother of the insolvent that the suit was not maintainable against them on the ground that the managing member of the family on his adjudication, has lost the power to sell the whole of the family property in order to discharge the family debts, was negatived. The learned Judge, Pandalai, J. Observed thus :\n \"................the plaintiff is not resorting to any property which is vested in the Official Receiver to give him relief in this suit...........unless the plaintiff can be prevented from pursuing his legal rights by some legal prohibition. I cannot see how the fact that an official ( receiver ) has the power to dispose of certain property is to affect or restrict the right of others who have a right to resort to that property. \"", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-27", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "26. The view expressed by Pandalai, J. In Chinna Veeraiah's case AIR 1934 Mad 223 was approved by a Division Bench in AIR 1939 Mad 572 at p. 573. Therein, the material facts are as follows : One Ramaswami Chettiar was adjudged insolvent in 1926 by the Sub-Court, Tinnevelley. A creditor by name Arunachalam Chettiar obtained in September, 1931 a decree for a sum of Rs. 19,383-10-1 with interest against the insolvent and his five sons. The official receiver had brought the properties of the family to sale on 9th April, 1932. On the application of the decree-holder, Arunachalam Chettiar, the official receiver was directed to sell the properties and deposit into Court 5/6th of the sale price to the payment of which the right of the decree-holder was declared. On appeal by the official receiver, the District Court reversed the finding of the Sub-Court, holding that the official receiver had the right to sell the properties vested in him.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-28", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "Finally the High Court on further appeal by the decree-holder, relying upon the decisions in ILR 51 Mad 342 = ( AIR 1928 Mad 479 (1) ) Manickam Pillai v. Vallayya Naicken, A. A. O. No. 253 of 1936 Madras High Court and AIR 1934 Mad 223, restored the order of the Sub-Court setting aside the decision of the District Court. This decision is an authority for the proposition that the son's shares in the family property do not vest in the official receiver or official assignee upon the adjudication of their Hindu father as insolvent and the same can be attached and proceeded against without the leave of the Insolvency Court and the attachment of son's shares puts an end to or extinguishes the right or power vested in the official receiver or official assignee to sell the sons' shares to discharge his insolvent father's lawful debts. We may usefully notice the following passage wherein the learned Judge, Leach, C. J. who spoke for the Court, referred to the scope and content of Sec. 28 (2) of the Insolvency Act :", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-29", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "\"This section refers only to the property of the insolvent and the prohibition against the institution of legal proceedings without the leave of the court refers to proceedings with regard to the insolvent's property. Although the right of the insolvent Hindu father to sell his son's share in the family property to discharge his own lawful debts vests in the Official Assignee or the Official Receiver as the case may be it does not follow that proceedings cannot be taken in respect of the son's interest in the family property without the leave of the Insolvency Court. The right to sell the son's interest only exists so long as the son's interest in the family property exists. If the interest has been sold or if there has been a lawful attachment which has the same effect there exists no property over which the power can be exercised. \" \n 27. The same view has been reiterated by a later Division Bench of the Madras High Court consisting of Venkataramana Rao and Abdur Rahman, JJ. In ( 1942 ) 1 Mad LJ 173 = ( AIR 1942 Mad 327 ). Therein, one Bulli Gangireddy borrowed certain sums of money from one Chinta Brahmayya for the purpose of carrying on family business and executed two promissory notes dated November 12, 1930 and December 5, 1930 in favour of the creditor. Gangireddy was adjudged insolvent on November 13, 1931. The insolvent's son Murali Mohan Reddi, minor represented by his guardian, filed a suit for partition on November 16, 1931 and obtained a preliminary decree. A final decree was also passed on April 6, 1935. The creditor, Chinta Brahmayya, who was unable to get any payment from the official receiver before whom his debt was proved brought a suit against the insolvent's son without obtaining the leave of the Insolvency Court.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-30", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "The Official Receiver was not made a party to the suit. The trial Court decreed the suit against the insolvent's son. On appeal by the son, the question that fell for decision before the learned Judges was the maintainability or otherwise of the suit by the creditor for not making the official receiver as a party defendant. The learned Judge, Venkataramana Rao, J., who spoke for the Court, rejecting the contention advanced on behalf of the insolvent's son that the leave or permission of the Insolvency Court was necessary to maintain the suit, observed thus ( at page 175 ) :\n \"We dont think it was the intention of the legislature to prohibit all suits in respect of the debt even as against persons over whom or whose assets the Insolvency Court would have no control. \" \n The plea of the appellant therein that the official receiver must be a party to the suit as legal representative of the father and without him no decree could be passed against the insolvent's son, was also negatived. We may add that this decision is an authority for the proposition that where a debt has been incurred by a father as manager of a Hindu joint family for the purpose of joint family business, such debt will be a joint family debt binding on the sons and other members of the joint family in the same way as it is binding on the father, and for recovery of such debts, the creditor can proceed against the shares of the sons or other members of the joint family in the family property, as they continue to be liable to pay such debts from and out of the family property in their hands even after their division from the family. With regard to this aspect the learned Judge proceeded to observe ( at page 175 ) thus :", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-31", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "\"The debt here was contracted by the father as the managing member of the joint family in the course of the joint family business. The debt was therefore a joint family debt and as much a debt of the son as that of the father. \" \n It was further observed by the learned Judge thus ( at pp. 175 and 176 ) :\n \"The father is dead and further the father and son became divided before the suit was instituted.....................The only question is whether in the circumstances of this case the creditor is not entitled to maintain the suit against the defendant. As the defendant is liable to pay the debt which was contracted on his behalf by the father who was also the manager from and out of the share of the joint family property in his possession, a suit against him by the creditor would be competent..................\" In that case, the father and son, as referred to earlier became divided before the institution of the suit by the creditor. It was held that the failure of the official receiver to secure the son's share for payment of the debts due to his father's creditors by requesting for a provision being made by setting apart some property for their discharge in the partition suit, would not deprive the creditor of his right to proceed against the son's share and realise the amount due to him.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-32", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "28. The aforesaid decisions would amply support the contention of the respondent-bank relating to the maintainability of the suit against the defendants 3 and 4, the divided sons of the insolvent 2nd defendant who are as much liable as their father, to discharge the lawful debts contracted by their father, the manager of the joint family, in the course of joint family tobacco business. The division in status of the defendants 3 and 4 would not absolve their liability to discharge the pre-partition debts incurred by the manager. No leave of the Insolvency Court under Section 28 (2) of the Insolvency Act is required to proceed against the shares or interests of the defendants 3 and 4 in the family properties.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-33", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "29. We shall now examine the decision of a Division Bench of the Madras High Court in ( 1942 ) 1 Mad LJ 177 = ( AIR 1942 Mad 360 ) on which strong reliance has been placed by the learned counsel for the appellants. Therein, one Mallayya was adjudged insolvent. Subsequent to his adjudication, a creditor, without obtaining the leave of the Insolvency Court, filed a suit against the insolvent and his sons and obtained a decree for a certain sum of money. The debt was incurred by the father as the manager of the family consisting of himself and his undivided sons. The sons sought for a declaration under Section 4 of the Insolvency Act that the decree obtained by the creditor was a nullity and not binding on the official receiver. On these facts the question that fell for decision was whether it was open to the Insolvency Court to declare under Section 4 of the Insolvency Act that the decree obtained by the creditor was a nullity in its entirety.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-34", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "It was held that the Insolvency Court is competent only to declare the decree as not binding on the official receiver, the representative of the insolvent, on the ground that no leave contemplated under Section 28 (2) of the Insolvency Act was obtained. But however, in so far as the decree obtained against the sons was concerned, the Court took the contrary view. It was of the opinion that the debt incurred by the insolvent was not a personal debt but it was incurred by him as the manager and for the benefit of the family consisting of himself and his undivided sons. In that premise, the learned Judge, Venkataramana Rao J. Speaking for the Bench, ruled thus ( at page 179 ) :\n \"The debt was therefore as much a debt of the sons as that of the father. It is also undoubted law that by the reasons of the insolvency of the father the shares of the sons do not vest in the Official Receiver but what vests in him is the right of the father to sell the son's share for the discharge of such debts as would be binding against the sons. Recently the question arose in ( 1942 ) 1 Mad LJ 173 = ( AIR 1942 Mad 327 ) whether leave of the insolvency Court is necessary to file a suit against the undivided sons of a father who was adjudicated insolvent in respect of a debt incurred by the father for the benefit of the joint family and it was there held that it was not necessary to do so. After hearing learned counsel in this case, we see no reason to take a different view............ The insolvency of the father does not prevent the sons alienating their shares and we have observed that it does not prevent a creditor from filing a suit as against them. \" \n 30. The learned counsel for the appellants relied upon the following passage ( at page 179 ) in support of his plea :", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-35", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "\"It was open to the sons to say that the suit would not be competent because leave of the Insolvency Court had not been obtained against the father, and if the suit could not be proceeded against the father, it could not be proceeded against them as well. \" \n The aforesaid observation of the learned Judges would not amount to the acceptance of the contention of the appellants. It only means that the sons could have raised in the suit the contention that without the leave of the Insolvency Court, no suit against the insolvent father and on that account, against them was maintainable. Whether such a plea was sustainable or not, was not decided in that case. Such a plea, though permissible to be raised in the suit filed by the creditor , is not available in an application under Section 4 of the Insolvency Act to declare the decree which has become final as a nullity on the ground that it was obtained without the leave of the Insolvency Court. Such plea was held to be not available even to the official receiver. This can be seen from the following observation of the learned Judges :\n \"But if no such objection was taken by the sons on that ground and they submit to a decree being passed, we do not see how it is open to the Official Receiver to take any exception in regard thereto. \" ( Page 179 ).", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-36", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "In those circumstances we are unable to agree with Mr. Ananta Babu that the decisions cited on behalf of the respondent-bank are distinguishable on the ground that the question arose in those cases after decrees had been obtained against the insolvent father and his sons, I. E., at the stage of the execution of such decrees. The decisions of the Madras High Court in AIR 1939 Mad 572 and ( 1942 ) 1 Mad LJ 173 = ( AIR 1942 Mad 327 ) are of Division Benches decided prior to the formation of the Andhra State and hence, they are binding on us. That apart we are in entire agreement with the view expressed by the Madras High Court in those cases. The decision in Tatavarthi Nagaportharow's case ( 1942 ) 1 Mad LJ 177 = ( AIR 1942 Mad 360 ) relied upon by the appellants is distinguishable as pointed out earlier.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-37", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "31. On the application of the principles enunciated by the Madras High Court in the cases referred to above, to the facts of the present case, we must reject the contention of the appellants but agree with the plea of the respondent-bank that the suit for the recovery of the amounts other than the amount covered by the suit mortgage, in so far as against the defendants 3 and 4 are concerned is maintainable. The father was adjudged insolvent after the defendants 3 and 4 became divided from him. The debt in question was a pre-partition debt contracted by the father ass manager of the joint family in the course of the joint family business. It was not an avyavaharika debt. The debt of the father-manager, therefore, in as much as the debt of the defendants 3 and 4 and binding on them and hence, the creditor can proceed against the shares of the sons in the family properties for the recovery of such debt. The father did not prefer an appeal. He had already suffered a decree in the lower Court.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-38", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "In fact, there is no dispute about the truth of the debt to the plaintiff-bank in the instant case. The official receiver did not exercise the power of the insolvent father to proceed against the shares of the defendants 3 and 4 in the family properties, which were vested in him upon the adjudication of the 2nd defendant as insolvent. In any event, such right was put an end to when there was severance of status between the sons and the father on account of the filing of the partition suit. In any event, it came to an end when the creditor sought to proceed against the shares of the sons in the family properties subsequent to the adjudication of the father and before the official receiver exercised the power vested in him to sell the son's shares for the benefit of the general body of creditors. That apart, this objection relating to the maintainability of the suit for the recovery of the amount not covered by the suit mortgage, without the leave of the Insolvency Court was not raised by the appellants herein or their father in their written statements. Nor was any issue framed on this point. \n\n This point was not even urged in the course of the arguments before the trial Court. The official receiver representing the estate of the insolvent who was added as defendant No. 1 became ex parte and he did not raise any objection. If this objection was raised in the written statements, the plaintiff could have obtained the leave of the Insolvency Court and rectified the defect, if any. We may add that it was not even alleged in the written statements filed on behalf of the defendants 2 to 4 that the quantum of consideration for the suit mortgage was only Rs. 75,00 /- For all the reasons stated we are satisfied that the suit is maintainable as against the appellants in respect of the amounts not covered by the suit mortgage.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-39", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "32. The only other question that survives for our decision relates to the rate of interest that is payable on the amount due and payable to the plaintiff-bank by the contesting defendants. The interest payable on the principal as per the contract was 10% for a certain period and thereafter 11 1/2 % on the amount in question. The Court below has awarded interest as per the agreed rate till the date of redemption i.e. 4 months from the date of the passing of the preliminary decree and thereafter 6% till realization. The contention of the appellants' counsel is that the Court is not invariably bound to award interest as per the contract rate from the date of the suit and in the circumstances of the case it is reasonable and proper to fix 6% interest from the date of the suit.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-40", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "This claim has been resisted by the counsel for the plaintiff-bank contending inter alia that the rate of interest payable to the Bank is controlled by the Reserve Bank which publishes the rates from time to time and the interest grated by the Court below in its discretion is just and proper and not liable to be interfered with in appeal. Reliance has been placed by the respondent decree-holder on the decisions of the Madras High Court in China Papinaidu v. Imperial Bank of India. and Rajagopalaswamy v. Karaikudi Bank, and that of Andhra High Court in Bank of Bapatla Ltd., v. Manyam Bibi (1954) 2 Mad LJ (Andh) 215. True as stated by the respondent's counsel interest at 12% was awarded by the Court in the cases decided by the Madras High Court and at 9% in the case decided by the Andhra High Court. However we may add that those decisions arose under the Madras Agriculturists' Relief Act and were rendered on the interpretation of the provisions of Sections 4 (e) and 10 (2) (iii) of that Act. The facts of those cases are distinguishable from those of the present case.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "10234309ed7e-41", "Titles": "Pentala Githavardhana Rao And ... vs The Andhra Bank Ltd. And Ors. on 24 December, 1971", "text": "In a recent decision of the Supreme Court in Soli Pestonji Majoo v. Ganga Dhar Kemka, it was held relying upon the decision of the Federal Court in Jaigobind Singh v. Lachmi Narain Ram. AIR 1940 FC 20 that it is not absolutely obligatory on the Courts to decree interest at the contractual rates after the dates of redemption in all circumstances even if it is not penal excessive or substantially unfair and the courts have got discretion so far as interest payable subsequent to the date of the sit is concerned. In those circumstances the contract rate of interest was granted till the date of suit and thereafter simple interest at 6% per annum on the principle sum adjudged was granted till the date of realisation. \n\n On a careful consideration of the facts and circumstances of the present case we are of the view that the rate of interest agreed upon by the parties is not penal, excessive or unfair within the meaning of the Usurious Loans Act, 1918 but we are satisfied that it is just and proper to award interest at the contract rate till the date of suit and from the date of suit till the date of preliminary decree and thereafter simple interest at 6% per annum till the date of realization. We, therefore fix the interest accordingly. \n\n 33. With the above modification relating to the rate of interest the appeal fails and is dismissed with costs. The costs in the suit as well as in this appeal payable to the respondent and the court-fee payable to the Government have to be recovered from the estate of the family. We grant 4 (Four) months' time from today for redemption\n\n \n\n34. Appeal dismissed.", "source": "https://indiankanoon.org/doc/1609558/"}
+{"id": "3293693874f1-0", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "JUDGMENT\n \n\n 1. The judicial somersault for a decade in the hands of the Division Benches and the Full Bench and the decisional upheavals inherent in the system continue to make the litigant under the perennial predicament and speculation. This is one such instance, we are called upon to clear the riddles. \n\n2. The matter is brought before us on a reference made by a learned Single Judge (BPRJ) in regard to the decision rendered by the Full Bench of this Court reported in Motichand Jain v. Jaikumar M, (FB). \n\n3. The issue that arises for consideration is\n   \n\n (a) Whether A.P. Civil Court (Amendment) Act, 30 of 1989 is retrospective or prospective in operation? \n\n(b) Whether there is any distinction between vested right and right to forum?  \n4. The Andhra Pradesh Civil Court Act, 1972 was brought into statute book with effect from 1.11.1972. The pecuniary jurisdiction of Courts both original and appellate and as also the forum are being amended from time to time. By A.P. Civil Court (Amendment) Act, 30 of 1989 under which pecuniary jurisdiction to entertain the appeal inter alia to the District Court/ Chief Judge, City Civil Court, Hyderabad was raised from the then existing Rs. 30,000/-to Rs. 1 lakh. The amendment became effective from 2.12.1989. It is also to be noted that by a further amendment, the pecuniary limits to entertain the appeal was raised to Rs. 3 lakhs with effect from 1.11.2000. We would discuss the details at a little later point.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-1", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "5. The following are the circumstances under which the matter has come to be dealt with at various levels:\n A plaint came to be filed before the II Additional Judge, City Civil Court, Hyderabad in O.S. No.28 of 1980 for specific performance of Agreement of Sale and the value of the subject-matter of the suit was Rs. 45,000/-. However, the suit was dismissed by the learned Judge on 30.12.1990. By the date of the judgment of the lower Court, Amendment Act 30 of 1989 came into effect with effect from 2.12.1989. Therefore, the plaintiff filed an appeal before the revised forum namely Chief Judge, City Civil Court, Hyderabad consequent on the amendment. The Office took an objection on the maintainability of the appeal and the learned Chief Judge, City Civil Court, Hyderabad by an Order dated 26.4.1991 held that he had no jurisdiction and that the plaintiff ought to file an appeal before the High Court. Against the said Order, the plaintiff filed CMA No. 1454 of 1991. When the matter reached before the learned Single Judge, it was referred to Full Bench on the premise that the dicta laid down by this Court in S. Kameswaramma v. M/s. Radhakrishna and Company, and K. Hara Gopal v. K. Venkata Ratna Kumar, (DB), and subsequent cases following the aforesaid cases required reconsideration. \n6. The Full Bench considered the matter at length and by an Order dated 24.10.2003 held that right to appeal is a vested right while the right to forum is governed by procedural law and hence the provision creating appellate forum under the Act is retrospective and consequently held that the Chief Judge is having jurisdiction to entertain and decide the appeals.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-2", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "7. During the interregnum, number of appeals were filed before the High Court in pursuance of law declared by the Division Bench right from Kameswaramma's case (supra). The result is that some of the appeals were disposed of and number of appeals are still pending disposal. The learned Single Judge (BPRJ) while dealing with such appeals expressed the view that the decision of the Full Bench has a greater ramifications on very large number of pending appeals and was of the opinion that matter requires reconsideration by a Larger Bench for an authoritative pronouncement. Thus, we are required to deal with the issue now. \n\n8. Before going into the actual matrix, we find it appropriate to refer to the historical background of A.P. Civil Courts Act, 1972 (Act XIX of 1972). This is an Act to consolidate and amend the law relating to the Civil Courts subordinate to High Court in the State of Andhra Pradesh. It was enforced with effect from 1.11.1972. The said Act repealed (a) The Andhra Pradesh (Andhra Area) Civil Court Act, 1873, (b) Andhra Pradesh (Telangana Area) Civil Court Act, 1954, (c) Section 17 of Andhra Pradesh (Telangana Area) Small Causes Courts Act, 1330 Fasli. Sections 8 and 18 of the Andhra Pradesh General Clauses Act, 1891 were made applicable to such repeal.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-3", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "9. The appellate forum as also the pecuniary limits was prescribed under Section 9, which reads thus:\n \"9. Forum for appeals :--(1) An appeal shall, when it is allowed by law, lie from any decree or order in a civil suit or proceeding--\n (i) of the Chief Judge or the Additional Chief Judge of the City Civil Court, to the High Court;\n(ii) of the Senior Civil Judge of the City Civil Court,\n   \n\n (a) to the Court of the Chief Judge, when the amount or value of the subject-matter of suit or proceeding is not more than Rs. 15,000/-. \n\n(b) to the High Court in other cases; and  \n \n\n(iii) of the Junior Civil Judge of the City Civil Court to the Court of the Chief Judge (2) The Chief Judge may, subject to the orders of the High Court transfer for disposal any appeal filed in the City Civil Court to any Additional Chief Judge or any Senior Civil Judge. \n(Note: The pecuniary limits have been revised from time to time)\n \n\n10. The hierarchy of Appellate Courts in Districts is stipulated in Section 17, in the following terms:\n\"17. Appeals from the decrees and orders of Courts in the Districts:--(1) An appeal shall, when it is allowed by law, lie from any decree or order in a civil suit or proceeding:--\n (i) of the District Court, to the High Court; (ii) of the Court of Senior Civil Judge,--\n(a) to the District Court, when the amount or value of the subject-matter of the suit or proceeding is not more than Rs. 15,000/-. \n\n(b) to the High Court; in other cases; and", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-4", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(b) to the High Court; in other cases; and \n \n\n(iii) of the Court of Junior Civil Judge, to the District Court. \n(2) The District Judge may, subject to the orders of the High Court transfer for disposal any appeal from the decree or order of a Court of Junior Civil Judge preferred in the District Court, to any Court of Senior Civil Judge within the district. \n\n(3) Where a Court of Senior Civil Judge is established in any district at a place remote from the seat of the District Court, the High Court, may, with the previous sanction of the Government, direct that an appeal from the decree or order of any Court of Junior Civil Judge within the local limits of the jurisdiction of such Court of Senior Civil Judge shall be preferred in the said Court of Senior Civil Judge:\nProvided that the District Judge may, from time to time, transfer to his own Court, any appeal so preferred, and dispose it of himself.\" \n11. The pecuniary limits were being raised from time to time through Amending Acts by substituting the quantum of amounts representing the value of the appeal. The following diagram will make the matter clear:\n ----------------------------------------------------------------------------------------------\nAct          Appeal from the decree or Order of                          Effective date\n----------------------------------------------------------------------------------------------\nAct 19 of 1972  Chief Judge/Additional Chief     Additional Judge, City        1.11.1972\n                 Judge/D.J to the High Court      Civil Court/S.C.J. to\n                 (if the value of the subject-    C.J./D.J. if the value\n                 matter is more than              of the appeal is not\n                 Rs. 15,000/-)                    more than Rs. 15,000/-\n\nAct 19 of 1984 More than Rs. 30,000/-            Not more than Rs. 30,000/-     21.5.1984", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-5", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "Act 30 of 1989 More than Rs. 1,00,000/-          Not more than Rs. 1,00,000/-   2.12.1989\n\nAct 28 of 2000  More than Rs. 3,00,000/-          Not more than Rs. 3,00,000/-   1.11.2000\n----------------------------------------------------------------------------------------------\n\n \n\n12. By Section 34(1) of the Act, the Andhra Area Civil Court Act, 1973. A.P. (Telangana Area) Civil Court Act, 1954. Section 17 of A.P. (T.A) Small Causes Courts Act, 1330F were repealed. By Sub-section (2) of Section 34, the provision of 8 and 18 of the A.P. General Clauses Act, 1891 were made applicable to such repeals.\n \n\n13. The question that calls for consideration is whether the amendment has retrospective effect and whether it has the effect on the pending appeals as on the date of the respective amendment Acts coming into force.\n \n\n14. The learned Counsel for the parties have virtually traced the entire case-law on the subject right from Colonial Sugar case, the decision of the Supreme Court and also the decision of this Court. Therefore, it became necessary to refer those decisions in material particulars.\n \n\n15. Mr. Challa Sitaramaiah, Senior Counsel, J.V. Suryanarayana, S.S. Prasad, P. Raghuram, V.S.R. Anjaneyulu, Nooty Rammohan Rao and host of Advocates appeared opposing the decision of the Full Bench. Mr. Vilas V. Afzalpurkar had to put a solo fight in support of the principles laid down by the Full Bench.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-6", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "16. The decisions of this Court and other High Courts directly touching the Act would be referred in the first instance.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-7", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "17. In Kotina Papayya v. Samminga Appalanaidu, 1960 (1) An.WR 100, the District Court, Visakhapatnam referred the matter to the High Court under Section 113 read with Order 46, Rule 1 of Code of Civil Procedure as to whether Madras Civil Courts (Andhra Amendment) Act, 1955 (1 of 1956) raising the monetary jurisdiction of the subordinate Appellate Courts coming into force from 1st April, 1956 has retrospective effect so as to affect the right of appeal to the High Court arising out of the pending suits. The State Government issued notification after consulting the High Court specifying the amount or value of the subject-matter of the suit not more than Rs. 7,500/- for the purpose of appeals to the District Court from the decree and the Orders of the Subordinate Judge and District Munsif and also fixing 1st April, 1956 as on the date on which the provision would come into force. Prior to the amendment, the appeal would lie to the High Court if the valuation was Rs. 5,000/- after the Amendment Act, the appeal will have to be filed only in the District Court if the valuation does not exceed Rs. 10,000/-. The question arose before the High Court was whether it would be within the competence of the District Court to take cognizance of the appeals whose value exceeds Rs. 5,000/- and below Rs. 7,500/-. The Division Bench after referring to Colonial Sugar Refining Company Limited v. Irving, 1905 AC 369 and Garikapati Veerayya v. Subbiah Choudhry, , the statement and the reasons of the Amendment Act observed that the Amendment Act was retrospective in its application and would apply to the cases instituted before the Act came into force. Again similar matter came up for consideration", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-8", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "would apply to the cases instituted before the Act came into force. Again similar matter came up for consideration before the Division Bench of this Court in S. Kameswaramma 's case (supra). The issue that came up for consideration was whether the provision of A.P. Civil Courts Act, 1972 (19 of 1972) are only prospective or retrospective in operation. The Division Bench again referring to the principles laid down in Garikapati Veeraiah's case (supra) and also Kotina Papayya (supra), observed that any change in the law relating to appeals after institution of original proceedings, which adversely touches the vested right in a suitor is presumed not to be retrospective in the absence of anything in the enactment that would compel Courts to hold otherwise.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-9", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "18. The Division Bench observed that a right of appeal to the High Court, which accrued to the litigant and existed as on the date of institution of the suit under Section 13 of Madras Civil Courts Act, 1873 was preserved to the litigant. The dominant intention of the Legislature was thus clearly and distinctly expressed that the Act would not prejudicially affect the vested rights by the expressed provisions of Clause 2 of Section 34 of the Act. Therefore, the Division Bench ruled that the Act was only prospective and not retrospective. The Division Bench distinguished the principle laid down by the earlier Division Bench in Kotina Papayya's case (supra) observed that the learned Judges in coming to the conclusion that the Legislature intended the Act to have retrospective operation relied on the postponement clause that the Act would come into the force on the date notified by the State Government and secondly on the statement and objects and reasons which would reveal the intention on the part of the Legislature to reduce the heavy files of first appeals in the High Court by the enhancement of the Appellate Court jurisdiction of the District Judges upto Rs. 10,000/-. It further observed that, it is true that as. per the present Act, there is also a postponement clause. Section 1(3) enacts that the Act shall come into force in such area and on such date as the Government may, by notification appoint; and different dates may be appointed for different areas and/or different provisions of this Act. But, postponement clause by itself is not decisive of the matter whether a statute is prospective or retrospective in operation. Retrospective operation cannot be taken to be intended unless that intention is manifested by express words or necessary implication. The Division Bench was of the view that the learned Judges were impelled by the strong surrounding circumstances to draw the inference that the intendment was to have retrospective operation. But, in the case dealt with the matter in", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-10", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "that the intendment was to have retrospective operation. But, in the case dealt with the matter in Kameshwaramma's case (supra), the Division Bench found that there are no such strong circumstances that would compel to draw the presumption that the intendment of the Act was to have a retrospective operation. The preamble of the Act merely recites that the Act is to consolidate and amend the law relating to the Civil Courts subordinate to the High Court in the State of Andhra Pradesh and accordingly held that it is not retrospective in operation and the appeal therefore, preferred before the District Court was not maintainable.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-11", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "19. In Hara Gopal's case (supra), the Division Bench has to consider the Andhra Pradesh Civil Courts (Amendment) Act, 1984 (Act 19 of 1984). In the said amendment, the appellate jurisdiction of the District Court was raised from Rs. 15,000/- to Rs. 30,000/-with effect from 21.5.1984. The Division Bench held that right of appeal to a particular forum is a substantive right and is not lost by alteration in law unless provision is made in that behalf expressly or by implication arises in that behalf. Prior to Amendment Act 19 of 1984, the District Court had jurisdiction to entertain an appeal against the judgment of Subordinate Court if the value is not more than Rs. 15,000/-. By virtue of Amending Act, increasing the value to Rs. 30,000/-, the jurisdiction of the Chief Judge/District Judge is entitled to entertain an appeal if value of the suit is less than Rs. 30,000/- and an appeal lies to the High Court, if the value is more than Rs. 30,000/-. The amendment has come into force on 21.5.1984. The suit value was Rs. 22,950/- when it was instituted on 23.4.1983. As on the date of the filing, the suit was covered by Act 19 of 1972, the appeal therefrom lies to the High Court only. Therefore, the Division Bench observed that right to prefer an appeal to the High Court was not taken away by the Amending Act 19 of 1984.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-12", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "20. One of us (BRSRJ) in Maddileti Alivelamma v. Saraswathamma, , while considering the effect of Andhra Pradesh Civil Courts Act, 1972 (as amended by Act 29 of 1997) observed that the amendment to the provisions as amended in Act 29 of 1997 was prospective in nature and the amendment provisions have no application to suits already instituted and pending on the file of the competent Court of jurisdiction. The law as on the date of filing of the suit will govern until disposal of the suit. Following the decision in Ham Gopal's case (supra), the learned Judge held that the Senior Civil Judge where the suit was instituted was entitled to consider the suit de hors the amendment raising the pecuniary jurisdiction of the District Munsif Court from Rs. 50,000/- to Rs. 1 lakh. He further held mat the provisions of the Act as in force as on the date of the institution of the suit will apply in respect of such suits instituted until their final determination. In the circumstances, the proceedings of the District Judge withdrawing and transferring the suit to the Court of the learned Principal Junior Civil Judge was set aside. Following the same decision, the Division Bench in Duggireddy Ramakrishna Reddy v. A.P. State Co-operative Societies Act, Government of A.P., , held that the Amendment Act 29 of 1997 had no application to the suits pending in the competent Courts, the law as on the date of filing of the suit governs until the disposal of the suit.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-13", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "21. It is apt to refer to a Full Bench decision of Nagpur High Court reported in Radhakisan Laxminarayan Toshnival v. Shridhar Ramchandra Alshi, AIR (37) 1950 Nag. 177 (FB), where vested right and procedural law was discussed. The issue that was referred to Full Bench was \"Does an Appellant who filed Second Appeal before 27th May, 1949 obtain a vested right to have the appeal heard by a Division Bench of two Judges with the result that the amendment to the Rules of this Court effected on 27th May, 1949 will not apply to him?\" and in Paras 11, 12 and 13 observed thus:\n\"11. The reference to a Full Bench has arisen because of an objection taken to the hearing of this appeal by a Single Judge pursuant to the amendment of Rule 1(b), Chapter I, Part I of the High Court Rules. The Original rule read as follows:\n\"1. The following matters shall ordinarily be heard and disposed of by a Judge sitting alone:\n (b) An appeal from an appellate decree of a District Court in which the value of the appeal or of the appeal and any cross-objection therein under Order 41, Rule 22 of the Code of Civil Procedure, does not exceed Rs. 2,000/-.\" \nBy the amendment of 27th May, 1949 the Rule was renumbered as (1)(a), and all words after 'District Court\" were deleted. The result was that if the unamended rule had stood this appeal, is also all second appeals above Rs. 2,000/- in value, would have gone before two Judges. Now this appeal, as also all Second Appeals irrespective of the value of the claim involved, go before a Judge sitting alone.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-14", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "12. In the case out of which this reference arises an objection was taken to the rule on the ground that the subject-matter of the appeal is now worth over a lower Appellate Court of rupees and that if a Single Judge hears the appeal, the parties will lose, what was called 'a vested right of appeal' to the Federal Court by reason of the operation of Section 111, Code of Civil Procedure. An affidavit has been sworn in support of the contention that the value of the claim in the appeal is now over a lower Appellate Court of rupees.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-15", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "13. The learned Chief Justice who heard the objection referred the question to a Full Bench\" \nThe Full Bench reiterating the rules of interpretation expressed difficulty in distinguishing the procedure and vested right. It held in Paras 26 to 28, thus:\n\"26. It is a well-established rule of interpretation of statutes that in general when the law is altered during the pendency of an action the substantive rights of the parties remain unaffected and are decided according to law as it existed when the action was begun, unless the new amendment is made retrospective either expressly or impliedly. It is equally well settled that if the statute merely deals with procedure and does not affect the substantive rights of the parties it is held to apply prima facie to all actions pending as well as future. \n\n27. Now, for the purpose of this rule of interpretation, an appeal is a continuation of the original action initiated by the filing of a plaint. As was observed by West J. in Chinto Joshi v. Krishnaji Narayana (3 Bom. 214 at p. 216), \"the legal pursuit of a remedy, suit, appeal and Second Appeal, are really but steps in a series of proceedings connected by intrinsic unity.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-16", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "28. What pertains to procedure and what to the domain of substantive rights is at times difficult to say. The line of demcarcation between the two is not always easy to draw. It is now settled authoritatively that a right to continue a duly instituted suit or a right of appeal are not mere matters of procedure but are substantive rights: See Venugopala Reddiar v. Krishnaswami Reddiar (1943 F.C.R. 39 = AIR (30) 1943 f.c.24). The leading case on the subject that an appeal is a substantive right is Colonial Sugar Refining Company v. Irving, (1905) A.C. 369) (74 L.J. P.C. 77) in which Lord Macnaghten laid down that to deprive a suitor in a pending action of an appeal to a Superior Tribunal, which belonged to him as of right, was a very different thing from regulating procedure. I shall examine the facts of this case later.\" \nThe Full Bench speaking through Hidayatullah J., (as he then was) while distinguishing vested right as between a right of appeal and the appeal at the discretion of the Court observed:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-17", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"47. Now if any distinction is to be made between appeals as of right and appeals either as of grace or in the discretion of Courts, it is obvious that the only appeal which cannot be taken away except by the clearest piece of legislation is an appeal which vests in a party as of right. Every tenuous possibility of leave which might be granted is not to be confused with a substantive right like an appeal which belongs to a litigant as of right. A difference must, therefore, be made between those cases in which the appeal is such an absolute fact that it can be said to vest in a litigant the moment his case is before the Court and those cases in which the litigant has no immediate right and the appeal can only be taken to the Superior Court when the Court itself decides that the case is fit for a decision of the King in Council. It may be that the litigant may have the right to draw the attention of the Court that his is such a case, but since the determination of this question is entirely in the discretion of the Court and the fitness of the case depends not on any monetary valuation, the right cannot be said to be substantive or to vest in the litigant when the case was filed.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-18", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "48. An appeal is nothing more than a method of passing from one Tribunal to another so that the errors of the inferior Tribunal may be corrected by the Superior Tribunal. In this process we have on the one hand a class of cases in which the right is absolute, not depending in any way upon the discretion of the inferior Court (as for example in these cases where the subject-matter of the appeal is of a certain value), and those cases in which the appeal can only be filed if the Court considers the case fit for decision by a Superior Tribunal. I cannot but describe this right as contingent and not self-supporting. Whether the grace is exercised by the Superior Court or the discretion is exercised by the inferior Court is not much to the purpose. The appeal is merely a contingency and in this matter cannot be distinguished from a Letters Patent Appeal from one Judge to two Judges under Clause 10, Letters Patent.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-19", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "While dealing with the procedural law, the Full Bench after referring to English cases observed in Para 49 thus:\n\"49. An appeal is merely a limitation of a Court's jurisdiction to pronounce a final decision on matters litigated. On the one hand that limitation is imposed ab extra where the decision is as of right appealable. On the one (other?) hand the limitation arises from the violation of the Court itself, privilege having been granted to the Court to reserve cases for decision by a Superior Tribunal if the Court exercising its own discretion thinks fit. It is wrong to confuse the two aspects of the question and to think that the exceptional privileges or discretion conceded to a Court is a right of the litigant. By a change in procedure (which is always retrospective) I do not consider that the right (much less a vested right) of the litigant is at all affected. The case then is governed by the rule that a statute dealing with procedure only, unless the contrary is expressed, applies to all actions, whether commenced before or after the passing of the statute. This rule has been affirmed in several leading cases. In Wright v. Hale, (1860) 6 H & n, 227 = (30 L.J. Ex. 40) Pollock C.B. stated:\n\"When an Act of Parliament alters the proceedings which are to prevail in the administration of justice, and there is no provision that it shall not apply to suits then pending, I think it does apply to such actions.\"  \nThe rule was again stated by Wild B. in the same case as follows:\n\"But, where the enactment deals with procedure only unless the contrary is expressed, the enactment applies to all actions whether commenced before or after the passing of the Act. That this is the principle appears from the cases that have been referred to on both sides.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-20", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "This rule was followed by A.L. Smith L.J. in the leading case of The Ydun, (1899) P. 236, at p. 245 = 68 L.J. P. 101, See also: Kimbrav v. Draper, (1868) 3 Q.B. 160 at pp. 162, 163 = (37 L.J.K.B. 80); In re. Joseph Suche & Co., (1875) 1 Ch.D. 48 - (45 L.J.Ch.12). In the leading case of James Gardner v. Lucas, 1878. 3 A.C. 582 at p. 603, Lord Blackburn stated the rule in the following words:\n\"I think it is perfectly settled that if the Legislature intended to frame a new procedure, that instead of proceeding in this form or that, you should proceed in another and a different way, clearly there bygone transactions are to be sued for and enforced according to the new form of procedure. Alterations in the form of procedure are always retrospective, unless there is some good reason or other why they should not be.\" \nAnd finally, it held that:\n\"insofar as appeals above the appealable limit are concerned the rule, though merely a rule of produce, deprives them of a substantive right of appeal which vested in the litigants before the rule was amended, but that in cases below the appealable limit the rule touches no such right. My answer to the question propounded by my Lord the Chief Justice is:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-21", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"An appeal who filed his Second Appeal before 27.5.1949 obtained a vested right to have the appeal heard by a Bench of two Judges, with the result that the amendment of rule of this Court effected on 27.5.1949 will not apply to him provided his case satisfies the condition of valuation prescribed in Section 109, Clauses (1) and (b) read with Section 110, Civil Procedure Code. This would not apply to those appeals which are below the mark and which are appealable only under Clause 3 of Section 109 Civil Procedure Code.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-22", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "22. A reference is also made to the Division Bench decision of Orissa High Court reported in Duryodhan Samal v. Smt. Uma Dei, AIR 1986 Ori. 30, wherein the Division Bench held that the suit for valuation of Rs. 20,000/- or less was filed before the enforcement of the Act. Appeal subsequent to the enforcement of the Act lay before the District Judge and not in the High Court. It was held that statute altering forum is retrospective. The Division Bench relied on the decision of the Supreme Court reported in New India Insurance Company Ltd. v. Smt. Shanti Misra, . In that case, the suit for partition was filed in the Court of Subordinate Judge, Badrak on 6.10.1978 and it was disposed of by a judgment and decree dated 28.2.1985 and decree dated 30.3.1985. This appeal valued at Rs. 5,900/- and the appeal was filed before the Orissa High Court. The objection relating to maintainability of the appeal was raised in view of the provisions contained in Section 16(2) of Orissa Civil Court Act. The said Act was assented from the President of India on 30.1.1985 and it was given effect from 1.1.1985. Under Section 25 of the Bengal, Agra and Assam Civil Courts Act, 1887, in its application to State of Orissa was repealed. Consequently, the new Act came to be governed in Orissa State. The question that arose for consideration was irrespective of decree or Order of the appeal shall from the Subordinate Judge to the District Judge, where the value of the original suit in which or in any proceedings out of which the decree or Order was made did not exceed Rs. 20,000/- as per the provisions of Section 16(2). Under Section 16(1),", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-23", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "as per the provisions of Section 16(2). Under Section 16(1), the appeal proviso and the Court to which the appeal lies is stipulated which reads thus:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-24", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"4. Section 2(1) of the Act enumerates classes of Civil Courts. Section 16 of the Act which provides the forum of appeal is quoted for proper appreciation:\n\"16(1) Save as otherwise provided by any enactment for the time being in force,--\n(a) an appeal from a decree or Order of a District Judge or Additional District Judge shall lie to the High Court;\n(b) an appeal shall not lie to the High Court from a decree or Order of an Additional District Judge in any case, in which if the same had been made by the District Judge an appeal would not lie to the High Court. \n(2) Save as aforesaid, an appeal from the decree or Order of a Subordinate Judge shall lie-\n(a) to the District Judge, where the value of the original suit in which or in any proceeding arising out of which the decree or Order was made, did not exceed twenty thousand rupees; and", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-25", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(b) to the High Court, in any other case, (3) Save as aforesaid, an appeal from the decree or Order of a Munsif shall lie to the District Judge. \n\n(4) Whether the function of receiving any appeals which lie to the District Judge under Sub-section (2) or Sub-section (3) has been assigned to an Additional District Judge, the appeals may be preferred in the Court of such Additional District Judge.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-26", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(5) The High Court may, by notification, direct that any or all appeals referred to in Sub-section (3) shall be preferred in the Court of any Subordinate Judge mentioned in the notification, and the appeals shall, thereupon, be preferred accordingly. \n5. It would be seen from a plain reading of the section that appellate jurisdiction of the District Judge has been enhanced to Rs. 20,000/- which was previously Rs. 5,000/- under the Bengal, Agra and Assam Civil Courts Act, 1887, and where the value of the decree passed by Subordinate Judge did not exceed Rs. 20,000/-, the appeal shall lie to the District Judge. It has been argued at the Bar that since the right of appeal is a vested right and such right accrued to the parties on the date of the institution of the suit in the year 1978 in accordance with the provisions of the Bengal, Agra and Assam Civil Court Act, 1887, the said right of appeal shall continue to exist and to that extent the old law must govern the exercise and enforcement of that right. It has also been argued that since the Act is not retrospective in operation, the Appeal against the decree passed in any suit instituted prior to 1.1.1985 (the date on which the Act came into force) must be continued to be filed in this Court in accordance with the provisions of the Bengal, Agra and Assam Civil Court Act, 1887.\" \nThe Division Bench held that under the Act, appeal arising out of the suits or proceedings valued at Rs. 20,000/- or less in which decrees have been passed or Orders have been made irrespective of whether suits or proceedings have been subsequent or prior to Act coming into force, shall lie to the District Court and not the High Court. \n\n23. We may have a look at the foreign decision and the authoritative and acknowledge texts.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-27", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "24. The legal genesis of the subject is traceable to Colonial Sugar's case (supra), which is being followed by both the English Courts and Indian Courts consistently. In that case, Collector of Customs acting under Excise Tariff Act, 1902 called upon the appellants to pay certain excise duty basing on the quantity of sugar. The claim was disputed and there upon after depositing the money with the Collector, they brought an action before the Supreme Court of Queensland against the Collector for recovering the sum. The writ was issued on 25.10.1902. As on the said date, right of appeal to His Majesty in Council from the judgment of the Supreme Court was available under the Order in Council dated 30.6.1860. The Full Court recorded the opinion on 4.9.1903 in favour of Collector. However, in the meanwhile, Judicial Act, 1903 was passed on and it received the Royal assent on 25.8.1903 i.e., about 10 days before the judgment was delivered by the Supreme Court. By Section 38 of the Act, the jurisdiction of the High Court of Australia in certain specified matters was made exclusive of jurisdiction of several Courts of State and by Section 39, it was made exclusive in all other matters except therein provided. Sub-section (2) of Section 39 provided that several Courts of the State would be invested with federal jurisdiction in all the matters mentioned therein except those specified in Section 38 subject to certain conditions and restrictions, one such condition was that every decision of a Court of a State from which, at the establishment of the Commonwealth, an appeal lay to the Queen in Council should be final and conclusive except so far as an appeal might be brought to the High Court. The result of this Act was that Her Majesty in Council ceased to be a Court of Appeal from the decision of the Supreme Court and the only appeal from the Supreme Court under the Act lay to", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-28", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "from the decision of the Supreme Court and the only appeal from the Supreme Court under the Act lay to the High Court of Australia. The Supreme Court of Queensland having granted leave to the Appellants under the Order in Council of 1860, the Appellants filed the appeal in the Privy Council. The respondent filed a petition before the Privy Council for dismissal of the appeal on the ground that right of appeal to His Majesty in Council by virtue of the Order in Council of 1860 under which the leave had been granted had been taken away by the Judiciary Act, 1903 and that the only appeal from the decision of the Supreme Court of Queensland lay to the High Court of Australia. In fact, it was the contention of the Appellant that provisions of the Judiciary Act, 1903 were not retrospective so as to defeat the right in existence at the time when the Act received the royal assent. However, Their Lordships of the Privy Council dismissed the respondent's petition and observed thus:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-29", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"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 Judiciary 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 stems 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 principle, 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 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.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-30", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "25. The aforesaid proposition of law has been firmly established in English jurisprudence and is accepted as sound and cited with approval in leading textbooks. The decision has been followed and applied in numerous decisions in England and India and its correctness or otherwise has not been questioned so far. The said principle was also followed in Delhi Cloth and General Mills Company Ltd. v. Income Tax Commissioner, Delhi, AIR 1927 PC 242. The facts of the case as could be traced are that the two assessment Orders were made, one on June 12, 1923 and on March 23, 1924. In each case, the sum in dispute exceeded Rs. 10,000/-. On the request of the assessee two cases were stated by the Commissioner to the High Court under Section 66 of Indian Income Tax Act. The High Court affirmed the decisions of the Commissioner in January, 1926. Thereafter, the assessee applied for leave to appeal to the Privy Council. On April 1, 1926, the amendment was brought to Indian Income Tax Act, 1926 wherein Section 66A was added which gave right of appeal. The learned Judges of the High Court were of opinion that the petitioners had a right of appeal to His Majesty in Council provided they could in effect bring their cases within the requirements of Section 109(c) of the Code of Civil Procedure but not otherwise. The High Court dealt with the applications for certificates on that footing but dismissed them as it refused to certify that the case was a fit one for appeal to His Majesty in Council. The company applied to the Privy Council for special leave to appeal from the two orders of the High Court passed in January, 1926. It will be noticed that in January, 1926 when the orders were made by the High Court Sections 66 and 66A was not in the Act at all and it has been held by the Privy Council in", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-31", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "was not in the Act at all and it has been held by the Privy Council in Tata Iron and Steel Company Limited v. Chief Revenue Authority, 50 Ind App 212 = (AIR 1923 PC 148) (D), that there was no right of appeal from a judgment delivered by the High Court under Section 66 of the Indian Income Tax Act. Therefore the orders of the High Court were final when they were made in January 1926. Such was the position until April 1, 1926 when Section 66A was added to the Act. The question arose was whether Section 66A destroyed the finality, that had attached to the orders when they were made and gave any right of appeal at all from the orders of the High Court. Their Lordships observed thus:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-32", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"The principle which their Lordships must apply in dealing with this matter has been authoritatively enunciated by the Board in 1905 AC 369 (A), where it is in effect laid down that, while provision of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment. Their Lordships can have no doubt that provisions which if applied retrospectively, would deprive of their existing finality orders which, when the statute came into force were final, are provisions which touch existing right. Accordingly, if the section now in question is to apply to orders final at the date when it came into force, it must be clearly so provided. Their Lordships cannot find in the section even an indication to that effect. On the contrary, they think there is a clear suggestion that a judgment of the High Court referred to in Sub-section (2) is one which under Sub-section (1) has been pronounced by \"not less than two Judges of the High Courts\", a condition which was not itself operative until the entire section came into force.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-33", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "The question of finality of order was considered by this Court in the case of Indira Sohanlal v. Custodian of Evacuee Property, Delhi 1955-2 SCR 1117. In that case the facts shortly stated were as follows: On 10.10.1947 the appellant had arranged with a Pakistani for the exchange of certain properties she left behind at Lahore at the time she migrated to India after the partition for certain lands in a village in the State of Delhi belonging to that Pakistani. On 23.2.1948, the appellant applied to the Additional Custodian for confirmation of the transaction under Section 5-A of the East Punjab Evacuees (Administration of Property) Act, 1947 as amended in 1948. Section 5-B, of that Act provided that it the original order under Section 5-A was passed by an Additional or Deputy Custodian of Evacuee Property, any person aggrieved by such order might appeal within 60 days from the date of the order to the Custodian would be final and conclusive. For some reason or the other the appellant's application for confirmation was not taken up promptly, but was adjourned from time to time. In the meantime the East Punjab Evacuees' (Administration of Properly) Act, 1947 was repealed by ordinances, which in their turn were eventually replaced by the Administration of Evacuee Property Act 1950, (Central Act XXXI of 1950). Section 27(1) of the Act empowered the Custodian General, either on his own motion or on application made to him in this behalf, to call for the record of any proceeding in which any District Judge or Custodian had passed an order for the purpose of satisfying himself as to the legality or propriety of any such order and to pass order in relation thereto as he thought fit. In other words Section 27(1) of", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-34", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "order in relation thereto as he thought fit. In other words Section 27(1) of the new Act gave a power of revision to the Custodian General on 20.3.1952 the Additional Custodian acceded to the appellant's application and confirmed the exchange. On 5.5.1952 the appellant appliedto be put in possession, thereupon a notice was issued under Section 27(1) of the Central Act XXXI of 1950 to the appellant to show-cause why the order of the Additional Custodian dated 20.3.1952 should not be set aside. On 20.5.1953 the Custodian General passed an order setting aside the order of confirmation passed by the Additional Custodian on the ground, inter alia, that notice had not been served on all parties interested and directed the Custodian to decide the case on notice to all parties interested. The petitioner obtained special leave to appeal to this Court against the order of the Custodian General or, Evacuee Property. At the hearing of the appeal the learned Counsel for the appellant contended that according to the principle laid down by the Privy Council in Colonial Sugar Refining Co. Ltd. v, Irving (A) (supra), she had, on the filing of her application for confirmation in 1948, acquired a vested right to have it determined under Section 5-A with the attribute of finality and conclusiveness attaching to the order when made just as a litigant acquired a vested right of appeal on the commencement of his suit or proceeding and that vested right could not be taken away by subsequent statute except by express provision or by necessary intendment. There was according to the appellant, nothing in Section 27 of the Administration of Evacuee Property Act 1950 (Central Act, XXXI of 1950), which expressly or by necessary intendment took away that vested right. It will be noticed that at the", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-35", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "which expressly or by necessary intendment took away that vested right. It will be noticed that at the date of the commencement of the Central Act XXXI of 1950 no order had actually been made to which the attribute of finality could attach. In these circumstances this Court repelled the contention of the appellant with the following words:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-36", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"However this may be, it appears to be clear that while a right of appeal in respect of a pending action may conceivably be treated as a substantive right vesting in the litigant on the commencement of the action-though we do not so decide- no such vested right to obtain a determination with the attribute of finality can be predicated in favour of a litigant on the institution of the action. By the very terms of Section 5-B of East Punjab Act XIV of 1947, finality attaches to it on the making of the order. Even if there be, in law, any such right at all as the right to a determination with the attribute of finality, it can in no sense be a vested or accrued right. It does not accrue until the determination is in fact made when alone the right to finality becomes an existing right as in ILR 9 Lah. 284. We are, therefore, of the opinion that the principle of Colonial Sugar Refining Co. Ltd. v. Irving (A) (supra) cannot be invoked in support of a case of the kind we are dealing with.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-37", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "However, it has to be seen that the Supreme Court left open the question whether the right of appeal in respect of the pending action could be treated as substantive right vesting in the litigation on the commencement of the action. Therefore, for this purpose, the Supreme Court in Garikapati Veeraya 's case (supra), went into this aspect and laid down appropriate principles. \n26. In the words of Craies on Statute law, \"One of the most well-known statements of the rule regarding retrospectively is contained in this passage from the judgment of R.S. Wright J, in Re. Athhumney: \"Perhaps no rule of construction is more firmly established than this - that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only.\" The rule has, in fact, two aspects, for it \"involves another and subordinate rule, to the effect that a statute is not to be construed so as to have a greater retrospective operation than its language renders necessary.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-38", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "If, however, the language or the dominant intention of the enactment so demands, the Act must be construed so as to have a retrospective operation, for \"the rule against the retrospective effect of statutes is not a rigid or inflexible rule but is one to be applied always in the light of the language of the statute and the subject-matter with which the statute is dealing\" \nIn Re A. Solicitor's Clerk (1957) 1 W.L.R. 1219, it was held thus:\n \"The clerk was convicted in 1953 on four charges of larceny but the charges did not relate to money or property of his employer or employer's client, and so an order prohibiting solicitors from employing him could not be made under the provisions of Section 16 of the Solicitors Act, 1941. The Solicitors (Amendment) Act, 1956, Section 11, amended Section 16 so as to include convictions of larceny irrespective of ownership. The Divisional Court held that the amendment was not a true retrospective provision. \"It enables an Order to be made,\" said Lord Goddard C.J. (at pp.1222, 1223), \"disqualifying a person from acting as a solicitor's clerk in the future and what happened in the past is the cause of reason for the making of the Order, but the Order has no retrospective effect. It would be retrospective if the Act provided that anything done before the Act came into force or before the Order was made should be void or voidable or if a penalty were inflicted for having acted in this or any other capacity before..... This Act simply enables a disqualification to be imposed for the future which in no way affects anything done by the Appellant in the past.\" \nIn Waugh v. Middleton, (1853 8 Ex. 352), reads thus:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-39", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"The Bankruptcy Act, 1849, which made a deed of arrangement \"now or hereafter\" entered into by a trader with six-servants of his creditors binding on the non-executing creditors at the expiration of three months after they should have notice of it, was held to apply only to deeds executed after the passing of the Act. To apply the statute to past transactions would have been so unjust that it was expedient to get rid of the apparent effect of the word \"now\" by any possible means: and it was accordingly understood as restricted to arrangements not completed, but yet binding in equity, at the time when the Act was passed.\" \nWith regard to change of law during the pendency of action, it is stated thus:\n \"In general, when the substantive law is altered during the pendency of an action, the rights of the parties are decided according to the law as it existed when the action was begun, unless the new statute shows a clear intention to vary such rights.\" \nMaxwell on Interpretation of Statutes 12th Edition, reads thus:\n\"But, if the necessary intendment of a statute is to affect the rights of parties to pending actions, the Court must give effect to the intention of the Legislature and apply the law as it stands at the time of the judgment even though there is no express reference to pending actions. This principle was applied to the Landlord and Tenant (Rent Control) Act, 1949 in Hutchinson v. Jauncey (1950) 1 K.B. 574), the Court of Appeal taking the view that Sir George Jessel M.R. had gone too far when he said that express terms alone could alter the rights of parties by taking away or conferring any pending right of action (Re. Joseph Suche and Company Ltd. (18.75) 1 Ch.D.48).", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-40", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "The effect of a change in the law between a decision at first instance and the hearing of an appeal from that decision was discussed by the House of Lords in Att. Gen. v. Vernazza. (1960) A.C. 965). Lord Denning said (at p.978) that it was \"clear that in the ordinary way the Court of Appeal cannot take into account a statute which has been passed in the interval since the case was decided at first instance, because the rights of litigants are generally to be determined according to the law in force at the date of the earlier proceedings (Re. Debtor (No. 490 of 1935) (1936) Ch.237). But, it is different when the statute is retrospective either because it contains clear words to the effect or because it deals with matters of procedure only, for then Parliament has shown an intention that the Act should operate on pending proceedings, and the Court of Appeal are entitled to give effect to this retrospective intent as well as a Court of first instance.\" For this purpose, however, a statute which actually takes away the right of appeal is not to be regarded as affecting mere matters of procedure (Colonial Sugar Refining Company Ltd. v. living (1905) A.C. 369).", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-41", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "In respect of procedural Acts, the presumption against retrospective construction has no application to enactments which affect only the procedure and practice of the Courts. No person has a vested right in any course of procedure (Republic of Costa Rica v. Erlanger (1874) 3 Ch.D.62, but only the right of prosecution or defence in the manner prescribed for the time being, by or for the Court in which he sues, and if an Act of Parliament alters that mode of procedure, he can only proceed according to the altered mode (Wright v. Hale (1860) 39 L.J. Ex.40). \"Alterations in the form of procedure are always retrospective, unless there is some good reasons or oilier why they should not be.\" (Gardner v. Lucas (1878)3 App. Cas. 582)\" \nEven in declaratory statute, the principle that the statute is not to be construed so as to take away. Previously vested is not applicable. In principles of Statutory Interpretation 5th Edition by G.P. Singh at Page 315, it is stated thus:\n\"The presumption against retrospective operation is not applicable to declaratory statutes. As stated in CRAIES and approved by the Supreme Court:\nFor modem purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law, or the meaning or effect of any statute. Such Acts are usually held to be retrospective. The usual reason for passing a declaratory Act is to set aside what Parliament deems to have been a judicial error whether in the statement of the common law or in the interpretation of statutes. Usually, if not invariably, such an Act contains a preamble, and also the word 'declared' as well as the word enacted.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-42", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "In Maxwell on interpretation of Statutes, 12th Edn.(1969), the learned author has made the following observations based on various decisions of different Courts, specially in Athlumney, Re, (1989)2 QB 547 = (1895-9) All.E.R. Rep. 329, at preparation 551, 552:\n \"Perhaps no rule of construction is more firmly established than this that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matters of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only\". The rule has, in fact, two aspects, for it, \"involves another and subordinate rule, to the effect that a statute is not to be construed so as to have a greater retrospective operation than its language renders necessary\". \n27. It is cardinal principle of construction that every Statute prima facie prospective, unless it is expressly or by necessary implication made to have retrospective operation. But, the rule in general is applicable where the object of statute is to effect the vested right or to impose new burdens to impair existing obligations. It is said that nova constitutio futuris formam imponere debet non praeteritis. In the words of Lord Blanesburg, the provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express indendment or necessary intendment. (Delhi Cloth Mills's case (supra) and Colonial Sugar's case (supra).", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-43", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "28. It is not possible to point out as to when the substantive law ends and procedural law commences and vice versa. It does not therefore, appear that the substantive law determines rights and procedural law deals with remedies is wholly valid, for neither the entire law of remedies belong to procedure nor are rights merely confined to substantive law because the rights are hidden even \"in the interstices of procedure. In the words of G.P. Singh also, the rule against retrospectivily has also been stated in recent years avoid the classification of statutes into substantive and procedural and avoiding use of words like existing or vested. \n\n29. In Ram Singha v. Shankar Dayal, ILR 50 All. 965 = AIR 1928 All. 437 (FB), the suit for rent was filed on July 12, 1926, when North Western Provinces Tenancy Act, 1901 (U.P. Act II of 1901) was in force. Section 177 of the Act gave right of appeal from the decision of the Asst. Collector to the District Judge, when the amount or value of the subject-matter of the suit exceeded Rs. 100/-. On 7th September, 1926, Agra Tenancy Act came into force repealing 1901 Act. Section 240 of the New Act reproduced Section 175 of the Old Act. Provided that no appeal would lie to the decree or Order passed by any Court under this Act, except as provided in this Act. The material portion reads thus:\n \"An appeal shall lie to the District Judge from the decree of an Asst. Collector of the first class or of a Collector in any of the suits included in Group A of the Fourth Schedule in which--\n(a) the amount or value of the subject-matter exceeds rupees two hundred; or", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-44", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(b) ................................On December 23, 1926 i.e., after the new Act came into force, the suit was decreed by the Asst. Collector. The defendant presented an appeal to the District Judge and the said appeal was returned. The defendant presented a memorandum of appeal before the Collector of Etawah and that Officer was of the opinion that he had no jurisdiction to entertain the appeal and referred the case to the High Court under Section 267 of Agra Tenancy Act. The following was referred to the Full Bench:\n \"Whether the question of filing of an appeal was governed by the law obtaining at the date of institution of a suit or by the law that may prevail at the date of the decision of it, or at the date of the filing of the appeal?   \nThe Full Bench expressed the following opinion:\n\"In our opinion, the point is concluded by the pronouncement of their Lordships of the Privy Council in the case of the Colonial Sugar Refining Co. Ltd. v. Irving (A). In that case ordinarily an appeal lay to their Lordships of the Privy Council from an order of the Supreme Court. While the matter was pending in that Court, the law was amended so as to allow an appeal to the High Court. Their Lordships of the Privy Council held that the new Act could not deprive the party of his right to appeal to the Privy Council. Lord Macnaghten remarked at Page 372: \"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.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-45", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"It was observed that the language of the new Act, which came into force before the decree was passed, was not regarded as containing anything which expressly or by necessary intendment took away the right of appeal which vested in the parties on the date of the institution of the suit on the mere ground that the decree had been made after the new amendment came into force. Thus, this case clearly establishes that the right of appeal vests in the parties at the date of the suit and is governed by the law prevailing at that time and the date of the decree or of the filing of the appeal does not affect this right unless some subsequent enactment takes away this right expressly or by necessary intendment. Further, the language of the New Act namely Section 242(1) namely, \"An appeal shall lie to the District Judge from the decree of an Assistant Collector......\" could not be construed as covering the decree passed after the date of the new Act in a suit instituted before its date.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-46", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "30. In Hoosein Kasam Dada (India) Limited v. State of Madhya Pradesh, , on November 28, 1947, the appellants submitted returns to the Sales Tax Officers. At that time Section 22(1) of the Central Provinces and Berar Sales Tax Act, 1947 provided that no appeal against the Order of assessment should be entertained unless it was shown that such amount of tax as the appellant might admit to be due from him has been paid. Pending the assessment on the appellant's return the Act was amended on November 25, 1949 which provided that no appeal would be admitted unless such appeal was accompanied by satisfactory proof of payment of tax in respect of which the appeal had been preferred. The Asst. Commissioner to whom the return was transferred for disposal made an assessment on April 8, 1950, the Appellant preferred an appeal on May 10, 1950 without depositing the amount of tax in respect of which he has filed an appeal and which came into force from 24.11.1949. The Board of Revenue was of the opinion that Section 22(1) as applied to the case as the assessment was made and appeal was preferred after the amendment came into force. The Supreme Court held that the right of appeal was a matter of substantive right and not merely a right of procedure, that this right became vested in a party when the proceedings were first initiated and that such right could not be taken away except by express enactment or necessary intendment. Accordingly, it was held that the appellant had a vested right of appeal when the assessment were initiated in 1947 that his right of appeal was existed on that date. That the Amendment of 1950 could not be regarded as a mere alteration in procedure or an alteration regulating the exercise of the right of appeal, if it whittled down the right itself and that it had no retrospective effect as the Amended Act of", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-47", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "whittled down the right itself and that it had no retrospective effect as the Amended Act of 1950 did not expressly or by necessary intendment give it retrospective effect and the appeal could not, therefore, be rejected for not-payment of tax in respect of which the appeal was preferred.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-48", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "31. All the aforesaid cases and some other eases came to be considered by the Supreme Court in Garikapati Veeraiah's case (supra). It was a case where the suit was instituted on April 20, 1949 in the Sub-Court of Bapatla, which was then within the jurisdiction of Madras High Court. Judgment of the Trial Court was passed on 14.11.1950 dismissing the suit. The plaintiff filed an appeal on October 1, 1953, when Andhra State was formed and a new High Court was established under Section 28 of the Andhra State Act, 1953 (Act XXX of 1953). The High Court accepted the appeal and reversed the decree of Trial Court and decreed the suit. The application for leave to appeal to the Supreme Court was dismissed on the ground inter alia that the value of the property was Rs. 11,400/- and did not come up to Rs. 20,000/-. The petitioner contended that the judgment being one of the reversal being value above Rs. 10,000/- he was entitled, as a matter of right to come up to before the Supreme Court and that right had been denied to him by the High Court. The Supreme Court should exercise in its discretion to grant Special Leave under Article 136 of the Constitution of India. It was the contention that as from the date of the institution of the suit, plaintiff acquired vested right of appeal to Federal Court, which has been replaced by the Supreme Court. The Supreme Court after referring to catena of decisions referred to above carved out the following principles. Para 23 is relevant, which is extracted below:\n\"23. From the decisions cited above the following principle clearly emerge:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-49", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"23. From the decisions cited above the following principle clearly emerge:\n(i) That the legal pursuit of a remedy, suit appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-50", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(ii) The right of appeal is not a mere matter of procedure but is a substantive right. \n\n(iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. \n\n(iv) The right of appeal is a vested right and such a right to enter the Superior Court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right it to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. \n\n(v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise.  \nThe Supreme Court in Paras 24 and 25 further observed as follows:\n\"24. In the case before us the suit was instituted on April 22,1949 and on the principle established by the decisions referred to above the right of appeal vested in the parties thereto at that date and is to be governed by the law as it prevailed on that date that is to say, on that date the parties acquired the right, if unsuccessful, to go up in appeal from the sub-Court to the High Court and from the High Court to the Federal Court under the Federal Court (Enlargement of Jurisdiction) Act, 1947 read with Clause 39 of the Letters Patent and Sections 109 and 110 of the Code of Civil Procedure provided the conditions thereof were satisfied. The question for our consideration is whether that right has been taken away expressly or by necessary intendment by any subsequent enactment. That respondents to the application maintain that it has been so taken away by the provisions of our Constitution.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-51", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "25. In construing the article of the Constitution we must bear in mind certain cardinal rules of construction. It has been said in Hough v. Windus, 1884-12 QBD 224 at P.237 (V) that \"statutes should be interpreted, if possible, so as to respect vested right. \"The golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation it cannot be to construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed. Leeds and County Bank Ltd. v. Walker, (1883) 11QBD 84 at Page 91(W); Moon v. Durden, (1848) 2 Ex 22:76 RR 479 at p.495 (X). The following observation of Rankin C.J. in Sadar Ali v. Dalimuddin, (K) (supra) at P.520 (of ILR Cal) : (at P.643 of AIR) is also apposite and helpful: \"Unless the contrary can be shown the provision which takes away the jurisdiction is itself subject to the implied saying of the litigant's right. \"In Janardan Reddy v. The State, (Y) Kania C.J. in delivering the judgment of the Court observed that our Constitution is generally speaking prospective in its operation and is not to have retroactive operation in the absence of any express provision to that effect. The same principle was reiterated in Keshavan Madhava Menon v. State of Bombay, (Z) and finally in Dajisaheb Mane v. Shankar Rao Vithal Rao, (Z1) to which reference will be made in greater detail hereafter.\" \nThis decision is consistently ruling the field.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-52", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "32. The decisions subsequent to Veeraiah's case (supra), continued to lay down the principle that substantial rights cannot be taken away by amendment retrospectively, unless the statute itself clearly expressed the intention of doing so or by necessary intendment. \n\n33. In State of Bombay v. Supreme General Films Exchange Limited, , certain amendments were made to Court Fee Act as applied to Bombay instead of fixed Court fee payable on a plaint etc., ad valorem fee become payable. The amendment came into force from 1.4.1954, but there was no provision, express or by necessary intendment for giving them retrospective effect. In respect of appeals filed after that date against the decrees passed in suits instituted before that date, the question arose as to whether the Court fee payable on the memoranda of appeal were according to the law in force at the date of the filing of the suits or according to the law in force at the date of the filing of appeals. It was held that the Court fee payable on the memoranda of appeal were according to the law as it stood at the date of the filing of the suits. The Supreme Court observed that the impairment of the right of appeal by putting a new restriction thereon or imposing a more onerous condition is not a matter of procedure only; it impairs or imperils a substantive right and an enactment, which does, so is not retrospective unless it says so expressly or by necessary intendment.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-53", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "34. In Lakshmi Narain v. First Additional District Judge, Allahabad, , the question for determination was whether the provisions of the U.P. Civil Laws (Reforms and Amendment) Act (U.P. XXIV of 1954) - a first appeal in a suit decided prior to the enactment of the Act, involving a valuation of less than Rs. 10,000/- could be transferred for hearing and disposal to a District Judge or Additional District Judge. The Appellant as a plaintiff instituted Suit No. 7 of 1949 in the Court of the Civil Judge, Mathura, for possession of certain properties on 26.1.1949. The suit was dismissed on 27.11.1951. The plaintiff preferred a first appeal to the High Court of Judicature at Allahabad, and it was numbered First Appeal No. 37 of 1952. It was pending in the High Court from 8.2.1952 to 23.4.1952 when it was notified to the parties that the appeal had been transferred to the Court of the District Judge, Allahabad, for hearing. This order was passed by the learned Chief Justice under Section 24(1)(a) of the Code of Civil Procedure, on his own motion. The Order reads thus:\n \"It is hereby ordered that first appeals mentioned in the list annexed hereto transferred under orders of this Court to the Court of the District Judge, Allahabad, are now transferred from that Court to the Court of the 1st Additional District Judge at Allahabad.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-54", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "This is one of the appeal, which forms part of the list. It appears that the orders were passed in view of the recent legislation of which amended large number of statutes, one of them being the Bengal, Agra and Assam Civil Courts Act (XII of 1887). Section 21, Clause (a) of Sub-section (1) was amended so as to substitute 'ten thousand rupees' for 'five thousand rupees', thus enabling District Courts to entertain first appeals up to a valuation of ten thousand rupees. The appellant appeared before the Court and raised a preliminary objection as to the jurisdiction of that Court to hear the appeal. The Court overruled the preliminary objection as to its jurisdiction by its order dated 31.5.1962, observing that it could not contravene the orders of the High Court. Thereupon, the appellant moved the High Court under Articles 226 and 227. The writ petition was dismissed on the basis of the decision of the Division Bench already existing as on that date. Therefore, even the appeal filed before the Division Bench was dismissed on the ground that the question raised was already concluded. The Division Bench also referred the question to the Larger Bench. Appellant then moved High Court for Special Leave, which was granted. The Supreme Court observed thus:\n\"The High Court emphasised the fact that appeals like the one before them had been transferred to the District Courts not under the provisions of the Act but under Section 24 of the Code of Civil Procedure. In this connection, the High Court proceeded to make the following observations:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-55", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"It is enough that the U.P. Amending Act contains no provision taking away our power to transfer the appeals under Section 24,C.P.C., or no provision laying down that the District Judges are not competent to hear appeals arising out of suits instituted prior to its enforcement. There is nothing in the provisions of Section 3 of the Act to render the District Judges incompetent to hear them. Sub-section (1) reserves rights acquired prior to the enforcement, but as we have explained earlier if the right of the parties to the appeals is affected, it is not on account of our enforcing any provision of it but on account of our exercising our power under Section 24 C.P.C.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-56", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "With all respect, the High Court has completely misdirected itself in interpreting the provisions of Section 3(1) of the Act, which must govern this case. That section runs as under : \nThe Supreme Court observed thus:\n\"Any amendment made by this Act shall not affect the validity, invalidity, effect or consequence of anything already done or suffered, or any right, title, obligation or liability already acquired, accrued or incurred or any release or discharge of or from any debt, decree, liability, or any jurisdiction already exercised, and any proceeding instituted or commenced in any Court prior to the commencement of this Act shall, notwithstanding any amendment herein made continue to be heard and decided by such Court.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-57", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "The High Court has not given effect to the words \"any proceeding instituted or commenced in any Court prior to the commencement of this Act shall, notwithstanding any amendment herein made continue to be heard and decided by such Court.\" Now, giving full effect to the words just quoted of Section 3(1) of the Act, the High Court and the High Court alone would be competent to hear and decide the appeals pending before it. In other words, the District Courts were not competent to hear such appeals, and, therefore, the High Court could not have transferred those appeals to be heard by the District Judge or Additional District Judge, inasmuch as Section 24 postulates that the Court to which the suit or appeal or other proceeding is transferred should be competent to try or dispose of the same. On the date the appeal in question was preferred in the High Court, the District Courts were not competent to hear such a case. The competency of those Courts to hear such cases rises by virtue of the amendment to Section 21 of the Civil Courts Act, aforesaid. We are here not concerned with the question whether in the absence of a saving clause, like the one introduced by Section 3(1), the High Court would have been right in taking recourse to ' Section 24 of the Code of Civil Procedure. But in the face of Section 3(1) of the Act, it is impossible to hold that the District Courts were competent to hear appeals of the valuation of ten thousand rupees or less in suits decided before the Act came into force, and appeals from which were pending before the High Court.\" \nUltimately, the Supreme Court held that the Order of High Court transferring the appeal to the District Judge or Additional District Judge is illegal and directed that the appeal be heard by the High Court in the absence of any law to the contrary.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-58", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "35. In Ittyavira Mathai v. Varkey Varkey, , the suit was instituted before the repeal of Travancore High Court Act, an Appeal was filed after repealing Act came into force. The question arose whether the appeal could be heard by Bench of three Judges or under the New Act? The Supreme Court held that the appeal could be heard by the two Judges as provided under the Travancore High Court Act was untenable.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-59", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "36. It was sought to be contended that the forum of appeal is merely a matter of procedure and therefore, it can be amended retrospectively. The Supreme Court observed in Paras 15 and 16 as follows:\n\"15. Having thus failed on all the contentions on merits learned Counsel has sought to urge a new point before us. The point is that the appeal before the High Court should have been heard not by a Division Bench of merely two Judges, but by a Bench of three Judges, as provided in Section 11(1) of the Tranvancore High Court Act, 1099 (IV of 1099). Learned Counsel admits that the appeal was heard not by the Travancore High Court but by the High Court of Travancore Cochin which came into being after the merger of the two States of Travancore and Cochin. He admits that the Travancore High Court Act, 1099 was repealed by Ordinance II of 1124 which was re-enacted by Act V of 1125; but he says that Section 25 of that Act provided that a Full Bench will hear and decide all appeals from the decrees of the District Courts in which the amount or value of the subject-matter is in excess of Rs. 5,000.00. This provision was also repealed before the appeal in question was even preferred. According to him, however, the appellants were entitled to prefer an appeal before a Tribunal which existed when the suit itself was instituted. The rights of parties to a suit in the matter of preferring an appeal are governed by the law as it obtained when the suit was instituted and, therefore, according to him, as under the law in a suit of that kind an appeal lay before a Bench of three Judges, it could be heard only by such a Bench and not one consisting of a lesser number of Judges.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-60", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "16. There are two reasons why this argument cannot be accepted. In the first place, the High Court of Travancore was itself abolished as a result of the merger and a new High Court came into being - the High Court of Travancore-Cochin. The rights of parties to prefer appeals to that High Court were governed initially by Ordinance II of 1124 and later by Act V of 1125. These provisions came into being subsequent to the institution of the suit. Therefore, the rights of a person aggrieved by the decision of a suit instituted prior to the coming into force of Act V of 1125 were only those which were conferred by that Act. A litigant has no right to contend that a Tribunal before whom he should have taken an appeal when he instituted the suit should not be abolished. The Legislature has full power to enact a law of that kind and it is not contended before us that the repeal of the Travancore High Court Act was unconstitutional. It would, therefore, follow that whatever rights may have vested in the party in the matter of filing an appeal were abrogated by competent Legislature. New rights were conferred in place of those which were taken away and it is only the new rights which could be availed of. After the new rights were conferred even they were modified in one respect and that was with regard to the hearing of certain kinds of appeals by a Full Bench. The rights to have the appeal heard by a Full Bench by virtue of the provisions of Act V of 1125 had never vested in any of the parties to the present litigation. Therefore, their abrogation by a later law cannot entitle them to make a complaint. There is yet another reason why the argument of the learned Counsel cannot be accepted. That reason is that an appeal lay to a High Court and whether it is to be heard by one, two or a larger number of Judges is merely a matter of procedure. No party has a", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-61", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "one, two or a larger number of Judges is merely a matter of procedure. No party has a vested right to have his appeal heard by a specified number of Judges. An appeal lay to the High Court and the appeal in question was in fact heard and disposed by the High Court and, therefore, no right of the party has been infringed merely because it was heard by two Judges and not by three Judges. No doubt in certain classes of cases, as for instance, cases which involves an interpretation as to any provision of the Constitution, the Constitution provides that the Bench of the Supreme Court hearing the matter must be composed of Judges who will not be less than five in number. But it does not follow from this that the legal requirements in this regard cannot be altered by a competent body. We therefore overrule the contention of the learned Counsel and hold that the appeal was rightly heard and decided by a Bench of two Judges.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-62", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "37. In Bharat Barrel and Drum Manufacturing Company Limited v. Employees State Insurance Corporation, , the following questions were referred by the Supreme Court to the High Court of Bombay:\n\"(1) Whether Rule 17 of the Employees' State Insurance Rules is ultra vires the rule making power of the State Government under Section 96 (1) of the Employees State Insurance Act?", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-63", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(2) If yes, what, if any, limitation applies to applications filed by the Corporation to the Employees' Insurance Court?.\" \nThe Supreme Court observed thus:\n\"The topic of procedure has been the subject of academic debate and scrutiny as well as of judicial decisions over a long period but in spite of it, it has defied the formulation of a logical test or definition which enables us, to determine and demarcate the bounds where procedural law ends and substantive law begins, or in other words it hardly facilitates us in distinguishing in a given case whether the subject of controversy concerns procedural law or substantive law. The reason for this appears to be obvious because substantive law deals with right and is fundamental while procedure is concerned with legal process involving actions and remedies which Salmond defines \"as that branch of law which governs the process of litigation\", or to put it in another way, substantive law is that which we enforce while procedure deals with rules by which we enforce it.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-64", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "The present tendency is that where a question of limitation arises, the distinction between so-called substantive and procedural statutes of limitation may not prove to be a determining factor but what has to be considered is whether the statute extinguishes merely the remedy or extinguishes the substantive right as well as the remedy. Instead of generalising on a principal the safest course would be to examine each case on its own facts and circumstances and determine for instance whether it affects substantive right and extinguishes them or whether it merely concerns a procedural rule only dealing with remedies, or whether the intendment to prescribe limitation is discernible from the scheme of the Act or is inconsistent with the rule making power etc.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-65", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "38. In Jose DA. Costa v. Bascora Sadashiva Sinai Narcornin, , the plaintiff filed a suit in 1961 in accordance with the Portuguese Laws, then in force in Territories of Goa, Daman and Diu for ejectment of the defendant from the suit property. The Trial Court passed a decree of ejectment directing the defendant to remove their super-structures or in the alternative to receive from the plaintiff a sum of Rs. 1,084/- which was found to be the value of the material. Aggrieved by the decree, the defendant preferred an appeal before the learned Additional Judicial Commissioner and the appeal was dismissed affirming the decree of the Trial Court. Therefore, an appeal was preferred to the Supreme Court. In this regard, it has to be noted that under the Portuguese Law a person aggrieved by a nullity in judgment of the Court of second instance, was not entitled to get redress by directly filing a further appeal, to such a judgment to the Portuguese Supreme Court, he was to approach the same Court under Article 669 for rectification of the \"nullity\" and if he still felt aggrieved by the decision rendered in reclamacae, he could go in further appeal (agravo) under Article 722 against such a decision to the Portuguese Supreme Court at Lisbon. The Territories of Goa, Daman and Diu were made part of India with effect from 20th December, 1961.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-66", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "39. The point arose for consideration was: Are the provisions of the Portuguese Civil Code relating to Rcclamaca0 merely matters of procedure? Or, do they create or affect vested rights and remedies? That is to say does a Reclamacao have all the attributes of a substantive right of appeal existing at the commencement of the suit? Did the Superior Court of Appeal at Lisbon stand abolished as an appellate forum in relation to Goa, Daman and Diu from 20-12-1962? If so, what is its effect on the right of appeal given by Articles 677 and 722 of the Portuguese Civil Code and their application to the present case? Was the Portuguese Supreme Court at Lisbon succeeded by the Supreme Court of India, for the purpose of the aforesaid Articles 677 and 722 of the Portuguese Code? If so, did this position hold good after 15-6-1966? Does the Central Act 30 of 1965 read with Notification No. S.O.1597, issued thereunder, expressly or impliedly, make inapplicable the provisions of the Portuguese Civil Code in the matter of Reclamacao in respect of a decision or judgment rendered by the Court of Judicial Commissioner after 15-6-1966? That is to say, have the rights, remedies or obligations arising out of the, Portuguese Law relating to Reclamacao saved by any of the Clauses (a), (b) or (c) of the first Proviso to Section 4(1) of Act 30 of 1965? The Supreme Court observed as follows:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-67", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"It may be noted that while a right of appeal from Court to Court is a substantive right which under the then law, exists on and from the date of the institution of the suit, the same cannot be said with regard to Reclamacao. The provisions of the Portuguese Civil Code relating to Reclamacao lay down only special rules of procedure which have to be gone through before a litigant is entitled to raise in appeal a material point left undecided by the lower Court. The object of requiring a party aggrieved by a 'nullity' is to save the time of the Appellate Court by precluding a party to reagitate in appeal pleas that had been left undecided by the lower Court. It also minimises the necessity of remands to the lower Court for trial of particular issues and thus shortens litigation. The requirement or obligation to file a Reclamacao is not an obligation in esse or/ and from the institution of the suit. Nor is the procedural right to file Reclamacao - if at all it can be called a 'right' - a vested right existing from the date of the suit. The filing of a Reclamacao is dependent upon the happening of an uncertain event. It arises only when a judgment suffering from a 'nullity' is passed. Such a contingency may or may not arise. On the other hand in the case of a suit it can be predicated that it would normally result in a decree entitling the aggrieved party to have the suit reheard and redecided in a higher forum by filing an appeal provided of course such a right is available under the law prevailing at the institution of the suit.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-68", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "In the present case, the judgment of the Additional Judicial Commissioner in which the alleged \"nullity\" or \"omission to adjudicate\" on the point of prescription occurs was delivered on 20-1-1968, that is, long after the extension of Articles 132, 133 and 134 of the Constitution Rules framed under Article 145 of the Constitution and Sections 109 and 110 of the Code of Civil Procedure to Goa, Daman and Diu. The procedural provisions of the Portuguese Code relating to Reclamacao, and appeal from a decision on Reclamacao, from the High Court in Goa, Daman and Diu stood repealed and superseded by the extended Indian Laws when the judgment now under appeal was rendered.\" \nThe Supreme Court held that the provision of the Portuguese Civil Code Act was not applicable to the case with effect from 15.6.1966 when the Central Act 30 of 1965 came into force. If that be the correct position, there is no legal hurdle in the way of Appellant to the re-agitation in this Court as to prescription left undecided by the Court below. The Supreme Court finally summed up saying since on and from 15-6-1966 the Portuguese Law relating to Reclamacao stood repealed and no substantive right or obligation had been acquired or incurred under that repealed law within the meaning of the first proviso to Section 4(1) of Act 30 of 1965, the appellants cannot be debarred from canvassing in this appeal under Article 136. The plea of prescription notwithstanding the fact that they did not file any Reclamacao in the Court of the Judicial Commissioner.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-69", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "40. In New India Insurance Company Limited v. Smt. Shanti Misra, , the question of law which fell due for determination was whether an application for compensation under Section 110-A of the Motor Vehicles Act arising out of an accident which occurred more than 60 days before the Constitution of the Motor Accident Claims Tribunal could be entertained by the Tribunal or the remedy of the aggrieved person was to institute a civil suit.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-70", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "41. By virtue of amendment with effect from 16.2.1956, Section 110 was deleted and new Sections 110 to 110-F were introduced, while considering the scope of Sections 110-A and 110-F, the Supreme Court observed thus:\n \"On the plain language of Sections 110A and 110F there should be no difficulty in taking the view that the change in law was merely a change of forum i.e., a change of adjectival or procedural law and not of substantive law. It is a well-established proposition that such a change of law operates retrospectively and the person has to go to the new forum even if his cause of action or right of action accrued prior to the change of forum. He will have a vested right of action but not a vested right of forum. If by express words the new forum is made available only to causes of action arising after the creation of the forum, then the retrospective operation of the law is taken away: Otherwise the general rule is to make it retrospective. The expressions \"arising out of an accident\" occurring in Sub-section (1) and \"over the area in which the accident occurred\", mentioned in Sub-section (2) clearly show that the change of forum was meant to be operative retrospectively irrespective of the fact as to when the accident occurred.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-71", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "42. In Maria Christine De. Souza Soddar v. Maria Zurna Pereira Pinto, , which was relied on by the Full Bench, an interesting complex question arose before the Supreme Court namely what was the Law of Limitation applicable to the Union Territories of Goa, Daman and Diu. The proceedings launched therein prior to and pending at the date of liberation in respect of the partitions of properties of one Portuguese gentleman. There was a partition among the family members on 28.1.1941, when one of the daughters was a minor, on 15.3.1960. The said minor daughter together with her husband filed a suit against the other members of the family in the Comarca Court at Margao attacking the partition effected on 28.1.1941 stating that certain items of properties were not properly valid which resulted in loss to the plaintiff. The learned Trial Judge by a judgment and decree dated 8.3.1968 decreed the suit and also counter claim. Aggrieved by the said decree, the defendants therein filed First Appeal No. 6 of 1968 before the Judicial Commissioner Court at Goa on 6.6.1968. The objections which were raised before the Appellate Court was", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-72", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(a) that the appeal had not been filed in proper Court? \n\n(b) that the appeal was barred by Law of Limitation. It is the contention of the objector that as per the provisions of Portuguese Code, the appeal was required to file in the Court which decided the suit and as such the Appellants could not have lodged the appeal in the Court of Judicial Commissioner. Further in Portuguese Court, the period of limitation for filing an appeal was 8 days from the service of the judgment or order of the Trial Court and the appeal admittedly was filed beyond 8 days. \nTo this objection, the Appellants sought to support their contention with reference to the events that took place, it has to be noted that during the pendency of the suit, the following events were occurred:\n(a) the territories of Goa, Daman and Diu were liberated and became a part of the Union of India with effect from 20.12.1961. \n\n(b) the Limitation Act, 1963 was enacted by the Parliament was in force with effect from 1.1.1964 and became applicable to the whole of India including the Union Territory of Goa, Daman and Diu;\n(c) the Parliament also enacted the Goa, Daman and Diu (Extension of the Code of Civil Procedure, 1908 and Arbitration Act, 1940) Act, 1965 (Act XXX of 1965) whereunder the provisions of the Indian Code of Civil Procedure, 1908 were extended to the territories of Goa, Daman and Diu with effect from 15.6.1966 repealing Portuguese Code.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-73", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(d) the Legislative Assembly of Goa, Daman and Diu enacted the Goa, Daman and Diu Civil Courts Act, 1965 (Act XVI of 1965) which came into force on 15.6.1966. Under Section 34(2) of Goa enactment (Act XVI of 1965) the pending suit before the Comarca Court at Margao stood transferred to the corresponding Court of Senior Civil Judge and it was continued and ultimately it was decreed. Since the property involved in the suit was of value exceeding Rs. 10,000/- an appeal from the decision lay direct to the High Court which expression under Section 2(f) of the Act meant the Judicial Commissioner's Court.\" \nOn the basis of these events, it was sought to be contended that the appeal was properly laid and it was also within limitation as the Limitation Act came into force in Goa, Daman and Diu from 1.1.1964 when the suit was pending before the lower Court. The learned Judicial Commissioner held that the Forum of Appeal will be as provided in the Indian Code, however, did not express any firm opinion and disposed of the appeal on the point of limitation holding that Indian Law did not effect the right acquired under the repeal Part of Portuguese Court and that the legal proceedings or remedies in respect of that right could be enforced as if Indian Code had not been passed. It was held that the appeal was barred by limitation. Therefore, the matter went to the Supreme Court at the instance of the aggrieved party-Appellants.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-74", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "43. On the basis of the aforesaid facts, the Supreme Court repelled the contention that right of appeal conferred by the provisions of Portuguese Act, the forum that could be, lodged appeal would govern by the Portuguese Code and observed that right of appeal is a substantial right and it gets vested in a litigant, no sooner the Us is commenced in the Court of the first instance and such right or any remedy in respect thereof will not be affected by any repeal of the enactment conferring such right unless the repealing enactment either expressly or by necessary implication takes away such right or remedy in respect thereof. By Clauses (b) and (c) of Sub-section 4 of the Central Act 30 of 1965, the usual effect of repeal as contended in Section 6(c) and (e) were made applicable. The Supreme Court taking into consideration the Colonial Sugar's case (supra), Garikapati Veeraiah's case (supra), accepting the aforesaid proposition, but however, observed that the forum where such appeal can be lodged is indubitably a procedural matter and therefore, the appeal, the right under which Repeal Act will have to be lodged in a forum provided for by the repealing Act that the forum of appeal and also the limitation for it or matters to be pertaining to procedural law and referred to the following passage from Salmond's Jurisprudence (12th Edn.), at Page 462 thus:\n \"Whether I have a right to recover certain property is a question of substantive law, for the determination and the protection such rights are among the ends of the administration of justice; but in what Courts and within what time I must institute proceedings are questions of procedural law, for they relate merely to the modes in which the Courts fulfil their functions.\" \nThe Supreme Court observed thus:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-75", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "The Supreme Court observed thus:\n \"that Section 4 of Central Act 30 of 1965 (which corresponds to Section 6(e) of the General Clauses Act, 1897) provided that a remedy or legal proceeding in respect of a vested right like a right to an appeal may be instituted, continued or enforced as if this Act (Repealing Act) had not been passed. But this provision merely saves the remedy or legal proceeding in respect of such vested right, which it is open to the litigant to adopt notwithstanding the repeal, but this provision has nothing to do with the forum where the remedy or legal proceeding has to be pursued. If the Repealing Act provides new forum, where the remedy or the legal proceeding in respect of such vested right can be pursued after the repeal, the forum must be as provided in the Repealing Act and thus held that under the repealing enactment (Act 30 of 1965) read with Goa Enactment (Act 16 of 1965), the appeal lay to the Judicial Commissioner's Court and the same was accordingly filed in proper Court.\" \n44. In Gurbachan Singh v. Satpal Singh, , the Supreme Court held in Paras 35 and 36, thus:\n\"(35) It has been contended on behalf of the accused-respondents that Section 113A of the Indian Evidence Act was inserted in the Statute Book by Act 46 of 1983 whereas the offence under Section 306, I.P.C. was committed on 23.6.1983 i.e., prior to the insertion of the said provision in the Indian Evidence Act. It has, therefore, been submitted by the learned Counsel for the respondents that the provisions of this Section cannot be taken recourse to while coming to a finding regarding the presumption as to abetment of suicide committed by a married woman, against the accused persons.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-76", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(36) The provisions of the said Section do not create any new offence and as such it does not create any substantial right but it is merely a matter of procedure of evidence and as such it is retrospective and will be applicable to this case.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-77", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "45. In Vinod Gurudas Raikar v. National Insurance Company Limited, , an accident took place on 22.1.1989. The Motor Vehicles Act, 1939 was repealed by Section 217(1) of Motor Vehicles Act, 1988 which came into force from 1.7.1989. The period of limitation for filing a claim petition both under the old Act and the new Act being six months expired on 22.7.1989. The claim petition of the appellant, however, was filed belatedly on 15.3.1990 with a prayer for condonation of delay. The Accident Claims Tribunal held that in view of provisions of Sub-section (3) of Section 166 of the new Motor Vehicles Act, the delay of more than six months could not be condoned. The application was accordingly dismissed. The injured unsuccessful challenged the decision before the High Court. It was contended that since the accident had taken place when the old Act was in force, the proceedings before the Claims Tribunal must be held to be governed by the old Act, and petition cannot be dismissed on the basis of the provisions in the new Act. The difference in the two Acts which are relevant in the present case was in regard to the provisions relating to condonation of delay. In view of the proviso to Sub-section (3) of Section 166 of the new Act, the maximum period of delay which can be condoned is six months which expired on 22.1.1990. If the new Act is held to be applicable the Appellant's petition filed in March had to be dismissed. The case of the Appellant is that the accident having taken place before the new Act came into force, the proceeding is governed by the old Act, where there was no such restriction as in the new Act. The question is as to which Act is applicable. The Supreme Court observed in Paras 6,7 and 11 as", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-78", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "to which Act is applicable. The Supreme Court observed in Paras 6,7 and 11 as follows:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-79", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"(6) Even independent of the General Clauses Act, it is firmly established that unless a new statute expressly or by necessary implication says so, it will not be presumed that it deprives a person of an accrued right. On the other hand, a law which is procedural in nature, and does not affect the rights, has to be held to be retrospectively applicable. The question is whether the appellant has been deprived of an accrued right or privilege in the present case.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-80", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "7. It is true that the appellant earlier could file an application even more than six months after the expiry of the period of limitation, but can this be treated to be a right which the appellant had acquired. The answer is in the negative. The claim to compensation which the appellant was entitled to, by reason of the accident was certainly enforceable as a right. So far the period of limitation for commencing a legal proceeding is concerned, it is adjectival in nature, and has to be governed by the new Act -subject to two conditions. If under the repealing Act the remedy suddenly stands barred as a result of a shorter period of limitation, the same cannot be held to govern the case, otherwise the result will be to deprive the suitor of an accrued right. The second exception is whether the new enactment leaves the claimant with such a short period for commencing the legal proceeding so as to make it unpractical for him to avail of the remedy. This principle has been followed by this Court in many cases and by way of illustration we would like to mention New India Insurance Co., Ltd. v. Smt. Shanti Misra, .", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-81", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(11) In the case before us the period of limitation for lodging the claim under the old as well as the new Act was same six months which expired three weeks after coming in force of the new Act. It was open to the appellant to file his claim within this period or even later by 22-7-1989 with a prayer to condone the delay. His right to claim compensation was not affected at all by the substitution of one Act with another. Since the period of limitation remained the same there was no question of the appellant being taken by surprise. So far the question of condonation of six months delay was concerned, there was no change in the position under the new Act. In this background the appellant's further default has to be considered. If in a given case the accident had taken place more than a year before the new Act coming in force and the claimant had actually filed his petition while the old Act was in force but after a period of one year, the position could be different. Having actually initiated the proceeding when the old Act covered the field a claimant could say that Ms right which had accrued on filing of the petition could not be taken away. The present case is different. The right or privilege to claim benefit of a provision for condonation of delay can be governed only by the law in force at the time of delay. Even the hope or expectation of getting the benefit of an enactment presupposes applicability of the enactment when the need arises to take its benefit. In the present case the occasion to take the benefit of the provision for condonation of delay in filing the claim arose only after repeal of the old law. Obviously the ground for condonation set up as 'sufficient cause' also relates to the time after the repeal. The benefit of the repealed law could not, therefore, be available simply because the cause of action for the claim arose before repeal. 'Sufficient cause' as a ground of condonation of delay in filing the claim", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-82", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "before repeal. 'Sufficient cause' as a ground of condonation of delay in filing the claim is distinct from 'cause of action' for the claim itself. The question of condonation of delay must, therefore, be governed by the new law. We accordingly hold that the High Court was right in its view that the case was covered by the new Act, and delay for a longer period than six months could not be condoned. The appeal is dismissed, but in the circumstances, without costs.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-83", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "46. In Ramesh Chandra v. III Additional District Judge, , while dealing with the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act (13 of 1972), the Supreme Court held that the Act does not apply to the premises in respect of which cases are pending as on the date of the suit, when 10 years period had expired. Therefore, it was held that law applicable as on the date of the institution of the suit alone governs the suit and the mere fact that the statutory period of 10 years expires during the pendency of the suit/appeal/ revision, the Act does not become applicable.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-84", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "47. The Supreme Court aptly observed in Commissioner of Income Tax, Orissa v. Dhadi Sahu, 1994 Supp. (1) SCC 257, that no litigant has any vested right in the matter of procedural law but where the question is of change of forum it ceases to be a question of procedure only. The forum of appeal or proceedings is a vested right as opposed to pure procedure to be followed before a particular forum. The right becomes vested when the proceedings are initiated in the Tribunal or the Court of first instance and unless the Legislature has by express words or by necessary implication clearly so indicated, that vested right will continue in spite of the change of jurisdiction of the different Tribunals or forums.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-85", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "48. In K.S. Paripoornan v. State of Kerala, , the Constitutional Bench by majority observed that while holding that in respect of the acquisition proceedings initiated prior to the date of commencement of Amending Act, the additional amount payable under Section 23 (1-A) will be restricted to matters referred to in Clause (a) and (b) of Sub-section (1) of Section 30 of the Amending Act, it observed that a statute dealing with a substantive right differ from a statute which relates to procedure or evidence or is declaratory in nature inasmuch as while a statute dealing with substantive rights is prima facie prospective unless it is expressly or by necessary implication made to have retrospective effect, a statute concerned mainly with matters of procedure or evidence or which is declaratory in nature has to be construed as retrospective unless there is a clear indication that such was not the intention of the Legislature. A statute is regarded as retrospective if it operates on cases or facts coming into existence before its commencement in the sense that it affects, even if for the future only, the character or consequences of transactions previously entered into or of other past conduct. By virtue of the presumption against retrospective applicability of laws dealing with substantive rights transactions are neither invalidated by reason of their failure to comply with formal requirements subsequently imposed, nor open to attack under powers of avoidance subsequently conferred. They are also not rendered valid by subsequent relaxations of the law, whether relating to form or to substance. Similarly, provisions in which a contrary intention does not appear neither impose new liabilities in respect of events taking place before their commencement, nor relieve persons from liabilities then existing, and the view that existing obligations were not intended to be affected has been taken in varying degrees even of provisions expressly prohibiting proceedings. The question whether a particular statute operates prospectively only or has retrospective operation also will have to be determined on the basis of the effect it has on existing rights and obligations, whether it creates new obligations or imposes new duties or", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-86", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "the effect it has on existing rights and obligations, whether it creates new obligations or imposes new duties or levies new liabilities in relation to past transactions. For that purpose it is necessary to ascertain the intention of the Legislature as indicated in the statute itself.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-87", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "49. It further held that in relation to pending proceedings, the approach of the Courts in England and in India is that the same unaffected by the changes in the law so far as they relate to the determination of the substantive rights and in the absence of a clear indication of a contrary intention in an amending enactment, the substantive rights of the parties to an action fall to be determined by the law as it existed when the action was commenced and this is so whether the law is changed before the hearing of the case at the first instance or while an appeal is pending. It further held that in order that the provisions of a statute dealing with the substantive right may apply to pending proceedings the Courts have insisted that the law must speak in language which expressly or by clear intendment, takes in every pending matters. \n\n50. In Hitendra Vishnu Thakur v. State of Maharashtra, , the Supreme Court evolved certain principles for determination as to when the Amendment Act operates retrospectively. The Supreme Court observed thus:\n\"The illustrative though not exhaustive, principles which emerge with regard to the ambit and scope of an Amending Act and its retrospective operation may be culled out as follows:\n(I) A statute which affects substantive rights is presumed to be prospective in operation, unless made retrospective, either expressly or by necessary intendment, whereas a Statute which merely affects procedure, unless such a construction is textually impossible is presumed to be retrospective in its application, should not be given an extended meaning, and should be strictly confined to its clearly defined limits. \n\n(II) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal, even though remedial, is substantive in nature. \n\n(III) Every litigant has a vested right in substantive law, but no such right exists in procedural law.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-88", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(IV) A procedural Statute should not generally speaking be applied retrospectively, where the result would be to create new disabilities or obligations, or to impose new duties in respect of transactions already accomplished.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-89", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(V) A Statute which not only changes the procedure but also creates a new rights and liabilities, shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication.\"  \n51. In R. Rajagopal Reddy v. Padmini Chandrasekharan, , the issue before the Supreme Court was \"whether Section 4(1) of the Benami Transactions (Prohibition) Act, 1988 can be applied to suit claim or action to enforce any right in property held benami against person in whose name such property is held or any person, if such proceeding is initiated by or on behalf of a person claiming to be real owner thereof, prior to the coming into force Section 4(1) of the Act. The Supreme Court while answering the issue in negative held that Section 4(2) was not retrospective in operation. However, even if suit claim or action filed by the ostensible owner on the basis of the Sale Deed or title deed prior to the Act coming into operation of Sub-section (2), the defendant-real owner cannot be allowed to raise defence based on any right in respect of the property held by benami. The expression \"No defence ...... shall be allowed\" means such defence shall not be allowed for the first time after coming into operation of Sub-section (2) and therefore, such defence can be allowed if the same already allowed in a pending suit prior to coming into operation of Sub-section (2). The Supreme Court held thus:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-90", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"The Act was enacted to efface the then existing right of the real owners of properties held by others benami. Such an Act was not given any retrospective effect by the Legislature. In this respect clear legislative intention is seen from the words \"no such claim, suit or action shall lie\", in Section 4(1) meaning thereby no such suit, claim or action shall be permitted to be filed or entertained or admitted to the portals of any Court for seeking such a relief after coming into force of Section 4(1). The word 'lie' in connection with the suit, claim or action having not been defined by the Act, going by the dictionary meaning it would mean that such suit, claim or action to get any property declared benami will not be admitted on behalf of such applicant against the defendant concerned in whose name the property is held on and from the date on which this prohibition against entertaining of such suits conies into force. The view that Section 4(1) would apply even to such pending suits which were already filed and entertained prior to the date when the Section came into force and which has the effect of destroying the then existing right of plaintiff in connection with the suit property cannot be sustained in the face of the clear language of Section 4(1). The Legislature in its wisdom has not expressly made Section 4 retrospective. Then to imply by necessary implication that Section 4 would have retrospective effect and would cover pending litigations filed prior to coming into force of the section would amount to taking a view which would run counter to the legislative scheme and intent projected by various provisions of the Act. It is however, true as held by the Division Bench of the Supreme Court in Mithilesh Kumari v. Prem Behari Khare , case that on the express language of Section 4(1) any right inhering in the real owner in respect of any property held benami would get effaced once Section 4(1) operated, even", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-91", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "of any property held benami would get effaced once Section 4(1) operated, even if such transaction had been entered into prior to the coming into operation of Section 4(1), and hence after Section 4(1) applied no suit can lie in respect to such a past benami transaction. To that extent the section may be retroactive. But from this it does not logically follow that the then existing rights got destroyed and even though suits by real owners were filed prior to coming into operation of Section 4(1) they would not survive.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-92", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "While dealing with the provision Section 4(1), the Supreme Court observed thus:\n\"There is no substance in the contention mat when the law nullifies the defences available to the real owners in recovering the benami property from the benamidar, the law must apply irrespective of the time of the benami transactions and that the expression \"shall lie\" under Section 4(1) and \"shall be allowed\" in Section 4(2) are prospective and shall apply to present (future stages) and future suits, claims or action only. The words \"no suit shall lie\" as found in Section 4(1) and \"no defence based on rights in respect of property shall be allowed\" as found in Section 4(2) have limited scope and operation and consequently this consideration also cannot have any effect on the conclusion which can be reached in this case.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-93", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "Future defences of real owners against benamidars holders have been nullified as are covered by the sweep of Section 4(2) and not others. Rights of the parties to a suit would be determined on the basis of rights available to them on the date of filing of the suit.\" \nConsidering the scope of Section 4(1) and 4(2), the Supreme Court observed in Para 11 as follows:\n\"On the contrary, clear legislative intention is seen from the words \"no such claim, suit or action shall He\", meaning thereby no such suit, claim or action shall be permitted to be filed or entertained or admitted to the portals of any Court for seeking such a relief after coming into force of Section 4(1). In Collins English Dictionary, 1979 Edition as reprinted subsequently, the word 'lie' has been defined in connection with suits and proceedings. At Page 848 of the Dictionary while dealing with Topic No. 9 under the definition of term 'lie' it is stated as under :\n\"FOR an action, claim appeal etc., to subsist; be maintainable or admissible\". \nFinally, the Supreme Court held in Para 21 thus:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-94", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "Finally, the Supreme Court held in Para 21 thus:\n \"As a result of the aforesaid discussion it must be held, with respect, that the Division Bench erred in taking the view that Section 4(1) of the Act could be pressed in service in connection with suits filed prior to coming into operation of that Section. Similarly the view that under Section 4(2) in all suits filed by persons in whose names properties are held no defence can be allowed at any future stage of the proceedings that the properties are held benami, cannot be sustained. As discussed earlier Section 4(2) will have a limited operation even in cases of pending suits after Section 4(2) came into force if such defences are not already allowed earlier. It must, therefore, be held, with respect, that the decision of this Court in Mithilesh Kumari's case does not lay down correct law so far as the applicability of Section 4(1) and Section 4(2) to the extent hereinabove indicated, to pending proceedings when these sections came into force, is concerned. Accordingly, the question for consideration is answered in the negative. Registry will now place all these matters before an appropriate Division Bench for disposing them off on merits in the light of the answer given by us.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-95", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "52. In Ramesh Singh v, Cinta Devi, , the short question that arose for consideration was: does a right of appeal accrue to a claimant under the Motor Vehicles Act, 1939 notwithstanding its repeal by the Motor Vehicles Act, 1988. In other words, does the right of appeal under the Old Act survive even after its repeal by the New Act. An accident took place on 27-5-1988 which gave rise to a claim for a compensation under the Old Act. The claim application was filed on 23-12-1988 and the New Act came into force with effect from 1-7-1989. The claim application which was instituted under the Old Act was disposed of on 29-6-1992 after the New Act came into force. That gave rise to a right to file an appeal. The appeal was preferred under the Old Act on 25-9-1992. However, the Division Bench of the High Court by the impugned order dismissed the appeal on the ground that the appellant had not deposited the amount as required by the proviso to Section 173 of the New Act, which prescribes a condition that no appeal by the person who is required to pay any amount in terms of such award shall be entertained by the High Court unless he deposited with it a sum of Rs. 25,000/- or 50% of the amount so awarded, whichever is less. The Supreme Court taking into consideration the Sub-section 4 of Section 217 of the New Act, which preserves Section 6 of the General Clauses Act and also following the decision of the Supreme Court in Hoosein Kasam Dada (India) Limited v. State of M.P., , State of Bombay v. Supreme General Films Exchange Limited, , and Vitthalbhai Naranbhai Patel v. C.S.T., , held that unless the New Act expressly or by necessary implication makes the", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-96", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "v. C.S.T., , held that unless the New Act expressly or by necessary implication makes the provision applicable retrospectively, the right of appeal will crystallize in the appellant on the institution of the application in Tribunal of first instance and that vested right of appeal would not be dislodged by the enactment of the New Act. In other words, the appellant would be entitled to file the appeal without being required to make the deposit under the proviso to Section 173 of the New Act.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-97", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "53. In Rajendra Kumar v. Kalyan, , the Supreme Court observed that it is well settled that no person has vested right in procedural aspect. One has only a right of prescription or defence in the manner prescribed by the law for the time being and in the event of any change of procedure by Act of Parliament one cannot possibly have any right to proceed with the pending proceeding excepting as altered by the new Legislation and as such we need not dilate on the issue. The Supreme Court observed in Paras 20 and 21 as follows;\n\"20. We do feel it expedient to record that the analysis as effected by the High Court stands acceptable and as such we refrain ourselves from dilating on this aspect of the matter any further. It is pertinent to add in this context that some differentiation exists between a procedural statute and statute dealing with substantive rights and in the normal course of events, matters of procedure are presumed to be retrospective unless there is an express ban on to its retrospectivity. \n\nIn this context, the observations of this Court in the case of Jose Da Costa v. Bascora Sadasiva Sinai Narcornim, is of some relevance. This Court in Paragraph 31 of the Report observed :\n\"Before ascertaining the effect of the enactments aforesaid passed by the Central Legislature on pending suits or appeals, it would be appropriate to bear in mind two well-established principles. The first is that while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment (Delhi Cloth and General Mills Co. Ltd. v. Income-tax Commissioner, AIR 1927 PC 242).", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-98", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "The second is that a right of appeal being a substantive right the institution of a suit carries with it the implication that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout the rest of the career of the suit. There are two exceptions to the application of this rule, viz., (1) when by competent enactment such right of appeal is taken away expressly or impliedly with retrospective effect, and (2) when the Court to which appeal lay at the commencement of the suit stands abolished (Garikapati Veeraya v. N. Subbiah Choudhary, and Colonial Sugar Refining Co. Ltd. v. Irving, (1905) AC 369)\".", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-99", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "21. Still later this Court in Gurbachan Singh v. Satpal Singh, expressed in the similar vein as regards the element of retrospectivity. The English Courts also laid that the rule that an Act of Parliament is not to be given retrospective effect applies only to statutes which affect the vested rights: It does not apply to statutes which alter the form of procedure or the admissibility of evidence, or the effect which the Courts give to evidence: If the new Act affects matters of procedure only, then, prima facie, it applies to all actions pending as well as future. In Halsbury's Laws of England (4th Edition: Vol. 44: Para 925, page 574) upon reference to Wright v. Hale, (1860) 6 II and N 227 and Gardner v. Lucas, (1878) 3 App. Cas 582 along with some later cases including Blyth v. Blyth (supra) it has been stated: \"the presumption against retrospection does not apply to legislation concerned merely with matters of procedure or of evidence, on the contrary, provisions of that nature are to be construed as retrospective unless there is a clear indication that such was not the intention of Parliament\". \n54. In Shyam Sunder v. Ram Kumar, , the Supreme Court referring to Maxwell on Interpretation of Statutes and also Garikapati Veeraiah 's case (supra), Hitendra Vishnu Thakur's case (supra) and K.S. Paripoornan's case (supra), observed thus:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-100", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "\"When a repeal of an enactment is followed by a fresh legislation such legislation does not effect the substantive rights of the parties on the date of suit or adjudication of suit unless such a legislation is retrospective and a Court of appeal cannot take into consideration a new law brought into existence after the judgment appealed from has been rendered because the rights of the parties in an appeal are determined under the law in force on the date of suit. However, the position in law would be different in the matters which relate to procedural law but so far as substantive rights of parties are concerned they remain unaffected by the amendment in the enactment.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-101", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "Therefore, where a repeal of provisions of an enactment is followed by fresh legislation by an amending Act such legislation is prospective in operation and does not effect substantive or vested rights of the parties unless made retrospective either expressly or by necessary intendment. Further there is a presumption against the retrospective operation of a statute and further a statute is not to be construed to have a greater retrospective operation than its language renders necessary, but an amending Act which affects the procedure is presumed to be retrospective, unless amending Act provides otherwise. \n\nA reading of substituted Section 15 would show that the words used therein are plain and simple and there is no ambiguity in them. The words used in the section do not give rise to more than one meaning. It is also not possible to find that the amending Act either expressly or by necessary implication is retrospective. If it is held that the amending Act is retrospective in operation, it would be re-legislating the enactment by adding words which are not to be found in the amending Act either expressly or by necessary intendment and it would amount doing violence with the spirit of the amending Act. For these reasons, the application of rule of benevolent construction is wholly inapplicable while construing substituted Section 15. \n\nThere is no such rule of construction that a beneficial legislation is always retrospective in operation, even though such legislation either expressly or by necessary intendment is not made retrospective. \" \nUltimately, it was held that the amending Act being retrospective in operation does not affect the rights of the parties to the litigation on the date of adjudication or preemption of the suit and the appellate Court is not required to take into account or give effect to the substituted Section 15 introduced by the amending Act.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-102", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "55. In Raminder Singh Sethi v. D. Vijayarangam, , it was held that Karnataka Rent Act, 1999 has no retrospective effect. It was observed that ordinarily the rights of the parties to litigation stand crystallised on the date of the commencement of the lis. Section 70 of the new Act which speaks of repeal and savings and which also makes provision for the new Act being applicable to certain cases and proceedings, does not speak of the new Act being applicable to the appeal or proceedings pending before the Supreme Court.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-103", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "56. In R. Kapilnath v. Krishna, , one of the contentions raised before the Supreme Court was that Karnataka Rent Control (Amendment) Act, 1994 exempting from the operation of the Act premises belonging to religious or charitable institutions regardless of whether such institutions were under the management of State Governments which came into force during revision stage of suit for eviction of the respondent, Manager of Temple against Appellant, held that the management would not cause Court of Munsif to lose jurisdiction to try the suit. The Supreme Court observed in Para 4 thus:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-104", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "'The above submission of the learned Counsel has been stated only to be rejected. It is pertinent to note that the proceedings in the Court of Munsif had already stood concluded by the time the amendment came into force. It is not disputed that Amendment Act No. 32 of 1994 has not been given a retrospective operation and there is nothing in the Act to infer retrospectively by necessary implication. The Act has been specifically brought into force with effect from the 18th day of May, 1994. The learned Counsel for the appellant cited a number of decisions laying down the law as to how an amendment in legislation brought into force during the pendency of legal proceedings has to be given effect to. Without stating the decisions so cited, suffice it to observe that all those decisions deal with substantive rights having been created or abolished during the pendency of legal proceedings and depending on the legislative intent and the language employed by the Legislature in the relevant enactment, this Court has determined the impact of the legislation on pending proceedings and the power of the Court to take note of change in law and suitably mould the relief consistently with the legislative changes. So far as the present case is concerned, the only submission made by the learned Counsel for the appellant is that the effect of the amendment is to deprive the Court of Munsif of its jurisdiction to hear and decide proceedings for eviction over such premises as the suit premises are. In other words, it is a change in forum brought during the pendency of the proceedings. The correct approach to be adopted in such cases is that a new law bringing about a change in forum does not affect pending actions, unless a provision is made in it for change over of proceedings or there is some other clear indication that pending actions are affected. (See Principles of Statutory Interpretation, Justice G. P. Singh, 8th edition, 2001, p.442). We have already indicated that the Act does not bring about a change in forum", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-105", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "p.442). We have already indicated that the Act does not bring about a change in forum so far as the pending actions are concerned. Moreover by the time the amendment came into force, the proceedings before the Munsif had already stood concluded and the case was pending at the stage of revision before the Additional District Judge. Further we find that an objection laying challenge to forum's competence was not raised before the learned Additional District Judge nor the objection was taken before the High Court in the civil revision preferred by the appellant. It was not taken as a ground in the special leave petition. It has been taken only by way of a separate petition filed subsequently and seeking leave to urge additional grounds. Such an objection cannot be allowed to be urged so belatedly. However, we have already held the argument based on 1994 amendment as of no merit.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-106", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "57. In Shiv Shakti Co-operative Housing Society, Nagpur v. Swaraj Developers, , the maintainability of the revision application after the Amendment Act 46 of 1999, which was given effect from 1.7.2002 was, the issue considered. The Supreme Court observed in Paras 15 and 16 thus:\n\"15. Language of Sections 96 and 100 of the Code which deal with appeals can be compared with Section 115 of the Code. While in the former two provisions specifically provide for right of appeal, the same is not the position vis-a-vis Section 115. It does not speak of an application being made by a person aggrieved by an order of Subordinate Court. As noted above, it is a source of power of the High Court to have effective control on the functioning of the Subordinate Courts by exercising supervisory power.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-107", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "16. An appeal is essentially continuation of the original proceedings and the provisions applied at the time of institution of the suit are to be operative even in respect of the appeals. That is because there is a vested right in the litigant to avail the remedy of an appeal. As was observed in K. Eapen Chako v. The Provident Investment Company (P) Ltd., AIR 1976 SC 2610 only in cases where vested rights are involved, a legislation has to be interpreted to mean as one affecting such right to be prospectively operative. The right of appeal is only by statute. It is necessary part of the procedure in an action, but \"the right of entering a Superior Court and invoking its aid and interposition to redress the error of the Courts below. It seems to this paramount right, part of the progress of the inferior Tribunal.\" (Per Westbury See: Ag v. Sillem, 33 J.Ex 209). The appeal, strictly so-called, is one in which the question is, whether the order of the Court from which the appeal is brought was right on the materials which that Court had before it\" (Per Lord Devuil Ponnamal v. Arumogam, 1905 AC 390. The right of appeal, where it exists, as a matter of substance and not of procedure (Colonial Sugar Refining Company v. Irving, 1905 AC 368). \nFinally, the Court held:", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-108", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "Finally, the Court held:\n\"32. A plain reading of Section 115 as it stands makes it clear that the stress is on the question whether the order in favour of the party applying for revision would have given finality to suit or other proceeding. If the answer is 'yes' then the revision is maintainable. But on the contrary, if the answer is 'no' then the revision is not maintainable. Therefore, if the impugned order is of interim in nature or does not finally decide the lis, the revision will not be maintainable. The legislative intent is crystal clear. Those orders, which are interim in nature, cannot be the subject-matter of revision under Section 115. There is marked distinction in language of Section 97(3) of the Old Amendment Act and Section 32 (2) (i) of the Amendment Act. While in the former, there was clear legislative intent to save applications admitted or pending before the amendment came into force. Such an intent is significantly absent in Section 32 (2) (i). The amendment relates to procedures. No person has a vested right in a course of procedure. He has only the right of proceeding in the manner prescribed. If by a statutory change the mode of procedure is altered the parties are to proceed according to the altered mode, without exception, unless there is a different stipulation.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-109", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "33. Section 6 of the General Clauses Act has no application because there is no substantive vested right available to a party seeking revision under Section 115 of the Code. In Kolhapur Canesugar Works Ltd. and another v. Union of India and Ors., it was observed that if a provision of statute is unconditionally omitted without a saving clause in favour of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goes into effect, there is no scope for granting it afterwards. There is modification of this position by application of Section 6 of the General Clauses Act or by making special provisions. Operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in the statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings, then it can be reasonably inferred that the intention of the Legislature is that the pending proceedings shall continue but a fresh proceeding for the same purpose may be initiated under the new provision.\" \n58. In a recent judgment of the Division Bench of this Court in S. Shiva Raja Reddy v. S. Raghu Raj Reddy, (DB), in which one of us (BRSRJ) is a party has to consider \"Whether Section 100-A C.P.C. is retrospective and no Letters Patent Appeal will lie against a judgment is of a Single Judge passed in an appeal from an original decree or order and whether all such of those Letters Patent Appeals filed prior to 1.7.2002 alone are saved?\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-110", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "59. It is to be noted that by virtue of Act 46 of 1999, Section 100-A was substituted in place of Section 100-A of 1976 Act. Section 100-A of 1976 reads thus:\n \"No further appeal in certain cases:-Notwithstanding anything contained in any Letters Patent for any High Court or in any other instrument having the force of law or in any other law for the time being in force where any appeal from an appellate decree or order is heard and decided by a Single Judge of a High Court, no further appeal shall He from the judgment, decision or order of such Single Judge in such appeal or from any decree passed in such appeal\". \nand the substituted Section vide Act 46 of 1999 reads thus:\n\"100-A. No farther appeal in certain cases:--Notwithstanding anything contained in any Letters Patent for any High Court or in any other instrument having the force of law or in any other law for the time being in force;\n(a) where any appeal from an original or appellate decree or order is heard and decided, by a Single Judge of High Court, no further appeal shall lie from the judgment, decision or order of such Single Judge\".", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-111", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "(b) ...............\"  \nUnder Section 32(g) of Chapter 4 of Act 46 of 1999, all those appeals admitted prior to the Act coming into force were saved. However, Section 100 was further amended and were brought to Code of Civil Procedure through Act No. 22 of 2002 and Section 100-A of the Principal Act was also substituted by the following:\n \"100--A. No further appeal in certain cases :--Notwithstanding anything contained in any Letters Patent for any High Court or in any instrument having the force of law or in any other law for the time being in force, where any appeal from an original, or appellate decree or order is heard and decided by a Single Judge of a High Court, no further appeal shall lie from the judgment and decree of such Single Judge\" \nThe said provision fell for consideration before the Division Bench. The substituted provision came into force with effect from 1.7.2002. The question was as to whether the provision is retrospective in its nature and if so, the extent of its retrospective operation.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-112", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "60. The Division Bench referred to various decisions. Some of them are referred to hereinabove and concluded that taking away right of a party to prefer a further appeal as against the decree and judgment of a learned Single Judge of the High Court to a Division Bench, would not amount to taking away substantive right of any fundamental importance. The right of appeal is against the decree and judgment against the decree of a Subordinate Judge was well protected and was not taken away by the amended provision. While deliberating on the issue as to whether any party to a Us has a vested right to have his appeal to be heard by more than one Judge of the High Court, the learned Division Bench observed that right of appeal is not a mere right of procedure, but is a substantial right and also a vested right and such a right to enter the Superior Court accrues to the litigant and exists as on from the date of the lis commences. The right is to be governed by law prevailing at the date of institution of the suit. But, however, such a right of appeal can be taken by an enactment either by expressly or necessary intendment and observed that a provision may in its operation be retrospective, and yet the extent of its retrospective character need not extend so far as to affect pending suits, when the language of the statute does not compel them to do so. Interpreting the expression, \"no further appeal shall lie from the judgment and decree of such Single Judge\", the Bench observed that retrospective operation of Section 100-A would not extend to and be . applicable even to such of those Letters Patent Appeals which are already admitting and pending adjudication and that the provision is limited to the extent of taking away the right accrued in favour of a litigant to prefer Letters Patent Appeals arising out of the suits instituted or filed before 1.7.2002 and finally, the Division Bench observed that no further appeal against an order of the Single Judge shall He and be entertained after", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-113", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "Division Bench observed that no further appeal against an order of the Single Judge shall He and be entertained after 1.7.2002.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-114", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "61. Finally, the Division Bench held that the appeals already filed, admitted and pending final disposal are in no way affected by the newly amended provision. Its retrospective effect is not so sweeping even to affect those appeals. Those appeals were subjected to threshold scrutiny and having found a prima facie case for correction of the judgments rendered by the learned Single Judge. The Division Bench admitted the same and they are awaiting final adjudication. There is nothing either expressly or by necessary implication in order to hold that the newly inserted provision affects even the appeals that were already admitted and accordingly, declared that all the Letters Patent Appeals presented or filed before 1.7.2002 are maintainable whether they have been admitted or not. To this extent, these appeals are excluded from the operation of the newly inserted provision. \n\n62. From the aforesaid case law and the statements made by various Law Lords, the following principles (illustrative not exhaustive) would emerge:\n1. Every legislation is a prima fade prospective unless it is expressly or by necessary implication made to have retrospective effect on the principle of \"Nova comtitutio futuris formam imponere debet now Paranteritus\" means - A new law ought to regulate which is to follow, not the past. \n\n2. All laws which effect substantive rights generally operate prospectively and there is a presumption against their retrospectivity if they affect the vested right and obligation unless the legislative intent is clear and unambiguous. \n\n3. While considering the question of retrospective operation of the statute, the right affected must be first considered, whether there is a vested right. The amendment must be considered as a prospective so as to not to cause vested right and if the right is merely procedural, normally it is not treated as a vested right. \n\n4. The intention of the Legislature is always be to gather the words always used by it in plain, grammatical meaning.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-115", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "5. Retrospective operation of a statute is not to be given so as to impair the existing right or obligation, otherwise than as regards a matter of procedure, unless that effect cannot be effected without doing violence to the knowledge of the enactment. A statute, which impairs vested right or legality of the past transactions or the obligation of a contract should not be held to be retrospective. \n\n6. Even in respect of the amendments, substantive rights cannot be taken away by subsequent amendment, unless specifically enacted by the legislation. \n\n7. The law which only affects the procedural rights is presumed to be retrospective, unless such a construction is textually inadmissible. \n\n8. A statute, which not only changes the procedure, but also creates new rights and obligations, shall be construed to be prospective unless otherwise provided either expressly or by necessary implication. \n\n9. Whether the amendment is brought during the pendency of the suits or actions, whether such amendment has retrospective effect or prospective effect has to be considered with reference to object of the amendment, unless it is expressly provided in the statute. But, however, if the rights and procedures are dealt with together, if the procedural alterations are inextricably linked with the changes simultaneously, it is not permissible to give retrospective effect of operation. Unless, Legislature has enacted such an intention, there is always general presumption that the statute is deemed to be prospective unless otherwise expressly provided.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-116", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "10. The question whether statute or any provisions in it has retrospective operation has to be determined with reference to the intention of the legislation and it is to be gathered from the language with reference to the object and nature of the rights affected the circumstances under which the statute came to be. The statute which is not declaratory of pre-existing law nor the matter relating to procedure, but affects vested rights cannot be given a greater prospective, retrospective effect than it renders necessary. The test when decided a particular provision of law has to be given retrospective effect or not is not merely considered whether a law of procedure or substantive law, but also any alleged questions existing rights including the rights of action which are substantive rights. If a law destroys an existing right or places language a restriction on it, no retrospective effect would be given unless statute is expressly enacted to that effect. \n\n11. No person can have a vested right in the course of procedure and the plaintiff or defendant has a right of prosecution or defence in the manner prescribed for the time being and if the procedure is altered during the pendency of action, the altered procedure ought to be adopted. Legislature can always provide that pending proceedings shall be effected by an amendment Act, though in the absence of such any express provision amending Act cannot be held to be govern the pending proceedings. \n\n12. A new law bringing about a change in forum does not affect pending actions unless there is clear expression to the said effect. \n\n13. Right of appeal is substantive right and it cannot be impaired as taken away by a statute retrospectively unless by specific provision in enactment or by necessary intendment, This right vests with the suitor at the time of institution of original proceedings. Any change in the law relating to appeals after institution of original proceedings which adversely touches this right is presumed not to be retrospective.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-117", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "14. A change of forum except in pending proceedings is a matter of procedure and therefore, if a new Act requires certain type of original proceedings to be instituted before a special Tribunal constituted under the Act to the exclusion of Civil Court, all proceedings of that type whether based on old or new causes of action will have to be instituted before the Tribunal. \n\n15. The statutes providing for new remedies for enforcement of a existing right are treated as procedural and applied to future as well as the past causes of action. \n\n16. The classification of statute as either substantive or procedural does not necessarily determine whether it may have a retrospective operation. But, a statute of limitation is generally regarded as procedural. However, if its application to a past cause of action has effect of reviving or extinguishing a right of suit such an operation cannot be said to be procedural. Consequently such procedural law is prospective in operation. \n\n17. In the words of Dixon CJ \"The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. But, given rights and liabilities fixed by reference to the past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption\".", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-118", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "18. In the words of S.R. Das, the cordinal rule of construction, however, in the absence of anything in the enactment to show that it has a retrospective operation, it cannot be so construed as to have altering the law applicable to a claim in litigation at the time when the Act was passed. Therefore, if Legislature intends to apply a statute to the pending proceedings, it must indicate an express provision to that effect. \n\n19. In matters of substitution by an amendment, it has to be construed that there is no real distinction between the repeal and an amendment. Whether a provision of an Act is omitted by an Act and the said Act simultaneously re-indicates new provision which substantively covers with certain modifications. In that event, such re-enactment is recorded as having force continuously and modification are treated as changes with effect from the date of the enforcement of the re-enacted provision. \n\n20. It makes no difference in application to these principles that the amendment is by substitution or otherwise. However, the statutes dealing with the procedures in contrast with the substantive rights are presumed to be retrospective, unless such a conclusion is textually inadmissible. If the new Act affects the matters of procedure, then only prima facie it applies to all actions pending as well as future. \n\n21. While the law relating to forum and limitation is procedural in nature while the law relating to right of action and right of appeal even though remedial is substantive in nature, that a procedural statute should not generally be speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished. A statute which not only changes the procedure but also creates new rights and obligations shall be construed to be prospective, unless otherwise provided either expressly or by necessary implication,", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-119", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "22. A statute which takes away or impairs vested rights acquired under existing laws, or creates a new obligation or imposes a new duty or attaches a new disability in respect of transactions already past must be presumed to be intended not to have a retrospective effect and as a logical corollary of the general rule, that retrospective operation is not taken to be intended unless that intention is manifested by express words or necessary implication, and there is a subordinate rule to the effect that a statute or a section in it is not to be construed so as to have larger retrospective operation than its language renders necessary.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-120", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "23. Where the rights and procedure are dealt with together, the intention of Legislature may well be that old rights are to be determined by the old procedure and the new rights under substituted section by the new procedure. If the procedural alteration is closely and inextricably linked with the changes simultaneously introduced, it is not possible to give retrospective effect to the procedure unless the Legislature has indicated such an intention either by express words or by necessary implication.\" \n63. Keeping in view the aforesaid principles, it has to be considered whether the amendment Act is retrospective in operation. The Andhra Pradesh Civil Court Act is a consolidated Act, which came into effect with effect from 1.11.1972. The Act repealed certain Acts referred to supra. The pecuniary and territorial jurisdiction as well as appellate jurisdiction together with fora is contained in various provisions of the Act. A right to appeal is a substantive right and it inheres to the party from the date when action is instituted and enures till the end of the litigation viz., appeal, second appeal etc. The pecuniary limits together with fora were being awarded from time to time by appropriate amendments. Initially, the appeal against the decree of Additional Judge, City Civil Court laid before the Chief Judge if the value of appeal was not more than Rs. l5,000/-and to the High Court if the value is more than Rs. 15,000/-. Subsequently, the value was being substituted as Rs. 30,000/-, Rs. 1,00,000/-and presently Rs. 3,00,000/-.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-121", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "64. It is beyond pale of controversy that a vested right cannot be affected by an amending Act retrospectively unless specifically expressed or by necessary intendment. Per contra a procedural law or adjectival law is presumed to have retrospective effect. But, as already observed in various cases, the clear cut distinction between laws of procedure and substantive law is not possible and hence the language, object and reasons and the circumstances under which the adjectival law is brought into effect has to be considered. It is not a rule of thumb that procedural law is always retrospective. In the picturesque aphorsm of Therman Arnold \"Substantive law is canonised procedure. Procedure is unfrocked substantive law\" (XLV Harvard Law Journal 617 and 645). Even a procedural law which not only changes the procedure but also creates new rights and obligations have to be construed to be prospective as such a law cannot have the effect on vested rights which were already accrued and put into action. The Supreme Court in a very recent case Kapilnath 's case (supra) has categorically held that even the procedural law if it is sought to be made applicable to the pending matter, the legislation has to specifically contain such expression and in the absence of such a provision, the adjectival law has to be construed to be prospective and not retrospective in operation", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-122", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "65. Even if we go by the language of the amendment, the Act contained expression as \"an appeal shall lie\" would only refer to action in futuro and not in presenti. As early as 1909 the English Court in Smithies v. National Association of Operative Plasterers, while agreeing with Lord Chief Justice, Vaughan Williams LJ, said \"We are all agreed on this point. It is a proposition founded in common sense that, where vested rights have already accrued, and legislation is passed which uses words expressive of futurity, such as \"shall\" or \"shall not\", which prima facie would appear to be meant to be applicable to future cases, it is not to be construed retrospectively so as to affect those vested rights, unless terms are used which clearly compel the Court to give it that construction, This is only to impute common sense to the Legislature; any reasonable person would say that clear terms ought to be used, if it is intended to divest a vested right. It is stated in Maxwell on the Interpretation of Statutes, 3rd Ed. P.333, that, where a statute is in its nature a declaratory Act, the argument that it must not be construed so as to take away previous rights is not applicable. I suggested to Mr. Shearman that he might base an argument on this passage, but he did not receive the suggestion with enthusiasm. I am clearly of opinion that the Trade Disputes Act, 1906, Section 4 is not declaratory so as to prevent the general rule against construing a statute retrospectively from applying. It is impossible, I think, to suppose that the Legislature meant that, where an action was already commenced, the passing of the Act should stop it. I think that on this preliminary point the Lord Chief Justice was quite right.\"", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-123", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "66. To the same effect, the decisions of the Supreme Court in Rajagopal Reddy 's. case (supra) and Ramesh Singh's case (supra). \n\n67. Consequent on every amendment, there was change of forum coupled with the value of the subject-matter. It is only in case of merely procedural laws unconnected with the rights, the said law is construed to be retrospective. But, if the law is inextricably an admixture of right and remedy, such law has to be construed as having prospective operation as the vested rights cannot be interfered with except specifically expressed or by necessary implication. The right to remedy and the forum when presumed by law in an integrating manner, the later follows the former as the same is a vested right. A right of remedy without forum or vice versa, would be an ineffective right and therefore, they always travel together. In the case on hand, the right to file appeal with pecuniary limitation is intrinsically coupled with the forum. In such an event, it is not possible to divide vested right and fora and apply substantive law to the right and adjectival law to the forum. Further, we find that the destination between substantive law and procedural law is rather difficult to make out and hence any effort on the part of the Court to make an effort to divide there two areas is unwarranted. The only course left for the Court is to see whether the adjectival statute extinguished merely the remedy or the substantive right as well as the remedy. For such determination, each case has to be considered on its own facts and circumstances.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-124", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "68. There is yet another reason to hold that the amendment is not retrospective. The amendment is only a substitution of the value of the appeal. No specific repeal provisions were enacted. Therefore, when substitution takes place it merely gets embebbed in Section 9 and other provisions of the Act apply from the date of substitution. The Andhra Pradesh Civil Court Act while repealing other Acts applied Sections 8 and 18 of Andhra Pradesh General Clauses Act, by which any right, privilege, obligation or liability acquired or incurred under any enactment so repealed is unaffected.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-125", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "69. It is to be noted in this regard that in Maria Christiane's case (supra) the maintainability of the appeal was the subject-matter before the Supreme Court. Though, it was presented, not admitted, but continued to be in the fold of Appellant Court. The forum was constituted with effect from 15.6.1966. As on the date of the disposal of the matter, Portuguese Code was no more in existence and the Court of Judicial Commissioner was equated with that of the High Court and therefore, as on the date when the suit was dismissed on 6.6.1968, it stood transferred to Senior Judge's Court by virtue of the provisions contained in the Goa Act 6 of 1965 and in such circumstances, the Supreme Court held that the forum as created under the Goa Act has to be availed off. The Supreme Court did not consider the aspect as to whether the right to forum created has restospetive effect or prospective effect. Therefore, taking into consideration the principle laid down by the Supreme Court in this case with reference to the facts in the present case, on the date when the suit was decreed, the amended provisions relating to the pecuniary jurisdiction of Appellate Court as also the forum came into existence and therefore, the decision on the other hand, supports the case of the appellants rather than defendant and therefore, it has to be held that inasmuch as the amended Civil Court Act did not specify that the provisions would effect the pending cases, it has to be only inferred that the intention of the legislation was not to affect the cases or the appeals which were presented as also pending on the date of the amendment came into force.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-126", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "70. Even the assistance sought to be taken from the judgment of the Supreme Court reported in Mukund Deo (dead) by his LRs. Kasibai v. Mahadu, , the same cannot be made applicable to the facts of this case. In that case, one Mr. Beli Ram, who was having certain lands died leaving his wife Rukhma Bai and his daughter Vitha Bai. On his death, the property devolved on his wife Rukhma Bai as a limited owner. By a deed dated 26.7.1916, she sold the lands to Mukund Deo and delivered the possession. Rukhma Bai died in the year 1940. However, the sons of Vitha Bai, daughter of Rukhma Bai brought an action if February, 1944 assailing transfer and for a decree of possession of the lands sold by Rukhma Bai, The Trial Court decreed the suit against which an appeal was filed before the Additional Sub-Judge, who reversed the decree of the Trial Court. In the Second Appeal before the High Court of Hyderabad, the judgment of the lower appellate Court was reversed restoring the decree of the Trial Court. The legal representative of Mukund Deo preferred the civil appeal before the Supreme Court. The contention before the Supreme Court was that the High Court in Second Appeal had no jurisdiction to set aside the finding of fact recorded by the first appellate Court as per Section 100 of Code of Civil Procedure. But the contention was repelled by the Supreme Court stating that when the suit was filed the lands in dispute were situate within the territory of H.E.E. the Nizam of Hyderabad and the suit filed by the respondents had to be heard and disposed of according to the relevant provisions of the Code of Civil Procedure in force in the State of Hyderabad and under Section 602 of Hyderabad Civil Court Act, the second appeal shall lie to the High Court from every decree which is passed in", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-127", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "Civil Court Act, the second appeal shall lie to the High Court from every decree which is passed in first appeal, thereby implying that second appeal lie with regard to the question of fact as well as the question of law.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-128", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "71. The Supreme Court observed that \"it is true that as a general rule, alteration in the law of procedure are retrospective, but a right of appeal to a particular forum is a substantive right and is not lost by alteration in the law, unless provision is made expressly or by necessary implication. Therefore, the Supreme Court referred to Colonial Sugar's case (supra), Delhi Cloth and General Mills's case (supra) and Garikapati Veeraiah's case (supra), observed that vested right of appeal is a substantive right and is governed by the law prevailing at the time of commencement of the suit, and comprises all successive rights of appeal from Court to Court, which really constitute one proceeding. Such a right may be taken away by a subsequent enactment expressly or by necessary intendment. The Supreme Court held that Code of Civil Procedure to the Territory of State of Hyderabad either by express or by necessary intendment invested Section 100 of the Code with retrospective operation and that the power of the High Court to deal with the appeal before it must\" be with reference to procedure contained in Hyderabad Code without reference to Section 100 of Code of Civil Procedure, 1908. Thus, the Supreme Court held under the Hyderabad Code, second appeal can be raised on questions of fact and law, while under Code of Civil Procedure only substantial question can be entertained and vested right which accrue under Hyderabad code cannot be taken away retrospectively. Therefore, what was observed by the Supreme Court in this case is vested right of the Appellant in the second appeal relating to both fact and law and merely as on the date when the Code of Civil Procedure was made applicable, it cannot deny the vested right of the appellant to agitate the same before the High Court, both the questions of law and fact. But, this case also is of no avail.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-129", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "72. Therefore, we are of the considered view that the reliance placed on Maria Christine De. Souza Soddar's case (supra) and Kasi Bai 's case (supra), is inappropriate to the fact situation of the present case. A principle in abstract without reference to the facts and circumstances cannot be applied to other cases. It is also to be noted that it is a case of substitution and not a complete repeal. The pecuniary jurisdiction of the Court were altered and consequently the forum also changed. Therefore, it is not a case as a case of right of appeal was taken away, while not disturbing the substantive right, if the forum is changed and the right of the appeal in the forum are so inextricable that they cannot be separated by clear cut measure. It has to be that the right of appeal as well as the forum are both substantive rights and therefore, they only apply to the cases in future and not applied to the pending cases. \n\n73. Therefore, we reached the following conclusions :\n1. That the Civil Court (Amendment) Act 30 of 1989 is applicable prospectively from 1.12.1989. \n\n2. Even in case of suits which were filed earlier to the amendment and they are pending disposal as on the date of the amendment came into force, the appeal if any has to be necessarily filed before the Forum created under the amended Act depending on the pecuniary limits. To this limited extent, the decision in Kotina Papaiah's case (supra) and Kameshwaramma 's case (supra) and Haragopal's case (supra) stand modified. \n\n3. Any appeal having been presented before date of amended Act coming into force and the appeals pending as on the said date are required to be disposed of by the Courts, wherever they were pending and the amendment will not have any effect on pending appeals either presented or pending.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "3293693874f1-130", "Titles": "Vallabhaneni Lakshmana Swamy And ... vs Valluru Basavaiah And Ors. on 23 April, 2004", "text": "4. The suits or petitions in which decrees were passed prior to 1.12.1989, they will be dealt with in accordance with the pre-amended procedure. \n\n5. In the cases before us, even after the amendment came into force on 1.12.1989, number of appeals having value less than Rs. one/3 lakhs were admitted by this Court and some of them were disposed of by virtue of the judgment of the Division Bench in Kameshwaramma's case (supra) subsequent cases though in fact they do not fall within the category of either pending appeals or appeals presented, before the amendment. The pecuniary limits and forum go together and the amendment being prospective in operation, the appeals ought to have been filed before the amended forum. But, taking into consideration that large number of appeals were already admitted by this Court, and they are pending for a considerable length of time and keeping in view the maxim that \"Actus curiae neminem gravabit\" (An act of the Court shall prejudice no man), we declare that such of the cases which were filed subsequent to amendment are deemed to have been transferred to this Court under Section 24 of Code of Civil Procedure for their disposal in accordance with law. \n74. The judgment of the Full Bench in Motichand Jain's case (supra) declaring that the Amendment Act 30 of 1989 falling under adjectival law has retrospective effect stands overruled subject to the aforesaid conclusion. \n\n75. The Registry shall list the cases before the appropriate Court for disposal. \n\n76. Before parting with the cases, we would like to place on record our appreciation for the able and matured submissions made by all the Counsel appearing for both the parties and the case-law cited by them has assisted this Court to clear the riddle, which has been lingering for the decades. \n\n77. No costs.", "source": "https://indiankanoon.org/doc/1604496/"}
+{"id": "1ae8f104426b-0", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "ORDER Bhimasankaram, J. \n 1. One of the important questions to be decided in this appeal is whether the agreement Ex. A-6 is a 'lease' falling within the ambit of Section 17(1) (d) and, therefore, comes within the mischief of Section 49 of the Indian Registration Act. The Act defines a lease as including an agreement to lease.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-1", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "2. The Privy Council decision in Hemanta Kumari Debi v. Midhapur Zamindari Co. ILR 47 Cal 485 at p. 494: (AIR 1919 PC 79, at p. 80) dealt with the meaning of the phrase 'agreement to lease' and their Lordships made the following observations :\n \"..... the Registration Act of 1908 provides that 'lease' includes an agreement to lease, and by Section 17 enacts that leases must be registered, the penalty for non-registration being imposed by Section 49, which provides that if not registered, no document shall affect immoveable property which it comprises or be received as evidence of any transaction affecting such property. If the document in question can be regarded as a lease within the meaning of this definition it could not be received in evidence. Then Lordships are of Opinion that it cannot be so regarded. An 'agreement for a lease', which a lease is by the statute declared to include, must, in their Lordships' opinion, be a document which effects an actual demise and operates as a lease.\"", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-2", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "3. Their Lordships were, in that case, dealing with an agreement which was not enforceable on the date when it was entered into but which could become enforceable only in case a certain event happened. Before that decision was rendered, a Full Bench of the Madras High Court had in Narayanan Chetty v. Muthiah Servai, ILR 35 Mad 63 (FB) ruled that) an agreement to execute a sub-lease and to get it registered at a future date is a lease wtthin Section 3 of the Indian Registration Act III 06 1887 and is compulsorily registerable under Clause (d) of Section 17. Some time after the case in ILR 47 Cal 485 : (AIR 1919 PC 79) was decided, a similar question came up for consideration before the Madras High Court in Swaminatha Mudaliar v. Ramaswami. Mudaliar, ILR 44 Mad 399 at p. 404 : (AIR 1931 Mad 72 at p. 73). Referring to the observations of the Privy Council in ILR 47 Cal 485 : (AIR 1919 PC 79) one of the learned Judges remarked as follows, after quoting the passage above extracted from the decision.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-3", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "\"Turning to Panchanan Bose v. Chandi Charan Misra, ILR 37 Cal 808 we see that the Chief Justice held that the document he was considering did not come within Section 17(1) (d) of the Registration Act and that consequently it was affected by rule contained in Clause 2 (5). In fact, the conclusion was that unless an agreement to lease had the effect of operating as an immediate demise of the property it need not be registered. It may be urged that this view practically destroys the difference between a lease and an agreement to lease, but apparently the position created by the definition section has become very anomalous and Courts have been at pains to devise a way out of the difficulty; and as the solution has emanated from such a high authority as Sir Lawrence Jenkins and has the approval of the Judicial Committee, I feel that we should accept it unreservedly. \n\nI am DOG prepared to regard the pronouncement of the Judicial Committee as an Obiter Dictum which it is open to us to ignore, having regard to the Full Bench decision of this Court, The question was directly before the Board and they pointedly drew attention to the decision of the Chief Justice of the Calcutta High Court on the matter. I feel no compunction in respectfully accepting this view, and in holding that ILR 35 Mad 63 (FB), should no longer be regarded as good law; otherwise it would result in perjured evidence being let in to prove a supposition oral agreement in such cases.\" \n4. The other learned Judge, Wallis C. J., however, seemed lib opine that the Court was still bound by the decision in ILR 35 Mad 63 (FB).", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-4", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "5. No subsequent derision binding upon us throwing light upon the meaning of the passage cited above from the Privy Council decision has been brought to our notice. We find considerable difficulty in applying the observations of their Lordships to the instrument before us. We. therefore think it desirable that the following question should be decided by a Full Bench :\n \"Whether Ex. A-6 is a lease within the meaning of Section 17 (1) (d) of the Registration Act?\" \n The papers will be placed before the learned Chief Justice for the constitution of a Full Bench to decide the question. \n\nCase Note: \n(i) Contract lease - Section 2 (7) of Registration Act, 1908 dispute regarding nature of agreement to lease whether agreement to lease within meaning of Section 2 (7) as gathered from intention of parties - agreement itself states that it should be regarded as lease within meaning of Section 2 (7). \n(ii) Specific performance - Sections 27A and 12 of Special Relief Act, 1877 and Section 53A of Transfer of Property Act appellant suing for specific performance under Section 27A unregistered lease deed adduced as evidence - unregistered agreement of lease signed by one party under which no possession delivered not covered by Section 27A held, suit for specific performance not maintainable on basis of unregistered document. \nJUDGMENT Chandra Reddy, C.J. \n6. The question referred to the Full Bench is whether Ex. A-6 is a lease within the meaning of Section 17(1) (d) of the Registration Act. The fact's necessary for an appreciation of the relative contentions of the parties may be briefly set out.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-5", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "7. The suit was laid by the appellant on the basis of Ex. A-6 dated 30-5-1955 an agreement to lease permanently properties mentioned therein on certain terms and conditions which would be referred to presently. The answer of the defendants was that the agreement in question was the result of fraud and misrepresentation and that the document relied on should not be received in evidence for want of registration as it fell within the scope of Section 17(1) (d) of the Indian Registration Act. The trial Court over-ruled the objection based on the provisions of the Registration Act, but dismissed the suit accepting the plea of the defendants that the instrument was brought about by fraud and misrepresentation. The aggrieved plaintiff preferred the present appeal against that judgment complaining against the finding. When the appeal came up before Justice Bhimasankaram and Justice Krishna Rao, the view of the trial court, that the document was unaffected by the provisions of Section 17(1) (d) read with Section 49 of the Indian Registration Act was canvassed before them by the respondent. As the learned Judges felt some difficulty in applying the observations of the Privy Council in ILR 47 Cal 485 : (AIR 1919 PC 79) they wanted a Full Bench to interpret the document. \n\n8. The determination of the question as tot whether Ex. A-6 is an agreement to lease or not depends upon the meaning to be attributed to the words \"agreement to lease\". In other words, the exact scope of Section 2 Clause 7 of the Registration Act has to be determined. ''Lease\" has been defined to include a counterpart, kabuliyat, an undertaking to cultivate or occupy, and an agreement to lease. The construction of this clause was the subject of several judicial decisions.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-6", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "9. The leading case on the subject is ILR 47 Cal 485 ; (AIR 1919 PC 79). There, two actions were laid by the appellant to his Majesty in Council, one against Midnapur Zamindari and the other against the Government for recovery of possession of certain plots of land. The suit against the company was premised on terms that the company should recognise the title of the plaintiff bull should be allowed to remain in possession of the property as lessee and that the properties forming the subject-matter of the other suit should be granted a Jote settlement in the event of her succeeding in that suit.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-7", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "Eventually, when the suit was decreed, the appellant refused to fulfil the terms of the compromise. This led the company to file a suit for specific performance of the agreement embodied in the compromise petition. The main defence to the action was that the compromise was unenforceable for the reason that it was not registered as required by the relevant provisions of the Registration Act. This contention was repelled by their Lordships in the view that the document in question did not create any immediate and present demise in the company. The rule was stated by there Lordships in the following words :\n\"xxxxx, the Registration Act of 1908 provides that 'lease' includes an agreement to lease and by Section 17 enacts that leases must be registered, the penalty for non-registration being imposed by Section 49, which provides that, if not registered, no document shall affect immoveable property which it comprises or be received as evidence of any transaction affecting such property. If the document in question can he regarded as a lease within the meaning of this definition it could not be received in evidence. Their Lordships are of opinion that it cannot be so regarded. An 'agreement for a lease' which a lease is by the statute declared to include, must, in their Lordships' opinion, be a document which effects an actual demise and operates as a lease.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-8", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "They think that Jenkins C.J.. in the case of ILR 37 Cal 808 correctly stated the interpretation of Section 17 in this respect. The present agreement is an agreement that, upon the happening of a contingent event at a date which was indeterminate and, having regard to the slow progress of Indian litigation, might be far distant, a lease would be granted. Until the happening of that even* it was impossible to determine whether there would be any lease or not. Such an agreement does not. in their Lordships' opinion, satisfy the meaning of the phrase \"agreement for a lease\", which, in the context where it occurs and in the statute in which it is found, must in their opinion relate to some document that creates a present and immediate interest in the land.\" \nIn this decision the dictum of Jenkins C. J., in ILR 37 Cal 808 was approved. In the latter case the plaintiffs sought declaration of their right to a patta for a share in some lands and for possession thereof. The claim was based by the defendants on various grounds but in the appeal the controversy was confined to the question whether the 'solehnama' which was foundation for the suit was admissible in evidence. Jenkins, C.J., who delivered the opinion of the Court upheld the pleas of the plaintiffs that the document did not amount to a lease for the reason that it only created a right to obtain another document which alone was contemplated to operate as an actual demise. The learned Judge thought that the document was merely an agreement to create a lease at a future data the (terms of which were to be defined by a document to be executed in future.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-9", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "10. Sri Ramamurthy, the learned counsel for Hie appellant seeks to bring the present case within the ambit of these rulings. His contention is that the document by itself did not form the transaction and as such it was only an agreement between the parties that some time later and on fulfilment of certain conditions a permanent lease was to be granted to the appellant. It was also urged by him that the Full Bench ruling in ILR 35 Mad 63 which laid down the proposition that an agreement to execute a sub-lease and get it registered at a future date, whether possession was given to the lessee or not, was a lease within the meaning of Section 3 of the Indian Registration Act of 1877 corresponding to Section 2(7) of the present Act requiring registration under Clause 1(d) of Section 17, is no longer good law in view of ILR 47 Cal 485 : (AIR 1919 PC 79).", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-10", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "11. Before we examine the soundness of this contention with reference to the terms of the document we shall also deal with the cases referred to by the counsel for the appellant. In Valiya Kalyamani v. Krishna Nambiar, AIR 1927 Mad 699 Ramesam. J., ruled that an agreement between the parties for a renewal of 'kanom' did not amount to an agreement to lease for the reason that the parties intended that the document should not operate as a present demise till the payment of a particular sum of money. The ratio of this ruling is that the demise was intended to come into existence only on the happening of some contingent event and the parties did not want that it should operate as a present demise, Suleman v. P. N. Patel, AIR 1933 Bom 381 Illustrates the same principle, namely, that if agreement Is to grant a lease in future it would not constitute an agreement, to lease within the scope of Section 2(7) of the Indian Registration Act. In that case, the defendant wrote to the plaintiff agreeing to take a flat for five years commencing from a certain day. Since on the relevant date the plaintiff had not decided which flat he would let to the defendant it was decided by Justice Wadia that the latter did not create a present demise of either the one or the other flat and consequently it was not an agreement to lease requiring registration. Trivenibai v. Leelabai, AIR 1955 Nag 170 belongs to the same category. On a reading of the whole document, the learned Judge came to the conclusion that the document was primarily meant to evidence payment that was made and was not meant to effect an actual demise in the property concerned.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-11", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "12. Kanti Chandra v. Brojendra Mohan, AIR 1929 Cal 186 does not carry the appellant any farther. There, an agreement was entered into for leasing certain properties after calculation of the area of the land and for fixing the rent after measurement thereof. Pursuant to this agreement the intending lessee was put in possession of the land not for its immediate use but for clearing the jungle so that the land could be measured. In a suit for rent the question arose whether the agreement was inadmissible in evidence, not having been registered. It was answered in the negative as it was felt that the agreement was to lease the property on certain conditions such as clearing the jungle, for measuring the land, fixing the rent etc., and that there was no present right created in the land in favour of the proposed lessee. \n\n13. It is seen that in all these cases, the instrument in question was found to be not a lease for the reason that the terms and the surrounding circumstances clearly indicated that the parties did not intend to effect a present demise in the immovable property by and under that document. If the intention of the parties as could be collected from the words of the instrument was that they should take effect as an actual demise, there could be little doubt that the instrument would constitute an agreement to lease, so as to attract Section 17(1) (d) read with Section 49 of the Registration Act.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-12", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "In Purmanand Das Jiwandas v. Dharsey Virji, ILR 10 Bom 101, the opinion expressed by Sargent, C.J. and justice Bayley is that of the document tends to create a present interest although the agreement contemplated the execution of a formal document at an early date it needs registration. iT was observed that it was the paramount intention that could be gathered from the instrument itself that should prevail. The view taken in Sanjib Chandra Sanval v. Santosh Kumar Lahiri, ILR 49 Cal 507: (AIR 1922 Cal 436) is to the same effect.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-13", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "14. There is an exhaustive discussion on the subject in Ramjoo Mahomed v. Haridas Mullick, ILR 52 Cal 695 : (AIR 1925 Cal 1087). Justice Page who decided the case had collected all the cases bearing on the subject. There, a suit was filed for specific performance of an alleged agreement embodied in two letters to lease a particular premises in Calcutta, that was in possession of the plaintiff and in the alternative for damages for breach thereof. The contents of the letters were as follows:\n \"I do hereby agree to take by our personal settlement your house and premises No. 7, Bowbazar street on a lease for 21 years under the following terms:\" \nThe defendant replied:", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-14", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "The defendant replied:\n \"I do confirm your letter dated 19-11-1921. All terms will be settled on the agreement.\" These two letters were interpreted by the learned Judge as containing terms amounting to a present demise of the said premises and creating an immediate interest therein. In his judgment reference is made to several English decisions touching the topic. In Maldon's Case (Doe d. Jackson v. Ashburner), (1793) 5 TR 163 at p, 167, the words \"you shall have a lease of my lands in D for twenty one years, paying therefor 10 shillings per annum, make a lease in writing and I will seal were interpreted as making a good lease by parol, and that the making of it in writing was but for further assurance. The proposition that a document would operate as a present demise though it has to take effect in future on either of the two dates mentioned therein whichever first happened after the lessor recovered the land in question from the person then in possession is contained in Barry v. Nugent. (1782) 3 Doug (KB) 179. The observations of Lord Ellenborough in Doe d. Walker v. Groves, (1812) 15 East 244, which are instructive have been extracted by the learned Judge:", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-15", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "\"If by the terms of this agreement it had been provided that there should be no entry until a lease was executed I should have had considerable doubts. But as the case stands it does appear to me that the instrument must be considered as a present lease from 5-4-1798. From that period it Has the operation of a demise, not depending upon the contingency of the party's granting a future lease, which was the stipulation only for the better security of the lessee. It falls, therefore, within the case of Poole v. Bentley, (1810) 12 East 168; and in (1782) 3 Doug (KB) 179 the Court thought, notwithstanding it was agreed that leases with the usual clauses were to be drawn, that! such a stipulation did not affect the words of present demise. Here the lessee might never have the benefit of an executed lease; in the interim, therefore, this was an agreement to operate as a present demise, commencing immediately from the 5th of April; though a more formal lease was afterwards to be granted.\"  \n It is unnecessary to multiply citation on either side since the cases referred to above lay down in clear terms the rule that should govern the interpretation of Section 2(7) of the Registration Act. The principles that emerge from the various authorities ace these.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-16", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "If the conditions of a contract to lease are fully ascertained and if ie is intended that the right to possession should vest in the lessee either immediately if the term is to commence at once or in future, if it is to come into operation subsequently, the instrument has to be regarded as a lease. \"Such a lease takes effect from the date fixed for the commencement of the lease without the necessity of actual entry.\" If, on the other hand, it is only an agreement binding one of the parties to the agreement to lease and the other to accept it, it is only an executory contract since the legal relationship of landlord and tenant would not be created by and under the instrument. Thus, the test is whether the agreement itself would confer a legal right or whether the execution of another instrument which give a legal right was in the contemplation of the parties. It should be construed to be a lease if the present demise is to be inferred from the language employed. The fact that it contains a stipulation for the execution of a formal document subsequently would not make any difference if the covenants mentioned therein are to become binding at once. If, on the other hand the terms are not fully ascertained and some at lease of the essential conditions are to be settled at a later stage even if the words used indicate a present demise, it would not be a lease as defined in In Section 2(7). It is the dominant intention of the parties that should be gathered from the language in which the document is couched that should be the criterion in deciding whether a particular instrument is an agreement to lease or merely an agreement to grant a lease m future creating a right in a party to obtain a document under certain circumstances or on the happening of a certain contingency. \n\n15. The rules stated by Readman in his book on \"Landlord and Tenant\" in paragraphs 50, 51 and 52 are in conformity with the principles indicated above.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-17", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "16. We do not also accede to the proposition that ILR 35 Mad 63 (FB) was overruled by Hemanta Kurmari Debi v. Midnapur Zamindari Co., ILR 47 Cal 485: (AIR 1919 PC 79) on the issue as to whether an agreement to lease would require registration even if possession of the property was not given to the proposed lessee. For one thing, no reference was made by the Privy Council to this ruling, nor could it be said that by necessary implication ILR 47 Cal 485: (Am 1919 PC 79) has nullified the effect of ILR 35 Mad 63 (PB) on this aspect of the matter. Further we are not here concerned with the answer given by ILR 35 Mad 63 (FB) on the question as to whether a lease requiring registration but not registered is receivable in evidence in a suit for specific performance of a contract or for damages for breach of contract. It was only on this issue that the majority of the Full Bench of five Judges in Muruga Mudaliar v. Subba Reddiar, expressed the opinion that ILR 35 Mad 63 (FB] should be overruled. On the other point, it was not overruled; on the other hand, it is stated specifically by Justice Viswanathan Sastry that it is still good law on the question whether such an agreement required registration or not. However, that does not help the appellant in any way for she reason that the present problem has to be solved Only with reference to the question whether the document has the effect of creating an actual demise or not.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-18", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "17. Bearing in mind these principles, we shall proceed to scrutinise the terms of Ex. A-6 and consider their effect on the relevant provisions of the Registration Act. The contents of Ex. A-6 are as follows;", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-19", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "\"We have agreed to permanently lease out to you the following lands situated in Kondadadi village in Chipurupali Sub-district belonging to us and which are in our enjoyment by virtue of purchase by individuals Nos. 1 and 2 from Kolanavadai Suryatnarayanaraju and others and from Gachamatta Peda Venkataraju and others viz., lands in Yeguvapoonu Istuva wet and dry lands in Sankarapuvani Istuva, wet and dry lands, under Routuvani tank and Chintapoonu tank istuva, together with all the trees like palm, margosa, mango etc., thereon and inclusive of mango usufruct, water rights! and fishery rights, with the stipulations that you should duly pay us a fixed cist of Rs. 1800/- annually, that you should evict the tenants from all those lands and take possession of the entire extent according to the sale deeds and get them cultivated granting sub-leases to tenants of your choice bearing the expenses thereof yourself, that you should yourself without any concern to us, look to the repairs and improvement of these lands, that you should pay the circar taxes deducting the same from out of the cist payable to us, that in regard to this permanent lease to you, you should deposit with us Rs. 12,000/- (rupees twelve thousands only), that interest thereon at Rs. 0-6-0 per cent, per mensem might be deducted from the cist payable to us and the balance alone need be paid. Should the annual cist for any year be not properly paid but default committed the stipulations as to the permanent lease are to be cancelled, and you should forfeit the deposit and surrender the lands to us, It is also agreed that you should look to she disputes and to the repairs etc., of these lands yourself reaping the benefit", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-20", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "you should look to she disputes and to the repairs etc., of these lands yourself reaping the benefit by an act of State or Vis Major. The lease is to be got written (on a stamp paper) and registered within a month from this date. As regards the cist due to us from the ryo's of these lands for this year pardhiva we shall transfer the Kadapas to you and on your responsibility you will recover the said cist from them yourself and debiting the public court expenses incurred in respect thereof against us, you will pay us the balance, and this transaction is unalterable. This unalterable document letter (Dastavesu Uttaram) is executed out of our free will.\"", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-21", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "It is seen that this document contains the whole bargain and the parties had agreed on all the cardinal points of the contract and no essential particulars remained to be settled at a future date. The description of the document has also to be borne in mind although the label that is given to an instrument docs not furnish conclusive test in determining the nature of the document. In the preamble it is described as a document letter (Dastavesu Uttaram) and at the end of the document the descriptsion given is 'unalterable document letter.' That a finality is given to the transaction appears from he recitals ''Sthirachittamnto and Moonohpoortigo\" which expressions are meant to convey the impression that it was a solemn, document. Sri. Ramamurthy invites us to hold than this document merely conferred a right upon the proposed lessee to obtain a grant of the lease on fulfilment of certain conditions by him on the grounds that the deposit of Rs. 12,000/- was a condition precedent to the creation of a lease, that no time was fixed for the coming into operation of the lease and that lastly it contained a stipulation that the lessor should transfer the kadapas executed in his favour by the previous tenants. We do not think we can give effect to this argument. Whatever might be the force of the argument, if the condition regarding the deposit of Rs. 12,000/- is a pre-requisite to the grant of a lease, it loses all force if it is regarded as one of the several terms and conditions of the agreement. A reading of the concerned recital leaves no room for doubt in our minds that it was only one of the terms of the agreement and was not a condition precedent as contended for by the appellant. Neither the fact that a lease comes into effect at a future date or on the termination of the existing lease nor the fact that a formal document shall be executed at a subsequent stage is", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-22", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "termination of the existing lease nor the fact that a formal document shall be executed at a subsequent stage is conclusive in deciding the nature of the document. If it was intended that the transaction should be kept in abeyance till the execution of a formal document, it may be said that there was no concluded agreement to lease the properties. That is not the position here. It is plain from a reading of the document that the dominant intention of the parties was that it by itself should be regarded as the transaction. The circumstance that the lessor was required to transfer the kadapas executed by the previous tenants, is on the other hand a clear indication that immediate effect should be given to the document and that the lessee should he given as much possession as the property was capable of, having regard to the fact that a permanent lease was given under the agreement. That this is so is manifest from the admission of the appellant himself in his deposition in Exs. B-6 and B-6(a).", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-23", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "\"We had a final discussion and the document was written on 30th. As Vizianagaram was far away, the defendants did not want the agreement to he written on stamp paper. Nothing remains to he done by the defendants after the execution of Ex. P-1. I have to pay them money and take possession of the lands.\" \n18. These admissions answer the contention of the counsel for the appellant that the deposit of Rs. 12,000/- was a condition precedent to the granting of a lease and that the parties contemplated that nothing could be done till the deposit was made and that the execution of a formal document was essential before the parties could fulfil the terms of the contract. In these circumstances, we hold that Ex. A-6 is a lease within the definition of Section 2(7) of the Indian Registration Act requiring registration and Is hit by Section 17(1)(d) and Section 49 of the Indian Registration Act. \n\n(This Appeal coming on for final hearing on Friday the 3rd July, 1959 after the expression oi opinion by the Full Bench and the Appeal having stood over for consideration till this day, the Division Bench delivered the following):\nJUDGMENT Bhimasankaram, J.  \n19. (Dated 15-7-1959) The answer of the Full Bench to the question referred to it by us is against the appellant. Ex. A-6 the agreement on the basis of which he seeks specific performance has been held to be an agreement of lease tailing within the definition of Section 2(7) of the Indian Registrar tion Act and so being covered by Section 17(1)(d) oi the Act as within the mischief of Section 49 thereof.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-24", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "20. The question however remains as to whether it is saved by the proviso to bee. 49 of the Indian Registration Act which is in these terms;\n \"Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purpose of Section 53-A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument.\" \n21. Under this proviso, if the present suit is one for specific performance of a contract of lease and is thus within the scope of Chapter II of the Specific Relief Act, then Ex. A-6 should be used as evidence of such a contract; Otherwise not. Thus, in order to decide the question of the admissibility of Ex. A-6, we shall have to decide whether there can be founded on that document a claim for specific performance. The relevant sections are Sections 12 and 27-A. Section 12 is a general provision dealing with the specific enforcement of any contract, \"except as otherwise provided in this Chapter.\" Section 27-A provides for similar enforcement of contracts of lease of a special character, subject to certain specified limitations. In order to succeed, the appellant must bring his case under one or the other of these sections. \n\n'Now Section 27-A of the Act runs thus :   \n\n\"27A. Subject to the provisions of this Chapter, where a contract to lease immoveable property is made in writing signed by the parties thereto on their behalf, either party may, notwithstanding than the contract, though required to be registered, has not been registered, sue the other for specific performance of the contract if", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-25", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "(a)    Where specific performance is claimed by the lessor   he has delivered possession of the property to the lessee, in part performance of the contract; and\n \n\n(b) where specific performance is claimed by the lessee, he has in part performance of the contract taken possession of the property or, being already in possession, continues in possession in part performance of the contract and has done some act In furtherance of the contract :\n \n\nProvided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.\n \n\nThe section applies to contracts to lease executed after the first day of April. 1930.\"  \n \n\n In the present case, Ex. A-6 is not signed by the appellant himself (the lessee) nor has he been put in possession of the property; so it is clear that this section does not avail him. But if is contended for the appellant that Ex. A-6 embodies a contract that could be enforced under Section 12. Now, it has been held, and in our opinion rightly, that oral agreements to lease are enforceable under Section 12. Vide Gokul Chandra Law v. Haji Mohammad Din, ILR (1938) 1 Cal 563 : (AIR 1938 Pal 136). But it is not the plaintiffs case that there was a separate oral contract preceding Ex. A-6 on which a claim for specific performance could be rested.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-26", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "The position then is this : Here is a written contract to lease immoveable property signed only by the lessors. That there can be a contract in writing signed only by one of the parties cannot be isputed. See Maneklal Mansukhbhai v. H. J. Ginwalla and Sons, Can a suit for specific performance be laid on the basis of this contract under Section 12 of the Specific Relief Act? If Section 27-A of the Act is to be read as intended to cover all written contracts of lease, then Sec, 12 must be held to be confined to the enforcement only of oral contracts of lease. If, on the other hand, Section 27-A is not exhaustive or all cases of written contracts, then, Section 12 may be held to extend to written contracts not covered by that section.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-27", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "22. In order to answer the question so raised, it seems to us necessary to bear in mind the circumstances in which Section 27-A was enacted. That section was enacted by the legislature at the same time as it inserted Section 53-A in the Transfer of Property Act and the proviso to Section 49 in the Registration Act. This spurt of simultaneous legislation in three directions was inspired by the decision of the Privy Council in Skinner v. Skinner, ILR 51 All. 771 : 56 Ind App 363 : AIR 1929 PC 269 which has ruled that an unregistered agreement to sell immovable property which was made the foundation of a suit for specific performance could not be received in evidence as it fell within the purview of Section 17 and therefore within the prohibition of Section 49 of the Registration Act as'it originally stood. The effect of that decision was that a vendee under a written contract of sale--although such a contract was never held to be compulsorily registrable until Skinner's case, AIR 1929 PC 269 -- could not even defend the possession he had obtained thereunder and was liable to be ejected at the instance of the vendor.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-28", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "In the case of a written agreement to lease, which could be read as creating a present and immediate demise and therefore compulsorily registrable, the result was similar. A lessee with such a contract could neither maintain a suit for specific performance nor defend his possession. The legislature therefore introduced Section 53-A into the Transfer of Property Act wherebv a person having the benefit of an agreement to sell or an agreement to lease is enabled to defend his possession. While Section 53-A gave only a shield, Section 27-A of the Specific Relief Act placed a weapon of attack in the hands of the lessee. He can not only defend his possession but also file a suit claiming specific performance and thus obtain a good title. This new section in the Specific Relief Act must be understood as making an exception in favour of possessory rights of persons having in their favour written contracts of lease which were hitherto inadmissible in evidence and (therefore ineffective to sustain suits for specific performance. According to well-known canons of construction, the legislature must be held to have intended than the new remedy is to be confined to cases falling within the four comers of the section.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-29", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "23. We may point out, too, that if the appellant's contention is to be given effect to, the result would be that a person seeking enforcement of a contract signed by one of the parties would be in a better position than one suing on the basis of a contract signed by both the parties, because in the former case, he can seek specific performance even though he has not been put in possession. The substantial object of both Section 53-A of the Transfer of Property Act and Section 27-A of the Specific Relief Act it seems to us is to protect rights acquired under written contracts which have been partly performed. It can hardly be said therefore that the intention of the legislature was to make a written contract of lease of a compulsorily registrable character enforceable proprio vigore. In our opinion, it is clear that no suit for specific performance of a written contract to lease immoveable property can be ..... maintained unless it can be brought within the language of Section 27-A. \n\n24. Our view that Section 27-A is exhaustive of all claims for specific performance based on written contracts is also supported by authority. Subba Rao C.J., as he then was, dealt with a case exactly like the one before us and rejected a similar argument as that now urged on behalf of the appellant in Venkateswarlu v. Kotilingam, 1956 Andh. L.T. 998. To the same effect is the ruling of the Nagpur High Court in Balram v. Mahadeo, AIR 1949 Nag 389. The learned Judges in the latter case discussed the matter at considerable length and we find ourselves in complete agreement with their reasoning. \n\n25. If this argument fails, it is not disputed that this appeal should be dismissed.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "1ae8f104426b-30", "Titles": "Gadiraju Sanyasi Raju vs Kandula Kamappadu And Ors. on 26 June, 1958", "text": "25. If this argument fails, it is not disputed that this appeal should be dismissed. \n\n26. Mr. Ramamurthy however has asked us to go into the evidence in order to see whether the defence on the merits is sustainable as the matter may be taken up to the Supreme Court. We may say that we are not impressed with the defendant s case that Ex. A-6 has been brought into existence under the circumstances mentioned in paragraph 6 of the written statement of the 1st defendant. Indeed, if we had been inclined to agree with the view of the lower court that the contract was unenforceable for the reasons mentioned therein, we might have spared the Full Bench the trouble of deciding the question which we ret erred to it. Further, we would add that Mr. Somasundaram for the respondents was not keen in his endeavour to support the judgment of the lower court on the basis of that finding. We do not however propose to record a definitive finding on the matter as we are clearly of the opinion than this appeal should fail for the reasons stated above. \n\n27. This appeal is dismissed with costs.", "source": "https://indiankanoon.org/doc/1183662/"}
+{"id": "7baacb474016-0", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "JUDGMENT M.N. Rao, J. \n1. At issue in this writ petition is the legality of the order passed by the Commissioner of Income-tax, Visakhapatnam, dated October 5, 1989, respondent No. 2 herein, under section 273A of the Income-tax Act, 1961, dismissing the application of the petitioner herein, a partnership firm carrying on business in Vijayawada, represented by its managing partner, for waiver of interest in respect of the assessment years 1982-83, 1983-84 and 1984-85 :  \n \"since the conditions of section 273A(1) are not satisfied.\" \n2. The Government of India introduced a scheme called amnesty scheme to encourage assesses to file returns voluntarily assuring them that no penal action for concealment of income would be initiated if returns were filed as laid down in the scheme. The said scheme was in force from November 15, 1984 to March 31, 1987. On March 27, 1986, during the currency of the amnesty scheme, the petitioner for the assessment years 1982-83, 1983-84 and 1984-85 were completed by the first respondent, Income-tax Officer, D-Ward, Circle-II, Vijayawada, and he levied interest in respect of the completed assessments under sections 139 (8) and 217 of the Income-tax Act as detailed below :  \n --------------------------------------------------------------------\nAssessment    Date of completion   Interest under   Interest under\nyear           of assessment       section 139(8)     section 217\n--------------------------------------------------------------------\n                                      (Rs.)              (Rs.)\n1982-83           25-3-1987           6,310              6,794\n1983-84           25-3-1987           5,648              2,688", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-1", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "1984-85           25-3-1987           4,719              6,041\n--------------------------------------------------------------------\n                                     16,677             15,528\n--------------------------------------------------------------------", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-2", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "3. Contending that no penalties were imposable in respect of the returns filed under the amnesty scheme, the petitioner preferred appeals to the Deputy Commissioner of Income-tax (Appeals), Vijayawada, who, by his order dated November 29, 1989, allowed the appeals and directed cancellation of penalties. We are informed by Shri S. R. Ashok, learned standing counsel for the Income-tax Department, that against the appellate orders of the Deputy Commissioner dated November 29, 1989, the Department has preferred appeals to the Income-tax Tribunal and the same are now pending. Simultaneously, while pursuing the remedy by way of appeals in relation to the levy of penalties, the petitioner made an application on June 17, 1987, before the second respondent, Commissioner of Income-tax, for waiver of interest under section 273A of the Act. That application was dismissed by the Commissioner holding :", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-3", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "\"I find that the income disclosed by the assessee in the returns filed on July 23, 1986, is not true and full. In all the years under review, the Income-tax Officer has levied penalties under section 271(1) (c) and according to the provisions of section 273A (1), in cases where proceedings under section 271(1) (c) are initiated, the income disclosed by such assessee cannot be considered as a true and full disclosure. Moreover, in the instant case, the assessee has filed the revised returns of income on July 23, 1986, after survey operations had been conducted under section 133A on July 9, 1986. It may be also stated here that the disclosure made by the assessee is out of fear which is clear from the fact that the assessee has made the disclosure only after the survey operations conducted by the Department under section 133A on July, 9, 1986. Had there been no survey operations, the assessee would not have come forward with the disclosure. I will seek support for this proposition from the decision of the Allahabad High Court in the case of Hakam Singh v. CIT . In view of this discussion, I will dismiss the assessee's petition since the conditions of section 273A (1) are not satisfied.\" \n4. Shri Y. Ratnakar, learned counsel for the petitioner, contends that the Commissioner's view that the returns filed after the commencement of survey operations are not \"voluntary\", is erroneous. Equally objectionable is the view that the returns were filed by the petitioner, out of fear, and therefore, they are not voluntary.", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-4", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "5. Opposing these contentions, Shri S. R. Ashok, learned standing counsel for the Revenue, asserts that the conduct of the petitioner disentitles him from claiming the benefit of waiver of interest under section 273A. A return filed after the survey operations have commenced will lose its voluntariness; fear of detection of concealed income was the real motive that prompted the petitioner to file the revised returns and, therefore, they are neither voluntary returns nor can good faith be discerned in them.  \n6. Before considering the rival contentions advanced before us, it is necessary to notice section 273A which confers power on the Commissioner to refuse or waive interest is concerned, the material portion of the section reads :  \n \"273A. Power to reduce or waive penalty, etc., in certain cases. - \n (1) Notwithstanding anything contained in this Act, the Commissioner may, in his discretion, whether on his own motion or otherwise, - ...  \n (iii) reduce or waive the amount of interest paid or payable under sub-section (8) of section 139 or section 215 or section 217 or the penalty imposed or imposable under section 273, if he is satisfied that such person - ...", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-5", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "(c) in the cases referred to in clause (iii), has, prior to the issue of a notice to him under sub-section (2) of section 139, or where no such notice has expired, prior to the issue of notice to him under section 148, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the income so disclosed, and also has, in all the cases referred to in clauses (a), (b) and (c), cooperated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year...\"  \n7. It is not in dispute that, in respect of the three assessment years, revised returns were filed by the petitioner on March 27, 1986, when the amnesty scheme was in operation. It is also not in controversy that survey operations in relation to the petitioner had already begun by the date of the filing or the revised returns under the amnesty scheme.  \n8. The definite stand taken in the counter-affidavit is that survey operations had commenced on July 9, 1986, and, in the course of the said operations, the petitioner furnished addresses of certain creditors to the Inspector of Income-tax who, on conducting an enquiry on July 10, 1986, could not locate the alleged creditors, and, on July 11, 1986, the Income-tax Officer issued a letter to the managing partner to produce the creditors duly posting the case to July 16, 1986 and, thereafter, it was further adjourned to July 23, 1986.", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-6", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "\"Confronted with the factum of non-traceability of the creditors and the mechanic sheds where they were reportedly working, the assessee came forward with the revised returns. Thus, it is very clear that only after the survey operations and the gathering of the relevant material which proved the falsity of the claim of the petitioner, he chose to file revised returns making disclosure.\"", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-7", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "9. The file produced before us does not show that, on July 11, 1986, the Income-tax Officer issued a letter to the petitioner to produce the alleged creditors from whom certain amounts were claimed to have been borrowed by the assessee as disclosed in the original returns. In fact, it was only on August 4, 1986, long after the revised returns were filed by the assessee, that such a letter was issued by the Income-tax Officer. On July 9, 1986, summons were issued under section 137 of the Income-tax Act to the petitioner to produce the day book, ledger and bank account copies for the three periods specified therein, on July 11, 1986. The proceedings as recorded by the Income-tax Officer on July 11, 1986, disclose that, in response to the summons issued on July 9, 1986, the managing partner of the petitioner-firm was present and he was requested to produce the 18 persons said to be the creditors of the firm on July 16, 1986. The managing partner was also examined on July 11, 1986. On July 16, 1986, the matter was adjourned to July 17, 1986, as the officer was on leave. A representation was made by the petitioner for a short adjournment to July 23, 1986, to produce the creditors and, accordingly, the request was granted. On July 23, 1986, a letter was filed before the Income-tax Officer stating that revised returns were filed for the relevant years. It was only after the revised returns were filled that the Income-tax Officer issued a communication dated August 4, 1986, calling upon the petitioner to produce the alleged creditors. The record also contains an \"enquiry report\" dated July 10, 1986, of the Income-tax Inspector to the effect that the three persons mentioned in", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-8", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "1986, of the Income-tax Inspector to the effect that the three persons mentioned in the report and said to be the creditors of the petitioner \"appear to be non-existent\". What transpired up to July 11, 1986, according to the file, is that the Income-tax Inspector was asked to enquire about three of the creditors of the petitioner and he submitted a report on July 10, 1986, stating that the three persons were not available at the addresses furnished to him. What emerges from a perusal of the record is that the petitioner has not been told at any time before he filed the revised returns on July 23, 1986, that his alleged creditors were fictitious persons and, therefore, the transactions were bogus. No doubt, a survey was conducted by the date of filing the revised returns and some sort of enquiry by the Income-tax Officer was in progress at that time, but the petitioner cannot be attributed with any knowledge of the probable result of these enquiries or any adverse material appearing against him.", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-9", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "10. The only question that has to be considered is whether the petitioner in the revised returns filed on July 23, 1986, \"voluntarily and in good faith made full and true disclosure of his income\" \n as statutorily obligated under sub-clause (c) of clause (iii) of sub-section (1) of section 273A.  \n11. According to the impugned order, the revised returns were filed by the petitioner for two reasons : (1) they were filed \"after survey operations were conducted under section 133A on July 9, 1986\"; and (2) \"the disclosure made by the assessee is out of fear which is clear from the fact that the assessee has made the disclosure only after the survey operations were conducted by the Department under section 133A on July 9, 1986\".  \n12. There is no allegation that the disclosure made in the returns were not full and true. There is also no finding that the disclosure made was not in good faith. The file shows that information regarding three of the several creditors of the petitioner was not definite at that stage. The report of the Inspector that they were not available at the addresses furnished to him was a confidential one and it cannot be presumed that the petitioner became aware of the said report. In a case where a return was filed by an assessee after he was apprised of any adverse material leading to a real apprehension of penal action against him, his return could not be construed to the voluntary within the meaning of section 273A(1). But that is not the fact situation here. Survey operations followed by enquiries which have not even progressed to the extent of the assessee being apprised of the alleged adverse material collected against him could not be construed as relevant factors for rejecting the returns filed by such an assesses as not voluntary if they contained \"full and true disclosure of his income.\"", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-10", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "13. The second ground on which the impugned order is based, viz., that it was out of fear because of survey operations, that the petitioner made the disclosure, slides into the first ground to a very large extent, the exclusionary part being fear as the motive prompting the assessee to file the return. We think, this ground is totally irrelevant. There is no basis for presuming that free will or a sense of commitment to the well being of the State always propels the citizens to pay taxes. An honest and well-informed citizen never consciously commits default in the payment of taxes even if the law does not contemplate penal action for non-payment is at the bottom of the success of any tax legislation and the Income-tax Act is no exception to this; Chapter XXI of the Act deals with the penalties imposable.", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-11", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "14. We are, therefore, inclined to think that the expression \"voluntarily\" occurring in sub-section (1) of section 273A could not be construed in isolation with reference to the general animus or state of mind of the assessee. From the legal obligation to file a return, no element of fear could be either attributed or inferred. The word \"voluntarily\", in the context of section 273A (1), therefore, has to be construed as filling of the return by the assessee without being prompted by the animus to avoid or prompt adverse exposure or penal action. The Commissioner, before rejecting the returns as not voluntary, must have material based upon which it is reasonable to infer that, in all probability, but for the filling of the \"voluntary\" return, the assessee would have been subjected to penal action or adverse exposure. In other words, \"out of fear, an assessee has made full disclosure\", by itself, without anything more, cannot be a ground for not exercising the discretion under section 273A. The fear must be traceable to the imminent or proximate exposure of the assessee to penal action but for the filling of the voluntary return under section 273A and, in order to enquire into this subjective element, there must be in existence objective facts warranting such an inference.", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-12", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "15. The Commissioner sought support for the conclusions reached by him from the decision of the Allahabad High Court in Hakam Singh v. CIT . In that case, the business premises of the assessee were searched by the Income-tax Department and certain books were seized on November 22, 1973. Nearly eleven months thereafter, on October 7, 1974, returns were filed and a notice was issued on March 25, 1975, by the Income-tax Officer under section 148 alleging escapement of income from assessment. Penalty proceeding were also initiated for the delay in filing the returns. These facts clearly show that there was little scope for the assessee to escape from the penal consequences and so, very rightly, the Commissioner of Income-tax held that the return filed was not voluntary under section 273A. The Allahabad High Court, after distinguishing the decision of the Gujarat High Court in Madhukar Manilal Modi v. CWT it was held that the word \"voluntary\" applies to disclosure of wealth but not, to filling of returns, sustained the action of the Commissioner, in the particular facts of that case, in refusing to grant relief under section 273A. The earlier view of the Allahabad High Court in Mool Chand Mahesh Chand v. CIT that a return filed in order to save oneself from a possible penal action cannot be termed as \"voluntary\" was followed. The facts in Hakam Singh's case are neither parallel nor similar to the facts of the case on hand and, therefore, the finding that the return filed in that case was not \"voluntary\" could not constitute a valid ground for refusal by the second respondent-Commissioner to exercise discretion under section 273A.", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-13", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "16. The decision of the Gujarat High Court in Madhukar Manilal Modi's case relates to waiver of penalty by the Commissioner under section 18(2A) of the Wealth-tax Act. The crucial words in section 18(2A) that fell for consideration before the Gujarat High Court that the assessee, \"... Voluntarily and in good faith made full disclosure of his net wealth,\" \n are identical to the expressions used in section 273A of the Income-tax Act. The wealth-tax returns for two earlier years were filed in that case only after the assessee was asked to do so in the course of the assessment proceedings for the year 1971-72. His request for wavier of penalty was rejected by the Commissioner on the ground that the returns filed by him were not voluntary. The Gujarat High Court held that the expression \"voluntary\" should not be read in the context of filing of return, but it should be read with the expression \"made full disclosure of his net wealth\". With great respect to the learned judges, we are unable to accept the reasoning. A return which contains true and full disclosure need not necessarily be a voluntary return. When the element of voluntariness is absent because of supervening factors like imminence of adverse exposure, \"voluntariness\" disappears although the return filed may contain a true and full disclosure. As a rule, therefore, it cannot be said that if the return filed contains a full disclosure, it automatically becomes \"voluntary\" irrespective of the circumstances under which the same was filed.", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-14", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "17. In Sarvaria (A. N.) v. CWT , a learned single judge of the Delhi High Court has taken the view that the filing of the return under the Wealth-tax Act after the survey operations had commenced would not render the return \"not voluntary\" when the return contained full disclosure of the wealth and no concealment was detected. Hira Singh v. CWT [1982] 134 ITR 438 (P&H) arose under the Wealth-tax Act. For two assessment years, the assessee, in his returns, disclosed the extent of his agricultural lands as 24 acres, 6 kanals but for the subsequent two years the extent shown by him was 9 acres 7 kanals, on the ground that his share was reduced in a partition between him and his sons. The Wealth-tax Officer accepted the extent mentioned in the returns for all the years were filed by the assessee without the issuance of any statutory notice. The Commissioner waived penalties for the assessment years 1970-71 and 1971-72 but declined to grant the relief for the remaining years. As the petitioner had correctly disclosed the particulars of his land in returns which he filed before the statutory notices were issued, the Punjab and Haryana High Court ruled that the return filed was voluntary and, on the view, set aside the order of the Commissioner of Wealth-tax.  \n18. In S. R. Jadav Desai v. WTO , the Karnataka High Court had taken the view that if, without notices, returns were filed under the Wealth-tax Act without any compulsion, they must be treated as voluntary returns. The following statement of law enunciated by Venkataramiah J., (as he then was), in Shankara Apaya Swami v. WTO :", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-15", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "\"The expression 'voluntarily' means 'without compulsion' and 'good faith' means 'with due care and caution'. Hence, if the return filed by the assessee does not show that he should be considered as having satisfied the above condition\" \n was followed.  \n18. The Kerala High Court, in Alukkas Jewellery v. CIT , preferred the view that, if a return was filed without any pressure or duress, it may be treated as voluntary. In that case, consequent on a search conducted in the premises of the assessee, both residential and business, certain books of account and jewellery were seized. In that context, viewing the overall conduct of the assessee, the Commissioner rejected the application filed under section 273A and the same was sustained by the Kerala High Court.  \n19. It will thus be seen that the conclusions reached in the persuasive precedents cited by both sides turned upon the facts of each case and no precise legal principle of general application is deducible from them.  \n20. The question was viewed by the Commissioner from a wrong perspective. He left that the returns were filed after the survey operations were completed and that is what is discernible from the words, \"after conducting survey operations under section 133A on July 9, 1986, the revised returns were filed.\"", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-16", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "21. The extent of the progress made in the survey operations we have already referred to supra, after going through the record placed before us. Without considering the effect of the survey operations on the conduct of the assessee, the Commissioner reached the conclusion that the returns filed were not voluntary and this conclusion is clearly impermissible in law. The discretion conferred upon the Commissioner under section 273A also compels him to take into account relevant factors and eschew irrelevant factors from consideration. The aspect of fear that is alleged to have prompted the assessee in filing the revised returns which was made out as a ground for not exercising discretion under section 273A is in our view an irrelevant factor in the context of the failure of the Commissioner in not giving reasons indication the genuine link between the fear and the probability of exposure to penal action.  \n22. The extant legal position in the domain of public law as to the parameters of exercise of statutorily ordained discretionary powers is well-settled :  \n \"... a person entrusted with a discretion must direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to the matter that he has to consider. If he does not obey those rules, he may truly be said and often is said, to be acting 'unreasonably'. (Per Lord Greene M. R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1947] 2 All ER 680, 682 (CA)).  \n The above English principle of public law was accepted by our Supreme Court in Rohtas Industries Ltd. v. S. D. Agarwal .", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "7baacb474016-17", "Titles": "Sujatha Rubbers vs Income-Tax Officer And Anr. on 18 December, 1991", "text": "For these reasons, we hold that all the three revised returns filed by the petitioner must be construed to be \"voluntary returns\" within the meaning of section 273A(1) of the Income-tax Act, and accordingly, we set aside the impugned order passed by the Commissioner of Income-tax dated October 5, 1989, allow the writ petition and remit the matter to that authority to consider the case of the petitioner afresh in the light of this judgment and pass appropriate orders in accordance with law. There shall be no order as to costs.", "source": "https://indiankanoon.org/doc/1203758/"}
+{"id": "bf3ac83c4a35-0", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "JUDGMENT B.P. Jeevan Reddy, J.  \n 1. R.C. No. 315 of 1982. - Two questions are referred under section 256(1) of the Income-tax Act, 1961, in this case. They are :  \n \"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amount of Rs. 15,092 should not be considered for being taxes as revenue but had to be set off against interest payment of Rs. 7,79,297 and the balance alone had to be capitalised ?  \n (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount of Rs. 4,900 could not be considered as a separate revenue receipt but had to be set off against larger amounts of expenditure of a capital nature and the reduced amount alone should be considered for the purpose of determining the actual cost of assets ?\"   \n 2. The assessment year concerned is 1977-78. The assessee-company was incorporated on July 19, 1974. The main objects of the company were to own and acquire ferrous and non-ferrous metal melting furnaces, rolling mills and to carry on business as traders and manufacturers of ferrous and non-ferrous metal ingots, etc., and to do business of traders or manufacturers of steel products and hardware of all kinds, and also to act as stockists, commission agents, etc., for engineering and industrial requirements. In the return filed by the assessee for the assessment year 1977-78, it showed its total income as \"nil\" and gave the following computation of its income :  \n   \"I. Income from business :                             Rs.     Rs.\nThe company is still under construction stage and has\nyet to commence production. The expenses incurred", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-1", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "The company is still under construction stage and has\nyet to commence production. The expenses incurred\nduring construction period, pending allocation to\ncapital account, are detailed in the notes attached\nto the balance-sheet as at 30-6-1976.\nThe interest income received by the company is being\ntreated as a part of the business income, pursuant to\none of the objects for which the company is\nestablished. Since it is being treated as business\nincome, a portion of the expenditure incurred has to\nbe deducted from the income. Therefore, \"Nil\"\nincome is being returned under this head.\n(a) Interest received as detailed in\nSchedule \"E\" of the\nbalance-sheet...                               15,092\n(b) Other miscellaneous receipts...                    4,900\n                                                      -------     19,992\nExpenses apportionable...                                      30,13,628\n                                                               ---------\nBalance to be capitalised...                                   29,93,636\n                                                               ---------\n                                                                  Nil\n                                                               ---------\n                                       Total Income               Nil\n                                                              ---------\"", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-2", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "3. A few facts need to be stated to understand the above computation. In the words of the Tribunal, the following is the factual position :  \n \"In the present case, on facts, the assesseee had borrowed funds. Some of the borrowed funds which were not immediately required were kept by the assessee in deposits and some interest was earned. There was a direct nexus between the borrowed the borrowed funds and the deposited funds, since the deposited funds came out of the borrowed funds...\"  \n 4. It was further found :  \n \"On the facts, admittedly, in the present case, the interest receipt of Rs. 15,092 is on deposits made from borrowed funds, on which interest paid by the assessee, which funds were kept in such deposits till they were used in the construction work. We find from schedule 'E' to the balance-sheet as at June 30, 1976, that there were interest payment in all to the extent of Rs. 7,94,389 which remainded unadjusted...\"", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-3", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "5. From the above statement of facts, it is clear that the assessee, after been incorporated, was engaged in setting up the plant. During the accounting year relevant to the assessment year concerned herein, it was still at the stage of construction. It had borrowed certain funds for setting up the plant. A part of the funds which was not immediately required was kept in deposit upon which some interest was earned. On the amounts borrowed by it, it was paying interest at a much larger figure. It, therefore, sought to deduct the interest earned by it from out of the interest paid by it and capitalise the balance interest paid. The Income-tax Officer, however, did not agree with this method. He treated the interest earned in a sum of Rs. 15,092 as \"income from other sources\" and held that no amount is deductible therefrom as none was expended wholly and exclusively for earning the said interest amount. In short, he treated the said amount as income of the said year refusing to allow it to be deducted from the interest paid by the assessee during the relevant assessment year. On appeal, the Commissioner (Appeals) affirmed the order of the Income-tax Officer. On further appeal, however, the Tribunal took a different view. Relying upon the notes prepared by the Institute of Chartered Accountants of India on \"A study on expenditure during construction period\", the Tribunal held that the proper method to be adopted in such cases is not to treat the said interest amount of Rs. 15,092 as income from other sources, but to treat the same, as also the interest paid by the assessee on the loans obtained by it, as one single account. This is what the Tribunal said :", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-4", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "\"It is, therefore, clear that on the facts of the present case, receipts and payments of interest have to be considered as in a single account. Therefore, the receipts of interest would go to reduce the payment of interest. As we have already pointed out, interest payments were to the extent of Rs. 7,94,389 and interest receipts were to the extent of Rs. 15,092. Thus the amount of interest to be considered for capitalisation purposes would, on the facts of this case, be only the net figure, i.e., Rs. 7,79,297 (Rs. 7,94,389 less Rs. 15,092), because this is the net interest outgoing....\"  \n 6. Questioning the correctness of the said finding, the Revenue asked for and obtained reference of the above two questions.  \n 7. Sri. M. Suryanarayana Murthy, learned standing counsel for Revenue, contended that the Tribunal was in treating the receipts and payments of interest as a single account. He submitted that the interest received on deposits is income from other sources, chargeable under section 56 of the Act, and that it cannot also be said that the interest paid by the assessee was an expenditure incurred wholly and exclusively for earning this interest amount. For that reason, there is no question of setting off these two amounts against one another, he argued.", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-5", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "8. On the facts found in this case, we are of the opinion that the reasoning adopted by the Tribunal is the correct one and is a realistic assessment of the situation. The company was incorporated for setting up a plant and to manufacture certain products and no deal in them. During the relevant accounting year, it was in the course of setting up the plant. For that purpose, it had borrowed certain amounts upon which it was paying interest. All the amount borrowed was not needed at once. A portion of the said amount was kept in deposit, until needed. Those deposits earned some interest. Would it be realistic to say that that is income from source, or would it be more appropriate to adopt the approach indicated by the Institute of Chartered Accountants of India in their \"A Study on Expenditure during construction period\"; relied upon by the Tribunal ? The following portions of the said study are relevant for the present purpose :  \n \"Pars 8 to 8.3 :  \n 8. Income during the construction or pre-production period :  \n 8.1 : It is possible that a new project may earn some income from miscellaneous sources during its construction or pre-production period. Such income may be earned by way of share transfer fees or by way of interest from the temporary investment of surplus funds prior to their utilisation for capital for capital or other expenditure.", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-6", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "8.2 : Where a particular item of miscellaneous income can be directly related to a particular item of expenditure, it is suggested that it should be set of against the expenditure, and the net amount of the expenditure should be treated in the appropriate manner depending upon its nature, in accordance with the various principles suggested above. For example, income from share transfer fees may be set off against the various corporate expenses incurred during the construction or pre-production period and income, if any, from lending transport vehicles to outsiders may be set off against the expenditure incurred in operating and maintaining those vehicles. Similarly, interest income earned during the construction period may be off-set against interest expenses incurred during this period...\".", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-7", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "9. In our opinion, the course indicated by the institute of Chartered Accountants of India is the proper one to be adopted in such circumstances. Indeed, a somewhat similar case had arisen before us in R.C. No. 134 of 1982, deposited of on April 2, 1987 (CIT v. Andhra Farm Chemicals Corporation ). There, a subsidiary company had borrowed certain funds from its parent company. The subsidiary company, the assessee was in its formative period. With a view not to keep the borrowed money idle, it deposited a part of the same with the holding company, which was not mature only by December 31, 1974. Meanwhile, the assessee required some amount and, accordingly, it borrowed a small amount from the parent company on which it was made to pay interest. The interest earned by the assessee-company on deposits made by it was Rs. 34,865 and the interest paid by it on the loan taken from the parent company was Rs. 13,464. Accordingly, the assessee returned an income of Rs. 21,401 representing the difference between both the figures. An identical contention was urged by the Revenue that the interest earned is \"income from other sources\" and since the interest paid by the assessee was not an expenditure incurred for earning the said interest amount, the said amount cannot be set off under section 57 of the Act. We noted the finding of the Tribunal recorded in that case, viz., that though for the purpose of accountancy, there appeared to be two independent transactions, i.e., one of deposit by the assessee with the parent company, and the other the transaction of borrowing of the money by the assessee from the parent company, they, in truth and reality, constituted one single transaction. On the basis of the said finding, we upheld the assessee's contention that the income received by the assessee in that case is only Rs.", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-8", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "the assessee's contention that the income received by the assessee in that case is only Rs. 21,401, and nothing more. We observed that having regard to the finding of the Tribunal, section 57(iii) has no application, nor can the said interest income be treated as \"income from other sources.\" Of course, we did not think it necessary to go into the concept of \"real income\" which concept too was employed by the Tribunal in that case to sustain its finding.", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-9", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "10. We are of the opinion that though the particular situation of a subsidiary company and parent company does not obtain in this case, the same principle must be applied.", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-10", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "11. Learned standing counsel for the Revenue relied upon a few decisons which we may refer now. In CIT v. New Central Jute Mills Co. Ltd. , the assessee-company was setting up a heavy chemical plant, and during the accounting year relevant to the assessment year 1958-59, the plant was under erection. Earlier in 1955, the assessee had obtained from the Government of Uttar Pradesh a loan of Rs. 145 crores for the purpose of setting up the said plant. The amounts received towards loan were kept in deposit with a bank till their transfer or utilisation for the stipulated purpose. During the relevant assessment year, the assessee earned a sum of Rs. 1,75,471 as interest on such deposits, while during the same period it paid to the Government U.P. a sum of Rs. 9,54,588 as interest. The assessee, since it was an existing company and already engaged in another business, claimed the difference between the interest earned and interest paid, i.e., Rs. 7,79,117, as revenue expenditure, which was disallowed by the Income-tax Officer on the ground that the expenditure had nothing to do with the existing business of the assessee, but related to a separate unit altogether which was still under erection. The Appellate Commissioner affirmed the said view. On further appeal, the Tribunal held that the amount paid by way of interest should be allowed as a deduction as against interest earned from the bank in terms of the loan; that as the assessee had to keep the money in deposit with the bank segregated its other business assets, the interest earned from the deposits would be \"income from other sources\", and that by adopting a different method of assessment, the Income-tax Officer could not defeat the assessee's claim. It held that the interest paid by the assessee towards loan to the Government should be set off against the interest earned by the assessee on its", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-11", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "towards loan to the Government should be set off against the interest earned by the assessee on its deposits. This view was questioned by the Revenue before the Calcutta High Court. The High Court held that though the assessee had succeeded in establishing that there was some connection or nexus between the interest paid to the Government and the interest earned from the bank, it was not established that it was one of the terms of the agreement of loan that the amount borrowed shall be kept in a deposit account which would earn interest in the interim period. Accordingly, it held that the interest so earned had to be treated as \"income from other sources\", and since the interest paid by the assessee cannot be said to be an expenditure incurred solely and wholly for the purpose of earning the said interest, it cannot be set off against the interest earned. It held further that the interest paid to the Government had to be capitalised and added to the cost of the plant which was being set up, and that the interest amount has to be taxed as income from other sources. In our opinion, the high Court has taken too narrow a view of the situation. Just because it was not proved that the loan agreement stipulated that the amounts borrowed should be kept in deposit earning interest, treating the said interest as an independent income may not be a proper course. After all, the assessee is not expected to keep the amounts in its own till. It kept them in a bank. Whether the amounts are kept in an account which earns interest or in an account which does not earn interest should not make any difference to the principle, because it was only an interim agreement. Instead of keeping the amounts with itself, the assessee deposited the same with a bank to be drawn and utilized as and when necessary.", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-12", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "12. The next decision cited is of the Bombay High Court in CIT v. United Wire Ropes Ltd. [1980] 121 ITR 762. Here too, the facts were similar; it was founded as a fact that the interest paid on foreign exchange loan and the interest earned on back deposits were not inter-connected or inter-dependent. Accordingly, it was held that under section 57(iii), the interest paid cannot be set off against the interest received. In our opinion, the finding that there was no connection or nexus between the transactions is the distinguishing factor.  \n 13. Learned standing counsel for the Revenue then relied upon the decision of the Madras High Court in Addl. CIT v. Madras Fertilisers Ltd. [1980] 122 ITR 139. The facts of this case too are again somewhat similar. But there too, a finding was recorded that there was no direct connection between the interest paid and the interest received. This finding again, in our opinion, is a distinguishing factor.", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-13", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "14. On the other hand, learned counsel for the assessee relied upon a decision of the Delhi High Court in Snam Progetti S.P.A. v Addl. CIT [1981] 132 ITR 70. In this case, Snam Progetti, an Italian company carrying on business as engineers and contractors in the filed of petroleum and petro-chemical plant, was engaged in India having huge contracts, each running into millions of dollars, which necessitated the assessee having large liquid funds. Th excess business funds were placed in short-term deposits with the bank and interest income was earned thereon. For the assessment year 1970-71, the assessee incurred a net business loss of Rs. 122 lakhs, but in the next assessment year 1971-72, it earned a profits of Rs. 30 lakhs and interest income of about Rs. 5 lakhs. The assessee sought to carry forward the business loss incurred in the assessment year 1970-71 and set it off against the interest income as well earned in the succeeding assessment year. This was rejected by the Department, whereupon the matter was taken to the High Court by way of a writ petition. The court held that, in the circumstance of the case, even the interest earned on short-term deposits should be deemed as \"business income\" and not as \"income from other sources.\" It observed that the assessee had not come from Italy to make bank deposits in India but had come to carry on business here and that the said short-term deposits were made in that connection. It, therefore, held that the interest earned is really business income and the losses of the previous assessment year carried forward can be set off against the said interest income as well. In our opinion, the approch adopted by the Delhi High Court in the facts of the case before it can also be adopted in the facts of the case before us. In this case too, the object", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-14", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "can also be adopted in the facts of the case before us. In this case too, the object of the assessee was not to earn interest on deposits. The object was to do business. It was in the course of setting up a plant and since all the borrowed money was not needed at once, it put certain moneys in deposits which earned interest. In our opinion, the said interest earned on deposits should be set against the interest paid by the assessee on the loans obtained by it and the balance of the interest amount capitalised.", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-15", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "15. For the above reason, we answer both the questions in the affirmative, i.e., in favour of the assessee and against the Revenue. There shall be no order as to costs.  \n 16. R.C. No. 8 of 1985 - The question referred in this case is :  \n \"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in directing that the interest payable to M/s. Andhra Pradesh Industrial Development Corporation is wholly and exclusively incurred for the purpose for earning the interest from short term deposits within the meaning of section 57(iii) ?\"  \n 17. The facts of this case are similar to the facts in R.C. No. 315 of 182. Though the question referred is squarely based upon section 57(iii), the finding of the Tribunal is that during the relevant assessment years, the assessee was engaged in setting up its plant and unit and that part of the amount borrowed by it from Andhra Pradesh Industrial Development Corporation was kept in short-term deposits with banks, whereon it earned some interest. The Tribunal disagreed with the departmental authorities that the said interest income should be treated as \"income from other sources.\" It was of the opinion that the payment of interest of the loans obtained by the assessee and earing of interest on short-term deposits made by it out of the amounts borrowed must be treated as a single transaction. on the above finding, we are of the opinion that the question referred does not really arise, because the interest income earned cannot be treated as income from other sources. As held by us in R.C. No. 315 of 1982, the said interest income has to be set off against the interest paid by the assessee during the relevant assessment years and the balance of interest capitalised.", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-16", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "18. Accordingly, we decline to answer the question referred while affirming the correctness of the decision of the Tribunal. No costs.  \n 19. R.C. No. 12 of 1985. - The assessee in this case is the A.P. Forest Development Corporation Hyderabad, and the question referred is :  \n \"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is justified in holding that interest received on short-term deposits is not assessable under the head 'other source' but would have to be set off against the payment of interest ?\"  \n 20. The facts of this case are again practically similar to the facts in R.C. No. 315 of 1982. For the same reasons as are given hereinbefore, the question referred is answered in the following terms : the interest received by the assessee on short-term deposits is not assessable under the head \"other source\", but would have to be set off against the interest paid by it, and the balance interest capitalised. No costs.  \n 21. R.C. No. 79 of 1985. - The question referred in this case is :  \n \"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that the bank interest received on the deposits during the stage of construction of the factory should be treated as capital receipt and this would go to reduce the actual cost of capital assets ?\"", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "bf3ac83c4a35-17", "Titles": "Commissioner Of Income-Tax vs Nagarjuna Steels Ltd. on 18 November, 1987", "text": "22. Though the question is framed differently, the facts found by the Tribunal are practically the same as the facts in R.C. No. 315 of 1982. Accordingly, for the reasons given in our judgment in R.C. No. 315 of 1982, we hold that the proper course to be adopted in such cases is to set off the interest earned against the interest paid by the assessee and capitalize the balance interest paid.  \n 23. Accordingly, while we do not wish to express any opinion on the question whether the said interest amount received represents a capital receipt or not, we are of the opinion that it cannot be taxed as income from other sources, and that the proper course to be adopted is the one indicated by us hereinbefore. Accordingly, we re-frame the question in the following terms :  \n \"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that the bank interest received during the stage of construction of the factory cannot be treated as income from other sources and should go towards reducting the actual cost of capital assets ?\"  \n 24. and answer the question in the affirmative. No costs.", "source": "https://indiankanoon.org/doc/248723/"}
+{"id": "41f51e25d0a0-0", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "HON'BLE SRI JUSTICE K.G.SHANKAR       \nC.M.S.A.Nos.2 of 2009 and batch  \n\ndated:12-4-2013         \n\nVenkat N.R. Akkineni occ: Managing Director, M/s. Heart Entertainment \nLimited,C/o.Annapurna Studios,Road No.2, Jubilee Hills, Hyderabad-500 033; and \nanother ... Appellants\n                        \nAppellate Tribunal for Foreign Exchange, Ministry of Law Justice & Company\nAffairs, Janpath (Indian Oil) Bhavan, New Delhi 110 001; and 3 others..\nRespondents  \n\n\nCounsel for the Appellants: Sri S.Ashok Anand Kumar \n\nCounsel for Respondents 2 &3: Sri P.S.P.Suresh Kumar  \n\n<Gist:\n\n>Head Note: \n\n?Cases referred:\n1. 2007 (4) ALD 35\n2. AIR 1961 SC 1633(1) \n3. 1969 (3) SCC 644 \n4. AIR 1969 SC 460 \n5. [1984] 146 ITR 341\n6. 1969 (2) SCC 627 \n7. (2006) 5 SCC 361 \n\nC.M.S.A.Nos.2 and 3 of 2009", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-1", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "C.M.S.A.Nos.2 and 3 of 2009 \n\nCommon Judgment:   \nThe two second appeals are directed against the orders of the Appellate Tribunal\nfor Foreign Exchange, New Delhi (the Appellate Tribunal, for short), in Appeal\nNos.125 of 2006 and 124 of 2006.  A common order was passed by the Appellate  \nTribunal on 22-10-2008 in the two appeals.  The appellants herein assailed the\norders of the Appellate Tribunal.  C.M.S.A.No.2 of 2009 is by the Managing\nDirector of M/s. Heart Entertainment Limited, Hyderabad.  C.M.S.A.No.3 of 2009\nis by the Company itself viz., M/s. Heart Entertainment Limited, Hyderabad.  As\nthe appeals arise common questions, both the appeals are disposed of through\nthis common judgment.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-2", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "2. M/s. Heart Entertainment Limited, Hyderabad (the Company, for short),\nobtained the approval of the Reserve Bank of India (RBI, for short) for\nestablishing\na foreign concern in the United States of America\n(the USA, for short) in the field of animation software.  The Company invested\nUS $ 1,75,000 through two instalments in August, 1999.  The Company however did  \nnot follow Regulation 15(iii) of Foreign Exchange Management (Transfer or Issue\nof any Foreign Security) Regulations, 2000 (the Regulations, 2000, for short)\nvide Notification No.FEMA 19/RB-2000, dated 03-5-2000, as it failed to submit\nAnnual Performance Report (APR, for short).  The Company also failed to furnish\nthe information called for under Section 37 of the Foreign Exchange Management\nAct, 1999 (FEMA, for short) read with Section 131(1A) of the Income Tax Act,\n1961, by failing to furnish information and details such as copies of the\nAudited Annual Accounts, APRs, copies of the Share Certificates and other\ndocuments in evidence of investment in foreign equity together with the details\nof dividend and royalty.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-3", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "3. The Company responded to the Notice dated  \n27-02-2003 through reply dated 30-6-2004 that the Company obtained approval from\nthe RBI on 02-02-1999 for investment of US $ 1,75,000 in Overseas Joint Venture\nin the USA, that the Company held 35% of the equity stock in M/s. Startoons\nIncorporation (Inc.,), that the Company has executed works worth US $ 2,27,430\nand that the Company received Share Certificate from M/s. Startoons\nInternational LLC (Limited Liability Company), USA, for US $ 1,75,000.  The\nCompany further claimed that no dividend could be declared as the Company went \ninto losses on account of slump in animation industry and that the Company had\nto close the operations to avoid further losses.  It also claimed that the APRs\ncould not be furnished to the RBI and that the Company did not provide the\nrequisite details which was because the accounts of LLC were not compulsorily\nauditable under the United States Local Laws.\nThe Company claimed that it submitted APRs for the years 2000 to 2003 to the RBI\nand that the audited financial statements, Directors' Report and Certificate of\nIncorporation of the Joint Venture could not be furnished owing to circumstances\nbeyond the control of the Company.\n4. Considering that the Company contravened the provisions of Section 6(3) of\nFEMA read with Regulation 15(iii) of the Regulations, 2000 [Foreign Exchange\nManagement (Transfer or Issue of any Foreign Security) Regulations, 2000 through\nNotification No.456(E) (FEMA 19/2000-RB, dated 03-5-2000) of the RBI] and\nrendered themselves liable to be proceeded against under", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-4", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "rendered themselves liable to be proceeded against under\nSection 13(1) of FEMA, 1999, Show Cause Notice dated 18-02-2005 was issued to   \nthe Company.  Show Cause Notice was also issued to the Managing Director in  \nterms of Section 42(1) of FEMA holding that the Managing Director was\nresponsible for the non-compliance of the Rules and Regulations.\n5. The Company issued a reply to the Show Cause Notice reiterating their stand\nthat it obtained approval of the RBI for direct investment of US $ 1,75,000 in\nOverseas Joint Venture in the USA with 35% of the equity stock and that as the\nRules and Regulations in the USA did not obligate the Company to undergo audit,\nthe accounts could not be audited by an Accountant in the USA.  It claimed that\nthe non-submission of APRs and audited accounts were beyond their control and \nthat\nthey were unintentional and without any mala fides.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-5", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "6. The dispute came up before the Deputy Director, Directorate of Enforcement\n(FEMA), Government of India, Bangalore.  Through orders dated 29-9-2005, the\nDeputy Director imposed a penalty of Rs.30,00,000/- upon the Company and  \nRs.20,00,000/- upon the Managing Director of the Company.  Aggrieved by the\nsame, the Company preferred Appeal No.124 of 2006 before the Appellate Tribunal\nwhereas the Managing Director preferred Appeal No.125 of 2006.  After\nconsidering the respective claims, the Appellate Tribunal dismissed the appeals.\nHence, the present civil miscellaneous second appeals.\n7. The point for consideration is whether the Company and the Managing Director\nare liable for imposition of penalty, and if so at what rate\n\n8. Sri S.Ashok Anand Kumar, learned counsel for the appellants, contended that\nthere was no violation, much less intentional violation on the part of the\nCompany and the Managing Director, so much so, neither of them is liable for\nprosecution and imposition of penalty.\n9. Sri P.S.P.Suresh Kumar, learned counsel representing the Enforcement \nDirectorate (respondents 2 and 3 herein), on the other hand, submitted that the\nappellants did not submit the APRs within the statutory period and never\nsubmitted the audited accounts and that the appellants consequently are liable\nto pay penalty under Section 13 of the FEMA, 1999.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-6", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "MAINTAINABILITY OF C.M.S.As:    \n        10. The first question that arises for consideration is whether the\nappeals are maintainable and if so,\non what basis\n        11. The Foreign Exchange Management Act, 1999 (FEMA, for short) was   \nenacted to replace the Foreign Exchange Regulation Act, 1973 (FERA, for short).\nThe present civil miscellaneous second appeals are laid under Section 35 of\nFEMA.  The relevant portion of Section 35, FEMA reads:\n\"35. Appeal to High Court\nAny person aggrieved by any decision or order of the Appellate Tribunal may file\nan appeal to the High Court within sixty days from the date of communication of\nthe decision or order of the Appellate Tribunal to him on any question of law\narising out of such order:\n...............................................................\n...............................................................\" FEMA thus envisages an appeal from the decision or order of the Appellate Tribunal on any question of law arising out of such an order. \n\n12. The learned counsel for the respondents 2 and 3 contended that there is no substantial question of law involved in these appeals and that these appeals therefore are not maintainable. \n\n13. The learned counsel for the appellants, on the other hand, drew a distinction between Section 100 C.P.C and Section 35, FEMA and submitted that under Section 100 C.P.C., a second appeal would lie on a substantial question of law in the case, whereas under Section 35, FEMA, a second appeal would lie if a question of law arises from such decision or order.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-7", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "14. The first point to be noticed is that an appeal under Section 35, FEMA, lies if there is a question of law which need not be a substantial question of law. Secondly, question of law need not be relating to the case; it is sufficient if it arises from the decision of the Appellate Tribunal. \n\n15. In Enforcement Directorate, Government of India, Hyd. v. Ilyas Moosa1, a learned single Judge of this Court observed that a civil miscellaneous second appeal would lie on any question of law arising out of an order of the Appellate Tribunal in view of Section 35, FEMA. \n\n16. The learned counsel also pointed out that there is no embargo under Section 35, FEMA that the High Court should formulate substantial question of law and then answer the same as in the case of a second appeal. \n\n17. In a five-Judge Bench judgment of the Supreme Court in Commissioner of Income-tax, Bombay v. Scindia Steam Navigation Co. Ltd.,2 a question arose as to the maintainability of an appeal under Section 66(1) of the Income-tax Act, 1922. The majority considered a four-fold circumstance. The Supreme Court held that when a question is raised before the Appellate Tribunal and is answered by the Appellate Tribunal and a question is raised before the Appellate Tribunal but is not answered by the Appellate Tribunal, such question shall be considered to be points arising out of the order of the Appellate Tribunal. While the Supreme Court further observed that if a question is not raised before the Appellate Tribunal but is answered by the Appellate Tribunal, such a question shall be treated as a question arising out of the order of the Appellate Tribunal; the Supreme Court further held that if a question is neither raised nor answered by the Appellate Tribunal, it would not be considered to be a question arising from the order.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-8", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "18. The learned counsel for the appellants contended that the issue relating to the violation of the Regulations is indeed considered by the Primary Authority as well as the Appellate Tribunal and that the question relating to the violation of the Regulations by the appellants consequently is a question arising from the order of the Appellate Tribunal.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-9", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "19. In an appeal arising under the Income Tax Act, 1922, in C.I.T., W.B.III v. K.S.RAMPURIA3, the Supreme Court pointed out:", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-10", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "\"4. It is well established that the High Court is not a Court of Appeal in a reference under Section 66 of the Act and it is not open to the High Court in such a reference to embark upon a reappraisal of the evidence and to arrive at findings of fact contrary to those of the Appellate Tribunal. It is the duty of the High Court to confine itself to the facts as found by the Appellate Tribunal and answer the question of law in the setting and context of those facts. It is true that the finding of fact will be defective in law if there is no evidence to support it or if the finding is unreasonable or perverse. But in the hearing of a reference under Section 66 of the Act it is not open to the assessee to challenge such a finding of fact unless he has applied for a reference of the specific question under Section 66(1). In India Cements Ltd. v. Commissioner of Income-tax (60 KTR 52), it was pointed out by this Court that in a reference the High Court must accept the findings of facts reached by the Appellate Tribunal and it is for the party who applied for a reference to challenge those findings of fact, first, by an application under Section 66(1). If the party concerned has failed to file an application under Section 66(1) expressly raising the question about the validity of the findings of fact, he is not entitled to urge before the High Court that the finding was vitiated for any reason. The same view has been expressed by this Court in a later case in Commissioner of Income- tax v. Sri Meenakshi Mills Ltd. (63 ITR 609). We are therefore of the opinion that the High Court was in error in reappraising the evidence before the Appellate Tribunal and in interfering with its finding that the Income-tax Officer had no reason to believe that there was an omission on the part of the assessee to disclose", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-11", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "Officer had no reason to believe that there was an omission on the part of the assessee to disclose fully and truly all the material facts necessary for the assessment.\"", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-12", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "It was thus held that the High Court should confine itself to the facts as recorded by the Appellate Tribunal and answer the question of law in the setting and context of those facts.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-13", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "20. In Oriental Investment Co. (P) Ltd., v. Commissioner of Income-tax, Bombay4, in an appeal arising under Sections 66(1) and 66(2) of the Income-tax Act, 1922, the Supreme Court elaborately considered the limits under Section 66 of the Income-tax Act, 1922; in the process of which, the Supreme Court also considered the meaning of question of law. The Supreme Court held that the conclusions of fact arrived at by the Tribunal or the Appellate Tribunal can be challenged on the ground that they are not supported by legal evidence or on the ground that the conclusions are perverse and that the High Court cannot otherwise go into the conclusions of fact arrived at by the Tribunal while exercising its powers under Section 66 of the Income-tax Act, 1922. Admittedly, Section 66 of the Income-tax Act, 1922, is para materia Section 35, FEMA, insofar as it relates to the jurisdiction of the High Court. \n\n21. In J.K.BARUAH v. COMMISSIONER OF INCOME-TAX, ASSAM5, a Division Bench of the Gauhati High Court held:\n\"If the Tribunal ignores or excludes admissible and relevant evidence and takes into consideration material irrelevant to the inquiry or considers material which is irrelevant to the inquiry, then this court can treat the same as a question of law and deal with the order of the Tribunal accordingly. Similarly, if it appears that the Tribunal has acted without any evidence or upon a view of the facts which could not be reasonably entertained, the question becomes a question of law which is examinable by the High Court.\" \n\nThe Division Bench further observed that a question of law not raised before the Tribunal and not dealt with by the Tribunal in its order cannot be said to have arisen from such an order.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-14", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "22. The substratum of all these decisions is that if a question is raised by the Appellate Tribunal or answered by the Appellate Tribunal, whether raised or otherwise, it would constitute a question of law for the consideration of the High Court. Further, any perverse conclusion would also constitute a question of law. \n\n23. Sri S.Ashok Anand Kumar, learned counsel for the appellants, pointed out that the Tribunal and the Appellate Tribunal held that the appellants contravened Regulation 15(iii) of Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004 and that when the order of the Appellate Tribunal is challenged, it is tantamount to a question of law, so much so, the appeal is maintainable. Evidently, the Primary Authority held and the Appellate Tribunal confirmed that the appellants violated the terms and conditions of Regulation 15(iii) read with Section 6(3), FEMA. Consequently, the appellants are primarily raising a question of law. As a question of law arises for consideration, these civil miscellaneous second appeals obviously are maintainable.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-15", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "FULFILLMENT OF THE CONDITIONS BY THE APPELLANTS:            \n 24. The RBI informed the 2nd respondent that the appellants violated Regulation 15(iii) issued under Section 37, FEMA read with Section 131(1A) of the Income Tax Act, 1922. When the appellants were put to notice through a Show Cause Notice, the Managing Director issued a reply denying that the appellants violated the conditions of sanction of foreign exchange, viz., the non- submission of APRs and Financial Statements, Directors' Report and Certificate of Incorporation for Joint Venture. Holding that the explanation offered was not acceptable, penalty was imposed by the Primary Authority and was confirmed by the Appellate Tribunal. Consequently, the question of law that arises for consideration is whether the appellants violated the terms of Regulation 15(iii) of the Regulations, 2000, under FEMA. Inter alia, the learned counsel for the appellants contended that there was no violation of the Regulations by the appellants and that in fact, Regulation 15(iii) under FEMA is not a statutory Regulation, so much so, the violation of the same cannot attract penal consequences.  \n 25. Section 47 of the FEMA empowers the RBI to make Regulations under the FEMA. The Regulations in question were made in exercise of the powers under Section 47 of the FEMA as well as under Section 6(3)(a) of the FEMA. Consequently, these Regulations have statutory force. The contention of the learned counsel for the appellants that the Regulations, 2000 are not statutory Regulations and are directory but not mandatory, therefore, cannot be accepted. The consequent contention of the appellants that the violation of Regulation 15(iii) of the Regulations, 2000 does not attract penal consequences also cannot be sustained.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-16", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "26. In the Show Cause Notice dated 18-02-2005 issued by the Deputy Director of Enforcement, it was alleged that the approval of the RBI for setting up a foreign concern in the USA involving equity investment of US $ 1,75,000 was subject to the conditions that the Company shall submit certified true copies of audited balance-sheet as well as profit and loss account together with the report of the Directors on the working of the Overseas Foreign Concern during the year and a Certificate of Incorporation of the Joint Venture. \n\nThe Show Cause Notice further envisages that the Company, which has acquired foreign security, shall submit to the RBI, APR each year in respect of each Joint Venture outside India within 30 days from the date of expiry of the statutory period as prescribed by the respective Laws. \n\n27. It is the contention of the learned counsel for the appellants that no period is prescribed by the USA as the host country for the finalisation of the audited accounts and that the condition that the Company shall submit APR within 30 days, therefore, has become inapplicable. However, Clause (6) of the Sanction Letter issued by the RBI on 02-02-1999 contemplated that the APRs shall be submitted within 6 months from the date of the closing of the relevant accounting period of the host country in the event no statutory period is provided by the foreign country. Consequently, in the event the USA as the host country did not provide for any period, the 30 days' period as envisaged in the Sanction Letter stands enlarged to 6 months before the expiry of which, the APRs and other details like audited accounts should be submitted to the RBI.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-17", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "28. In response to the Show Cause Notice, the Company issued a reply on 10-3-2005. It was stated by the Company:\n\"5. HEL could not submit the Annual performance reports to RBI as the JV Company did not provide us the details in time. The Directors/Managers of the JV Company informed us that, as the company being an LLC it is not bound by the local regulations/statutes to get their annual accounts audited by an Accountant. We expressed our inability to submit the audited accounts with RBI, Hyderabad. But the officers concerned were not appreciating the facts of the local regulations and insisting for the audited accounts. We explained them that getting the accounts audited by the Accountant in US would be costly and the JV partners were not inclined to spend that kind of money as the operations were not encouraging. HEL is helpess in this issue as we were unable to impress upon the JV Company to get the accounts audited. The copy of the APR's filed with RBI, Hyderabad up to 31st March 2003 were enclosed.\" \n The explanation further claimed in para 9:\n\"The local regulations for LLC's (Limited Liability Company) in US exempts the company from the conduct of regular meetings, annual general meetings, auditing of accounts etc. (The write downloaded from the Website is enclosed duly highlighted the relevant para).\"", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-18", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "29. The learned counsel for the appellants contended that in the light of detailed explanation, the appellants cannot be considered to have violated Regulation 15(iii) of the Regulations, 2000 and that the appellants are not liable for levy of any penalty. It is contended by the appellants that it must be shown by the respondents 2 and 3 that the appellants contravened the provisions of the Regulations, 2000 and that there should be an adjudication of the contravention. Section 16, FEMA, deals with the adjudication by the Primary Authority while Section 28, FEMA, provides for the procedure and powers of the Appellate Tribunal. The main case of the appellants is that the host country did not provide for compulsory audit of the accounts of the Limited Companies and that it consequently became impossible for the appellants to submit duly audited accounts. It is the contention of the learned counsel for the appellants that the subsidiary Company in the host country was not willing to submit its accounts for auditing where there is no statutory compulsion for a Limited Company to get its accounts audited; because the subsidiary Company considered it expensive to get its accounts audited.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-19", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "30. The learned counsel for the appellants, inter alia, contended that the order by the Primary Authority is not supported by reasoning and that the order more or less is imposition of penalty accepting the contentions of the charge. The learned counsel for the appellants contended that the order of the Primary Authority suffers from non-application of the mind. The order was subsequently confirmed by the Special Director as the Appellate Authority. The order of the Primary Authority as well as the Appellate Authority have reasonably explained the circumstances in which the contention of the appellants herein could not be accepted. I regret to disagree with the claim of the learned counsel for the appellants that the orders of the Primary Authority and the Appellate Authority are laconic and deserve to be set aside. On the other hand, both the Authorities have expressed sufficient reasons for rejecting the contentions of the appellants herein. That apart, the learned counsel for the respondents 2 and 3 contended that when the RBI prescribed a condition, the condition is liable to be complied with and that if the appellants failed to establish that it complied with the conditions, the violation as alleged by the Enforcement Directorate has been made out. In fact, the conditions as provided by the Sanction Letter as well as Regulation 15(iii) of the Regulations, 2000, are identical obligating the appellants to comply with the conditions. It therefore is not open for the appellants to turn round now and claim that the conditions cannot be enforced.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-20", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "31. One of the contentions raised by the learned counsel for the appellants is that the appellants shall fulfill their obligations on the happening of an event and that the appellants cannot be blamed for not fulfilling their obligations since the expected event did not occur. Clause (6) of the Sanction Letter obligated the Company to submit audited balance-sheet as well as the profit and loss account together with the Directors' Report on the working of the Overseas Foreign Concern during the year and also APRs. The only contingency is that the concerned documents ought to be submitted within 30 days after the expiry of the statutory period for the finalisation of the audited annual accounts as applicable in the host country and in the absence of such a period for the host country, within 6 months from the date of the closure of the relevant accounting period of the foreign concern. As there is no provision of compulsory auditing of the accounts of the foreign concern, the appellants should have submitted the documents within 6 months from the date of the closure of the accounting period for the host country. It is not open for the appellants to now claim that the 30 days time as mentioned has become irrelevant, that such a contingent event did not take place, that the condition has not been fulfilled and that there is no obligation on the part of the appellants to submit the documents envisaged by Clause (6) of the Sanction Letter. It is not as though the appellants were not aware about their obligation. \n\nThe appellants in fact submitted APRs from 2000 to 2003 belatedly on 25-8-2004. It is not open for the appellants to approbate and reprobate fulfilling one of the conditions of the sanction and failing to comply with the other conditions adamantly taking the stand that the conditions are not applicable.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-21", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "32. The learned counsel for the appellants, inter alia, submitted that the appellants are minority stakeholders and that the question of mismanagement of the Company by the appellants would not arise. \n\nAs rightly submitted by him, mismanagement of the Company is not the claim by the Enforcement Directorate. Their only case is that the Company failed to discharge its obligations and thus exposed itself to penal consequences. In summation, it may be pointed out that the appellants were sanctioned foreign exchange on certain conditions to be fulfilled in future, the failure of which would attract penal consequences. It is evident from the very contentions of the appellants that the appellants did not fulfill those conditions. In the reply to the Show Cause Notice, the appellants failed to explain the circumstances in which they did not fulfill the terms and conditions provided by Clause (6) of the Sanction Letter. Thus, the appellants themselves agree that the terms and conditions stipulated by the Sanction Letter have not been fulfilled by the appellants. The Primary Authority and the Appellate Authority therefore were perfectly justified in holding that the appellants violated the terms and conditions of the allotment and consequently violated Regulation 15(iii) of the Regulations, 2000. \n\nPENALTY:   \n 33. The Primary Authority imposed penalty of Rs.30,00,000/- against the Company and Rs.20,00,000/- against the Managing Director under Section 42 read with Section 13 of the FEMA.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-22", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "Section 13(1) of the FEMA reads:\n\"13. Penalties (1) If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorisation is issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day after the first day during which the contravention continues. \n\n (2) ....................................... \n\n Explanation.-For the purposes of this sub-section, \"property\" in respect of which contravention has taken place, shall include-\n(a) deposits in a bank, where the said property is converted into such deposits;\n(b) Indian currency, where the said property is converted into that currency; and \n(c) Any other property which has resulted out of the conversion of that property.\"", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-23", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "34. The contravention of the provisions of the FEMA, the Rules or the Regulations attracts penalty which may extend up to thrice the sum involved in the contravention if the amount can be quantified and up to Rs.2,00,000/- if the amount covered by the contravention cannot be quantified and a further penalty up to an extent of Rs.5,000/- for each day's contravention. Regarding the penalty, as an alternative relief, the learned counsel for the appellants contended that the contravention in this case is not quantifiable and that the appellants consequently can be penalised to a maximum extent of Rs.2,00,000/-. \n35. In HINDUSTAN STEEL LTD. v. STATE OF ORISSA6, penalty was sought to be imposed under the provisions of Orissa Sales Tax Act, 1947. The Supreme Court observed:", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-24", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "\"8. Under the Act penalty may be imposed for failure to register as a dealer-Section 9(1) read with Section 25(1)(a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the Company in failing to register the Company as a dealer acted in the honest and genuine belief that the Company was not a dealer. Granting that they erred, no case for imposing penalty was made out.\"", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-25", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "36. The Supreme Court thus observed that the imposition of the penalty was not automatic and that the penalty is imposed only when a party who failed to register as a dealer was acting deliberately in defiance of law or was guilty of dishonest conduct or was acting in conscious disregard of its obligations. \n\n37. In CHAIRMAN, SEBI v. SHRIRAM MUTUAL FUND7, regarding penalty for contravening provisions of Securities and Exchange Board of India Act, 1992, the Supreme Court observed that the quantum of penalty is discretionary for the authority. The decision of HINDUSTAN STEEL LTD. (6 supra) was indeed considered by this decision but the Court held that to constitute the contravention of the provision obligating the party to penal consequences need not be coupled with mens ria. Obligation envisaged by Regulation 15(iii) of the Regulations, 2000, as well as Clause (6) of the Sanction Letter are mandatory. The failure to comply with them certainly attracts penal consequences under Section 13 of the FEMA. The question consequently is as to the quantum of penalty leviable against the two appellants.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-26", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "38. The Primary Authority imposed penalty of Rs.30,00,000/- against the Company and Rs.20,00,000/- against the Managing Director of the Company. I may assume for the purpose of quantifying the penalty that the contravention cannot be quantified. The penalty in such a circumstance is not more than Rs.2,00,000/-. The rider however is that the contravener is liable to penalty up to an extent of Rs.5,000/- for each day's contravention. While the Sanction Letter was issued on 02-02-1999, the Company would appear to have utilised the sanction in 1999 itself. Right from the beginning of 2000, the non-filing of the statements and returns envisaged by Clause (6) of the Sanction Letter is a violation attracting penalty of not more than Rs.5,000/- per each day. Even if the penalty is worked out at Rs.2,00,000/- and penalty at the rate of Rs.5,000/- per day is added to the same, it would be much more for the past over 12 years. The Appellate Tribunal confirmed the order on 30-3-2006. I consider that imposition of penalty at Rs.2,00,000/- and working out additional penalty at Rs.5,000/- per day for over 5 years from 2000 onwards is far less than Rs.30,00,000/-. The Primary Authority as well as the Appellate Authority would appear to be in fact sympathetic with the case of the appellants in imposing penalty of Rs.30,00,000/- against the Company and Rs.20,00,000/- against the Managing Director of the Company. The penalty imposed is quite reasonable and does not warrant interference. The penalty as imposed by the Primary Authority and confirmed by the Appellate Authority deserves to be confirmed.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-27", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "penalty as imposed by the Primary Authority and confirmed by the Appellate Authority deserves to be confirmed. CONCLUSION:", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-28", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "39. For various reasons mentioned, the appeals are found to be devoid of merits and are accordingly dismissed. There shall be no order as to costs.", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "41f51e25d0a0-29", "Titles": "Venkat N.R. Akkineni Occ: ... vs Counsel For The on 12 April, 2013", "text": "__________________ K.G.SHANKAR, J.   \n12th April, 2013. \n\nThe learned counsel for the appellants orally sought the permission of the Court to move the Supreme Court under Article 132 of the Constitution of India. I do not find any substantial question of law that is involved in the case. Hence, the oral request for permission to appeal to the Supreme Court is rejected. _________________ K.G.SHANKAR, J.   \n12-04-2013", "source": "https://indiankanoon.org/doc/118182361/"}
+{"id": "4a01d93aa7c1-0", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "JUDGMENT Chandra Reddy, C.J. \n 1. The subject-matter of both the petitions is the order of the Government of Andhra Pradesh passed under Section 99-A of the Criminal Procedure Code in G. O. Ms. No. 501 Home (General-C) dated 23nd March, 1958. \n\n2. The petitioner is the author of a book called 'Bible Bandaram', which means the Treasure of the Bible'. He claims to have dealt with the Bible from a scientific and rationalistic point of view. Being of opinion that it contains matter, which falls within the purview of Section 99-A, Criminal Procedure Code, the State Government declared that all copies of the aforesaid book, wherever found, should be forfeited to the Government. Pursuant to this, the books are said to have been confiscated by the officers concerned. \n\nThese two petitions are filed in this Court challenging the validity of that order. Crl. M. P. No. 888 of 1958 is preferred under Section 99-B Criminal Procedure Code, while the Writ Petition raises the question of the constitutional validity of section 99-A. \n\n3. The main theme of the argument of the counsel for the petitioner in support of both the petitions is that Section 99-A of the Criminal Procedure Code offends Article 19 (1) (a) of the Constitution, which guarantees to the citizens freedom of expression. The stress of the argument of the learned counsel for the petitioner is that any law, which takes away or even curtails any of the freedoms enshrined in Article 19 is void and should, therefore, be struck down.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-1", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "4. It is contended that the power conferred by that section could be used by the executive in such a way as to interfere with the right of freedom of expression of a citizen and thus destroy the protection afforded under Article 19. The crucial point for consideration is whether there is any repugnancy between Article 19 of the Constitution and Section 99-A Criminal Procedure Code. \n\n5. We will presently show that the impugned section does not in any way violate Article 19 (1) (a). The right now claimed is created by Article 19 and is not independent of it and is subject to the limitation imposed by it and as such is not an unrestricted or unqualified right. It is useful to extract here the relevant provisions of Article 19. \n\n6. Article 19 (1) in so far as it is relevant runs as follows : -   \n\n\"19 (1)   All citizens shall have the right\n \n\n(a)     to freedom   of     speech     and  expression  \n  xx   xx                          xx\n \n\n(f)    to acquire,     hold     and     dispose of property,\"", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-2", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "(f)    to acquire,     hold     and     dispose of property,\"  \n \n\n  Article   19 (2) says :--\n \"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.'' Article 19 (5) says: --\n\"(5) Nothing in Sub-clauses (d), (e) and (f) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub-clauses either in the interests of the general public or for the protection of the interests of any scheduled tribe.\" \n7. It is seen that the rights guaranteed under Clause 1 are subject to certain restrictions of a reasonable kind. The restrictions on the rights contemplated should be within the limits set by Clause 2. Therefore, the point for decision is whether the offending section is saved by Sub-article (2). This, in its turn, depends upon the terms of Section 99-A of the Criminal Procedure Code. We will have therefore to read that section, here. It runs thus ; -\n\"(1) Where\n \n\n(a) any newspaper, or book as defined in the Press and Registration of Books Act, 1867 (25 of 1867) or", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-3", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "(b) any document Wherever printed, appears to the State Government to contain any seditious matter or any matter which promotes or is intended to promote feelings of enmity or hatred between different classes of the citizens of India or which is deliberately and maliciously intended to outrage the religious feelings of any such class by insulting the religion or the religious beliefs of that class, that is to say, any matter the publication of which is punishable under Section 124-A or Section 153-A or Section 295-A of the Indian Penal Code (45 of 1860) the State Government may by notification in the Official Gazette, stating the grounds of its opinion, declare every copy of the issue of the newspaper containing such matter and every copy of such book or other document to be forfeited to Government and thereupon any police officer may seize the same wherever found in India and any Magistrate may by warrant authorise any police officer not below the rank of Sub-Inspector to enter upon and search for the same in any premises where any copy of such issue or any such book or other document may be or may be reasonably suspected to be.\" \n8. It is seen that this section does not take away the right to write and publish books. People are at liberty to write books without offending deliberately the religious sentiments of the other citizens who are as much entitled to certain freedoms as the petitioner himself. Section 99-A does not place a total prohibition on the exercise of the fundamental right guaranteed to a citizen. It only empowers the Executive to take action in the interest of public order etc., in the eventualities mentioned therein.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-4", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "Surely, no citizen could claim a right to insult the religion or religious beliefs of another section of the population. The right which one citizen claims should be consistent with the rights of the other citizens. If people are permitted to indulge in activities calculated to wound the religious susceptibilities of the other religious denominations in the State, that would inevitably lead to the disruption of public order. \n\nIf there is no law authorising the executive to take necessary action to prevent or combat activities prejudicial to the maintenance of public order, there will be disorder in society and bitter feelings and even hatred between various sections of society which is not conducive to the maintenance of order. Any law aimed at preventing such a mischief is reasonable and is not intended to abridge any of the rights conferred under Article 19. The impugned provision is conceived in the interests of public order, decency or morality etc. That being so, the restriction placed by this statutory provision on the freedom of expression is a reasonable one and as such it falls within the reservation under Clause (2) of the Article. Consequently, it is not open to any objection based on the Constitution. \n\n9. Sri Chowdhury invited our attention to some of the rulings of the Supreme Court, which dealt with the scope and ambit of this Article of the Constitution None of these rulings Viz: Re-mesh Thappar v. State of Madras, , Chintaman Rao v. State of Madhya Pradesh, and Brij Bhushan v. State of Delhi, is in point. They do not bear on any treatise which insults the religion or religious feelings and in regard to which Section 99-A had been involved.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-5", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "10. Further, Article 19 (2) was amended after these rulings were rendered by the Supreme Court so as to nullify the effect thereof. Therefore, these decisions cannot render much assistance to the petitioner. Article 19 (2) before the amendment read as follows : --\n \"Nothing in Sub-clause (a) of Clause (1) shall affect the operation of any existing law so far as it relates to, or prevents the State from making any law relating to, libel, stander, defamation, contempt of court or any matter which offends against decency or morality or which undermines the security of or tends to overthrow the State.\" \nAs a result of the amendment, the scone of Article 19 (2) was very much enlarged. The amended article is couched in wide language so as to include restrictions to cover all eventualities enumerated in the amended Article. The expression 'in the interests of is of wide connotation. So, any law penalising activities which have a tendency to cause public disorder is within (the scope of) authorised limits. The impugned section therefore, comes within the range of clause 2 or that Article.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-6", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "11. A similar contention was repelled by the Supreme Court in Ramjilal Modi v. State of Uttar Pradesh, . There, the question posed was whether Section 295-A of the Indian Penal Code was obnoxious to Article 19 of the Constitution. The answer was in the negative. Their Lordships have observed that Article 1972) only punishes an aggravated form of insult to religion when it is perpetrated with the deliberate and malicious intention of outraging the religious feelings of that class. In the course of the judgment, the learned Chief Justice observed : --\n \"It cannot be predicated that freedom of religion can have no bearing whatever on the maintenance of public order or that a law creating an offence relating to religion cannot under any circumstances be said to have been enacted in the interests of public order.\" \nThis pronouncement of the Supreme Court applies equally to Section 99-A Criminal Procedure Code since it is only a matter that would fall either within the ambit of Section 295-A or Section 124-A and Section 153-A of the Indian Penal Code that would enable the Government to take action under Section 99-A.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-7", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "12. Another ruling of the Supreme Court which is of assistance in this enquiry is Virendra v. State of Punjab, . In that case, Section 2 of the Punjab Special Powers (Press) Act, which is analogous to the offending section was declared valid on the ground that it imposed reasonably restrictions on the exercise of the rights conferred by Articles 19 (1) (a) and 19 (1) (g) in the interests of public order and of the general public and was therefore, protected by Article 19 (2) of the Constitution. Section 2(1) (a) of that Act runs as follows : -\n\"2 (1) The State Government or any authority so authorised in this behalf if satisfied that such action is necessary for the purpose of preventing or combating any activity prejudicial to the maintenance of communal harmony affecting or likely to affect public order, may, by order in writing addressed to a printer, publisher, or editor : --\n(a) prohibit the printing or publication in any document or any class of documents of any matter relating to a particular subject or class of subjects for a specified period or in a particular issue or issues of a newspaper or periodical :\nProvided that no such order shall remain in force for more than two months from the making thereof :\nProvided further that the person against whom the order has been made may within 10 days of the passing of this order make a representation to the State Government which may on consideration thereof modify, confirm or rescind the order.\"  \n Their Lordships however declared Section 3 invalid since there was no time limit for the operation of the order made under that section nor any provision made for any representation being made to the State Government notwithstanding the fact that the powers under Section 3 were subject to the same condition as to the satisfaction of the State Government or its delegates as mentioned in Section 2 (1) (a). The principle underlying that judgment governs the instant case.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-8", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "13. In considering whether Section 99-A imposes a reasonable restriction, it has to be remembered that Section 99-D contains a provision for judicial corrective. That is a safeguard which is absent in Section 3 of the Punjab Special Powers (Press) Act. Further, in deciding whether a particular restriction is reasonable or not, the Court should take into account the character of the right alleged to have been violated and the underlying purpose of the restriction imposed, \"the extent and urgency of the evil sought to be remedied thereby, the disproportion of the Imposition and the prevailing condition at the time\" etc. Vide : State of Madras v. V.G. Row, . We feel that the restriction imposed by Section 99-A is not disproportionate to the evil sought to be remedied. For these reasons, we hold that Section 99-A is not hit at by Article 19 of the Constitution and its validity cannot be impeached. \n\n14. It was next faintly argued that this legislation also interferes, with the right to acquire, hold and dispose of property within the ambit of Article 19 and as such infringes Clause (f) of that Article. We cannot accede to this contention. Section 99-A does not seem to have any impact on Clause (f). Assuming that it has any such effect, it is protected by Clause (5) of that Article, as such an enactment is necessary in the interests of the general public. By that as it may, the law in dispute is protected by Clause (2), as it is concerned with the freedom mentioned in Clause (a). Therefore, no further, question arises.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-9", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "15. The validity of this provision is attacked on another ground also. It is urged that the right of application contained in Section 99-B of the Criminal Procedure Code is an illusory one in that it does not contemplate the issue of a notice of forfeiture to the person concerned, while a time limit is fixed for the filing of an application. The order for: felting the books generally does not come to the knowledge of the persons affected. The publicity in the Official Gazette does not amount to proper notice as the value of such notification is very little. \n\nThis defect renders the encroachment upon the light conferred by Clause (a) of Article 19 (1) unreasonable and takes it out of the operation of the saving clause, argues the Counsel for the petitioner. Reliance for this proposition is placed upon . We are not very much impressed by this argument either. \n\n16. The decision in (supra), has not laid down any proposition that the notification of an order in an Official Gazette is not proper publication and does not amount to notice. All that their Lordships remarked was: --\n \"Publication in the official gazette whose publicity value is by no means great, may not reach the members of the association declared unlawful, and if the time fixed expired before they know of such declaration, their right of making a representation, which is the only opportunity of presenting their case, would be lost.\" \nTheir Lordships have not stated as an invariable rule that the notification in the Official Gazette does not constitute notice to the persons concerned. These remark's have to be understood in the context they were made, viz. whether an association which was sought to be declared unlawful on the ground that it would interfere with the maintenance of public order, should not be given sufficient opportunity to make a representation to the Government within the time prescribed by that order in regard to the existence of the grounds on which the Government proposed to take action.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-10", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "That decision, therefore, does not establish the proposition of the Counsel for the petitioner. Under Section 99-A, the forfeiture has to be notified in the Official Gazette. That, in our opinion, is sufficient publication. The normal mode of notifying any order of Government is publication of it in the official gazette and no personal service is generally contemplated. Therefore, Section 99-A is not open to attack on that ground. \n\n17. Further, before the order is put into effect, the order should be communicated to the person concerned, be it the author, the printer or the publisher and that would enable him to move the High Court under Section 99-B. It is contended that the Government could deprive a party of the right of application by postponing the actual forfeiture of the book. We do not think that there will be any justification for attributing evil designs or mala fides to the Government. \n\nIt cannot be assumed that Government will throw obstacles in the way of the exercise of the right of application derived from the sub-section. The remedy provided by Sub-section D (sic) is a very effective one and gives an opportunity to have the legality of the order tested in the High Court. So Section 99-A cannot be challenged even on that account.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-11", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "18. It was alternatively contended that the order in dispute does not comply with the terms of Section 99-A. It is said that it is vitiated by the failure of the State Government to state the grounds of its opinion. It is true that the order has not set out the grounds for the opinion of the State Government that the book contains matter which is punishable under Section 295-A Indian Penal Code. It is also indisputable that the section requires the Government to mention the facts in support of its opinion and that a mere statement that the book contains matters constituting an offence under any of the provisions of the Penal Code recited therein does not fulfil the requirement of that section, which is a mandatory one. \n\nBut the defect in the order cannot be a ground for this Court to quash that order. Under Section 99-D, this Court has to consider whether the newspaper or book or other document ordered to be forfeited contains such of the matters as are referred to in Section 99-A. If the Special Bench is not satisfied that there is no such material, the order of forfeiture would be set aside. If on the other hand, there is enough material to justify the action of the Government, this Court will not interfere with it. \n\nTherefore, all that this Court is called upon to do by Section 99-D is to see whether there is any justification for the Government to pass the order forfeiting the books. It is pertinent to note that under Section 99-A the grounds of the order given in their factual aspects are tested in the enquiry by the Special Bench of the High Court. So the existence of grounds which would justify the order is amenable to determination by the High Court.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-12", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "Therefore, the argument that the non-observance of the rule in regard to the subject-matter of the grounds vitiates the whole order does not commend itself to us. There would have been substance in the argument if the satisfaction of the Government is final and is not open to question in a judicial proceeding. That is not the position under Section 99-A. The Special Bench has to be convinced about the existence of the grounds forming the basis of the order. It is not permissible for the Special Bench to consider a matter other than that specified in Section 99-D such as the one now raised for the petitioner. There is authority for this position in Harnam Das v. State of Uttar Pradesh (S) AIR 1957 All 538 (SB), which followed a judgment of the same Court in Baijnath v. Emperor, AIR 1925 All 195 (SB). This contention is, therefore, negatived. \n\n19. Another point raised is that the book contains only a dissertation on the unscientific, un-historical and unrationalistic nature of the Bible and that if any of the passages therein have the effect of insulting the religion or religious beliefs of Christians, that docs not attract the applicability of Section 99-A unless it is found that the petitioner had deliberately and maliciously done it. The petitioner had no intention at all to insult in any way the Christian religion, his only object in writing the book being to examine the Bible and its literature from a rationalistic point of view. The book in question was a dispassionate and scientific study of the Bible and the author as a rationalist had applied reason to the investigation of phenomena, proceeded the argument.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-13", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "20. We do not think that we can accept this proposition. It is true that each and every insult to the religion or religious feelings of a sect which arc unintentional would not bring the matter with in the ambit of Section 99-A. Sometimes it may be offered unwittingly or carelessly and without any deliberate or malicious intention. It is only insults to religion or religious beliefs that are deliberately and maliciously made that would bring into play Section 99-A Criminal Procedure Code. But the intention of the author has to be gathered primarily from the language used. If the words employed are of such a nature as would lead any reasonable man to think that they are grossly offensive and provocative and are intended to be regarded as such, the consequences indicated in that section ensue. \n21. Judged in that light, the ideas expressed in the book and the language used manifest a malicious intention to outrage the religious feelings of the Christian community by insulting their religion and their religious beliefs. The very tide of the book is disparaging and contemptuous in its tone and insinuation. The expression \"Bandaram\" is used in popular parlance in a satirical sense. Coming to the body of the books, the petitioner has used abusive and insulting language in regard to the religious personalities and the tenets of the Christian faith. The tenor and the tone of the publication is consistent only with a deliberate and malicious intention to offer insults to that religion. \n\n22. The effect of some of the passages therein as set out in the counter-affidavit fully supports this conclusion : --\n\"(a) That the Bible contains vivid descriptions of tribal warfare, sacrifices, drink, blood-shed which show that this book was produced by the uncivilised who were determined and engaged to destroy the more civilised races.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-14", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "\"(b) That the Old Testament is neither the word of God Jehovah nor the New Testament the word of Jesus. This is amply proved by the incongruities, excesses, improbabilities and anachronisms, vulgarities that are manifest in every page of the Bible.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-15", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "(c) That the Old Testament came into existence in the 4th and 5th century B. C. A critical reading of the Old Testament indicates that it is God Jehovah who is a cruel and selfish tyrant while Satan is a most excellent noble and normal person. The five books of the Old Testament are mere forgeries and cannot be said to have been written by Moses at the word of Jehovah. The prophecies contained in the Old Testament are mere poetic imaginations. The story of Jesus Christ built upon the shaky foundations of the Old Testament is a mere myth. The gospels of Saints Mathew, Mark, Luke, and John in the New Testament are subsequent fabrications. The material discrepancies contained in these gospels regarding the birth, life teachings, death and resurrection of Jesus amply prove their spurious nature. A person by name Jesus was reported to have been born out of an adulterous intercourse between his mother Mary and a Greek soldier in the Roman Army. The conception of the Holy Ghost was a later creation by interested followers to purify the sinful birth of Jesus. The virginity of Mary and her subsequent apotheosis were absurd and unwarranted. The story of resurrection is also untrue and improbable. Christianity is therefore a false and fabulous religion. Its early propagation is steeped in bloodshed and it is of little credit to the teachings of Christ. The Bible justifies such barbarities. The Christian Moral Code as thought in the Bible is contrary to human nature and natural evolution. The growth of fascism in European countries is entirely due to the previous propagation and belief in the stupid and extraordinary teachings of the Christian religion.\"", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-16", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "23. These passages clearly show that the petitioner is vilifying in grossest terms the principles and tenets of Christianity. There are other passages in the book which though not so objectionable as the above are calculated to produce the same effect. It is clear that he bad not spared even the founder of that religion Jesus Christ and he had described him as the off-spring of an adulterous intercourse. The Christian religious beliefs were depicted in grossly offensive and provocative terms.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-17", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "In these circumstances, the claim of the petitioner that it was a dispassionate study of religion could not carry conviction. On a reading of the offending passages, the reasonable conclusion that could be reached is that the book was published with the deliberate and malicious intention of outraging the religious feelings of Christians. \n\n24. It was next urged that no significance need be attached to the passages, a gist of which was given above and that the book should be read as a whole and the general effect which it would have on the mind of the people gathered. In support of this argument, reliance is placed on the judgment of the Supreme Court in State of Bihar v. Shailabala Devi, . That ruling does not support the wide proposition that even if there were a number of objectionable passages in provocative terms against the founder of a religion and other religious teachers, they should be ignored and the State Government should remain inactive. \n\nIn that case, the document that was sought to be forfeited was said to contain matter which had a tendency to incite people to over-throw the Government. Their Lordships thought that the document did not deserve much consideration, that it was some kind of patchwork with no consistency or cohesion between the different parts, that some portions of it were unmeaning and non-sensical and that in other parts it talked of revolution in the abstract and there was no appeal to anybody in particular or for any known or specific cause. \n\nIt was remarked that the document was written in high-flown Bengali language and contained a good deal of demagogic clap-trap with some pretence to poetic flourish. Therefore, that case does not furnish any analogy here.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-18", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "25. Another contention pressed upon us was that the thoughts expressed by the petitioner were not born of a desire to insult arty particular religion and that in fact he said such things in regard to other religions also. It is also said that as a free thinker he was justified in giving expression to his views and propagating them by means of a publication like this. It was further argued that similar ideas were expressed by several eminent writers in several other countries, to which no exception was taken and there was no reason why a book of his embodying similar concepts should be confiscated. We do not think that weight could be given to this argument. \n\n26. Free thinking does not involve freedom to make scurrilous attacks on the religion and religious beliefs of other sects with impunity. It is not free-thinking to abuse and insult other religions. Further, the method find the manner of discourse on a particular topic also matters very much. All the citizens of India are guaranteed freedom of religion and freedom of conscience by our Constitution and each one has a right to pursue his own way of attaining salvation, unhampered and without interference from others. \n\nIt is the duty of the State to create such a climate as would enable every one of its citizens to exercise freedom of religion and conscience. Section 99-A of the Criminal Procedure Code and Section 295-A of the Indian Penal Code are only legislative recognition of the power of the State to take action for the purpose of affording such protection to all its citizens. If the deduction that any citizen could intentionally wound the religious beliefs of others in the name of free-thinking were legitimate, no affront however deliberate and malicious it might be would be governed by Section 99-A of the Criminal Procedure Code and Section 295-A of the Indian Penal Code with, the result that they become otiose.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-19", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "27. As regards the justification pleaded viz: that there are writings of a similar description in other countries, we think that it is wholly outside the scope of this enquiry to consider the nature of those publications. All those writings have not been placed before us and we do not know whether those ideas were couched in a language similar to the one before us and what effect they would have on the mind of the readers. We are also not aware whether provisions akin to Section 99-A Criminal Procedure Code and Section 295-A of the Indian Penal Code exist in the statute books of those countries. \n\nSo, assuming that there are writings, which are of the same character as the one in this case and no action was taken in regard to them, that would not absolve the author of a document or a book from liability if it attracts the applicability of section 99-A, Criminal Procedure Code. We have to judge the writings in the setting of that section the conditions existing in this country, the light in which such treatises will be viewed by the people of this country who read them and the kind of people whose religious beliefs are attacked by the book. \nIn fact, it is disclosed in the counter-affidavit that representations were received from Indian Christian Associations that the book offered insults to the Christian religion and religious beliefs. If the conditions envisaged in that section are fulfilled, the author will become liable to be proceeded against. \n\n28. It is also no defence to a charge under either of the two sections to say that the author had incidentally attacked other religious beliefs also For these reasons, we negative these contentions. We are satisfied that the writing is of such a nature as to come within the purview of Section 99-A Criminal Procedure Code.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-20", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "29. There remains the point whether the forfeiture should be confined to one part or to both the parts of the book in question. What was maintained on behalf of the petitioner in this behalf was that in the second part of \"Bible Bandaram\", he merely picked up passages from different parts of the Bible itself and placed them in juxtaposition, so that the contradictions may be easily noticed by the readers, and, therefore, there is no ground for applying the section to this part also. \n\nIt was contended that the two parts constitute two books because they are bound in two volumes and that part of it which does not contain matter of the nature contemplated by that section, should he excluded from the purview of the order confiscating the books. We do not think we can accept these theories. First of all, it should be noted that the second part is a vituperative commentary on the Bible. Some of the teachings and tenets of Christianity are described as \"Sriranga Neethulu,\" which conveys the idea that the teachings are ludicrous ones. \n\nFurther, in order to gather the effect a book, is likely to produce on the mind of the reading public, it should be read as a whole. It cannot be postulated that the operation of Section 99-A, Criminal Procedure Code should necessarily he confined to isolated parts of the book, which come within the mischief of that Section. All that the section emphasises is that the book should contain matter which is deliberately and maliciously intended to outrage the religion or religious beliefs etc. It does not prescribe that each and every part of the book should in itself be of the nature indicated in that section. It is difficult to accede to the theory that only such parts of the book as would offer insults that should be extracted from the writing and forfeited.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-21", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "30. Taking up the next proposition, viz., that each part should be regarded as a separate hook we think it is equally untenable. Section 99-A talks of a book as defined in the Press and Registration of Books. Act (Act XXV of 1867), which defines a \"book\" as including every volume, part or division of a volume and pamphlet, in any language, and every sheet of music, map, chart or plan separately printed or lithographed. It is seen that the definition takes in every volume or division of a volume. Therefore, a book can be in more than one volume and each volume does not constitute a separate book. \n\nThat apart, one of the meanings of the word 'book' as given in the Oxford English Dictionary, Vol. I is a literary composition such as would occupy one or more volumes without regard to the material form or forms in which it actually exists. This clearly indicates that the expression 'book' is of wide import and covers every part and every volume of it. The fact that each part is bound in a different volume does not take it out of the meaning of the word 'book'. The question is posed whether all the volumes of Halsbury's Laws of England or Encyclopaedia Britannica constitute each a book. \n\nThis is easily answered because they deal with different topics and different subjects. In considering whether a particular volume is a book or not, the main test is whether the treatise deals with one subject and it does not depend upon whether a book is bound in one volume or in two volumes. Often a book is bound in two volumes if the size of it makes it convenient to have it so. If the number of pages of a book makes it unwieldly to have it as one volume, the publishers may think of having it bound in more than one volume so that they could be easily handled by the readers.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-22", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "Not unfrequently a book, which was published in the form of one volume at one stage, may be bound in two volumes at a later stage. Take the instance of the Civil Procedure Code by Mulla. The earlier editions consisted of only one volume but the latest edition consists of two volumes. Thus it depends upon the convenience and whims and fancies of the publisher whether a particular book is to be in one volume or in two volumes. So the question whether a particular part or volume constitutes a separate book does not turn upon how they are bound. Regard must be had to the contents of the book. \n\nIf each volume deals with a distinct subject, it forms a book by itself. The condition is not satisfied in the instant case. Both the parts together discuss the Bible and expose its hollowness and pretension and point out the alleged incongruities, contradictions and the immoral nature of the doctrines contained therein. The first part anticipates the contents of the second part. \n\n31. The petitioner did not treat them as two separate and independent books in his petition. Through out the petition, he proceeds on the assumption that the two parts make one book. In paragraph 7 of the affidavit of the petitioner it is alleged that there was no demonstration against the publication of his work and again he talks of the book 'Bible Bandaram' in the same paragraph. \n\nIn the next paragraph he also refers to the two parts as one book in several places. Thus, the petitioner himself did not treat them as two books. In our opinion, the two books together constitute one book and the second part also falls within the mischief of Section 99-A of Criminal Procedure Code.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-23", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "32. In this connection, the judgment of the Allahabad High Court in AIR 1925 All 195, relied on for the petitioner does nut furnish any guidance in this enquiry. There, the applicant published a Hindi reader for use in schools. It was composed of six separate readers numbered 1 to 6 and was designed for the instruction of boys of 8 to 13 or 14 years of age. The local Government issued a notification under Section 99-A declaring all copies of volumes 3, 4 and 5 forfeited inasmuch as they contained seditious matter. \n\nTheir Lordships remarked that it was necessary that they should consider each of the readers separately but this does not help the petitioner for the reason that the present position is not analogous to that envisaged in that decision. It should be noted that in the case under examination, each of the readers was meant for boys of a different class and they were separate text books. As appears from the statement of facts, each was a different reader meant as a separate text book. \n\nThus the case cited does not come to the rescue of the petitioner. The case on hand has to be decided with reference to the contents and nature of the two parts. We are satisfied that the two parts together answer the definition of 'Book' in the relevant enactment and together fall within the operation of Section 99-A. Consequently we think that the State Government was right in passing the order now assailed before us and we do not find any grounds for interfering with it. \n\n32a. W. P. No. 842 of 1958 is dismissed with costs and Criminal M. P. No. 888 of 1938 is dismissed. Advocate's fee is fixed Rs. 200/-. \n\n Bhimasankaram, J. \n33. I regret my inability to concur in the order proposed by my Lord.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-24", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "34. The Criminal Miscellaneous Petition is an application made under Section 99-B of the Code of Criminal Procedure, whereby the applicant seeks to have set aside an order made by the State Government under Section 99-A of that Code on 22-3-1958 and published in the Andhra Pradesh Gazette dated 10-4-1958 whereby all copies, wherever found, of the Telugu book entitled \"Bible Bandaram\" written by the petitioner and published by Kavirajasramam, Nagandla, Guntur District and all other documents containing copies, re-prints, translations of, or extracts from the said book arc forfeited to the Government. \n\n35. We have set as a special Bench of three Judges to hear the application as required by Section 99-C of the Code. Along with this application, the applicant has filed a writ petition under Article 226 of the Constitution impugning the constitutional validity of Section 99-A. \n\n36. It will be convenient to set out even at the outset the sections of the Code to which reference will have to be made in this opinion:\n\"99-A (1) Where:\n(a) any newspaper, or book as defined in the Press and Registration of Books Act, 1867; or", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-25", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "(b) any document, Wherever printed, appears to the State Government to contain any seditious matter or any matter which promotes or is intended \"to promote feelings of enmity or hatred between different classes of citizens of India or which is deliberately and maliciously intended to outrage the religious feelings of any such class by insulting the religion or the religious beliefs of that class, that is to say, any matter the publication of which is punishable under Section 124-A or Section 153-A or Section 295-A of the Indian Penal Code, the State Government may, by notification in the Official Gazette, staling the grounds of its opinion, declare every copy of the issue of the newspaper containing such matter, and every copy of such book or other document to be forfeited to Government and thereupon any police officer may seize the same wherever found in India and any Magistrate may by warrant authorize any police officer not below the rank of Sub-Inspector to enter upon and search for the same in any premises where any copy of such issue or any such book or other document may be or may be reasonably suspected to be. \n\n(2) In Sub-section (1) \"Document\" includes also any painting, drawing or photograph, or other visible representation. \n\n99-B. Any person having any interest in any newspaper, book or other document, in respect of which an order of forfeiture has been made under Section 99-A, may, within two months from the date of such order, apply to the High Court to set aside such order on the ground that the issue of the newspaper, or the book or other document, in respect of which the order was made, did not contain any seditious or other matter of such a nature as is referred to in Sub-section (i) of Section 99-A.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-26", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "XX XX XX XX 99-D. (1) On receipt of the application, the Special Bench shall, if it is not satisfied that the issue of the newspaper, or the book or other document, in respect of which the application has been made, contained seditious' or other matter of such a nature as is referred to in Sub-section (i) of Section 99-A, set aside the order of forfeiture. \n\n(2) Where there is a difference of opinion among the Judges forming the Special Bench the decision shall be in accordance with the opinion of the majority of those Judges. \n\n99-E. On the hearing of any such application with reference to any newspaper, any copy of such newspaper, may be given in evidence in aid of the proof of the nature or tendency of the words, signs or visible representations contained in such news paper, in respect of which the order of forfeiture was made. \n\n xx xx xx xx 99-G. No order passed or action taken under Section 99-A shall be called in question in any Court otherwise than in accordance with the provisions of Section 99-B.\" \nIt is also necessary to read Section 295-A of the Indian Penal Code as in the present case the Government notification states that the publication in question is within the mischief of that section:\n\"295-A. Whoever, with deliberate and malicious intention of outraging the religious feelings of any class of citizens of India, by words, either spoken or written, or by visible representations, insults of attempts to insult the religion or the religious beliefs of that class shall be punished with imprisonment of either description for a term which may be extended to two years, or with fine, or with both\".", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-27", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "The definition of a book in the Press and Registration of Books Act, 1867, referred to in Section 99-A of the Code of Criminal Procedure is as follows:\n \" \"Book\" includes every volume, part or division of a volume, and pamphlet, in any language, and every sheet of music, map, chart or plan separately printed or lithographed.\"  \nBefore considering the arguments, two obvious but important facts must be noted: One, that the State Government has in its notification not stated the grounds of its opinion as required by the Statute; two, that the notification does not expressly refer to the two volumes of the book which is declared forfeited. \n\n37. In support of his application under the Code and his writ petition, the applicant has filed an affidavit; therein, he has attempted to show 'Inter alia' that in writing the book he is not guilty of the \"deliberate and malicious intention of outraging the religious feelings of any class of citizens of India\". The Government has now tried to make up for the breach of its statutory duty by summarising in the counter-affidavit filed on its behalf in these proceedings the effect of three or four passages from Volume I of the book to justify its stand that the book is within the mischief of Section 99-A of the Code. \n\nNo endeavour has however been made by the Government even at the time of the hearing of these matters to translate into English which is still the official language of this court -- the whole of the book or at least the offending passages therein in their entirety and to place such a translation before us. Indeed, the court has not been furnished even with three copies of the original, one for each of the Judges constituting the Special Bench.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-28", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "What is more remarkable is that although it is contended for the State that the notification covers both volumes (or parts) of the book no copy of the second volume was available oven to the 3rd Government Pleader, who was not aware until one was produced by the petitioner's advocate that there was more than a single volume of the book. It is needless to add that no reference has been made in the counter-affidavit to the contents of the second volume. \n\n38. As both the writ petition and the application under Section 99-B have been heard together, the arguments raised in both may be dealt with together. \n\n39. The applicant has contended broadly in the first place that Section 99-A infringes the right to freedom of expression, the right to hold and dispose of property and also the right to practise any profession or carry on any occupation or business. He has argued that in clothing the Government with such a power, the legislature is not protected by Clauses 2, 5 or 6 of Article 19 of the Constitution. \n\nHe has next contended that in so far as the order passed by the State Government does not state the grounds of its opinion, it should be struck down 'in limine,' without reference to the merits, as such a statement of the grounds of its opinion is a precondition to the exercise of its power. He has then urged that he is a seeker after religious and philosophical truth, that he has no animus against any religion in particular, that he is opposed to all religions, that therefore he cannot, if the passages referred to in the Government's counter-affidavit are read in the context of the whole book, be charged with any intention to outrage the religious feelings of Christians, still less of a deliberate and malicious intention of that kind.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-29", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "He has drawn our attention to the fact that one of the passages complained of is an extract from the well-known book of Ernst Haeckel \"The Riddle of the Universe.\" find that the other passages are entirely innocuous. He has further argued that even assuming that Section 99-A is not obnoxious to the Constitution and even if it is established that the passages in question are objectionable as being of the nature mentioned in Section 295-A, I. P. C., still the Government's power to forfeit the book is limited to the volume containing the offensive passages and does not extend to so dealing with the second volume. \n\n40. The learned 3rd Government Pleader has, on the other hand, argued that Section 99-A is not open to any Constitutional objection; that the passages clearly evince an intention of the nature mentioned in Section 295-A Indian Penal Code, that the order of the Government is not liable to be quashed merely because it does not contain a statement of the grounds of the opinion of the Government; and that as the power of the Government to forfeit a book extends to all the volumes which make up the book, the word 'book' in the notification in the present case must be held to include both the volumes. He has in addition contended that the burden is on the applicant to establish his innocence of the guilty intention,\n \n\n41. I shall first deal with the last submission of the 3rd Government Pleader first. He submits that it is for the applicant in an application under Section 99-B to convince this Court that the order of forfeiture is unsustainable. In support of his proposition, the learned Pleader relies on a decision of the Allahabad High Court in (S) AIR 1957 All 538.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-30", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "Dealing with a similar application impugning an order of forfeiture under Section 99-A which toe did not contain the grounds of the opinion of the Government, the learned Judges observed as follows:\n \"When an application is made under Section 99-B to have an order of forfeiture set aside on the ground that the matter published does not fall within the mischief of Section 153-A or 295-A of the Indian Penal Code it is for the applicant to convince the Court that for the reasons he gives the order is a wrong order.\" \nThen again, towards the end of their opinion, they said:\n \"The applicant has entirely failed to show that the books did not contain matters which promoted feelings of enmity and haired between different classes, or which did not insult or attempt to insult the religion or religious beliefs of the Sikhs.\" \n With great respect to the learned Judges, I must confess my inability to appreciate their point of view. \n\n42. It falls to be observed in the first place that in order that a newspaper etc., may be attracted by Section 99-A the matter which is published must be punishable under Section 295-A (or the other Sections mentioned) of the Indian Penal Code; that is to say, when a conclusion is reached under Section 99-B by the Court, the Court is finding that a crime has been committed and the person responsible for the publication is liable to the punishment under Section 295-A, Indian Penal Code. \n\nThis would clearly in my opinion point to the necessity of the Government establishing the satisfaction of the Court that the book forfeited contains objectionable matter of the nature mentioned in Section 99-A.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-31", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "43. In the second place, there can be, in my opinion, no real question of onus in a case\" like this where the only material before the Court is the contents of a book and the question that arises for consideration is thus in substance a Question of law. A question of law is to be decided not with reference to any doctrine of onus but on the basis of arguments, the duty to decide in accordance with reason, right and justice being always on the court. \n\nIt is true that Judges do say occasionally that the burden of establishing a proposition of law is on a particular party; but in saying so, it seems to me they are only adopting a rhetorical device to convey the meaning that they are not satisfied that the propounder is right. \n\n44. It is conceivable however that in a particular case the Government may rely upon some facts to justify its order. It may seek to establish the objectionable intention on the part of the author by reference to other similar productions of his and certain other relevant facts (vide: Sections 14 and 15 of the Evidence Act). Questions of fact might then fall to be determined at the instance of the Government and the burden, undoubtedly, will, in such eases, be on the Government. It will of course be otherwise when the applicant himself relies upon certain facts,", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-32", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "45. Looking at the words themselves of Section 99-D, no other conclusion seems possible. Under it, the Special Bench shall \"if it is not satisfied that the issue of the .... ......... book ............... contained .......... matter of such a nature ........... set aside the order of forfeiture.\" \nNow, how can one be \"not satisfied\" that there is such and such a thing? Either when the proof that the thing exists is not satisfactory or when there is satisfactory proof 'that it does not exist. In my opinion, the party who asserts the' affirmative must carry the burden, if burden there is, of establishing it. \n\n46. Further, the view of the learned Judges in (S) AIR 1957 All 538, seems to be opposed to the view of an earlier decision of Special Bench of their own High Court in AIR 1925 All 195. It was observed as follows:\n \"Counsel for the applicant raised the further point that the onus lay upon the Local Government. This is a question of construction, not free from difficulty. We are inclined to think that having regard to the framework of the Section, the onus is cast upon the local Government.\" \n47. Even assuming for the sake of argument that there is any question of burden and that the burden rests upon the applicant, it would be highly technical in my opinion to insist upon his carrying the burden even in a case where the Government is guilty of breach of its statutory obligation to state the grounds of its opinion. When no such grounds are stated, the applicant is entirely in the dark as to how and why it falls within the purview of Section 99-A.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-33", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "It must be remembered that neither the author nor the publisher of a book is entitled to notice under Section 99-A and the Legislature provides that any person having an interest in the book must apply to the High Court to set aside such an order within two months from the date of such an order. The order is to be made under Section 99-A by a notification in the official gazette, the publicity value of which to use the words of the Supreme Court in , is \"by no means great\". \n\nWhen the applicant receives no personal notice and therefore may in a particular case be approaching the Court within a few days of his becoming aware of the orders; when, further, he is handicapped by the fact that no grounds of opinion are stated in the order it would be unfair to insist upon his satisfying the court that the book does not contain matter of such a nature. \n\n48. Even if the practical effect of such a view would be only that he would have to translate the whole of the book and give the Court and the other side an adequate number of copies, I should be inclined to hold that the burden to show that the order made is right apart from its obvious duty to establish the intention -- is on the Government. \n\n49. But perhaps in using the word \"burden\" in this context, what is meant is the right to begin and the right to reply. If that only is meant the Government ought not to complain because they will have the advantage of opening and reply. I may state however that as a matter of fact the applicant himself began the arguments before us. I, therefore, see no substance in this contention urged on behalf of the Government.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-34", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "50. I shall now deal with the objection raised by the applicant that Section 99-A of the Code of Criminal Procedure operates as an impermissible abridgement of some of the fundamental rights conferred On a citizen by Article 19 of the Constitution of India. The Section confers on the Government the power to forfeit copies of an objectionable book, newspaper or a document containing matter the publication of which is punishable under Section 124-A or Section 153-A or Section 295-A of the Indian Penal Code. \n\nNow, in the present case, we are concerned with a book alleged to contain matter the publication of which is punishable under Section 295-A of the Indian Penal Code. In my opinion, it is unnecessary for us to consider the question whether Section 99-A in so far as it empowers the Government to deal with a newspaper etc., contained matter, the publication of which is punishable under Section 124-A or Section 153-A transgresses the constitutional limits. \n\nThe power of the Government to forfeit a publication containing matter falling within the mischief of Section 295-A seems to me clearly severable and its constitutional validity can be upheld even assuming for arguments' sake that the power of the Government to deal with a newspaper etc., containing matter, the publication of which is punishable under Section 124-A or Section 153-A should be held to be 'ultra vires'. \n\n51. Now, we are absolved from the task of pronouncing upon the constitutional validity of Section 295-A, Indian Penal Code, because we have the recent pronouncement of the Supreme Court on that matter in . In that case, it was contended that Section 295-A, Indian Penal Code is 'ultra vires' and void as it interferes with a citizen's right to freedom of speech and expression and is not protected by the reservation made under Clause (2) of Article 19 of the Constitution.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-35", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "The contention was repelled by a unanimous decision of the Constitutional Bench of Supreme Court. It follows from this decision that a person can be punished in spite of Article 19 of the Constitution with imprisonment of either description for a term which may extend to two years or with fine or with both, if he with the deliberate and malicious intention of outraging the religious feelings of any class of citizens of India by words, either spoken or written, insults or attempts to insult the religion or the religious beliefs of that class. \n\nNow, Section 99-A empowers the Government to forfeit any newspaper etc., which contains words or visible representations insulting or attempting to insult the religion or religious beliefs of any class of citizens of India. Does this power with which the local Govt., is clothed, extend beyond the terms of the respective saving clauses in Article 19 of the Constitution? First I shall consider the right of freedom of expression. If it is proper that a person should be punished for publishing words which outrage religious susceptibilities, then it seems to me to be equally proper that the words so published should not be allowed to be circulated. \n\nAny law aimed at destroying such dangerous words must surely in my opinion be deemed to be reasonable. I cannot conceive it as an excessive curtailment of the citizen's freedom of expression, when \"in the interests of the security of the State, friendly relations with foreign States, public order, decency or morality\" \nany matter which outrages the religious feelings of a class of citizens is wiped out of existence. No man's freedom of expression is prejudiced merely because he cannot deliberately and maliciously outrage the religious feelings of a class of his fellow citizens. I therefore think that Section 99-A is saved by Article 19 (2) of the Constitution.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-36", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "52. Now, coining to the argument that it offends the right to acquire, hold and dispose of property, the State has got under Clause (5) of Article 19 the right to make a law \"imposing reasonable restrictions in the interests of the general public or for the protection of the interests of any Scheduled Tribe\". It seems to me that the phrase \"in the interests of the General Public\" contained in Clause (5) of Article 19 should be understood in a broad sense. The Supreme Court pointed out in , already referred to, that the phrase \"in the interests of ........ public order\", used in Clause (2) of Article 19 of the Constitution has much wider connotation than the expression \"for maintenance of public order\". To quote the words in that decision \"the calculated tendency of this aggravated form of insult (i.e. insult to religion when it is perpetrated with deliberate and malicious intention of outraging the feelings of that class is clearly to disrupt the public order\". \nThe words in this clause \"in the interests of the Public\" are even wider in scope than the words \"in the interests ............. of public order\". I apprphend therefore that the power to seize and forfeit any property the user of which tends to disrupt the public order is without a doubt, well within the limits of reasonableness, and the grant of such power to the executive (subject to judicial supervision), can be fairly described as conceived \"in the interests of general public\". It is not unlike the forfeiture to the State of a lethal instrument used by an offender to commit a crime, I therefore see no force in this contention either of the applicant.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-37", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "53. Coming then to the objection based upon the violation of the right guaranteed under Article 19 (1) (g), the saving clause is contained in Clause (6) of the Article which, in so far as it is material, is as follows:\n \"(6) Nothing in Sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or -- any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause.\" \nPreventing a book-seller from publishing a matter which has the effect of disrupting the public order is in my opinion, clearly no more than imposing a reasonable restriction on the exercise of his right to carry on business. I, therefore, hold that Section 99-A does not infringe any of the rights guaranteed by Article 19 of the Constitution. \n\n54. It has also been argued that the mode of notification prescribed in Section 99-A and the limitation imposed in Section 99-B whereby the order can be brought before tin's Court only within a period of two months from the date of such notification render the encroachment upon the guaranteed rights unreasonable and place it outside the saving clauses of Article 19 above-referred to.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-38", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "With respect to the mode of notification, although as I have already observed referring to the Supreme Court's decision in , the publicity value of such a notification is not great, still, it seems to me, that having regard to the nature of the power, it can hardly be expected to be exercised only after due notice of not only to the author or publisher but also to a book-seller or indeed any person who may be in possession of copies of the offending newspaper etc. The power vested in the Government to prevent the mischievous consequences that may flow from the circulation of the paper or the book will be rendered almost nugatory if there should be any such requirement as to notice. In the circumstances, therefore, I am not persuaded that the procedure prescribed militates against the Constitutional validity of Section 99-A. \n\n55. With respect to the limitation as to time, it is true that in certain cases, it may cause hardship. It is possible for instance that an author, publisher or book-seller who has invested heavily in publishing or keeping for sale a number of copies may find to his dismay that the period provided by Section 99-B has already expired by the time that he becomes aware of the order and may thus be disabled from impeaching its validity. \n\nBut I venture to doubt whether the provision in Section 99-B limiting the right to question the order to two months could prevent the exercise of the power vested in the High Court under Article 226, and in the Supreme Court under Article 32 of the Constitution. It seems to me that an unconstitutional order which affects a citizen's fundamental right can always be brought up for question before the High Court or the Supreme Court so long as it is in force and may be used in derogation of such a right.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-39", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "The limitation as to time therefore in my opinion should be construed as affecting the availability of the special mode of relief provided by Section 99-B. In that view, I am not inclined to uphold the contention that that provision by itself operates to render the power vested in the Government under Section 99-A of the Code of Criminal Procedure unconstitutional if the nature of the power itself, is otherwise, as I have held it is, within constitutionally permissible limits. These contentions too, have little force. \n\n56. As to the submission that the order of the State Government is to be set aside merely on the ground that it does not contain the grounds of the opinion of the Government, I am inclined to think that we cannot and in any case ought not to do so. Under Section 99-D of the Code all that we are called upon to do is to decide whether the book in question contains matter of such a nature as is referred to in Sub-section (1) of Section 99-A and to set aside the order only if we are not satisfied that it does. \n\nFurther, I do not read the phrase \"stating the grounds of its opinion\" in Section 99-A as a condition precedent to the validity of the order passed under Section 99-A, particularly when the whole matter can be thrashed out in the High Court before a special Bench of three Judges. The prejudice if any caused by the non-statement is no more than inconvenience and the applicant can be said at the worst to be somewhat handicapped in the conduct of his defence. But such a non-statement does not, in my opinion, go to the validity of the order.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-40", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "57. It may however be argued that our powers under Article 226 of the Constitution are wider than those which are conferred by Section 99-D and they may be resorted to. But it seems to me that even so, it would be taking too technical a view of the matter, to set aside the order of forfeiture solely on the ground that the grounds of the Government's opinion are not stated therein, if, as a matter of fact, we find that the book does contain objectionable matter. \n\n58. This brings me to the question as to whether there is material placed before us which enables us to draw the conclusion that the applicant is guilty of deliberate and malicious intention to outrage the religious feelings of the Christian community. This cannot be a matter merely of presumption arising from the fact that the Government has forfeited the book. \n\nIt should be a matter of proof and the proof should, beyond all question, be offered by the Government. There is little doubt, as I have already pointed out, that if a prosecution were launched under Section 295-A, the burden would be wholly upon, the Government to establish the intention. Of course, the intention in such a case is to be gathered mainly from the words used by the author. But when I speak of the words used, I have in my mind not merely the words used in isolated passages. From the point of view of common sense, as well as sematies alike, all words should be read and interpreted with reference to their context.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-41", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "The context of any passage in a book such as the one we are dealing with here is the whole of the book. Otherwise to give an example, it would not be difficult by a careful selection of passages or illustrations from a text-book of physiology or psychology of sex or a book on family planning to make out a strong case that the author concerned has a pornographic intention. The authority of the Supreme Court is available for this view if authority be needed, in the decision of . Dealing with a case under Section 4 (1) of the Press (Emergency Powers) Act, XXIII of 1931, they held that \"in order to determine whether a particular document falls within the ambit of any of the clauses of Section 4 (1) of the Press Act, the writing has to be considered as a whole and in a fair and free and liberal spirit, not dwelling too much upon isolated passages or upon a strong word here and there, and an endeavour should be made to gather the general effect which the whole composition would have on the mind of the people.\" \n59. The relevant passages in the counter-affidavit filed on behalf of the Government may now be extracted in order to ascertain how they want to make out firstly that the applicant has insulted or attempted to insult by words the religion or the religious beliefs of Christians & secondly that he has done so with the deliberate and malicious intention of outraging their religious feelings. The relevant portions of their counter-affidavit will therefore have to be read:", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-42", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "\"2. The very title of the book Bible Bandaram is disparaging and contemptuous in its tone and insinuation as the word 'Bandaram' in Telugu is used in popular parlance in a disparaging and satirical sense. The claim of the petitioner that the book is a dispassionate and scientific study of the Bible connected with Biblical literature is inconsistent with the abusive and insulting language in which religious personalities and tenets of the Christian (sic) have been characterized in the pages of the book as would be evident from some of the passages to which a detailed reference will be made hereinafter as typical of the insulting tone and content of the subject-matter of the book.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-43", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "The petitioner may call himself a rationalist and humanist. He may claim that he is not a believer in the Hindu Religion and that the very basis of religion is shocking to his conscience. Whatever the scientific or rationalist motives that might have actuated the petitioner in embarking upon a vituperative and abusive commentary on the Bible, I respectfully submit the intention to outrage the Christian religion and its leading lights and its adherents is apparent from a reading of the book and the publication of the book would certainly come within the four corners of Section 295-A of the Indian Penal Code attracting the power of the Government to issue the prohibitory order under Section 99-A of the Criminal Procedure Code..... \n\nWhether the book 'Bible Bandaram' is the outcome of truth seeking rationalism or scientific humanism or dogmatic religionism it is certainly a publication brought out with the deliberate and malicious intention of outraging the religious feelings of the Christian community, as borne out by some of the passages in the book which are to the following effect:\n(a) That the Bible contains vivid descriptions of tribal warfare, sacrifices, drink, blood-shed which shows that this book was produced by the uncivilized who were determined and engaged to destroy the more civilised races,\n \n\n(b) That the old testament is neither the word of God Jahovah nor the New Testament the word of Jesus. This is amply proved by the incongruities, excesses, improbabilities and anachronisms, vulgarities that are manifest in every page of the Bible", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-44", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "(c) That the Old Testament came into existence 5n the 4th & 5th Century B. C. A critical reading of the Old Testament indicates that it is God Jehovah who is a cruel & selfish tyrant while Satan is a most excellent, noble and normal person. The five books of the Old Testament are mere forgeries and cannot be said to have been written by Moses at the word of Jehovah. \nThe prophecies contained in the Old Testament are mere poetic imaginations. The story of Jesus Christ built upon the shaky foundations of the Old Testament is a mere myth. The gospels of Saints Mathew, Mark, Luke, and John in the New Testament are subsequent fabrications. The material discrepancies contained in these gospels regarding the birth, life, teaching, death and resurrection of Jesus amply prove their spurious nature. \n\nA person by name Jesus was reported to have been born out of an adulterous intercourse between his mother Mary and a Greek Soldier in the Roman Army. The conception of the Holy Ghost was a later creation by interested followers to purify the sinful birth of Jesus. The virginity of Mary and her subsequent apothesis were absurd and unwarranted. \n\nThe story, of resurrection is also untrue and improbable ............. Christianity is therefore a false and fabulous religion. Its early propagation is steeped in blood-shed and it is of little credit to the teachings of Christ. The Bible justifies such barbarities. The Christian Moral Code as taught in the Bible is contrary to human nature and natural evolution. The growth of fascism in European countries is entirely due to the previous propagation and belief in the stupid and extraordinary teachings of the Christian religion.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-45", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "3. In view of the above grossly offensive and provocative language used in depicting the Christian Religious beliefs and in painting the birth and character of Jesus Christ in an indecent manner the claim of the petitioner that it is a dispassionate study of religion cannot carry any conviction. \n\nOn the contrary the petitioner's deliberate Intention to outrage the feelings of the Christians would be evident therefrom and various representations have been received from the Christians and Christian associations, that the book has deeply wounded their religious feelings and sentiments.\" \nIt is unnecessary to refer to the other portions of the affidavit which do not directly bear upon the important question now under consideration. Speaking for myself I am not prepared to hold that even if the word 'Bandaram' in Telugu carries a disparaging and satirical sense in popular parlance, it follows that it necessarily establishes malice on the part of the author. \n\nDisparagement and satire do not in my opinion, necessarily import malice. On the other hand I may make it clear that the petitioner's contention that the word 'Bandaram' means only \"treasure\" in the innocuous sense does not commend itself to me. \n\n60. I shall now refer to the passages to which a detailed reference is made in order to see whether they necessarily evince the particular intention.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-46", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "61. The first passage referred to in sub-paragraph (a) of paragraph above-referred to is to be found at page 10 of the book. Freely translated, the passage is as follows :--\n \"Just as in the Hindu Vedas, evil practices like racial hatred, wars, sacrifices, and the taking of intoxicating drink are also freely found in the Bible. It may be that this is the result? of the fact that this book was born in communities which destroy the communities in which the civilisation had progressed.\" \nIn this passage, there is criticism not only of the Bible but also of the Vedas of the Hindus. At the bottom of the previous page, the author stated thus :--\n \"In truth, these books (referring to the sacred books of various religions) serve only to enable us to know the social culture of the times to which they relate and cannot be treated, as the followers of the religion foolishly think, as affording authority for an all time faith, because when any idea embodied in a book becomes effete and that idea sets a limit to man who has to progress by attaining ever-new knowledge, then it is equivalent to his death. The Zend Avesta of the Zoroastrians, the Vedas of the Hindus, the Pitakas of the Buddhists, the Bible of the Christians and the Quoran of Mohammedans etc., are books which point to man death as the alternative way.\"", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-47", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "These passages indicate that the author is attacking the sacred books of all the leading religions of the world. He may be right or wrong but in my opinion, it would be incorrect to attribute to the author a malicious intention towards the adherents of a particular religion although in the book under notice he is dealing with the Sacred Book of one religious community. It would be inappropriate in my opinion to use the word 'malice' with respect to an attitude of mind which makes no distinction between one class of people and another, It would hardly be correct in my judgment to speak of a man having malice towards the whole of humanity or towards followers of all religions. Malice should have a more specific and direct aim. Such a person may be styled a cynic, a misanthrope, but cannot be characterized as malicious.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-48", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "62. It would not be out of place in judging the intention of the applicant to compare his words with those of other authors of books in wide circulation all over the civilised world. \n\n63. In Frederic Harrison's book \"The Creed of a Layman\" we find the following passage. Reviewing a book entitled 'Essays and Reviews' to which several authors contributed and which he describes as a book \"which at once repudiates miracles, inspiration. Mosaic history, and the authenticity of the Bible\". Harrison observes as follows with reference to one of the essays therein written by Dr. Williams who, to use Harrison's words, is \"a well-known tutor at Cambridge, who is now vice-principal of a training college for the priesthood and thus adds to the character of vicar, that of in educator of the clergy :--\n \"............ it subjects the entire scripture to a process which combines that pursued by Niebuhr upon Livy, with that of Wolf upon Homer. In short, the truth of the narrative and the identity of the authors disappear together. It becomes a medley of legend, poetry and oral tradition, compiled, remodelled, and interpolated by a priestly order centuries after the times of its supposed authors. And this applies to the New Testament (though in a much less degree) just as to the Old.\" \nThe essay reviewed by Harrison was written and published in the year 1860 in England where there is no constitutional guarantee of freedom of expression. One can hardly dream of attributing malice to Dr. Williams in subjecting the Bible to such searching criticism or to Harrison for describing the process.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-49", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "64. Then with regard to the aspersions of the applicant against the Jewish race, I may quote a passage from the same book :--\n \"Now, in spite of their monotheism, which they held in common with other Oriental races the Jewish national character bounds in repulsive features ................ We ask whether morbid pride, egotism, ferocity, inhuman hate and frantic fanaticism, superstition and hypocrisy, went for nothing in the national character? .............. Why, all history scarcely shows a race whose character was distorted by such hateful vices ........ It poisons their wild mythology and their sanguinary annals, it stiffens the Mossic ritual into a debasing formalism; their national songs choke with the thirst for vengence, and the warnings of their prophets are voiled in a gloomy horror.\" \nIt would be preposterous to charge the great and distinguished author of these words with a malicious intention to malign the Jewish race or outrage the feelings of Christians. \n\n65. I am therefore inclined to think that the first passage relied on by the Government does not establish malice. \n\n66. As regards the second passage referred to in sub-paragraph (b) of paragraph 2, it seems to me to be wholly innocuous. No reference is made in the affidavit to the particular page or pages in the book from which this passage is extracted. I have not been able to find in the book any single passage to this effect. The hook, however, does any these things although it may not be contained in a single passage. I consider it difficult to hold that this criticism furnishes any evidence of malice.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-50", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "67. As regards what is contained in sub-paragraph (c) of paragraph 2 of the counter-affidavit. I may say that passages similar to what is contained up to the words 'spurious nature' are to be found in most books of Biblical criticism. For example, I may extract the following passages from Ingersoll's Lectures and Essays, Second series, entitled \"Some Mistakes of Moses.\" :--\n \"The real oppressor, enslaver, and corrupter of the people is the Bible. That book is the chain that binds, the dungeon that holds the clergy. That book spreads the pall of superstition over the colleges and schools. That book puts out the eyes of Science, and makes honest investigation a crime. That book unmans the politician, and degrades the people. That book fills the world with bigotry, hypocrisy, and fear. It plays the same part in our country that has been played by \"Sacred Records'\" in all the nations of the world. \n\nThe first five books in our Bible are known as the Pentateuch. For a long time, it was supposed that Moses was the author, and among the ignorant the supposition still prevails. As a matter of fact, it seems to be well settled that Moses had nothing to do with these books, and that they were not written until he had been dust and ashes for hundreds of years.\" \nNo one pretends that Shakespeare was inspired and yet all the writers of the books of the Old Testament put together could not have produced Hamlet. \n\n My own opinion is that General Joshua knew no more about the motions of the earth than he did about mercy and justice.\" \nAbout the meaning of this book, called a revelation, there have been ages of war, and centuries of sword and flame............", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-51", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "It is not infinitely more reasonable to say that this book is the work of man, that it is filled with mingled truth and error, with mistakes and facts, and reflects, too faithfully perhaps, the \"very form and pressure\" of its time? \n\nIf there are mistakes in the Bible, certainly they were made by man. If there is anything contrary to nature, it was written by man, If there is anything immoral, cruel, heart-less, or infamous, it certainly was never written by a being worthy of the adoration of mankind.'' With reference to the applicant's statement about Satan, it may be noted that Bertrand Russell's History of Western Philosophy quotes the following sentence from William James in the Chapter (XXIX) headed \"William James\" :\n \"The prince of darkness may be a gentleman, as we are told he is; but whatever the God of earth and heaven is, he can surely be no gentleman,\" \nNeither William James nor Berlrand Russell could be charged with a malicious intention to outrage the religious feelings of any community.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-52", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "68. The only passage in sub-paragraph (c) of Paragraph 2 to which objection could really he taken is contained in the following sentence : --\n \"A person by name Jesus was reported to have been born out of an adulterous intercourse between his mother Mary and a Greek Soldier in the army.\" \nThe other sentences cited are commonplaces of what is known as nationalistic criticism. As regards this particular sentence, this is really a translation of a passage from the well-known book of the celebrated German Biologist Ernst Haeckcl entitled \"The Riddle of the Universe\". Ernst Haeckel begins by saying in a preceding page that \"the dogma of the immaculate conception ..........means that Mary was exempted at her birth or conception, from the law by which every child of Adam incurs the guilt of original sin, according to the teaching of the Catholic Church.\" \n Then the author proceeds to say : --\n \"With regard to the doctrine of the miraculous conception of Christ by Mary (or the doctrine of \"The Virgin Birth\"), comparative religion has shown that this myth has even less claim to originality than most of the other stories in the Christian mythology; it has been borrowed from order religions, especially Buddhism. Similar myths were widely circulated in India, Persia, Asia Minor, and Greece several centuries before the birth of Christ. Whenever a king's unwedded daughter, or some other maid of high degree, gave birth to a child, the father was always pronounced to be a God, Or a demi-God; in the Christian case, it was the Holy Ghost.\" \nThen follows this passage : --", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-53", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "Then follows this passage : --\n \"To return to the particular question of the impregnation of the Virgin Mary by the Holy Ghost, we are referred to the gospels of testimony to the fact. The only two evangelists who speak of it, Matthew and Luke, relate in harmony that the Jewish maiden, Mary was betrothed to the carpenter Joseph, but became pregnant without his co-operation, and, indeed, \"by the Holy Ghost\" ..........When, therefore, we find in one of them, the gospel of Hicodemus (which is assigned by some scholars to the second century), a statement that Jesus was accused by the Jews of being \"begotten, in sin\" -- a statement that is somewhat enlarged by the second century Platonist writer Celsus (as indicated by Origen, Contra Colsum, I-32) into the charge that \"the mother of Jesus was divorced by the carpenter who had married her, because she was convicted of adultery, and had borne a child to a certain soldier named Pantheras\" -- we naturally connect it with the later Jewish story (in the .........)\".", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-54", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "The passages are to be found in the book in the chapter entitled \"Science and Christianity\". That book was published in the 19th century and has been in circulation, I believe, all over the civilized world ever since and has been reprinted several times by the Rationalist Press Association, the latest edition to which I have access being that in the Thinker's Library and published in February, 1929. I am riot concerned to deny that a book or a newspaper or a document may well fall within the mischief of Section 99-A in spite of the fact that the words used therein are not of the author himself but of somebody else, although the fact that the idea expressed thereby is not the author's brain-child but one adopted from a book in wide circulation may well be a factor to be taken into account in reaching a conclusion as to his intention. But in the present case, I am not satisfied that a malicious intention can be gathered. It will be readily conceded, I apprehend, that such malicious intention could hardly be attributed to so earnest and sober-minded an investigator of scientific truth as Haeckel.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-55", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "69. Now there are lot of people both in America and in England, not to mention other countries in the European continent, who believe that all sacred books were written by man and contain mere myths. I am prepared to admit that conditions in India are different from those in other parts of the civilized world in regard to religious beliefs, and that there are classes of people in this country prone to fanaticism, bigotry and superstition. Cut all the same, we must not forget that we are in a secular State and cannot object to free-thinking. As a people, we must get used as a result of the enjoyment of our fundamental rights to greater tolerance even of intolerance. \n\nThat will of course take time but that is no reason why we should not try to keep up in these matters with other advanced countries. One cannot of course be unmindful of the terrible ordeal through which our country has passed for one or two years both before and after the attainment of independence. In spite of it all, our law and Constitution do allow citizens even to offer insults to religion, if such insults are not made with the deliberate and malicious intention of outraging the religious feelings of that class, on the twin principles that curbs on freedom of expression are a greater evil than any consequences that may follow me exercise of such freedom and that one must not he afraid of error so long as truth is free to combat it.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-56", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "I may mention that there are some books of Anatole France, the well-known French writer, which contain passages contemptuous of Christianity. Who has not read his famous story, entitled \"Procurator of Judaea\"? Swinburne's well-known Hymn to Proserpine breathes anti-Christian spirit, it is true that present day Rationalists of Europe no longer adopt the violent language of abuse to which the Bible was subjected in the 19th Century but that is only because rationalism has become established there for nearly a century. But new converts to rationalism, like new converts to any religion or cult, are apt to be fanatical and the applicant is obviously so. But fanaticism, however reprehensible, is not malice. \n\n70. To sum up I grant that conditions in our country are different. I grant also that the passages relied on by the State may be offensive and shock the susceptibilities of overzealous Christians : But I may point out that they are no worse than excerpts I have cited from authors of three different countries where Christianity is the prevailing religion of part of one of the countries. The fact is also significant that the passages from the English author are nearly a century old while those from the American and German authors are nearly 60 years old. \n\nThey are, too from books, two of which at least must be very widely in circulation because they have been re-issued several times in \"paper-books\" while the other book that by Harrison, has been published by one of the most respectable publishing companies in the world, M/s. Macmillan and Co. That being so, it is difficult to hold that ideas and sentiments which have been freely in vogue for more than half a century and nearly a century in large parts even of the Christian world could be said to outrage Christian feelings.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-57", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "71. Further, in the present case, the first volume of the \"Bible Bandaram\" closely read shows that according to the author there was no person like Jesus Christ. Viewed in that light, it cannot be said that the Christ of Christianity is intended to be disparaged. You cannot he guilty of disparaging a non-existing individual. Furthermore, having read the book through in the original Telugu (a course which I was forced to adopt because of the failure on the part of the Government to recognise their duty to give an English translation of the book) I am satisfied that although the passages may outrage the feelings of some Christians, it cannot be said that the author was inspired by the malicious intention to do so. He may be accused, perhaps, of deficiency in taste or discretion. He may be characterised as a fanatical rationalist. His choice of words may not be considered happy. He is quite clearly contemptuous of what is found in any sacred book. But we live in a country which has guaranteed freedom of expression in its Constitution. \n\n72. We must not overlook the fact that it is not enough to find an intention to outrage but we must go further and find affirmatively a deliberate as well as a malicious intention. These passages may, at the worst, he held to evince a mere intention to outrage hut there is in my judgment nothing in the book to show that the author had a deliberate intention to outrage and that he was actuated by malice : The evidence afforded by the passages considered in the light of the whole of the book cannot, I think, bring home to the applicant any guilty intention.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-58", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "73. Now, it is also to he remembered that by finding the book as manifesting the necessary intention, we are holding the author guilty of a crime. In holding that Section 295-A Indian Penal Code falls under the reservation made under Clause (2) of Article 19 of the Constitution, the Supreme Court has observed in : --\n \"........... Section 295-A does not penalise any and every act of insult to or attempt to insult the religion or the religious beliefs of a class of citizens but it penalises only those acts of insults to or those varieties of attempts to insult the religion or the religions beliefs of a class of citizens, which are perpetrated with the deliberate and malicious intention of outraging the religious feelings of that class. Insults to religion offered unwittingly or carelessly or without any deliberate or malicious intention to outrage the religious feelings of that class do not come within the section. It only punishes the aggravated form of insult to religion when it is perpetrated with the deliberate and malicious intention of outraging the religious feelings of that class. The calculated tendency of this aggravated form of insult is clearly to disrupt the public order .....\"", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-59", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "74. Now, I am prepared to concede that the passages in question may constitute insults or attempts to insult the religion or the religions beliefs of Christians, but it will not be enough for us to hold that they are such. We shall have to hold that they constitute that aggravated form of insult' to religion which is perpetrated with the deliberate and malicious intention of outraging the religious feelings of Christians. However injudicious or regrettable the passages may be and deliberate as they may be found to be, the presence of malice also must be established. That Christians, (accustomed perhaps as the more enlightened among them must be to criticisms of this Kind contained in hooks freely in circulation even in this country) have not been, as a matter of fact, outraged is to my mind shown by the fact that although this book was published in November, 1956, the present action by the Government has been taken only on the 10th of April, 1958, when the present notification was issued. The Government have adduced no evidence, whatsoever even to the effect that Christians as a class have shown that their feelings have been outraged.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-60", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "But it is an aspect of the case that need not be pursued because it does not bear directly on the question of the applicant's intention. I shall content myself with stating that it is the duty of the State to prove the objectionable intention beyond all reasonable doubt as in a criminal case and that it has failed to prove it. \n\n75. I shall now turn to the next question as to whether it is open to the Government to issue an order covering all the volumes of a book issued in several volumes when only one of the volumes contains obnoxious matter. It has been contended before us that the word \"book\" means every volume of a book and Section 99-A enables the Government to do so. Speaking for myself, I can only express my great surprise that such an argument could be advanced. \n\nThe whole object of Section 99-A is to prevent the outrage of religious feelings by deliberate and malicious action. Objectionable words which have so outraged, if they are contained in a particular volume, that particular volume which causes the offence should be destroyed. But I can think of no conceivable reason why when a book consists of 16 volumes and the offending matter is contained in the 14th volume all the 16 volumes should be forfeited. \n\nIt seems to me that there is no justification for the State Government exercising any such power either on the ground of commonsense or on the plain meaning of the words of the section. \"Book\" is defined in the Press and Registration of Books Act, 1867, as including every volume, part or division of a volume, and pamphlet, in any language, and every sheet of music, map, chart or plan separately printed or lithographed. (This definition will perhaps have to be token along with the clause above it that this is the meaning of 'book' unless there is something repugnant in the subject or context).", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-61", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "This is only an inclusive definition and therefore we must read into it in addition the ordinary meaning of a \"Book\". A hook in its plain and ordinary meaning is in my opinion a separately hound volume. Of course the word also has a larger sense. All Shakespeare's dramas can be referred to as one book when they are contained in a single volume. The whole Bible is a hook and so is the New Testament by itself. Every volume of Gibbon's \"Decline and Fall of the Roman Empire\" is a hook and so likewise is the whole of the Encyclopeadia Britannica. Even a single volume is found sometimes divided into 'books'. \n\nThe word 'book' has thus a wide as well as a narrow sense and when the word has to be understood in a particular statute, it should be understood with reference to the context as well as the purpose and object of the Statute. The purpose of the Statute is to destroy the offending matter by forfeiture. It is well settled that when forfeiture is involved, the narrowest possible construction consistent with the object of the statute should be adopted. \n\nThe definition includes even a part or a division of a volume but part or a division of a volume cannot be separately forfeited. So, the power should be read as extending to the forfeiture of the volume containing the offensive matter. That is the sense in which the word 'book' is to be understood in the present context having regard to the object and effect of the Statute. I think the matter is so plain that it requires no authority to support it. However, I may refer to the decision of the Allahabad High Court in AIR 1925 All 195.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-62", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "There the learned Judges of the Special Bench were dealing with six separate text books of Hindi Readers, Nos. 1 to 6, each being a volume by itself. By a notification under Section 99-A, all copies of parts 3, 4, 5 and 6 were declared to be forfeited by the Government. The order of forfeiture was impugned before the learned Judges. In their order, they state that they did not propose to go into the contents of each of the books in any great detail and observe as follows : --\n \".......... but it is necessary that we should consider each of the Readers separately; and that if we find in any one of the series extracts which though extravagant, do not fairly come within Section 124-A, it is our duty to 'exempt that particular Reader.\"", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-63", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "The argument of the learned 3rd Government Pleader to the contrary is to my mind also otherwise unsustainable on the facts of this particular case, because as I have already noticed at the outset of this opinion, the Government does not seem to have been aware of the fact that there is a second volume of \"Bible Bandaram\". The notification does not refer to two volumes or parts. No copy of the second part or volume has been produced before us by the Government; nor any passages from that volume referred to in the counter-affidavit filed on behalf of the Government. It is not our duty, as I conceive it, to make an order of forfeiture but only to examine the correctness of any such order made by the Government It was suggested at one stage of the argument that the learned 3rd Government Pleader would translate portions of the second volume to show that they also contained passages to which objection could be taken. A translation of some of the passages has been handed over to us after the arguments were closed. But I have excused myself from the trouble of going through them because in my view, apart from the merits of the contention and the infirmities in the procedure adopted by the Government at the hearing of these petitions, it is not the task of this court in the discharge of the statutory duties imposed upon it by Section 99-D to go through a volume in which the Government have failed to discover for themselves any obnoxious matters.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-64", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "Having read through the book, I am not inclined to consider that the assertion of the applicant in paragraphs 1 and 2 of his affidavit that he only attempted to probe in a rationalistic spirit into the historicity of the Christ and the origins of the Christian gospels and faith is unacceptable. It seemed to me moreover that it would be an improper procedure to take into consideration against the applicant passages which were neither referred to in the counter-affidavit filed by the Government nor relied on at the hearing and which he had no opportunity of explaining. \n\n76. Before I conclude I ought to mention the argument on behalf of the Government that the applicant has not clearly made the point in his affidavit that there is an innocuous second volume of his book which, if deemed to be covered by the order, should be declared exempt therefrom. I am disposed to consider this objection as one conspiously devoid of substance. In the first place, this is not a matter to be decided on technical points. In the second place, when there are two or more volumes of a book in a notification under Section 99-A, the Government should state in a manner free from, all ambiguity whether their order is intended to cover one or more of the volumes. \n\nIn the present case, as I have already stated, neither the Government nor their counsel seems to have been even aware that there were two volumes and that is clear from the fact that at the hearing of these petitions they have only produced one. The counter-affidavit does not refer to any passages from the second volume -- so much the learned counsel for the State was compelled to concede. And what is not less striking is that in the counter-affidavit filed, the deponent skips over the passage in paragraph 8 of the applicant's affidavit which after referring to the two parts of the book advances the claim that the 2nd part \"should be excluded from the operation of the order.\"", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-65", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "Hence, I overrule this technical objection urged on behalf of the Government. Whether I am right or wrong in my view as the Volume I, I have no hesitation in reaching the conclusion that Volume 2, was not intended to be covered by the notification and cannot be covered by it. In the absence of a separate order of forfeiture in relation to it, we have no jurisdiction to go through the contents of the Second Volume in order to record the satisfaction or want of satisfaction mentioned in Section 99-D. \n\n77. I may add that if the submission for the Government is right -- and of course, I do not accept it -- I should hold that Section 99-A would have the effect of imposing an unreasonable restriction on the right of freedom of expression, not to mention the right to acquire, hold and dispose of property, because it would then empower the Government to deal not only with the offending matter or volume containing it but also altogether innocuous material. \n\n78. The result is that in my opinion, this application should be allowed. If my order should prevail, I should be inclined to award the petitioner Rs. 300/- by way of costs of the application. \n\n79. In my opinion, the writ petition need not be separately considered having regard to the result of the main application. In so far as its object is to attack the constitutionality of Sections 99-A and 99-B of the Criminal Procedure Code, it must fail. I propose to dismiss it. But having regard to what I propose to do in the result of the Criminal Miscellaneous petition, I would make no order as to costs.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-66", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "Srinivasachari, J. \n80. I have had the advantage of perusing the judgments of my Lord the Chief Justice and Bhimasankaram, J., and on a consideration of all the material placed before the court and the circumstances of this case I am inclined to agree with my Lord the Chief Justice that this writ petition should be dismissed and I would like to add a few words of my own.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-67", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "81. The title of the book now under consideration is \"Bible Bandaram\". It is urged that Bandaram in ordinary parlance means 'treasure'. The heading would connote that the book deals with the treasure of the Bible. But it cannot be gainsaid that if the words in a book, leave alone the title, though prima facie innocent are reasonably susceptible of a defamatory meaning, then it is a question to be determined as to what meaning the readers would attach to the words. It will be of no avail if the publisher urges that he meant the words in the innocent sense. No doubt courts would not strain to find an innocent meaning for words prima facie defamatory, neither will they put a forced construction which may fairly be deemed harmless. The court will find out the meaning of the words even though disguised in a riddle or in hieroglyphics. The sting of a libel may he contained in a word or sentence. If the book is a fair and honest criticism of the tenets contained in the Bible, then there could be no harm. But if it transgresses the bounds of fair and honest criticism and enters the realm of obscene abuse, the courts would step in to put an end to this criticism. Certain sentences occurring in the book now under consideration have been extracted in the judgment of the learned Chief Justice such as that \"Jesus was the result of adulterous intercourse\". It may be that the author of the book might justify it by reference to books which speak about this. But it is not the justification that matters as what consequences it would have been upon the religious susceptibilities of the Christian Community, who hold the Bible to be sacred.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-68", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "82. The Supreme Court in the case of Veerabhadra Chettiar v. Ramaswami Naicker, observes that \"Section 295 of the Penal Code has been intended to respect the religious susceptibilities of persons of different religions, persuasions or creeds. Courts have got to be very circumspect in such matters and to pay due regard to the feelings and religious emotions of different persons with different beliefs irrespective of the consideration..... Whether they are rational or otherwise in the opinion of the Court.\" \nIt follows from these observations that we cannot in a light-hearted way brush aside the religious susceptibilities of a class of persons. Section 295-A of the Indian Penal Code was introduced after an abortive prosecution of a person who had published a pamphlet called \"Rangeela Rasool\" meaning 'amorous Prophet' in which he described the incontinence of the Prophet Mohommed. When he was charged under Section 153-A Indian Penal Code the Lahore High Court held that the man could not be convicted as the attack was only on the founder of the religion and did not amount to creating class hostilities or hatred between classes within the meaning of Section 153-A. If the inevitable consequence of such writing is the excitement of feelings of hatred between the followers of two religions, then it must be put an end to. The matter must be judged primarily by the language of the book itself though it is permissible to receive and consider external evidence either to prove or to rebut the meaning ascribed to it in the order of forfeiture: Kali Charan Sharma v. Emperor, AIR 1927 All 649. \n\n83. No doubt where there is religious freedom, a certain latitude must of necessity be conceded in respect of a free expression of opinion together with a certain measure of liberty to criticise the beliefs of others but it is contrary to all reason, to imagine that liberty to criticise includes the licence to resort to vile and abusive language.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "4a01d93aa7c1-69", "Titles": "N. Veerabrahmam vs State Of Andhra Pradesh ... on 12 March, 1959", "text": "84. The right to freedom of religion Is guaranteed under Article 25 and Article 26 of the Constitution, In a case before the Supreme Court where a person was charged under Sections 153-A and 295-A and convicted for having published an article in a paper or a cartoon about a donkey on which the agitation was started by the Muslims of Uttar Pradesh, it was contended before the Supreme Court that Section 295-A was ultra vires in that it interfered with the petitioner's right to freedom of expression guaranteed to him under Article 19(1)(a) of the Constitution and it was urged that the restriction imposed thereon was not a reasonable restriction. While dealing with this question, their Lordships stated that where the restriction was in the interests of the security of the State and where the restriction is made in the interests of public order, such a restriction was a reasonable restriction and, therefore, it is no longer open to contend that Section 295-A of the Penal Code is violative of the fundamental rights guaranteed to the citizen under Article 19(1)(a) of the Constitution--Vide . \n85. For all the above reasons I am in agreement with my Lord the Chief Justice that this writ petition should be dismissed with costs.", "source": "https://indiankanoon.org/doc/1334741/"}
+{"id": "22a1c2c774db-0", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "JUDGMENT Ramaswamy, J. \n 1. These four writ petitions consisting of individual and juristic persons (Partnership Firms) and a lone lessee-licensees of cinema buildings (hereinafter called 'theatres') situation in West Godavari, Khammam, Nizambad and Mahboobnagar Districts are the petitioners. They invoked the constitutional remedy under Article 226 impugning \"the vires of R. 12 (3)\" of the Andhra Pradesh Cinema (Regulation) Rules, (1970), hereinafter called \"the impugned Rule\", mounting three pronged attack viz., infringement of their fundamental right to carry on trade or business in exhibiting cinematographs, on the anvil of (1) smack of statutory base, (2) excessive delegation and (3) unreasonable constraint in the exercise and enjoyment of their aforesaid right. Whether the base thus created on their four pillars (writ petitions) stand erected on solid foundation or shifting sand, is the subject of broach hereinafter. The reliefs claimed thereon are : (a) for declaration that the conferment of the rule-making power under Section 11 of the Andhra Pradesh Cinema (Regulation) Act (4 of 1955), hereinafter referred to as \"the Act\" as ultra vires the Constitution; (b) to declare R. 12 (3) and the conditions if any imposed in Form 'B' Licence pursuant to the said rule fixing the prices of cinema tickets as illegal, void and ultra vires the Constitution and the rule-making power; (c) and to issue a direction to the respondents to permit the petitioner to revise the rates of admission to their theatres.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-1", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "2. The allegations made in support thereof are that the petitioners are either proprietors or lessee-licensees of the theatres at their respective places of business. They constructed the theatres at a huge cost. They provided all amenities as per law. Pursuant to the licences granted under the provisions of the Act and the Rules in the prescribed 'B' Form to exhibit cinematographs, they are doing their business. As owners thereof and as incident to their business avocation, they have got a right to fix the rates of admission to permit the persons to enter into different classes to witness the cinematographs. But the respondents have impeded their free right to fix the rates of admission at their choice. The Act was legislated with the sole object to regulate only to ensure safety to the cine-going public in their theatres as enjoined under Section 6 and health and sanitation, as incidental to regulation. Sections 3 and 5 of the Act are intended to operate only in that field. Section 11 delegates power to the State Government to make rules regulating to work out successfully in implementation of the aforesaid purpose. Rules were initially made to meet those purposes. But the price control of cinema tickets is not within the purview of the Act and the Rules. Therefore, the fixation of maximum rates of admission to different classes cannot be said to carry out any of the purposes of hteAct. There is no specific provisions under the Act empowering the State Government or the Licensing Authority to fix the rates of admission. So, the rule-making power under Section 11 cannot travel beyond the above 'purposes'. They are incurring huge expenditure to provide the facilities and amenities prescribed, apart from the payment of minimum wages to workmen while meeting the mounting cost of exhibiting films. But in view of the unlawful interference by the licensing authority, viz., the second respondent in these writ petitions in fixing the rates of admission, the petitioners are put to great financial loss. The", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-2", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "writ petitions in fixing the rates of admission, the petitioners are put to great financial loss. The petitioners made repeated representations bringing to the notice of the licensing authorities of the loss thus being incurred and requrested to revise the rates of admission. Without any justification, they have been delaying revision of the rates of admission, thereby they are made to incur huge financial loss. Gradually the business be closed and be driven out from trade or business.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-3", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "3. The power to fix rates of admission is a legislative act. Incases where the Parliament intended to operate detrimental to the fundamental right of a citizen in respect of fixing the rates of prices, vis--vis the right to trade or to carry on business, specific enactments like the Essential Commodities Act, 1955, Industrial (Development and Regulation) Act 1951 and the Defence of India Act and various Control Orders issued in pursuance of the delegation thereunder, have been brought on statute book inhibiting the free right of a citizen to fix the prices of essential commodities. If the Legislature intended to invade into this right of fixation of rates of admission, being a legislative act, the Legislature would have specifically provided for such a power under the Act itself. But the Act does not envisage any such power. A reading of the preamble, all the provisions of the Act and Rules, does not indicate any such power being given to the Legislature. The Legislature intended its delegate to make rules only to operate in the field adumbrated and adverted to earlier. Therefore, exercise of power by the delegated authority, viz., the State Government in making Rule 12 (3) lacks legislative competency and therefore unconsitutional. Even admitting that there inheres such power. It is not incidental to the main purpose and is of excessive delegation. There are no guidelines provided under the Act or the Rules made thereunder. Therefore it is arbitrary leading to capricious exercise of power. Even otherwise, it is an unreasonable restriciton on the exercise of their fundamental right enshrined under Article 19 (1) (g). It is also arbitrary, offending Article 14 of the Constitution. The petitioners in all the four writ petitions have reiterated these contentions. Untrammelled by question of fact, questions of law arise for decision in all these writ petitions, we have therefore extracted the averments made in W. P. No. 480 of", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-4", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "petitions, we have therefore extracted the averments made in W. P. No. 480 of 1980 being first to approach.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-5", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "4. The Government have filed their counter-affidavits in all these writ petitions. We are constrained at the outset, to express out dissatisfaction of lack of interest and apathy on the part of the Government to meet any of the legal contentions in any of the counter-affidavits filed, except stating few skeletal factual position. It is deplorable, that when, the vires of R. 12 (3) which has got a great public importance is specifically assailed the Government adopted usual apathy and did not bestow any thought, care or attention to deal with these points, providing necessary material to the Court. But these questions being questions of law bearing constitutional importance, we are not inclined to short circuit the issues on mere technicality but propose to deal them in extenso.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-6", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "5. In the counter-affidavit filed in W. P. 480/80 it is stated that the licensing authority viz., 2nd respondent fixed the maximum rates of admission to different class4es in the theatres in the District in the year 1979. Within a short period thereafter the petitioners attempted to get them revised on the pretext of increast of expenditure. The Licensing Authority has to take into account the additional amenities provided in the interregnum and the purchasing capacity of the cine-going public. These factors required through examination. The Licensing Authority is anxious to consider the request. But without awaiting the decision, they rushed to this Court on vague feat. The Government made the impugned Rule. The Government also provided guidelines in G. O. Ms. No. 2041 Home Department dated 25-6-1953 and G. O. Ms. No. 744 Home Department dated 3-4-1965, hereinafter called \"the Guidelines\" for fixing the rates of admission. On receipt of interim directions from this Court, the authorities considered the request in the light of the guidelines, examined various aspects and enhanced the rates of admission taking into account the authorities provided in the theatres. \n 6. In the counter-affidavit filed in W. P. no. 1279/80 it was averred that the petitioner No. 2 did not apply for enhancement of rates of admission. Petitioners 1, 3 and 4 made their applications. It was referred to the concerned officer for inspection and reports. They submitted the reports pointing out lack of some of the basic amenities and of their giving direction for rectification thereof. Without rectifying those defects and to evade providing the wanting amenities and sanitary conditions in the theatres, they approached this Court suppressing those facts and obtained directions.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-7", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "7. In pursuance of the interim directions issued by this Court, the Licensing Authority made personal inspection of all the theatres. He found deplorable insanitary conditions and lack of basic amenities prevalent in the theatres. Yet he objectively considered and received the rates of admission depending upon the existing amenities etc. in the respective theatres. With regard to petitioner No. 1, he gave in paragraph No. 4 the particulars thereof and the reasons for increase or otherwise and for others in the subsequent paragraphs. He stated the existing, proposed and revised rates. They read thus :- \n Peititoner No. 1 :   \n ___________________________________________________________________________________", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-8", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Sl. No.  Class.         Existing rates Rates proposed by Rates enhanced now\n\n     the management.\n\n___________________________________________________________________________________\n\n1.  Balcony   Rs. 2-60   Rs.  2-80   Rs.  2-80\n\n2. I Class        2-00         2-65         2-20\n\n3. II Class        1-20         1-50         1-40\n\n4.     III Class        0-60         0-75         0-70\n\n___________________________________________________________________________________ \n\n \n\n Petitioner No. 3 : \n\n   ___________________________________________________________________________________\n\n1. Balcony    Rs. 2-25    Rs. 3-25    Rs. 2-70\n\n2.  II Class        1-50        2-50        2-20\n\n3. III Class        1-00        1-75        1-50\n\n4.       IV Class        0-60        1-00        0-70\n\n___________________________________________________________________________________ \n\n \n\n Petitioner No. 4 : \n\n   ___________________________________________________________________________________\n\n1. Balcony    Rs. 1-95   Rs.  2-50   Rs.  2-30\n\n2.   I Class        1-45        2-00        1-75\n\n3.  II Class        0-95        1-40        1-20\n\n4.       IV Class        0-45        0-70        0-60\n\n___________________________________________________________________________________ \n\n \n\n Petitioner No. 2 : \n  \n ___________________________________________________________________________________\n\n1. Balcony    Rs. 1-75   Rs.  2-30   Rs.  2-30", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-9", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "2.   I Class        1-15        2-00        2-00\n\n3.  II Class        0-75        1-25        1-25\n\n4.       III Class        0-60        0-80        0-70\n\n___________________________________________________________________________________", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-10", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "___________________________________________________________________________________  \n\n \n\n 8. In the counter-affidavit in W. P. No. 1279/80 it is pleaded that the rates were revised at request on 4-7-1978. No request thereafter was made except on 14-3-1980. Thereon it was referred to the Revenue Divisional Officer for report which is awaited. In the meantime he obtained interim directions on 27-3-80 from this Court. On receipt thereof on17-4-1980, he was called upon to produce evidence. It was received on 14-4-1980. By petition dated 16-4-80 he requested time for eight days which was acceded to. Yet he did not produce any evidence. The R. D. O. submitted his report stating that the petitioner did not provide any additional amenities. The record was considered and the request was rejected by memo dated 23-4-80. In W. P. No. 6335/80 it is stated in the counter-affidavit that a petition dated 4-2-1980 was filed requesting revision. On 26-4-1980 it was referred to the R. D. O. for inspection and report. It was submitted on 19-1-81. In the meanwhile the petitioner reduced the seating capacity. As per the rules, the concerned Commercial Tax Officer has to be consulted. On having consultation, the rates were revised by memo dated 22-3-1981 to the following effect : \n (For revised rates see the table below) ___________________________________________________________________________________ Existing classwise Classwise seating capacity and Now Seating capacity Seating capacity and rates of admission proposed and rates of admission Rates of admission. .by the proprietor. .allowed.\n___________________________________________________________________________________\n\n1. Ist Class 129 seats 1. Spl. Class 18 seats 1. Spl. Class 18 seats", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-11", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "(Chairs) Rs. 1-00 (Box. Newly Rs. 3/-     Rs. 2.20\n\n  opened Class)      (Box)\n\n2. 2nd Class  160 seats 2. Ist Class  140 seats 2. 1st Class  140 seats\n\n  Rs. 0-70    (chairs) Rs. 2-25    (chairs) Rs. 1-70\n\n3. 3rd Class  500 seats 3. 2nd Class  180 seats 3. 2nd Class  180 seats\n\n    (benches) Rs. 0-50    (Chairs) Rs. 1-50    (Chairs) Rs. 1-20\n\n    4. 3rd Class  430 seats 4. 3rd Class  430 seats\n\n        (Benches) Rs. 0-80    (Benches)\n\n             Ladies 200\n\n              Gents. 230  0-70\n\n___________________________________________________________________________________", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-12", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "9. Sri M. R. K. Choudary, learned counsel appearing for the petitioners in all these writ petitions, while reiterating the contentions in the pleadings, referred to us the preamble and purposes envisaged in Ss. 3, 5 and 6. From that he reiterated that the fixation of maximum rates of admission is not one of the purposes connected with the Act and pressed the contentions in the pleadings as part of his argument. He contends that the word \"Regulation\" though is of wide meaning only intended to operate in the matter of construction or reconstruction. The faixation of maximum rates of admission is not one of the purposes nor an incidental power. Had the Legislature intended, to give such power to its delegates, the Act would have made specific provision in that regard. The absence is eloquent. A reading of the provisions and the rules made thereunder does not lend any such indication. Therefore the delegatee cannot make the rule beyond what is provided for except to the extent of cognate or analogous matters incidental to the main purpose. He draws an analogy from the rules made for admission of students into medical courses and the University Acts and the Statutes made thereunder for the actual running of the University subsequent to the admission. He states that rules of admission are only made to select candidates. Once candidates are selected and were admitted into courses, the rules ceased to have any application and thereafter the students are bound by the University Act and the Statutes made thereunder. On that premise he urges that once the rules were made for construction of the theatres, and the theatres are constructed as per the rules, the power gets exhausted. There is no further power to inhibit the fixation of right of admission by the licensees of the theatres unless there is a separate provision in the Act to that effect. In support of his contention that fixation of rates of admission is not one of the purposes of the legislative act, he places", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-13", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "contention that fixation of rates of admission is not one of the purposes of the legislative act, he places strong reliance on the decisions reported in a Division Bench decision of the Delhi High Court in Durga Chand v. Union of India, , a single Judge's decision of the Punjab and Haryana High Court in Deepak Theatres, Dhuri v. State, and also a judgment of the Madras High Court in Royal Arts v. State, . He further contended that in construcing the provisions of the Act for the purpose of ascertaining its intention the law laid down in Pathumma v. State of Kerala, , has to be kept in view. In this context he pressed for considerations the motive behind the the impugned Rule. According to him, this was made as a step-in-aid to the Andhra Pradesh Entertainments Act to levy higher rate of tax. He also contends that unless there is specific power given under the Act, no rules can be made in exercise of its delegated legislation. It is not a plenary power. If made, it would be without authority of law. For this contention, he relies upon the decision reported in Hukum Chand v. Union of India, .", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-14", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "10. He further contends that even assuming that there is any such power to make rules, it is an excessive delegation of rule-making power. He contends that rules cannot override Statutes and Government cannot make rules fixing rates of admission under the guise of the rule-making power to trenching upon the legislative field. He relies upon Venkateswara Rao v. Govt. of Andhra Pradesh, ; Sant Saran Lal v. Parsuram, ; A. M. Sinha v. A. K. Biswas, ; and Gwalior Rayon Mills v. Asstt. Commr. of Sales Tax, .", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-15", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "11. He further contends that even if there is any such power, the Legislature did not give any guidelines. It left to the arbitrary exercise of power by the executive. Therefore it is uncanalised and unguided power leading to exercise of unbriddled and arbitrary power. The guidelines provided in the G. Os. referred to earlier are not statutory; they are only administrative in character; they cannot supplement the statutory rules and they cannot be relied upon. Therefore, unless statutory rules are made as part of the impugned rule, the conferment of the power in the impugned rule is unwarranted or excessive. It is the usual legislative practice that after the rules are made, they should be laid before the Legislature immediately after its sitting and the Legislature has got the power to annul. Under this enactment, there is no such provision provided. Therefore that should be taken as one of the indicia to find that the Legislature did not intend to give such wide power of fixation of rates of admission, a legislative act, to the rule-makign authority. Lastly it is contended that even assuming that the Act provides for making such a rule and the rules are not made in excess of hthedelegated legislation and are valid; even then, the rule infringes their fundamental right to carry on the trade and their incidental right to fix rates of admission is ultra vires and unreasonably invaded their right; therefore it is violative of their fundamental right guaranteed under Art. 19 (1) (g) of the Constitution. He relied on the decision reported in R. M. Seshadri v. District Magistrate, Tanjore, .", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-16", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "12. We may mention at the outset that though in the course of argument the learned counsel stated certain figures of percentage said to be increased in the cost of exhibiting cinematographs, we are refraining to refer them in detail for what of any material placed before us to consider their correctness. Though the contention of arbitrariness in procedure violating Article 14 of the Constitution was raised in the pleadings, it is not pursued at the Bar. Therefore we are relieved to consider the same. \n 13. Sri A. Venkatarama Reddy, learned Government Pleader appearing for the respondents, strenuously repelled all the above contentions. He argues in the first instance, that the Act itself is a regulatory measure. The provisions of Ss. 3 and 5 of the Act read in the light of its preamble clearly contemplates that the Legislature intended to regulate all the steps in the business inclusive of the right to fix the rates of admission. It is an integral part of the provisions of the Act. The Legislature enacted the law to delegate the power to make rules. The regulation of exhibition, therefore, includes the power to fix the maximum rates of admission to different classes for entry into the theatres by the cine-going public. This power is incidental to the power of regulation of exhibiting cinematographs to prevent the arbitrary exercise of power by the owners of the theatres or lessees thereof, so as to avoid unhealthy competition in exhibiting cinematographs. Thus, it is incidental to the main purposes of the Act. In support of his contention, he relies upon S. Subba Rao v. P. Veeraraghaviah, AIR 1977 Andh Pra 63 and Jayanthilal v. Union of India, . Therefore, the exercise of the power by the delegated legislation in making the impugned rule is thus backed by the legislative sanction and is within the competency of the State Government.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-17", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "14. He further contends that the Government have wide power to issue instructions regulating the manner of exercise of power by Licensing Authority. He relies upon the decisions reported in State of Punjab v. Harikishan, and Vishnu Talkies v. State of Bihar, . In exercise of that power, the Government have issued G. Os. referred to earlier in the counter-affidavit. The delegation of the power is not excessive. The Legislature has given discretion to the Licensing Authority to fix the rates of admission. He relies upon R. K Porwal v. State of Maharashtra, . He further contends that the Licensing Authority in each case has properly taken all the material available before them and revised the rates of admission in pursuance of the interim directions given by this Court and negatived in one case. There is no illegality committed by the Licensing Authority in revising the rates of admission. No material has been placed before the Court to substantiate as a fact the alleged arbitrary exercise of power in any of these writ petitions. Therefore the writ petitions are entailed to be dismissed. \n 15. In view of the above respective contentions, the questions that emerged for decision are: \n (1) Whether the Act gives power to make the impugned Rule? \n (2) Whether the fixation of the rates of admission are illegal? \n (3) Whether the fixation of the rates of admission are illegal? \n 16. Before adverting to the above questions, it would be profitable to refer to the legislative history of the Act and the Rules.  \n Legislative history:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-18", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Legislative history: \n 17. For the first time in 1918, the Central Legislature stepped in to regulate proper control of cinematograph exhibitions with particular reference to the safety of the persons to witness them and to prevent exhibition to the public of improper or objectionable films. In implementation therefo, the Cinematographs Act (2 of 1918) was brought on Statute Book to obtain licence subject to the conditions prescribed thereunder and certification of films suitable for public exhibition. The Act reigned the field nearly for 34 years with amendments made from time to time. With the ushering of the Constitution and with the avowed pledge in the fundamental principles of State Policy to promote welfare of the people, economic, social and cultural, to secure social order vis--vis the fundamental rights designed to entrust the task to its sovereign Legislature to make laws in that regard. As a step-in-aid, it enumerated the legislative power in Arts. 245 and 246 of the Constitution and earmarked to the Parliament and State Legislatures of the respective entries thereto enumerated in VIIth Schedule to the Constitution, namely, the Union List, State List and the Concurrent List. Thereunder Entry 60 of the Union List empowers the Parliament \"for sanctioning of cinematographs for exhibition\" and Entry 33 of the State List empowers the Legislature of the State to enact laws relating to \"cinemas\" subject to the provisions of Entry 60 of the Union List. As a consequence thereof, Act 2 of 1918 became a fixed blend necessitating to bring about an amendment. It was resolved to re-enact the provisions of Act II of 1918, separating the provisions relating to the sanctioning of films for exhibition relegating the licensing regulation of Cinemas (State subject) to the State Legislature. Thus, the Cinematographs Act (37 of 1952) was retained by the Parliament with suitable amendments.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-19", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "18. Similarly, the State Legislatures set in motion to enact laws under Entry 33 of the State List. Several States made Laws similar to the Act. On the conferment of the power on the President of India bys. 3 of the Andhra Pradesh Legislature (Delegation of Powers) Act, 1954 (Central Act 45 of 1954), the Parliament enactaed the Andhra Cinemas (Regulation) Act (4 of 1955). It was brought into force with effect from 19th March, 1955. It was re-enacted by the Andhra Pradesh (Andhra Area). Re-enacting Act, 1956 (Act VI of 1956). By Section 3 of the Schedule of Andhra Pradesh Extension of Laws (Andhra Pradesh Act 23 of 1958), the Andhra Cinemas (Regulation) Act, 1954 was extended to the Telangana area. The Short Title was substituted in the Act by amendment of Andhra Pradesh Laws (Amendment of Short Titles) Act, 1961 (Act IX of 1961). Thus, the Andhra Pradesh Cinemas (Regulation) Act (4 of 1955) has come into force in Andhra Area with effect from 27th March, 1955 and in Telangana Area from April 1, 1960. As on the date of filing of writ petitions, the Act is in force in the entire State of Andhra Pradesh regulating the exhibition of cinematographs. \n Meaning of the word \"Regulation\" & Title a Key :", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-20", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Meaning of the word \"Regulation\" & Title a Key : \n 19. In view of the specific contentions raised by the parties, it is profitable to refer to the relevant provisions of the Act in detail. The prominent feature that strikes glaringly to the naked eye is the title of the Act, \"The Andhra Pradesh Cinema (Regulation) Act, followed by its preamble. It is true\", quoted Chief Justice Lefroy, by Craies on Statute Law, Seventh Edition at page 192 that \"although the title of an Act cannot be made use of to control or express provisions of the Act, ye tif there be in these provisions anything admitting of a doubt, the title of the Act is a matter proper to be considered, inorder to assist in the interpretation of Act, and thereby to give to the doubtful language in the body of the Act a meaning consistent rather than at variance with the clear title of the Act (Shaw v. Ruddin, (1858) 9 Lr CLR 214, 219). The heart of the title is the word \"Regulation\". The prominence thus ascribed is to the word was \"Regulation\". But it lacks legislative definition of its own. Therefore, it is profitable to find what meaning has been ascribed to it either under the dictionaries or analogous statutes or Judge made law to understand its scope and reach and whether it would comprehend within its ambit the power to make rules to regulate maximum rates of admission. The term \"Regulate\" is defined in Oxford Dictionary, as follows: \n \"to control, to govern, to protect by rules or regulations, to subject to guidance or restrictions, to adopt to circumstances or surroundings.\" \n IN Corpus Juris Secundum, Volume 76, p. 610, the meaning of the word \"regulate\" is stated thus:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-21", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"The word 'regulate' is derived from the lating word 'rego and regula'. It is a word of broad import having a broad meaning and is very comprehensive in scope.\" \n 20. IN Municipal Corporation of the City of Toronto v. Virgo, (1896) AC 88 at 93 (House of Lords (Privy Council - Ed.), Lord Davey, while considering the word \"Regulation\" has held that: \n \"There is a marked distinction to be drawn between the prohibition or prevention of trade and the regulation or governance of it and indeed ............ a power to regulate and to govern seems to imply the continued existence of that which is to be regualted or governed.\"  \n 21. Sri C. Herman Prechette in \"The American Constitution\" III Edition, at page 186, gives the meaning of the word \"Regulation\" as the breadth of regulatory power which the Congress may exercise within its recognised scope of authority has seldom successfully questioned. Efforts to read restrictive interpretations into the word \"regulate\" have almost uniformly failed. Regulations, the Court has said, means not only \"protection and promotion\" but also \"restriction and even prohibition\". \n 2. In Cook v. Marshall Country, (1904) 196 US 261 at 272 Mr. Justice Brown of the Supreme Court of Congress to regulate inter-State Commerce, observed that : \n \".......... But so long as they are adopted in good faith, with an eye single to the public welfare, they are as much entitled to the recognition of the general Government as if they were uniformly adopted by all the States.\" \n 23. In this context, it is appropriate to refer to a decision of their Lordships of the Supreme Court in Indu Bhushan v. Rama Sundari, , where the scope of the word 'regulation' was considered, it was held :", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-22", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "'The Dictionary meaning of the word 'regulation' in Shorter Oxford Dictionary is \"the act of regulating\" and the word \"regulate\" is given the meaning \"to control, govern, or direct by rule or regulation\". This entry thus, gives the power to Parliament to pass legislation for the purpose of directing or controlling all house accommodation in cantonment areas. Clearly, this power to direct or control will include within it all aspects as to who is to make the constructions under that conditions the constructions can be altered, who is to occupy the accommodation and for how long, on what terms is to be occupied, when and under what circumstances the occupant is to cease to occupy it, and the manner in which the accommodation is to be utilised. All these are ingredients of regulation of house accommodation and we see no reason to hold that this word \"regulation\" has not been used in this wide sense in this entirety.\" \n 24. It would, therefore, be reasonable to deduce that the word \"regulation\" is a word of broad import having wide meaning comprehending all facets not only specifically enumerated in the Act but also embrace within its fold the powers incidental to the regulation envisaged in good faith with an eye single to the public welfare. Court has to recognise this power of the Government in public interest. \n Relevant provisions in the Act and Rules and their salient features: \n 25. When such is the sweep of the word \"Regulation\" engrafted in the title of the Act, what is the ambit it embraced in the Act is to be considered.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-23", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "26. The Preamble of the Act is a key to open the mind of its makers adumbrating that it is intended to regulate the exhibitions by means of cinematographs in the State of Andhra Pradesh. Section 2 (1) defines \"cinematograph\" includes any apparatus for presentation of moving pictures or series of pictures. sub-section (2) of S. 2 defines \"Government\" means the State Government. Sub-section (3) defines \"Notification\" means notification published in the Andhra Pradesh Gazette. Sub-section (4) defines \"Place\" includes a house, building, tent and any description of transport whether by water, land or air. Under sub-section (5), 'Prescribed' means prescribed by rules and under the Act. \n 27. Section 3 is important for consideration which reads thus: \n \"cinematograph exhibitions to be licensed; save as otherwise provided in this Act, on person shall give an exhibition by means of a cinematograph elsewhere than in a place licensed under this Act, or \"otherwise than in compliance with any conditions and restrictions imposed by such license.\" \n 28. Section 3 posits that a person acquires no right to exhibit cinematograph except as otherwise provided in this Act. It was couched in the negative language. In the positive form a person shall exhibit cinematographs only in the licensed 'place' on his complying with any conditions and restrictions imposed by such licence. It thus highlights the regulatory control by licensing system and its control thereof bythe Licensing Authority. \n 29. Section 4 defines \"Licensing Authority\" as to mean the District Controller having power to grant licences under this Act. The proviso thereto enables the Government by notification to constitute for the whole or anypart of the State \"such other authority\" as it may specify in the notification to be the Licensing Authority for the purposes of the Act.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-24", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "30. Section 5 imposes restrictions on powers of Licensing Authority to grant licence. It reads thus: \n \"(1) The Licensing Authority \"shall not grant a licence\" under this Act, \"unless it is satisfied that\"- \n (a) \"the rules made under this Act\" have been substantially complied with, and", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-25", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "(b) adequate precautions have been taken in the place, in respect of which the licence is to be given, to provide for the safety of the persons attending exhibition herein.  \n (2) \"Subject to\" the foregoing provisions of this Section and \"to the control of\" the Government, the Licensing Authority may grant licences under this Act, to such persons as that authority \"thinks fit and on such terms and conditions and subject to such restrictions as it may determine; \n (3) The Government may, from time to time, issue directions to licensees generally or to any licensee in particular for the purpose of regulating the exhibition of any film or class of films, so that scientific films, films intended for educational purposes, films dealing with news and current events, documentary films or indigenous films secure an adequate opportunity of being exhibited, and where any such directions have been issued, those directions shall be deemed to be additional conditions and restrictions subject to which the licence has been granted.\"  \n 31. In respect of the matters specified in clauses (a), (b) and (c) of S. 6 (1) of the Act set out in sub-section (1) of S. 6 are excluded in their application with reference to construction or reconstruction or use of or the installation of any machinery in anyplace or building to be used \"exclusively\" for the holding of cinematograph exhibitions. The applications for permission thereof shall be made to the Licensing authority under the Act in accordance with the rules made in that behalf. Sub-sec. (2) gives power to the Licensing Authority, subject to the control of the Government and any rules made in that behalf, after making consultations with the authorities mentioned therein and for the reasons to be recorded, either to grant or refuse to grant licence or the permissions applied for.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-26", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "32. Section 7, provides right of appeal to the aggrieved persons against the decisionof the Licensing Authority under S. 6. \n 33. Section 7 empowers the Government of the District Collector to suspend exhibition of films in certain cases while Section 9 prescribes penalties. Section 10 gives power to revoke or suspend the licence against which the right of appeal to the State Government and the power of the State Government to suspend the impugned order have been provided for. Though these provisions are are ......, a close reading of them would indicate that the regulation of licensing and control of the business of trade in exhibitions of cinematographs \"was couched in broad language\". \n 34. Section 11 gives power to the State Government to make rules by notification \"for carrying out the purposes of the Act\". \n Sub-section (2) says that- \n \"In particular\" and without prejudice to the generallity of the foregoing power, such rules may provide for- \n (a) \"the terms\", \"conditions and restrictions\", \"if any\", subject to which licences and permissions may be granted under the Act, ............... (The other clauses are not necessary for the purpose of this Act. Hence they are omitted.)", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-27", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "35. In exercise of the aforesaid powers, originally rules have been framed viz., Andhra Pradesh Cinema (Regulation) Rules, 1961 and were published in the Andhra Pradesh Gazette dated 26-7-1962 and they came into force with effect from July 26, 1962. Thereafter, the rules have been completely recast and new rules have been brought on the Statute viz., the Andhra Pradesh Cinema (Regulation) Rules, (1970), with appendices and forms prescribed therein hereinafter called \"Rules\". They were published in the Andhra Pradesh Gazette and they came into force with effect from August 14, 1970. Now for the first time impugned rule was made. Therefore, these rules and appendices are statutory in character and form part of the integral scheme of the Act. \n 36. Rule 2 (c) defines 'building' means - in relation to a permanent cinema and temporary cinema, a building which is constructed for permanent use with stone, etc.; Rule 2 (n) defines 'place' means town or village (including the hamlet or hamlets attached to the village); Rule 2 (o) defines \"prescribed' means prescribed by order of the Licensing Authority. Rule 2 (q) defines 'existing cinemas' mean the cinema buildings existing or those under construction prior to the commencement of these rules. Rule 4 empowers any person of the age of 20 years or any company or firm or association of individuals whether incorporated or not, to obtain or hold any permission or licence under the Act. \n 37. Rules 6 to 9 relate to compliance with the requirements of the specifications for construction of the cinema building and other general matters, as elaborated in the Appendices attached to the Rules etc.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-28", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "38. Rule 11 in Chapter III provides the procedure for applying to the Licensing Authority for grant or renewal of licence under the Act and the formalities to be complied with. \n 39. Rule 12 gives power to the Licensing Authority to grant licence or permission on satisfaction of the conditions prescribed therein. \n 40. Rule 12 (3) is the relevant which is now the subject-matter of attack. Therefore it is necessary to extract the said rule in extenso. It reads thus: \n \"12 (3) (a). The Licensing Authority, while granting or renewing a licence in form-B shall also fix the maximum rates of payment for admission to the different classes in the licensed premises; \n (b) These rates shall not be increased during the currency of the licence without an order in writing by the Licensing Authority permitting such increase. \n (c) The order of the Licensing Authority is liable to be cancelled or modified by the Government, if they consider such a course just or necessary. \n (d) Any person aggrieved by the order of the Licensing Authority may appeal to the Government who may make such order as is deemed fit.\"  \n 41. Rule 13 prescribes the duration of the period of licence granted under the Act shall be either for five years or one year respectively for permanent or temporary licences. Chapter IV deals with fees payable for inspection certificates, licences and appeals under the Act. \n 42. Chapter V deals with powers and functions of the Licensing Authority and the inspecting officers. It enjoins on the Licensing Authority or the officers specified therein to make necessary inspections and send the reports with the desirability of ..... of licence or renewal of licences applied for. \n 43. Rule 17 prescribed the power and functions of the Licensing Authority, etc. Chapter VI provides the right of appeal.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-29", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "44. Rule 18 postulates that any appeal to the Government under S. 7 or sub-section (4) of s. 10 or clause (d) of sub-rule (3) of R. 12 shall be preferred within thirty days from the date of receipt of the order appealed against, accompanied by the stated particulars. The proviso gives power to admit appeals after the expiry of the prescribed period, provided the appellant satisfies sufficient cause for the delay caused in not preferring the appeal. \n 45. Appendix I, under para 6 specifies the requirements as to specifications for construction of the cinema building and other general methods. \n 46. Para 19 of Appendix I deal with : \n \"Seating arrangements : (1) The number of seats to be provided in the auditorium; \n (2) The number of persons to be admitted ......... calculating at the rate of 25 persons per 9 square meters of floor area, .... .... And at the rate of 30 persons per 9 square meters of floor area, etc. .......\"  \n 47. Para 22-A prohibits the use of licensed premises for any other purposes except for the purpose for which the licence has been granted. \n (The other appendices are not necessary to be dealt with in detail for the purpose of this case.)", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-30", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "48. Form 'B' is the licence for exhibiting cinematographs as required under sub-rule (2) of R. 12. \n 49. It is necessary to extract Condition (11) as prescribed in sub-rules (2) and (3) of R. 12 referred to and extracted earlier, which reads thus: \n 1. Maximum number of persons permitted and maximum rates of admission allowed in each part of the auditorium under sub-paragraph (2) of para 19 of Appendix I and sub-rule (3) of R. 12. \n ___________________________________________________________________________________ Class of accomodation Maximum number of persons Maximum rates of admission permitted. allowed. \n\n (1)   (2)    (3)\n\n xx   xx    xx \n\n__________________________________________________________________________________\n\n \n\n Note: These rates of admission shall not be increased during the currency of this licence without an order in writing by the Licensing Authority permitting such increase. \n\n \n\n (The other conditions are not necessary to be dealt with.)", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-31", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "50. A resume of the relevant provisions thus surveyed would indicate \"the broad spectrum spread out the whole gamut of controlling the regulation of exhibiting cinematographs starting from construction and ending with appeals including imposition of terms, conditions and restrictions\" subject to which licensees are to carry their trade or business thereunder. \n Whether fixation of maximum rates of admission to different classes is one of the purposes: \n 51. As stated, earlier, Sri M. R. K. Choudary, learned counsel for the petitioner contends that the object of the Act is only to regulate the construction or reconstruction of the cinema theatres and providing health and sanitation as incidental thereat. The power thereafter gets exhausted. Section 11 empowers to make rules to achieve the said object. The fixation of rates of admission is a legislative act. There is no specific power in the Act to fix the rates of admission. Therefore fixation of maximum rates of admission is not one of the purposes of the Act. There is no policy or guidelines given under the Act except to regulate the above contended purpose. Undoubtedly there is no specific provision empowering the rule-making authority to frame the impugned rule. Therefore the first question that arises for consideration is, whether fixation of the maximum rates of admission to different classes is one fohte purposes and hwether the Legislature intended to give such power to the State Government to frame the impugned rule. Whether such a power inheres in the Act has to be gathered from a consideration of all the provisions of the Act, Rules and Appendices together. We have already considered earlier the meaning of the word 'Regulation' in the context of the title of the Act.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-32", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "52. Willoughby on American Constitution, II Edition, at page 1750, in connection with the right of a citizen to trade vis--vis public interest, construed the scope of regulation and said : \"The Constitutional Authority of the State to regulate private services and the use of private property affected with a public interest is \"often spoken of\" as embracing within the meaning of the so-called police power. The term \"Police Power\" ..... originally gave a signification \"broad enough\" to include within its scope \"all the general regulative powers of the State and thus to embrace the specific power over public employment and those affected with public interest.\" \n 53. In a regulatory measure the Legislature should lay down its policy and indicate the rule of line of action which would serve as a guidance to the implementing authority. The Court would consider as to what is the scope of the regulation, its operation and effect on the exercise of the rights of the citizen in Part III of the Constitution. When large powers are given to certain authorities, the exercise whereof may make serious inroads into the rights of the citizen. Court has to see whether there is any guidance to be collected from the Act itself, its object, its controlling provisions in the light of the surrounding circumstances the Legislature takes note of which the Court might take judicial notice. The Court would put up such construction which would effectually implement the provisions of hteAct to achieve its object and if possible avoid construction which would frustrate the very object of the legislation. The Court would also endeavour to find whether the Act provides any policy or nourishment by proper environment to the rule-making authority to frame rules to regulate the exhibition of cinematographs. \n Whether the Act intended only limited purpose:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-33", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Whether the Act intended only limited purpose: \n 54. Before embarking on consideration of the provisions in the Act, it is to be consdiered whether the Act intended to serve only the limited purpose contended for as extracted earlier or whether it intends to embrace all the facets relating to the exhibition of the cinematographs. As held already, that the title fohte Act itself indicates the meaning of the word \"regulation\" with a wide meaning comprehending all facets not only specifically enumerated in the Act and the rules but also embrace within its fold the powers incidental to the regulation under the statute.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-34", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "55. A citizen gets a right to exhibit cinematographs only on obtaining licence from the licensing authority. He was injuncted from exhibiting cinematographs \"otherwise than in compliance with any conditions and restrictions imposed by such licence.\" The licensing authority, as enjoined under Section 5, shall not grant licence under this Act unless it is satisfied that the rules made under the Act have been substantially complied with. It shall also be subject to such terms and conditions and subject to such restrictions as may be determined by the licensing authority and be further subject to the control fohte Government. Section 5 demonstrates that the licensing authority is empowered to issue directions generally for a particular purpose regulating the exhibition of any films or class of films for scientific or educational purposes or films dealing with news and current events or documentary films or indigenous films to impart and disseminate scientific, educational and current news to the people by means of exhibiting cinematographs. To achieve that objective, power of regulation is reserved in the licensing authority by issue of general or special directions. They were declared to be additional conditions or restrictions as part of conditions subject to which the licence has been granted. This is also one of the guidances given by legislative policy laid down in the Act. Thus, it would indicate that \"the policy was laid in broad terms\" and the right to exhibit cinematographs and the right to trade or business in connection therewith are made to acquire subject to the terms and conditions of the licence under the Act or Rules and further subject to such restrictions, terms and conditions as may be determined by the licensing authority. \n 56. In Jullundur Rubber Goods Manufacturers' Association v. Union of India, it was held:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-35", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"Where legislative policy is enunciated with sufficient clearness or a standard is laid down the Courts will not interfere. It will depend on consideration of the provisions of a particular Act including its preambles as to the guidance which has been given and the legislative policy which has been laid down in the matter.\" \n 57. Therefore, the Legislature indicated in Section 3 read with Section 5 and preamble laying down its broad policy specifying the purposes; adumbrated the powers and vested them in the licensing authority or notified officer and the State Government to carry out them. Power was given to the State Government to make rules regulating such conditions, restrictions and terms subject to which the licence could be granted and the general control. Thus, it could be seen that the purposes mentioned are neither exhaustive nor conclusive.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-36", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "58. Section 11 gives power to the Government to make rules by notification to carry out the purpose of this Act; in particular and without prejudice to the generality of the foregoing power, such rules may provide for the terms, conditions and restrictions, if any subject to which the licences and permission may be granted under the Act. Thus, the Act specifies the purposes, adumbrates the power and vests the powers in the authorities mentioned therein. It may be mentioned that it is implicit in the nature of the business of exhibiting cinematographs that several incidental restrictions, conditions and terms are to be imposed for the successful operation of the exhibition of cinematographs. Therefore it may not be possible or practicable to specify, particularise or enumerate with precision in the Act as a catalogue. It depends upon varying and fluctuating factors depending upon the local exigencies. Under these circumstances, the Legislature felt expedient to leave the detaus to be worked out by the rule making authority. In this context, the dictum of Justice Holmes is apposite to state : \"The meaning of a sentence is to be felt not proved. The general purpose is an important aid to meaning then any rule, grammer or formal logice, may lay down.\" The policy of a statute should be drawn out of its terms as \"nourished by the proper environment\" and not like nitrogen out of the air as held in D. A. Schulte Incorporated v. Gagni, (1945) 328 US 108 at pp. 121-122. This would equally apply to the facts in the present case. \n 59. Thus it could be seen that the object of the Act does not appear to confine its operation only within the limited campus contended for. On the other hand, it appears to have animated to give power to make rules to embrace all the legitimate activities connected with the exhibition of cinematographs.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-37", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "60. It is to be remembered that no specific provision in the Act is assailed. Only R. 12 (3) is subject of attack. When Legislature while empowering the Government to make rules enumerated its policy deliberately in broad language \"terms, conditions and restrictions\" subject to which licence may be granted to exhibit cinematographs, it appears to have intended that the rules thus made would subserve not merely the enumerated but any other legitimate incidental purposes necessary to carry them out effectually. \n 61. Therefore it has to be seen whether fixation of maximum rates of admission to different classes is one of the purposes envisaged under the Act. Witnessing cinematographs is an amusement to every person, rich or the lowest of the low. This habit has spread out widely even into the remotest villages or hamlets in the rural areas too and by now became an accustomed part of living. The Act itself provides for licence to permanent, semi-permanent and temporary theatres at any place. 'Place' has been defined in Rule 2 (n) to mean town or village including hamlet or hamlets attached to the village. Therefore, theleg intended that the power to regulate licensing of the exhibition of the cinematographs in all places situated at every nook and corner of the State. A majority of the population in the country are illiterates. Exhibition of cinematographs became media to impart education not only of the news, current events, but also of scientific, educational etc. (and) mythological stories of historical importance. Majority of population are poor, semi-middle class and middle class sections of the society. The business assumed public importance.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-38", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "62. It is settled law that the Court can take judicial notice of the matters of common knowledge or well-known facts. Therefore we can safely take notice of them. In such circumstances, the question for consideration is whether the right to fix the right of maximum admission is incidental to the exercise of the said power. It admits of no argument that when the object of the cinematograph is to impart education or amusement to the cine-going public it is of a welfare measure. Would it not be reasonable to conclude that the right to fix the maximum (sic) purpose? The analogy of rates of admission of students into medical colleges and governance by the University Act and Statutes thereafter and exhaution of power drawn by Sri Choudary, from experience as Ex. Government Pleader though alluring is inapt to apply to a Cinema Regulation. The Act, Rules and Appendices are integral part of comprehensive composite scheme. It intended to operate in the circumstances prevalent not only in praesenti but also to develop in futuro.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-39", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "63. In Corpus Juris Secundum, Vol. 76, at page 612, it is stated: \"The power to regulate carries with it full power over the thing subject to regulation, and in the absence of restrictive words the power must be regarded as \"plenary over the entire subject.\" ... ... It has been held to contemplate or imply the continued existence of the subject-matter to be regulated. The power to regulate includes the power to restrain, and indicate restriction in some respects and the term \"regulate\" embraces the idea of fixing limitations and restrictions, and contemplates the power of restriction or restraint.\" \"The word necessarily denotes some degrees of restraint of acts usually done in connection with the thing to be regulated.\" ... ... ... ... \"The power to regulate may include the power to licence or to refuse a licence, or to require a bond from an applicant therefor, or to require the taking out of a licence and it may include the power to tax or to exempt from taxation but not the right to impose a tax for revenue.\" \n 64. Thus, it could be seen that the power to regulate would also include the power to restrain and embrace the idea of fixing limitations and restrictions on the acts usually done in connection with the right to trade or business under existing licence and includes the power to tax or to exempt from taxation. But in exercise of this power, the Government have no right to impose tax for revenue. \n 65. It is not the contention that the Government is collecting any revenue from the rates of admission fixed. We will deal separately with the argument that the rates of admission are only motivated to fix the entertainment tax at an appropriate stage. But suffice to state here that the State is not deriving any revenue from the maximum rates of admission fixed under the impugned rule.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-40", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "66. In Corporation of Calcutta v. Liberty Cinema, it is laid donw by their Lordships of the Supreme Court that (at p. 1117): \n \"... ... ... fixation of rates of taxes may be legitimately left by a statute to a non-legislative authority for we see no distinction in principle between delegation of power to fix rates of classes of goods and power to fix rates simpliciter, if power to fix rates in some cases can be delegated then equally the power to fix rates generally can be delegated.\" \n 67. In Sukhanandan Saran Dinesh Kumar v. Union of India, it was laid down that the power to fix minimum price or grant of rebate comprehends the power to provide such incidental and anicllary regulations which will ensure the price. Chief Justice Waite held in Munn v. People of Illinois, (1876-78) 94 US 113 that \"the right to establish the maximum of charges as one of the means of regulation is implied. In fact, the common law rule which requires the charges to be reasonable is itself a regulation as to price. Without it the owner could make his rates at will and compel the public to yield to his terms or forego the use.\" \n 68. In Craies on Statute Law, 7th Edition at page 258, it is stated that if the legislature enables something to be done, it gives power at the same time, \"by necessary implication, to do everything which is indispensable for the purpose of carrying out the purposes in view.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-41", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "69. The contention of Sri Choudary that the power to fix maximum rates of admission is a legislative power and that it should be made manifest from the provisions of the Act, is not tenable. If Rule 12 (3) is in the nature of an impost intended to empower the State to collect revenue, then undoubtedly it is a legislative act and unless there is a specific charging provision under the Act or specific delegation thereof the State Government derives no power to make the impugned rule. But if the object is only incidental or ancillary for effective exercise of the regulatory power, then it is not mandatory that the Act itself should provide such a power. Witnessing a motion picture has become an amusement to every person; a reliever to the weary and fatigued; a reveller to the pleasure seeker; an imparter of education and enlightment enlivening to news and current events; disseminator of scientific knowledge; perpetrator of cultural and spiritual heritage to the teeming illiterate majority of population. Thus, cinema have become tools to promote welfare of the people to secure and protect as effectively as it may a social order as per directives of the State Policy enjoined under Article 38 of the Constitution. Mass media through motion picture has thus become the vehicle of coverage. The passage of time made manifest this growing imperative and the consequential need to provide easy access to all sections of the society to seek admission into theatre as per his paying capacity. Though it is business incident, the petitioners having created an interest in the general public therein, it has become necessary for the State to step in and regulate the activity of fixation of maximum rates of admission to different classes as a welfare weal. Thereby it became a legitimate ancillary or incidental step in furtherance of the regulation under the Act.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-42", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "70. The decision in B. C. Banerjee v. State of M. P., relied on by the petitioners for the proposition that the tax cannot be levied under the rule has no application to the facts in this case. Therein, the question that arose was, whether the Government under the guise of the rule making power can impose excise duty through an amendment to the rule. The object of the Excise Act is to get revenue to the State by imposing duty on the exercisable articles. Section 25, as stated in para 12 of the judgment, limits, the power to impose excise duty on specified four items. Section 62 gives power to the Government to make rules to carry out the purposes of the Act. During the currency of the contract, rules were amended imposing levy of duty of minimum quantity of the liquor and to pay monthly deficit of the minimum duty on unlifted liquor. It was challenged as being ultra vires. While considering the scope of the Act, their Lordships have considered in paragraphs 17 and 18 of the judgment holding that the Legislature has levied excise duty on those articles which come within the scope of Section 25. The rule making authority has not been conferred with any power to levy duty on any article which do not fall within the scope of Section 25. Rule was amended giving power to the Government to levy duty on liquor which the contractor failed to lift. While considering that question, it was held that : \n \"No tax can be imposed by any bye-law or rule or regulation unless the statute under which the subordinate legislation is made specifically assumed that the power to tax can be delegated to the executive. The basis of the statutory power conferred by the statute cannot be transgressed by the rule-making authority. A rule-making authority has no plenary power. It has to act within the limits of the power granted to it.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-43", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Thus the rule was struck down. We have carefully analysed the facts. The ratio has no application to the point in issue. \n 71. Sri M. R. K. Choudary then relies upon the provisions of the Essential Commodities Act, etc. and contended that such Acts have provided specific power to fix the prices of the essential commodities. Absence of such a provision in the Act is fatal. Those provisions have no application as an analogy to the facts in this case. The purposes therein are different. There is a direct interference with the right of the owner of the produce to fix the prices of essential articles or goods produced and that it was sought to be regulated in the public interest. Therefore the Legislature stepped in and made law delegating power under the Act to fix prices of essential commodities. The Division Bench decision of the Delhi High Court in Durga Chand v. Union of India, (supra) relied upon by the learned counsel, in our considered view, with due respect has not correctly laid down the law. Therein, the learned Judges agreed that fixation of rates of admission is a \"laudable purpose\" but assumed that it is in the nature of \"power to fix price control\". Further, it would appear from a reading of the provisions extracted in the judgment that there is no specific power delegating to the rule-making authority to impose such restrictions or conditions in the licence. We have carefully considered the judgment. We are unable to follow the ratio.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-44", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "72. Similarly, in Deepak Theatre, Dhuri v. State, (supra) a single Judge of the Punjab and Haryana High Court had taken the view as that of the Delhi High Court referred to above, but therein, the learned Judges proceeded on the assumption that the Act postulates only three enumerated objects referred to therein and were to be exhaustive of the purposes. On the premise the learned Judge held that there is no section in the Act authorising the licensing authority to prescribe classes in the cinema hall and to fix the rates of those classes. It is more in the nature of a dictum without providing any persuasive reasoning. In view of the consideration made on the subject by us, we are unable to agree with the learned Judge that there is no power under the Act to fix rates of admission. Therefore we are not persuaded to accept the same as correct law. \n 73. Similarly, the decision in Royal Arts v. State of Madras, (supra) also does not provide us any assistance. Therein the Government amended the rule directing the owner of the cinema theatre to collect fee of 0-05 ps. For each cycle kept in the cycle stand. That was challenged as being ultra vires of the power that learned Judge followed the earlier decision of that Court and held that the principle laid down in that decision apart from being applicable, the impugned order itself states that what is to be collected from the users of the cycle-stand is a fee for such user. In that event the licensee can correlate the quantum of the fee to the actual expenses incurred for providing amenities. That is the basis on which the learned Judge proceeded. Therefore it is also not of any help to decide the point in this case.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-45", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "74. Thus, on principle and on authority, it leads to an unmistakable conclusion that the right to fix maximum rates of admission to different classes is an incidental or ancillary purposes of the regulation to exhibit cinematographs. Under Section 11, the State Government is empowered to frame R. 12 (3) of the Rules. \n Delegation whether valid: \n 75. The next contention of Sri M. R. K. Choudary is that if it is held that the Legislature intended that the fixation of maximum rates of admission to different classes is one of the purposes which the Act seeks to achieve, then, it being a legislative act, the Legislature abdicated its legislative function by delegating the power to the State Government. Therefore the impugned rule is excessive and thereby unconstitutional. In support thereof, he relied upon a decision reported in Gwalior Rayon Mills v. Asst. Commr., Sales Tax, (supra). \n 76. The principle of delegating the legislative function to the subordinate legislation is now well known. The legislature cannot delegate its power to make a law but it can make law to delegate power to determine some facts or state of things upon which the law makes or intends to make its own action depend. The law being flexible having laid down broad principles of its policy, Legislature then can leave the details to be supplied by the administrator to adjust to the rapid changing circumstances. \n 77. Schwartz on American Administrative law at page 21 says that : \"The discretion should not be so wide that it is impossible to discern its limits.\" The delegate cannot transgress its limits bounded. Stream cannot raise higher than the source. \n 78. Willoughtry on \"Constitution of United States\" Second Edition, Volume III, at page 1637, stated:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-46", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"A discretionary authority may be granted to executive and administrative authorities - (1) To determine in specific cases when and how the powers the legislatively conferred are to be exercised; (2) to establish administrative rules and regulations binding both upon their subordinates and upon the police, fixing in detail the manner in which the requirements of the statute are to be met and the rights created therein to be enjoyed.\" \n Therefore, what is left to the administrative official is not the Legislative determination of what public policy demands but simply the ascertainment of what the facts the case require to be done according to the terms of the law by which it is governed. It Union Bridge Co. v. United States, (1906) 204 US 364 at p. 368, approved the statement of law in Lock's Appeal, 72 Pa. 491 at 498 wherein it was held: \n \"To assert that law is less than a law, because it is made to depend on future event or act, is to rob the legislature of the power to act wisely for the public welfare whenever a law is passed relating to a state of affairs and yet developed or to things future or importance to fully know........  \n To deny this would be to stop the wheels of the Government. There are many things upon which wise and useful legislation msut depend which cannot be known to the law making power and msut therefore be subject to enquiry and determination outside the halls of legislation.\" \n 79. This statement of law in Lock's appeal was approved by the Lordships of the Supreme Court in Hamdard Davakhana v. Union of India, . \n 80. In Corpus Juris Secundum, Vol. 73, at page 326, it is stated thus- \n \"The effectuation of principle and policy declared by legislature can be confided to agency created to administer the law in which the principle and policy are declared.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-47", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "81. At pages 327-328 it is stated: \n \"The legislature may establish a broad statutory rule and delegate to an administrative agency the duty of specifically applying the statute within the framework of a sufficiently definite primary standard. In other words the legislature need not specify precisely each ancillary act that may impose the duty to be performed within a prescribed field for a designated end, leaving to the discretion foh te administrative body the selection of appropriate methods and the other administrative details to be employed in accomplishing the statutory purpose ...... ......\" \n \"Where it is impracticable to lay down a definite comprehensive rule, it is not essential that a specific prescribed standard be expressed.\" \n 82. In Licher v. U. S. Cal Massons, Ohio, (1944) 324 US 742 it was laid down that :- \n \"The Congress need not supply administrative officials with a specific formula for their guidance in a field where flexibility and adaptation of the congresstional policy to infinitely variable conditions constitute the essence of the programme.\" \n 83. In Hamdard Dawakhana v. Union of India, (supra) their Lordships of the Supreme Court, speaking through Kapur, J. held (at p. 566): \n \".. ..... ... by delegated legislation the delegate completes the legislation by supplying details within the limits prescribed by the statute .. ... .....\" \n 84. In Banarsi Das v. State of Madhya Pradesh, their Lordships held that: \n \"This therefore is clear authority that the fixing of rates may be left to non-legislative body. No doubt when the power to fix rates of taxes is left to another body, the legislature must provide guidance for such fixation ... ... ... \n we first wish to observe that the validity of the guidance cannot be tested by a rigid uniform rule; that must depend on the object of the Act giving power to fix the rate.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-48", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "85. In Corporation of Calcutta v. Liberty Cinema, (supra) the Supreme Court, per majority, held (at p. 1109): \n \"No doubt a delegation of essential legislative power would be bad. But the fixation of rates of tax is not of the essence of legislative power of taxation. The fixation of rates of taxes may be legitimately left by a statute to a non-legislative authority, for there is no distinction in principle between delegation of power to fix rates of taxes to be charged on different classes of goods and power to fix rates simpliciter, if power to fix rates in some cases can be delegated then equally the power to fix rates generally can be delegated.\" \n 86. In Arnold Rodrick v. State of Maharashtra, , it was laid down that the delegation is necessary and the rules made are \"ancillary and subserve\" the purpose of the Act. That is the reason why the Legislature appears to have given wide power under Section 5 read with Section 11 in that behalf. \n 87. In Vasanlal Maganbhai v. State of Bombay, their Lordships of the Supreme Court, speaking through Gajendragadkar, J. (as his Lordship then was) while considering the question relating to the delegation of power to the rule-making authority to fix the market rate of rent, held that:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-49", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"The relevant factors having been specified by Section 12 (3) when the Provincial Government considers the question of fixing a lower rate of maximum rent payable in any particular area it is expected to adopt a basis which is suitable to that particular area. The relevant conditions of agriculture would not be uniform in different areas and the problem of fixing a reduced maximum rent payable in the respective areas would have to be tackled in the light of the special features and conditions of that area; that is why a certain amount of latitude had to be left to the Government in fixing the lower rate of the maximum rent in the respective areas and that is intended to be achieved by giving it liberty to adopt a basis which it thinks is suitable for the area in question ... ... ...\" validity of guidance required to make delegation of power cannot be judged by a stereotyped rule.\" \n 88. In Gwalior Rayon Mills v. Asst. Commr., S. T., (supra) which was relied upon by Sri M. R. K. Choudary, far from helping the petitioners, supports the view we have taken. Therein, the validity of Section 8 (2) (b) of the Central Sales Tax Act, 1956 was attacked as being excessive delegation. While upholding the validity of delegation, their Lordships have laid down the law as culled out from paragraphs 22, 26 and 29 of the judgment, in Head Note A thereof which reads thus: \n \"The legislature in conferring power upon another authority to make subordinate or ancillary legislation must lay down policy, principle or standard for the guidance of the authority concerned... ... .....", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-50", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "the Parliament has, under Section 8 (2) (b) of the Central Sales Tax Act, not fixed the rate of Central Sales Tax but ahs adopted the rate applicable to the sale or purchase of goods inside the appropriate State in case such rate exceeds 10 per cent. The Parliament in doing so has laid down legislative policy and has not abdicated its legislative function. The object of the law apparently is to deter inter-State sales to unregistered dealers as such inter-State sales would cailitate evasion of tax. It is also not possible to fix the maximum rate under Section 8 (2) (b) because the rate of local tax varies from State to State, the rate of local sales tax can also be changed by the State Legislature from time to time. Section 8 (2) (b) of the Central Sales Tax does not suffer from the vice of abdication or excessive delegation of legislative power.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-51", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "89. It is to be seen that in fixation of maximum rates of admission to different classes regard must be had (a) to the theatres-permanent, semi-transparent or temporary; (b) different places at which the theatres are situated i.e., the city, town, village or hamlet; and (c) consideration of varied and inumerable fluctuating factors like cost of production, nature of amenities provided, cost of exhibition and (d) other relevant circumstances. \"It is to be remembered that a regulation is to operate not only to the existing theatres but also the theatres to be constructed or reconstructed in the years to ensue.\" The legislature thereby mi9ght well have thought that the problem should be left to be tackled by the licensing authority. Thus it left enough freedom to the State Government to make rules or amend them from time to time. The problem is to be approached from the above perspectives. Rule 12 (3) is part of the composite scheme evidenced by the Act and the Rules made thereunder and if it is examined in the light of the above law and the area in which the Act intends to operate and facts and circumstances, it would be difficult to uphold the plea of the petitioners.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-52", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "90. We are therefore inclined to hold that the Act being applicable not only to existing theatres but to be constructed or reconstructed in the years to ensure, at different places at which fluctuating factors prevail in praesenti as well as state of affairs yet (not?) developed or things in future fully not known, the regulation is a wise and useful welfare measure. It is thereby impracticable to lay down definite comprehensive rule. It is subject of an enquiry and determination outside the halls of legislation. Therefore the Legislature couched its policy in broad language with sufficient flexibility leaving to the State Government to make rules to adjust meeting the changing circumstances. It is not ncessary to specify precisely each ancillary act. Fixation of maximum rates of admission to different classes is not a legislative act. It can be delegated to the State Government to select appropriate methods and details to infinitely variable conditions. The legislature did not abdicate its legislative function. It has rightly delegated to the State Government. Rule 12 (3) is thus not in excess of the delegated power. \n Whether Rule 12 (3) is ultra vires: \n 91. The next contention of Sri M. R. K. Choudary, learned counsel for the petitioner is that Rule 12 (3) is ultra vires of the power of the rule-making authority. As noticed earlier, though there is no express power empowering the State Government to make the impugned rule, on a consideration of the object and broad language couched in the Act, we held that the word \"regulation\" takes within its ambit every legitimate activity reasonably connected with the exhibition of cinematographs. Admittedly, Section 11 gives power to the State Government to make rules and it is held that fixation of maximum rates of admission to different classes is incidental to the power of regulation. \n Whether presumption are available to rules:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-53", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Whether presumption are available to rules: \n 92. The rules being statutory (are) entitiled to the insignia of all the presumptions available to a statutory provision. At this context, it is relevant to note two decisions of the Supreme Court and one of Bombay High Court, which have got a bearing on the topic. \n 93. Their Lordships of the Supreme Court, in State of U. P. v. Baburam, speaking through Subbarao, J. (as his Lordship then was) considering the scope of the Rule when it vires was assailed vis--vis the power of the Court to take judicial notice of the presumptions for the purpose of construction of rule and held thus (para 23): \n \"Rules made under a statue must be treated for all purposes of construction or obligation exactly as if they were in the Act and are to be of the same effect as if contained in the Act, and are to be judicially noticed for all purposes of construction or obligation. The statutory rules cannot be described as, or equated with administrative directions.\" \n 94. In Mulchand v. Mukund, a Division Bench of the Bombay High Court consisting of Chief Justice Chagla and Gajendragadkar, J. (as he then was) has to consider the scope of rule and held in that connection: \n \"Parliament or Legislature, instead of incorporating the rules into the statute itself, ordinarily authorise Government to carry out the details of the policy laid down by the Legislature by framing the rules under the Statute, and once the rules are framed, they are incorporated in the statute itself and become part of the statute, and the rules, must be governed by the same principles as the statute by itself.\" \n 95. In J. K. Cotton Spinning & Weaving Mills v. State of Uttar Pradesh, , Das Gupta, J. held:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-54", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"In the Interpretation of Statutes the Court always presume that the Legislature inserted every part thereof for a purpose and the legislative intention is that every part of the Statute should have effect. These presumptions will have to be made in the case of rule-making authority also.\" \n 96. We have no hesitation to hold that the Rules being statutory having been duly made by delegated authority, must be treated for all purposes of construction or obligations exactly as if they are part of the Act and be of the same effect as if contained in the Act. Courts are to take judicial notice thereof. The Court always presumes that the Legislature inserted every part for a purpose and should have effect. These presumptions will have to be made in the case of rule-making authority. \n Principles to be kept in", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-55", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "97. Therefore in adjudging the vires of the rule, we have to keep in view the following principles: It is now well settled that there is a presumption in favour of the constitutionality of the Statute and the burden is upon him who attacks to hsow that there has been a clear transgression of the constitutional principles. It must be presumed that the Legislature understands and correctly appreciates the need of its people and that the laws it enacts are directed to problems which are made manifest by experience. The Legislature is free to recognise the degree of harm andmay confine its restrictions to those where the need is deemed to be clearest. In order to sustain the pretake into consideration matters of common knowledge, maters of report, history of the time and may assume every state of facts which can be conceived existing at the time of legislation. While giving latitude to the Legislature, is good faith and its knowledge of existing conditions are to be presumed, if there is nothing on the face of the law or the surroundign circumstances brought to the notice of the Court of the intendment the Legislature seeks to achieve is discernible from the Statute itself, 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. The principles apply proprio vigore to amendments to the Act and amendments to rules as well. \n 98. In Attorney General v. Great Eastern Railway, (1880) 5 AC 473 at p. 478, Lord Selborne held that: \n \"The doctrine of ultra vires ought to be reasonably and not unreasonably understood and applied and that whatever may be fairly regarded as incidental to or consequential upon those things which the Legislature has authorised ought not (unless expressly prohibited) to be held by judicial construction to be ultra vires.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-56", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "99. We respectfully follow the dictum as it would tersely apply to the facts of this case. When the enactment is assailed as being ultra vires and unconstitutional what has to be ascertained is the true character of the legislation and for that purpose regard must be had to the enactment as a whole, its object, purpose and true intention and to the scope and effect of its provision and what they are directed against and what they aim at. \n 100. Of course, the Legislature cannot by-pass such constitutional prohibitions by employment of indirect methods. Therefore, the Court has to look behind the form and appearance to discover the true character and nature of the legislation. \n 101. We have to consider the plea in the light of the above law, whether the impugned rule is ultra vires of the rule-making power. Section 11 empowers the State Government to make rules regulating the terms, conditions and restrictions to be incorporated in the licence subject, to which a citizen should exhibit cinematographs in the licenced theatre. This section itself is not challenged. The power to fix maximum rates of admission to different classes is already held to be incidental or ancillary to the regulation exhibiting cinematographs. Therefore the Legislature empowered the State Government to make the rule. In that perspective, the absence of express provision does not take away the power of the State Government to make rules. \n 102. In this context, the observation of their Lordships of the Supreme Court in R. K. Porwal v. State of Maharashtra, , speaking through Chinnappa Reddy, J. are relevant. It is held (para 9) :", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-57", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"Absence of an express provision in the Act does merelymean that greater latitude is given to the rule-making authority to introduce regulation of making rules by stages and to ban on marketing activity outside the market. The latitude given to the rule-making authority cannot lead to the inference that the rule-making authority has no power to make a rule banning market activities outside the market once the market is established even when such a ban is found to be necessary.\" \n 103. This pragmatic construction put up on the provisions of the Maharashtra Markets Act would equally apply to the circumstances of regulating the exhibition of cinematographs in the larger interests of the cine-going public. \n Whether change in circumstances can be taken note of amend the Rules: \n 104. Sri M. R. K. Choudary, further contends that initially the Cinematographs Act was brought on statute in the year 1918 and after the advent of the Constitution, the Andhra Pradesh Act of 1955 has come into force. The Act is merely an extension of the Act of 1918 and there is no major change in the policy except necessitated constitutional bifuncation of legislative powers between the Parliament and ht establishments Legislatures. Therefore the circumstances prevailing in 1918 should alone be taken into account to adjudge whether the Legislature intended to give power to the rule-making authority to regulate the rates of admission. We are unable to accept this contention as being tenable. \n 105. In Home Building Loans Association v. Blaisdell, (1933) 290 US 398 (441), Chief Justice Hughes, speaking on behalf of the majority of the Supreme Court of America laid down that :", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-58", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"When we consider the contract clause and the decisions which have expounded it in harmony with the essential reserved power of the States to protect the security of their peoples we find no warrant for the conclusion that the clause has been warped by these decisions from its proper significance or that the founders of our Government would have interpreted the clause differently had they had occasion to assume that responsibility in the conditions of the later day. The vast body of law which has been developed was unknown to the fathers but it is believed to have preserved the essential content and the spirit of the Constitution. With a growing recognition of public needs and the relation of individual right to public security, the Court has sought to prevent the perversion of the clause through its use as an instrument to throttle the capacity of the States to protect their fundamental interests. This development is a growth from the seeds which the fathers planted. It is a development forecast by the prophetic words of Justice Johnson in Ogden v. Saudnders, (1824-27) 12 Wheat 286-6- L Ed 631.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-59", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "106. The exhibition of cinematographs are to be licensed under the Act to the theatres constructed or to be constructed or reconstructed at various places in the State at different times under varied circumstances. As seen earlier, the thezatres consists of permanent, semi-permanent or temporary and the Act intended to operate even in the remotest village or hamlets. Under those circumstances, the Legislature in its wisdom thought it expedient to empower the State Government to make a rule to fix the maximum rates of admission to different classes depending upon variegating circumstances or factors. Courts would, as laid down by Judicial Committee in A. G., Alberta v. A. G., Canada, AIR 1939 PC 53, take judicial notice of public knowledge of what effect the legislation would be. It is settled law that the prevailing circumstances would be taken judicial notice of. In that context the Legislature did not intend o fix any rigid formula. Nothing may be expected to remain static in this changing world of ours. We have already notieced that exhibition of cinematographs is an amusement to every person and the experience by the administration of the Act and Rule made it manifest the growing need to provide reasonable facility to the public at large to have easy access to witness the exhibition of cinematographs at reasonable rates. Therefore the wide reserved power of regulation inhered in the Act can be taken aid of by the rule-making authority to make the impugned Rule 12 (3).", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-60", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "107. It is no doubt true that the provisions of a particular statute should be construed iwht reference to circumstances prevailing at the time of making law that weighed with the Legislature. But in the case of regulation like the Act when it intended to apply to existing theatres and also to be constructed or reconstructed at a future date as well, then it is reasonable to infer that the Legislature felt it impracticable to lay down a fixed formula. Amending power charged the State Government to catch up with the changes made manifest intheliving habits and pursuits of the people and their impact on the public life and mould the law to subserve public weal so as to be a living law. Thus the delegated authority is empowered to amend the Rules from time to time attuned to the new situations emerged in the working of the regulation. That is the reason, the impugned R. 12 (3) though found no place in 1962 Rules but was engrafted in the recast rules of 1970. The reason therefor is thus obvious. \n 108. It is, therefore, reasonable to conclude that with the passage of time and the experience gained by the administrator, it became imperative to regulate the fixation of the maximum rates of admission too. Therefore, the prevailing circumstances at the time of making the amendment shall also be taken into account. \n Whether motive to make Rule can be looked into:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-61", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Whether motive to make Rule can be looked into: \n 109. In this context, the contention of Sri. M. R. K. Choudary, learned counsel for the petitioners is that the impugned Rule was made with an oblique motive to get the revenue under the Entertainment Tax Act is to b e disposed of. It is now settled law that the Court cannot go into the motives for enacting the legislation. Therefore it is not permissible for the Court to go into the motives alleged to have prevailed with the State Government in making the impugned rule so long as we found that the rule made was to subserve the public purpose, viz., to enable every person to have an easy access into the theatres to witness the exhibition of cinematographs at reasonable rates. \n Abuse of power - whether a ground to declare Rule invaid? \n 110. It is further contended that aif it is held that the Legislature has confined to the rule-making authority the power to make the impugned rule, then there will be abuse of power by the State Government in making the rule. It is now settled law that it is improper to start with an assumption that the State Government would abuse the discretionary power and decide the legality of the Act on that assumption. Abuse of power some times may occur, but the validity of the law cannot be contested because of such an apprehension. The exercise of discretion is necessarily to be assumed but power to discriminate unlawfully and possiblility of abuse of power will not invalidate the conferment of power. Conferment of power has necessarily to be coupled with the duty to exercise it bona fide for effectuating the purpose and policy underlying the rule which provide for exercise of a power. It has to be borne in mind that discretionary power is not necessarily a discriminatory power and the abuse of the power is not easily to be assumed where the discretion is vested in the Government and not in the minor official.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-62", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "111. As laid down by their Lordships of the Supreme Court in Chinta Lingam v. Government of India, , that when a power is conferred on a high-ranking officers (District Collector in that case) it cannot be assumed that it is likely to be abused. The presumption under Section 114, Illustration (e) of Evidence Act is that public officials would discharge duties honestly and regularly and the power would be exercised in a bona fide manner and according to law. \n 112. If it is shown that the executive action of the State is abused arbitrarily or in excess of the discretion conferred under the Statute, the arm of the Court is long enough to strike down that particular executive action but on that account it is not reasonable to hold that there will be abuse of power. \n 113. The possibility of abuse of a statute otherwise valid does not import to it any element of invalidity. The converse must also follow that is statute which is otherwise invalid as being unreasonable cannot be saved by its being administered in a reasonable manner. The constitutional validity of the Statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed. In this case except making a contention, no specific instance has been brought to our notice that the State Government has abused its discretionary power and made the impunged rule beyond the scope of the power entrusted in it or arbitrary. Therefore we do not find any unreasonableness in the exercise of the discretionary power in making the impugned Rule. \n Whether laying guidelines are conditions precedent to exercise power:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-63", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Whether laying guidelines are conditions precedent to exercise power: \n 114. It is further contended that there are no rules made giving guidance to the Licensing Authority. It is manifest that fixation of maximum rates of admission has to be done depending upon the local conditions in hteparticular theatre be it permanent, semi-permanent or temporary situated either in the city, town, village or hamlet. Therefore it is impracticable to lay down any particular rule in that regard. Guidance may be obtained in the light of the prevailing surrounding circumstances. The Licensing Authority will gather all the material facts including the cost of exhibition, etc., which have got a bearing in determining the rates of admission and hten decide the rates of admission. Of course it would be on observing the principles of natural justice and fair play. \n 115. In State of Punjab v. Hari Kishan, , while considering the similar provisions of Punjab Cinemas (Regulation) Act, S. 5 (2) thereof, their Lordships of the Supreme Court have laid down that the power of the State Government is wide to give general or special instructions for the legitimate purposes of the Act. Same is the view of our learned brother, Choudary, J. in D. Satyanarayana v. Government of Andhra Pradesh, . The Government, in exercise of power under Section 5 (2) have issued guidelines in G. O. Ms. No. 2041 dated 25-6-1953 and G. O. Ms. No. 744 dated 3-4-1965 for fixation of the rates of admission. They are: \n \"......... the following may generally be taken as justifiable grounds for increasing the rates of admission to cinema theatres: \n (1) Specially increased cost of production of a particular film of more than ordinary merit and of historical, national, puranic or social importance;", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-64", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "(2) If the show is in aid of some institution, in which case the particular show alone will be given the concession of charging enhance rates; \n (3) If improved amenities are provided such as improved seating arrangements, converting a cinema theatre into an air-conditioned one, etc.; \n (4) Local conditions and increased cost of exhibition of films; \n (5) Increased cost of exhibition of films - the quantum of increase being fixed with due regard to the local conditions.\"   \n Executive instruction - whether not valid? \n 116. Sri M. R. K. Choudary contended that these are only executive instructions and they have no statutory force. It is undoubtedly true. But in view of S. 5 (2) of the Act, it is not necessary that statutory urles alone should be issued providing guidelines. Even administrative instructions pertaining to the subject to achieve legitimate purpose could be issued by the State Government. Therefore the guidelines issued in these G. Os. form part of the rule to supplement the impugned R. 12 (3) and give enough guidance. \n Whether executive instructions under Repealed Act could be continued:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-65", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Whether executive instructions under Repealed Act could be continued: \n 117. Sri Choudary further contended that the rules were initially framed under the Act of 1918 and they continued to be in operation even after the Act and the Rules came into force. The instructions referred to earlier in the first G. O. were issued under the old Act and they were continued to operate; therefore they have no legal force. We are unable to accept the said contention. It is seeled law that any rules, regulations or instructions issued under the repealed Act shall be continued to be in force unless they are clearly inconsistent with the amended Act or instructions or the new rules framed. Since there is no inconsistency with the Act or the Rules made thereunder, the guidelines issued under the repealed Act shall continue to be in operation. It is also further settled law that it is not incumbent that Rules should be made before exercise of statutory power. It is further settled law that it is not mandatory to lay the Rules made before the Legislature to be operative. So the absence of such a provision in the Act does not whittle down the effect of the Rule if it is otherwise valid. \n 118. On consideration of the above facts, circumstances and principles of law, we have no hesitation to hold that the impugned Rule is not ultra vires the power of regulation. It is not either unguided or unbriddled or uncanalised or arbitrary. \n Whether petitioners have unbriddled power to fix rates of admission:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-66", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "119. It is further contended that the petitioners have got an unbriddled righ to fix the rates of admission and that the licence is the best person to fix the reasonable rates of admission, keeping in view, the investment made, amenities provided, cost of exhibition and reasonable rate of profit. It is an incident to the right to trade. But the impairment thereof by the State is unreasonable and hampers free play. It is true. It is already noticed that it has become an amusement to every person more particularly from the lower sections of the society to relieve them of their drudgery of their day long labour, witnessing cinematographs has become relaxation apart from educativae value. If the power to fix the rates of admission is left entirely to whim of the licensee, then depending upon the fortuitous exigencies, he may fix rates convenient to him to have unjust enrichment. Take for instance, a historical picture like Gandhi or mythological cinematograph, that has a grand impact on the public life. If fixation of maximum rates of admission are left to the waggery and fancy of the licensee then he would fix any rate to extort money to admit persons into his theatre. Take another example, where he wants to eliminate his co-competitor from the field of trade to gain monopoly at that place. With a view to drive out his co-competitor from the field he may fix in the first instance such a ridiculous low rates of admission. Though he sustains loss for a shortwhile, ultimately on eliminating his co-competitor and gaining monopoly he will resort to fix his own rates of admission and make the people to stand by to his dictations. Many instances can be multiplied. But suffice to state that in the public interest it is highly unsafe to place unbriddled power to fix maximum rates of admission in the hands of the licensee. Obviously with those and other analogous factors in view and to have uniform beneficial enjoyment by the general public,", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-67", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Obviously with those and other analogous factors in view and to have uniform beneficial enjoyment by the general public, depending upon the purchasing capacity of the cine-goers, the rules have been framed giving power to the Licensing Authority to fix maximum rates of admission to different classes. To put it negatively that if the plea of the petitioners is allowed to prevail, the wheels of the Government would be brought to a grinding halt; prevents to take stock of growing imperative public need made manifest by course of events ensued and thereby frustrate the purpose of the regulation public welfare depleted; cine-going public be made to crave for mercy of the licensee if admission fee is beyond his paying capacity or else to forgo the amusement; and to deny to the poor the benefit of imparting education or learning culture. Therefore the construction should be leaned inf avour of sustaining the regulation to subserve the public good and avoid frustration of public purpose. Thus it is in the interest of the general public. It is a social and welfare measure.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-68", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Whether impugned Rule is valid: \n 120. Thus we reach consideration of the impugned Rule as the subject of attack. Rule 12 (3) has already been extracted in extenso in the earlier part of our judgment; therefore it is not necessary to reproduce once over, but suffice to state that it consists of four clauses. Clause (a) gives power to the Licensing Authority while granting or renewing licence to fix the maximum rates of admission to different classes; (b) the rates shall not be increased during the currency of the licence without an order in writing by the Licensing Authority permitting such increase; (c) a right of appeal is provided to the State Government against the order of the Licensing Authority; and (d) the order of the Licensing Authority is liable to be cancelled or modified by the Government if they consider that such a course is just or necessary. That is the setting of the Rule. With regard to R. 12 (3) (a) if it is read in conjunction with the guidelines referred to above and para 19 of Appendix I, and Form 'B' as integral part, it goes without saying that it provides enough guidelines for determining the rates of admission in the initial as well as at the renewal stage. It is already stated that the Licensing Authority shall have to take into account all relevant facts in fixing the rates of admission of different classes. If it is shown that fixation of rates of admission is unreasonable, unrealistic, arbitrary or relevant factors were not considered or violates the principles of natural justice, in such an event it is that particular action of the Licensing Authority that is entailed to be attacked but that circumstances itself is not a ground to contend that the Rule itself is ultra vires.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-69", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "121. Under Rule 12 (3) (b) the rates shall not be increased during the currency of the licence originally granted or on renewal, without any specific order in writing by the Licensing Authority. It passes beyond comprehension as to how this is unreasonable. It is implicit to be an enabling provision beneficial to the licensee to have the rates of admission revised at the stage of renewal on establishing the objective facts and the change in the circumstances since the date of previous revision. Once it is done and accepted by the licensee it means all relevant facts were taken into account and the licensee is satisfied of such fixation of rates. It shall continue to be operative during the period of licence. It also presupposes that, yet, during the currency of the period of licence, if any further charges in circumstances are brought to the notice of the Licensing Authority, the Licensing Authority may order in writing to alter the rates of admission and that is the reason that appeas to have weighed with the rule-making authority to preserve such power to the Licensing Authority and the right of the licensee to bring to the notice of the Licensing Authority such altered circumstances to revise the rates of admission even during the currency of the licence. Without written permission, there is no authority for the licensee to alter unilaterally the rates of admission. It also goes without saying that the licensee obtains a right to exhibit cinematographs subject to the terms and conditions of the licence. Having obtained licence, it is not open to him to resile therefrom and contend that the rates of admission are unreasonable.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-70", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "122. With regard to R. 12 (3) (c) in a given case where the Government finds that the maximum rates of admission to different classes fixed by the Licensing Authority found to be excessive or ridiculously low or unreasonable, then the State Government may cancel ro modify the said order if such a course found to be just or necessary. It is implicit from it that such a cancellation or modification by the State Government would be consistent with the observance of the principles of fair play of prior notice to the affected parties, reasonable opportunity of hearing and the reasons therefor. It is a valuable built-in safeguard. It is amenable to correctional jurisdiction of this Court under Article 226 of the Constitution. Therefore, though the Rule is not explicit in this regard, the principles of natural justice should be read into this Rule and the vires of this Rule can be sustained. Such a course was held to be valid by their Lordships of the Supreme Court in ManekaGandhi v. Union of India, and Swadeshi Cotton Mills v. Union of India, . \n 123. It is not the case of the petitioners that the State Government has exercised its power without affording any reasonable opportunity of observing the principles of natural justice. Therefore this R. 12 (3) (c) is also beyond the pale of assailment. \n 124. Sub-rule (3) (d) of R. 12, a right of appeal to State Government is yet another benevolent and beneficial enabling remedy of redressal to the licensees. The period of limitation and power to condone delay of time-barred appeals are provided in the Rules. The reasons are to be recorded by the State Government. Therefore it cannot be said that this sub-rule is unreasonable.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-71", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "125. Section 12 of the Act also gives power of exemption where in the opinion of the Government reasonable grounds exist for doing so, the Government, by order in writing subject to such conditions and restrictions as it may impose, exempt any cinematograph exhibition or class of cinematograph exhibitions from any of the provisions of this Act or any Rules made thereunder. Therefore the power of exemption is also additional safeguard confided in the Government in appropriate cases to exempt from any of the provisions of the Act. \n 126. Sri Choudary, learned counsel for petitioners relied on Venkateswara Rao v. Govt. of Andhra Pradesh, (supra), contending that the Government cannot transgress the statutory limitations provided under the Act. He contends that since there is no power given under the Act to make the impugned Rule, transgression of the legislative power is apparent and so is its ultra vires nature. We have carefully analysed the ratio laid down therein. The facts in that case are clearly distinguishable. Under the Andhra Pradesh Panchayat Samithis and Zilla Parishads Act, 1959, power to establish and maintain primary health centres was vested in the Panchayat Samithis and the State Government while making the rules under Sec. 69 of the Act, framed Rules conferring that power in the Government. Thereby Government sought to defeat the legislative effect through rule-making power. Hence it was found ultra vires. \n 127. The other decision relied on by the learned counsel in Sant Saran Lal v. Parsuram, (supra), is equally inapplicable. Therein, while making the Rule the Government have fixed the upper limit of loans outstanding at anyparticular time by the money-lender. The Rule was asssailed as being ultra vires. While considering the said contention, Raghubar Dayal, J. speaking for the Bench held that :", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-72", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"..... Act does not anywhere provide for the fixing of the upper limit for the loans remaining outstanding at any particular time. The rule-making power of the Government does not extend to the fixing of such a limit ....... The rule-making power given to the State Government is not expressed in the usual form i.e., is to to the effect that the State Government may make rules for ht epurpose of the Act. The rule-making power is limited to what is stated in clauses (a) to (e) of S. 27 and these clauses do not empower the State Government to prescribe the limit up to which the loans advanced by money-lender are to remain outstanding at any particular moment of time.\" \n 128. In view of the facts and point raised therein, it has no application to the facts on hand. \n 129. Yet another decision relied on by the learned counsel is A. K. Sinha, v. A. K. Biswas, (supra). Far from helping the petitioners for his contention, it supports the view we have taken. Therein, the High Court has taken the view that the definition of 'gold' in R. 126-A (d) does not include the smuggled gold. Thereby the High Court has given restrictive meaning to the word 'gold'. His Lordships chandrachud, J. (as his Lordship then was) considered the definition of 'gold' in R. 126-A (d) and held that (para 20):", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-73", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"................. it is couched in wide terms and it does not make any distinction between smuggled gold and gold lawfully possessed. The intention of the Legislature must be gathered primarilty and principally from the words used by it and the definition of 'Gold' carves out no exception in favour of the smuggled gold. Secondly, if the intention of the Legislature as reflected in the scheme of law is to control the meaning of the words used in a particular section or Rule, it strikes us as surprising that the obligation to declare gold should be imposed on lawful possessors of gold but should leave untouched the possession by smugglers or their agents of gold smuggled into the country. Under the definition contained in R. 126-A (d), \"gold means gold\" and no rule of statutory construction can permit the definition to be altered materially so as to read \"gold means gold but shall not include smuggled gold\". To put such a construction on the definition is to coin a new definition and therefore to legislate.\" \n From the ratio of the above decision, it is clear that if the language couched in the Statute is wide enough to include the smuggled gold it is impermissible to cut down the sweep of the language couched in the Statute to defeat its ambit and the purpose of the Act. \n 130. On a consideration of the above facts, circumstances and principles of law, we have no hesitation to hold that the impugned Rule is not ultra vires the power of regulation. \n Unreasonable restriction :", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-74", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "131. The next bow in the string of Mr. M. R. K. Choudary, is that the petitioners have fundamental right to carry ontheir trade or business in exhibition of cinematographs. As incident thereof, they have unbriddled power to fix the rates of admission to the persons who seek admission into the various classes in their theatres. Therefore the impugned Rule impedes it unreasonably trenching upon their fundamental free right to business and fixation of maximum rates of admission, violates Art. 19 (1) (g) of the Constitution. Though the State has got the power to regulate, it is not being part of the scheme of the regulation nor being incidental, the restriction imposed is not saved by Cl. (6) of Art. 19 and, therefore, it is unconstitutional. To appreciate this contention, it is necessary to see, what is the nature of the right the petitioners possessed of; whether the right the petitioners claimed is absolute and whether the restriction imposed is in public interest and therefore reasonable. It is undoubted that Art. 19 (1) (g) reserves to every citizen fundamental right to practice any profession or to carry on any occupation, trade or business. When exercise thereof is impaired or controlled or limitations are put thereon, then, it is for the party that supports such impairment, etc. to satisfy that the restriction is reasonable in the interest of the general public and not arbitrary nor disproportion to public interest and so constitutional. If the right is not hedged or clothed iwht any public interest, then it is onerous on the respondent to establish with strong reasons for unwarranted interference with the exercise of the said fundamental right. The Court also has to zealously scrutinize with more care. On the other hand, if the right which the citizen claim is itself acquired under a particular statute or regulation or a rule, then his exercise thereof would be subject to the limitation imposed under the", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-75", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "statute or regulation or a rule, then his exercise thereof would be subject to the limitation imposed under the said statute or regulation or rule. Therefore, the first question to be considered is what is the right the petitioners possessed of.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-76", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Nature of right - Not an absolute right: \n 132. Before considering that question it is necessary to refer to few decisions which have got a bearing on the subject. Where a Statute creates a right and a specific forum to vindicate the injury, the redressal is to be had only through the forum created, not being a civil right but being a creature of Statute and Special Law, must be subject to the limitations imposed by it, is the law laid down in N. P. Ponnuswami v. Returning Officer, Namakkal, . \n 133. Where a right is created under a special law with a disqualification prescribed to exercise the said right, the right is to be exercised subject to the disqualification, though he has fundamental right to practice the profession of law was held in Sakhawant Ali v. State of Orissa, . The question that arose therein was whether a person practising as an advocate but being a Standing Counsel for the Municipality has a fundamental right to stand as a candidate for election to the Municipality while continuing to be the Standing Counsel. It was negatived. H. N. Bhagwathi, J. (speaking for the Bench) held (para 11): \n \"There is no fundamental right in any person to stand as a candidate for election to the municipality. The only fundamental right which is guaranteed is that of practising any profession or carrying on any occupation, trade or business. There is no violation of the latter right in prescribing the disqualification of the type enacted in Section 16 (1) (ix) of the Act.\" \n When a right to practice not being an absolute but subject to any other law is prohibited before Tribunals that created the forum, the prohibition was upheld in two Division Bench decisions reported in Mulchand v. Mukund, (supra) and Rangaswamy v. Industrial Tribunal, .", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-77", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "134. When a right to receive pension by a Government servant was hedged with a condition, though the advocate has a right to practice, so long as he wishes to receive pension, he shall be bound to obey the condition imposed in the recent decision rendered by us in Y. G. Rama Murthy v. Chairman, Central Board of Excise & Custom and Excise Union, W. A. No. 1079/82 dated 25-3-83. \n 135. When a right to membership of a Society is created under a Statute and the said society is restricted to a specified period, it was held by a Full Bench of this Court in Kamareddy Suryanarayana v. District Co-operative Officer, that :", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-78", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"The Society in question is a creature of the Statute formed under the provisions of the Andhra Pradesh Co-operative Societies Act. The right of the petitioner to contest the election for membership of the Committee emanated only out of the provisions of the Act, the Rules and Bye-laws. That right he cannot claim otherwise than under those provisions. His right to become a member of the Society or a member of the Committee is not the common law or a general right given to him from an Association and which is guaranteed under Article 19 (1) (c) of the Constitution. The Act under which the Society is formed confers certain rights and privileges and also imposes certain obligations and restrictions on the Society and its members. A member claiming rights under provisions is also bound by any restrictions imposed thereunder ......................... There is no compulsion or bar for one to become a member of a Society under the Act or not ................... If a Society is formed and is registered under the Act and its members calim special privileges and advantages conferred by the Act and the Rules framed thereunder, they cannot turn round and say that they are not bound by any restrictions imposed by same provisions of the Act or the Rules in the interests of good and fair administration and working of the Society on the ground that they are violative of the fundamental right to form Associations, guaranteed under Art. 19 (1) (c) of the Constitution and the restrictions imposed are not those contemplated under Clause (4) of Art. 19 and therefore they are not bound by them.\" \n In all these cases, the inhibition was assailed on the touchstone of Art. 19 (1) of the Constitution.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-79", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "136. From a conspectus of the above decisions, the result that emerges therefrom is that a person that obtains a right to carry on profession, trade or business under a Statute, is not an absolute right. He is entitled to the benefits of the right derived subject to the terms, conditions and restrictions imposed by the Statute. He cannot claim higher rights than was conferred. Having obtained a right it is not open to contend that he is not bound by the conditions and restrictions found unfavourable. \n Whether private contractual rights can be regulated: \n 137. The next question that has to be considered as its integral limb is the nature of business the petitioners undertook to carry on. Does that business purely operate in the field of private contract or does it clothed with public interest to be constrolled by the public for common good? In this context it is apposite to refer to the principle adumbrated by Lord Chief Justice Hale about three centuries ago in his treatise De Portibus Moris reported in Harb Law Tracts 78 thus: \n \"When the private property is affected with a public interest, it ceases to be \"juris private\" only and it becomes clothed with a public interest when used in a manner to make it of public consequence and affect the community at large; and so using it, the owner grants to the public an interest in that use, and must submit to be controlled by the public for common good.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-80", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "This statement was approved by the Supreme Court of America, a century ago in 18786, in the leading judgment in Munn v. The People of Illinois, (1876-78) 94 US 113 (supra). The facts therein also are similar to the present case under consideration. Therefore it is proper to state the facts in bried. Therein, the Illinois Legislature passed an Act imposing restriction to fix the rates for storage of grains in warehouses by a Statute of 1871. It was challenged on the ground of constitutional virus. The majority of their Lordships upheld the validity. Their Lordships noticed the impact of the business of storage of foodgrains in the warehouses, the mode of operation of the business, the need of the public and its tendency in the business of near monopoly in regulating the storage and its steep impact on the public utility. While considering the validity of fixation of rates from that background, majority of their Lordships, speaking through Chief Justice Waite, while reiterating the dictum of Lord Chief Justice Hale held that : \n \"Under such circumstances it is difficult to see why, if the common carrier, or the miller, or the ferrymen or the innkeeper, or the wharfinger or the baker, or the cartman, or the hackney-coachman, pursues a public employment and exercises \"a sort of public office\", these plaintiffs in error do not. They stand to use again the language of their counsel, in the very \"gateway of commerce\" and take toll from all who pass. Their business \"most certainly tends to a common charge, and is become a thing of public interest and use.\" \n Then continued and held:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-81", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Then continued and held: \n \"For our purposes, we must assume that, if a state of facts could exist that would justify such legislation, it actually did exist when the Statute now under consideration was passed. For us the question is one of power, not of expediency. If no state of circumstances could exist to justify such a Statute, then we may declare this one void because in excess of the legislation power of the State. But if it could, we must presume it did. Of the propriety of legislative interference within the scope of legislative power, the Legislature is the exclusive Judge. \n Neither is it a matter of any moment that no precedent can be found for a Statute precisely like this. It is conceded that the business is one of recent origin, that its growth has been rapid and that it is already of great importance. And it must also be conceded that it si a business in which the whole public has a direct and positive interest. It presents, therefore, a case for the application of a long known and well established principle in social science, and this Statute simply extends the law so as to meet this new development of commercial progress. There is no attempt to compel these owners to grant the public an interest in their property, but to declare, their obligations, if they use it in this particular manner. It matters not in this case that these plaintiffs in error had built their warehouses and established their business before the regulations complained of were adopted. What they did was, from the beginning, subject to the power of the body politic to require them to conform to such regulations as might be established by the proper authorities for the common good. They entered upon their business and provided themselves with the means to carry it on subject to this condition. If they did not wish to submit themselves to such interference, they should not have clothed the public with an interest in their concern.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-82", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "When a contention of loss of profit and the immunity of private contracts vis--vis statutory legislation was pleaded, their Lordships considered and held:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-83", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"What they did was, from the beginning, subject to the power of the body politic to require them to conform to such regulations as might be established by the proper authorities for the common good. They entered upon their business and provided themselves iwht the means to carry it on the subject to this condition. If they did not wish to submit themselves to such interference, they should not have clothed the public with an interest in their concerns. It si insisted, however, that the owner of property is entitled to a reasonable compensation for its use, even though it be clothed iwht a public interest, and that what is reasonable is a judicial and not a legislative question. As has already been shown, the practice has been otherwise. In countries where the common law prevails, it has been customary from time immemorial for the Legislature to declare what shall be reasonable compensation under such circumstances, or perhaps more properly speaking, to fix a maximum beyond which any charge made would be unreasonable. Undoubtedly, in mere private contracts, relating to matters in which the public has no control over such a contract. So too, in matters which do affect the public interest, and as to which legislative control may be exercised if there are no statutory regulations upon subject, the Courts must determine what is reasonable. The controlling fact is the power to regulate at all. If that exists, the right to establish the maximum of charges, as one of the means of regulation, is implied. In fact, the common law rule, which requires the charge to be reasonable is itself a regulation as to price. Without it the owner could make his rates at will and compel the public to yield to his terms, ro forgo the use. But a mere common law regulation of trade or business may be changed by statute. A person has no property, no vested interest in any rule of the common law. That is only one of the forms of municipal law, and is no more sacred than any other. Rights of property", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-84", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "one of the forms of municipal law, and is no more sacred than any other. Rights of property which have been created by the common law cannot be taken away without due process; but the law itself, as a rule of conduct, may be changed at the will, or even at the whim, of the Legislature, unless prevented by constitutional limitations. Indeed, the great office of statutes is to remedy defects in the common law as they are developed, and to adapt it to the changes of time and circumstances. To limit the rate of charge for services rendered in a public employment, or for the use of property in which the public has an interest, is only changing a regulation which existed before. It establishes no new principle in the law, but only gives a new effect to an old one.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-85", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "The above principle has become locus clasicus. In all subsequent host of decisions meeting varying circumstances it was followed. In Spring Valley Water Works v. Schottler, (1883-84) 110 US 347 at p. 354 wherein the statute regulating charging rates at which water shall be sold was upheld. In Wash St. L. P. R. Co,. v. Illinois, (1885-85) 118 US 557 at p. 559 it was held that it it the duty of the Legislature so far as to limit the amount of charges that should be made for such services. In Georgia R & BkG Co. v. Smith, (1887-88) 128 US 174 at p. 179, Field, J. who rendered dissenting judgment in Mann v. Illinois, (1876-78) 94 US 113 (supra) held that the Legislature has power to prescribe the charges for the carriage of persons and merchandise within its limits. \n 138. In German Alliance Insurance Co. v. Lewis, (1913) 233 US389 at pp. 411, 412 where the constitutional validity of fixation of rates of fire insurance was assailed, Justice Mc. Kenaa, speaking on behalf of the Court upholding the power of regulation held: \n \"The underlying principle is that business of certain kinds hold such a peculiar relation to the public interest that there is super-induced upon it the right of public regulation. It would be a bold thing to say that the principle is fixed, inelastic, in the precedents of the past, and cannot be applied though modern economic conditions may make necessary or beneficial its application ... ... .. Its personal character certainly does not of itself preclude regulation ... ... ....\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-86", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "No doubt the petitioners while undertaking exhibition of cinematographs have adopted the field of private contract. But it assumed of public importance. The question therefore is no longer merely that of one party to a contract as against the other, but of the use of reasonable means to safeguard the well-being of the people. Under such circumstances, reasonable exercise of the protective power reserved in the State is to be read into all the contracts clothed with public interest. \n 139. From this consideration, we have no hesitation to conclude that fixation of the rates of admission is itself a regulation. Though it is in the realm of private contract, when the persons undertake the business or occupation of exhibiting cinematography, it is \"clothed with a public interest\" as the cine-going public acquired direct and positive interest to have easy access of admission into the theatres. Thereby the business ceased to \"Juris Privati\" and the business tends to a common charge and became a thing of public interest and use. The business, became a sort of public office nearing monopolisation. The Legislature seeks to avoid this tendency in the interests of the public welfare. It becomes absolutely necessary to override the private rights of persons and property so as to effectuate the public order for the general welfare of the citizens. Therefore it has to be construed I the light of the change of times and the impact of the business on the public welfare. It should be considered in a flexible manner according to general consideration of public requirement, but not in a pedantic way. \n Whether Rule 12 (3) imposes unreasonable restriction? \n 140. Keeping in view of the above factors, it has to be considered whether the impugned rule impinges unreasonable restriction on the right of the petitioners to carry on trade or business in exhibition of cinematographs.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-87", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "141. Before considering the validity of the regulation on the ground of unreasonable restriction, it is profitable to refer to an instructive approach adopted by a Division Bench of the Bombay High Court consisting of Chagla, C. J. and Gajendragadkar, J. (as he then was) in State of Bombay v. Heman Santlal, observed (at p. 18): \n \"... .... ... In considering the validity of requisition, we have to bear in mind that although the administration of the Act may have resulted in some hardship on the whole it is a beneficial measure intended to subserve a very pressing social need. It, therefore, calls at our hands a benevolent interpretation. The Court must always lean in favour of holding the validity of an Act rather than against it. There may be cases where a law is alleged to contravene fundamental rights. In such a case, undoubtedly, the Court must zealously scrutinize the provisions of the impugned Act in order to see that fundamental rights are not violated. But where what is challenged is only the letter of the law and substance is in the interst of a large body of citizen, then as far as possible the Court must try to uphold the substance and not permit the letter to defeat the object of the Legislature.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-88", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Keeping this instructive caution, let us proceed to enquire whether the impugned rule imposes unreasonable restriction. Every citizen has fundamental right to pursue any lawful profession, occupation, trade or business. But it is obviously subject to such reasonable conditions as may deem expedient or essential to the safety, health, peace, order, morals or well-being of the community. In order to determine reasonableness, regard must be had to the nature of the business, the conditions prevailing in that trade, the interest of the general public sought to be achieved by imposing the restriction and whether it is unnecessarily harsh and overrides the objects to achieve which the law was enacted. \n 142. Reasonable restriction connotes that the limitation imposed on a person in enjoyment of a right should not be arbitrary or of excessive nature beyond what is required in the interests of the public. The word \"reasonable\" implies an intelligent care and deliberations, i.e., the choice of a course which reason dictates. Legislature which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed and the social control permitted by Cl. (6) it must be held to be wanting in that quantity. The test of reasonableness has to be considered in the context of the issues which faced the legislation. In the construction of such laws, and particularly in judging their validity the Courts have to necessarily approach it from the point of view of furthering the social interest which it is the purpose of the legislation to promote, for the Courts are not, in these matters, functioning as a vacuum but as parts of a society which is trying, by enacted law, to solve its problems and achieve social control and peaceful adjustment and thus furthering the moral and material progress of the community as a whole (Jyothi Pershad v. Union Territory of India, . In the same judgment, their Lordships have laid down that:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-89", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"The criteria for determining the degree of restriction and the right to hold property which would be considered reasonable age by no means fixed or state; but must obviously vary from age to age and be related to adjustments necessary to solve the problem which communities face from time to time.\" \n Test of inevitable effect on the right: \n 143. The other important test laid down by their Lordshps of the Supreme Court is, what is the direct and inevitable consequence or effect of the regulation on the fundamental right of the citizen. In Maneka Gandhi v. Union of India, (supra) Justice Bhagwati, speaking on behalf of the Court held that: \n \"In adjudging the constitutionality of a statute on the touchstone of fundamental rights to test or yardstick to be applied for determining whether a statute infringes a particular fundamental rights is \"the direct and inevitable consequence or effect\" of the impugned State action on the fundamental right of the citizen.\" .... .... \"It is the substance and the practical result of the act of the State that should be considered rather than its purely legal aspect. The correct approach in such cases should be to enquire as to what in substance is the loss or injury cauesd to the citizen and not merely what manner and method has been adopted by the State in placing the restriction.\" \n It is instructive to note the oft-quoted statement of law laid down by their Lordships of the Supreme Court speaking through Patanajali Sastri, C. J. in State of Madras v. V. G. Row, that:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-90", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"It is important in this context (restrictions on trade) to bear in mind that the test of reasonableness wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable to all caes. The nature ofh te right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent of urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict.\" \n 144. In Harakchand v. Union of India, , Ramaswami, J. speaking for the Bench laid down that (at p. 1464): \n \"It is not necessary to emphasise that the principles which underline the structure of the rights guaranteed under Article 19 of the Constitution is the principle of balancing of the need for individual liberty with the need for social control in order that the freedoms guaranteed to the individual subserve the larger public interests. It would follow the reasonableness of the restrictions imposed under the impugned Act would have to be judged by the magnitude of the evil which it is the purpose of the restraints to curb or eliminate.\" \n Loss of profit no ground for attack: \n 145. The contention of Sri Choudary that the petitioners are subjected to loss of profit return is answered by their Lordships of the Supreme Court in Nazeeria Motor Service v. State of Andhra Pradesh, where the Andhra Pradesh Act 34 of 1961 increasing the tax to be paid by the operators was assailed as being unconstitutional infringing their fundamental right. Grover, J. speaking on behalf of the Court laid down:", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-91", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "\"It has been found that there is no material which would warrant the conclusion that the increae in the surcharge of the fares and freight contemplated by the impugned validating Act would constitute an impediment to the trade. The utmost that could be said was that it would result in the diminution of profits. Even on the assumption that the profits would be diminished or greatly reduced it cannot be held that there is any infringement of Art. 19 (1) (g).\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-92", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "Same is the view in a recent judgment of the Supreme Court in Sukhanandan Saran Dinesh Kumar v. Union of India, where a similar contention was raised, Desai, J. held (para 23): \n \"Cl. 4-A (impugned restriction) serves two-fold purposes, (i) it ensures price of sugarcane avoiding impermissible deductions; (ii) it circumvents possible fraud by making such deductions as would render illusory even the negotiated price, if not fixed price. And it is indisputable that if the rebate is not statutory prescribed the cane growers will be at the mercy of the producers of sugar and khandasari sugar. If price or minimum price of sugar can be fixed by the State, because this power was never questioned before us, this very power comprehends the power to provide such incidental and ancillary regulations which will ensure the price. Price fixation measure is for protection of the farmer from the exactions of producers against which he cannot protect himself. The impugned measure ensures price either fixed or negotiated and, therefore, it is a restriction which is undoubtedly reasonable and imposed in the interest of general public and the guarantee of freedom of trade is not violated.\"", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-93", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "146. These two decisions have direct application to the facts in this case. The cine-going public at large cannot be allowed to be at the whim or vagary of the licensee seeking admission into the theatres to witness pictures to be exhibited in the theatres. The loss of profit is no ground to declare the rule unreasonble. Though patent injustice may not be encouraged, a reasonable return on investment or a reasonable rate of profit is not the sine qua non of the validity of an action taken in furtherance of the power conferred under the Act. The interst of the public has to be kept in the forefront and the prime consideration is the easy access to admission into theatre at reasonable rates. The problem has to be broached from social purpose. As held in Joseph Bcauharnais v. Illinois, (1951) 96 L Ed 919. \"It is the price for the trial and error inherent in effect with obstinate social issue.\" \n 147. The decision relied upon by the learned counsel for the petitioners in R. M. Seshadri v. District Magistrate, Tanjore, (supra) has no application to the facts in this case. Therein a special condition in the licence obliging the cinema owners to exhibit at the commencement of each performance not less than two thousand feet one or more approved films, was assailed as an unreasonable restriction on their right. We have examined the decision in detail and we are unable to see how the ratio therein is applicable to the facts in this case : The fixation of rates of admission by itself is not violative of Art. 19 (1) (g) unless it smacks of unreasonableness. We have to consider whether the rule is unreasonable.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-94", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "148. Keeping these well settled principles in view, we have to consider the contention whether the fixation of rates of admission imposes an unreasonable constraint on the right of the petitioners. We have already stated in the beginning that no material has been placed to determine factual basis regarding fixation of rates. It is already noticed that the right of the petitioners to carry on business in exhibition of cinematographs is not an absolute right. They acquired the right under a licence issued under the Act and the rules made thereunder. The petitioners have to exercise their right subject to the provisions of the Act. No doubt the petitioners made huge investments in construction of the theatres and in providing amenities as required under law. Though it is a private trade, is subject to regulation. They threw open their property devoting to public use. Therefore, their business tend to a common charge. It thereby became a thing of public interest and use. Thereby athe whole public have direct and public interest in the operation of the trade and business. It is already noticed that witnessing cinematographs has become a way of life of the people as a measure of amusement or means to a common man to relieve himself of weary and drudgery from the daily fatigue. The exhibition of cinematographs not only imparts education to illiterate but propogate cultural values creating great impact ro social life. It has a direct and inevitable effect on the public welfare. Thereby the fixation of rates of admission has become an absolute necessity to avoid (a) arbitrary exercise of the power of the licensee to fix his own rates of admission; (b) to avoid co-competitors from the field bymore powerful monied persons and thereby tend to avoid near monopoly; (c) to avoid keeping the people at the whim and vagary of the licensee in fixing the rates of admission; (d) to provide a reasonable facility for the pubilc; (e) it prevents the petitioners from charging varied rates of admission based on", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-95", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "pubilc; (e) it prevents the petitioners from charging varied rates of admission based on fluctuating fortuitous factors ensuring consequential curb or unjust enrichment but even otherwise preserved reasonable rates of profit return on the investment made and avocation pursued; and (f) in the general admission has thus become an integral and essential part of the power or regulation of exhibition of the cinematographs. It does not have the inevitable effect of driving out the licensee from the trade or business. In other words it assures orderly exercise of right to trade, business, avocation or occupation. Thus, it does not impinge nor impose unreasonable restriction upon the fundamental right to trade or business or exhibition the cinematographs. But in a given case, if the fixation of the rates is so unreasonable, arbitrary or capricious or the relevant factors were not taken into account, then it would be a case of assailing the individual action of the licensing authority, but on that account it cannot be held that the fixation of the maximum rates of admission to different classes is unreasonable. We conclude that interference is called for when the impugned statute adopts veiled and subtle trespass into a field unassigned or transgression of constitutional limitations. But when a beneficient legislation is assailed, the Court would adopt benevolent approach to lean in favour of sustaining the validity of the Act to subserve public interest, because the presumption is that the Legislature would not deliberately flout a constitutional safeguard or right. The infraction, however, may appear to be unjust or oppressive trenching upon private contracts, etc., the Court has to consider the object, purpose of the Act, the mischief it seeks to prevent and ascertain the true scope and operation of the Act; its ultimate and inevitable effect on the rights conferred under Part III of the Constitution. The minor invasions are inevitable to occur but be left to the State to rectify in its administration of the Act unless it is palpably arbitrary rendering redressal irremediable. In", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-96", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "administration of the Act unless it is palpably arbitrary rendering redressal irremediable. In view of these circumstances, the exercise of the power to fix rates of admission is not an unreasonable restriction and the impugned rule is legal, valid and constitutional.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "22a1c2c774db-97", "Titles": "D.K.V. Prasada Rao And Ors. vs Government Of Andhra Pradesh on 8 April, 1983", "text": "149. Coming to the third question, we have already stated that the petitioners have not placed any material before us to find out whether the exercise of the power of fixation of rates of admission into the theatre of the petitioners is unreasonable. On the facts in these cases, even before the licensing authorities could take action or decision, they have rushed to this Court seeking appropriate reliefs. This Court gave interim directions pending writ petitions for consideration of the applications by the licensing authority and we have already extracted that the licensing authority considered the matter on the basis of the material placed before it. None of the individual orders has been assailed in these writ petitions except assailing the vires of the rule in general pattern referred to above. Even then, we have perused the orders passed by the authority, as extracted in the counter-affidavit in the earlier part of our judgment. On the facts in these cases, the fixation of rates of admission to different classes cannot be said to be unreasonable nor beset with illegality. The refusal in one case remained unchallenged. Under these circumstances, we hold that ht epes did not make out any case for the issuance of the writs as prayed for. The foundation was laid only on shifting sand and consequently collapsed. Accordingly, the writ petitions are dismissed with costs. Advocate's fee Rs. 250/- in each. \n Oral representation for leave to appeal to the Supreme Court. \n 150. The learned counsel for the petitioners makes an oral application for leave to appeal to the Supreme Court under Article 134-A of the Constitution of India. We do not think that we can rightly certify under Article 133 (1) of the Constitution that this is a fit case for leave to appeal to the Supreme Court. The oral application is rejected. \n 151. Petitions dismissed.", "source": "https://indiankanoon.org/doc/699376/"}
+{"id": "35c4dd61e4b6-0", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "JUDGMENT Satyanarayana Raju, J.  \n 1. These petitions filed under Article 226 of the Constitution, pray for the issue of writs of Mandamus or other appropriate writs directing the respondents, namely (1) the State of Andhra Pradesi), and (2) the Market Committees, to forbear from enforcing the provisions of the Madras Commercial Crope Markets Act (XX of 1933) or the rules framed thereunder against the several petitioners. A common question of law arises in all these petitions concerning the legality and constitutional validity of Section 11 of the Act. \n 2. The Madras Commercial Croos Markets Act (hereinafter referred to as 'the Act') was originally' enacted in 1933 by the Madras Legislature after the-previous sanction of the Governor-General had been obtained to the passing of the Act. It was subsequently amended from time to time. As the Act was-a \"law in force\" immediately before the formation of the Andhra State, its provisions govern the territories forming part of the Andhra State by virtue of the Andhra State Act of 1953 and the adaptation of the Laws Order made by the Government of Andhra on the First November 1953. \n 3. The object of the Act, as stated in the preamble, is to provide for the better regulation of buying and selling of commercial crops and the establishment of Markets for commercial crops and make rules for their proper administration. For an appreciation of the contentions raised in the Writ petitions it is necessary to refer to the material provisions of the Act. \n 4. Section 2(i-a) defines 'commercial crop' as meaning cotton, groundnut or tobacco and as including any other crop or product, notified by the State-Government in the Official Gazette as a commercial crop for the proposes of this Act.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-1", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "Under Section 3 the State Government may, by notification in the Official Gazette, declare their intent iotti of exercising control over the purchase and sale of such commercial crop or crops and in such area as may be specified in the notification and such notification shall state that any objections or suggestions which may be received by the Slate Government, within a period to be specified in the notification, which will be considered by them. Under Section 4 the Government may declare the area specified in the notification under Section 3 or any portion thereof to be notified area for the purposes of the Act in respect of the commercial crop or crops. \nSection 4-A empowers the State Government to establish a market committee for every notified area, and it shall be the duty of the market committee to enforce the provisions of the Act and the rules and by laws made thereunder in such notified\" area as is entrusted to the Committee. The constitution of Market Committees is provided under Section 6 of the Act. Section 7 enacts that every market Committee shall be a body corporate. Section 9 empowers a market committee to employ such officers and servants as may be necessary for the management of the market and for the payment of their salaries. The form of contracts which may be entered into by a market committee is specified in Section 10. Then comes the material Section 11 which is in the following terms: \n \"11(1). The market Committee shall, subject to such rules as may be made in this behalf, levy fees on the notified commercial crop or crops brought and sold in the notified area at such rates as it may determine: \n Provided that until the market committee has determined the rates of such fees it shall levy fees at the rates specified in the Schedule to this Act or in the case of any crop or product notified by the State Government as commercial crop for the purpose of this Act, at the rates specified in this behalf in such notification.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-2", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "Explanation -- For the purposes of this sub-section, all notified commercial crops leaving a notified area shall, unless the contrary is proved, be presumed to be bought and sold within such area. \n (2) The fees referred to in Sub-section (1) shall be paid by the purchaser of the commercial crop concerned: \n Provided that where the purchaser of a commercial crop cannot be identified, the fee shall be paid by the seller. \n (3) Out of the fees levied under Sub-section (1) on the commercial crop or crops bought and sold in any part of the notified area which constitutes a village as defined in Section 2 of the Madras Village Panchayats Act, 1930, such proportion as may be prescribed shall be paid by the market committee to the panchayat concerned.\"  \n 5. Section 11-A empowers the market committee to levy subscription for collecting and disseminating among the subscribers, information as to any matter relating to crop statistics or marketing in respect of the commercial crop or any of the Commercial crops concerned. \n 6. Section 12 lays down that all moneys received by a market committee shall be paid into a fund to be called the 'Market Committee Fund', and all expenditure incurred by the market committee under or for the purposes of this Act shall be defrayed out of the said fund and that any surplus remaining after such expenditure has been met shall be invested in such manner as may be prescribed by rules. Section 13 enumerates the purposes for which the market committee fund may be expended.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-3", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "7. In Kutti Keya v. State of Madras, 1954-1 Mad LJ 117: (MR 1954 Mad 621) it was contended that the Act and the Rules framed thereunder had become void and unenforceable by reason of their being repugnant to the Constitution. After an elaborate consideration of the contentions raised before them, Kajamannar, C.J. and Venkatarama Ayyar, J., held that the provisions of that Act generally must be upheld under Article 19(6) of the Constitution as reasonable and as having been enacted in the interests of the general public. The learned Judges, however, declared that Section 5(4)(a) of the Act, which confers on the Collector an unlimited and uncontrolled discretion to grant or refuse licenses as he might choose, is void. Rule 37 which provides that buyers and sellers, whose names are not registered by the market committee, shall not buy or sell within the notified area, was also held to be void.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-4", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "8. the provisions of the Act in Sections 11 and 11-A and Rule 28(1) and (3), providing for the levy of fees on notified commercial crops, bought and sold in the notified area at such rates as it might determine, were held to be not repugnant to Article 286(2) of the Constitution. Rut the learned Judges observed that the amounts collected were taxes notwithstanding that they were not brought into the consolidated fund of the State under Article 266(1) but constituted into a separate fund and the levy was only on a section of the public. The learned Judge observed that as actually no levy had been imposed under Section 11 on any of the petitioners, its legality did not arise for determination in those proceedings and that the point was raised only as leading on to the further contention that as the levy, under Section 11 was illegal, the entire Act must fail. \n 9. The learned Advocates appearing for the petitioners have raised divergent contentions but they are all agreed- that the levy of fees as contemplated by Section 11 of the Act is unconstitutional. The learned Advocate appearing for the petitioner in W.P. No. 42 of 1955 has contended that the levy in Section 11 is a tax and not a fee and it must be struck down as being ultra vires the powers of the State Legislature. He has argued that even if the imposition is held to be a fee, and not a tax, there being no direct, proximate and immediate service to the petitioners, it cannot be justified.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-5", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "In these contentions, he is supported by the learned Advocates appearing for the petitioners in W. P. Nos. 718 of 1955 and 739 of 1936, who have argued that, if construed as a fee, it is so excessive that it does not bear a reasonable relation to the services rendered by the market committee. The learned Advocates appearing for the petitioners in W. P. Nos. 1060 of 1956 and 1367 of 1957 have, however, argued that the observations made in the Madras decision with regard to Section 11 are obiter, that the levy under Section 11 is not a tax but a fee, and that as a fee, it is unconstitutional. \n 10. The learned Advocate-General, appearing for the respondents, has contended that the Act was passed in 1933 at a time when there was no distinction between a tax and a fee and the only requirement then was that where it was a tax the sanction of the Governor-General was necessary, and that the requirement having been complied with, the Act is valid both under Section 292 of the Government of India Act and Article 372 of the Constitution and that therefore the question of legislative competence does not arise. \n The learned Advocate-General has further argued that even assuming that the validity of Section 11, on the ground of want of legislative competence, is now open for determination, having regard to the general scheme and the purpose of the Act, the imposition must be held to be a fee and not a tax. He went a step further and has argued that even if the provision is regarded as authorising the levy of a tax, it is perfectly valid because it is an ancillary and incidental provision in a legislation relating to a subject enumerated in the State List.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-6", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "11. We shall deal at the outset with the last contention of the learned Advocate-General for if that contention is sound, it would render unnecessary the consideration of the other questions. He relied upon certain decisions in support of the contention. In United Provinces v. Mst. Atiqa Begum 1941-1 Mad LJ FC (Sup) p. 65 at pp. 77 and 78: (AIR 1941 FC 16 at p. 25) Gwyer, C.J. said. \n \"The subjects 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 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. I deprecate any attempt to enumerate in advance all the matters which are to be included under any of the more general descriptions; it will be sufficient and much wiser to determine each case as and when it comes before this Court.\" \n 12. In State of Bombay v. F.N. Balasara 1951-2 Mad LJ 141 at p. 147: (AIR 1951 SC 318 at p. 322) the following observations occur:", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-7", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "\"It is well-settled that the validity of an Act is not affected if it incidentally trenches on matters outside the authorised field, and therefore it is necessary to inquire in each case what is the pith and substance of the Act impugned. If the Act, when so viewed, substantially falls within the powers expressly conferred upon the Legislature which enacted it, then it cannot be held to be invalid, merely because it incidentally encroaches on matters which have been assigned to another Legislature.\" \n 13. In Prafulla Kumar v. Bank of Commerce, Ltd., Khulna, AIR 1947 PC 60 if has been held that if an enactment according to its true nature, its pith and substance, clearly falls within one of the matters assigned to the provincial Legislature, it is valid notwithstanding its incidental encroachment of a Federal Subject. This decision of the Privy Council was followed by the Federal Court in Miss Kishori Shetty v. The King, AIR 1950 FC\n69.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-8", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "14. As was pointed out by the Supreme Court when the validity of an Act is called in question, the first thing for the Court to do is to examine whether the Act is a law with respect to a topic assigned to the particular Legislature which enacted it. If it is, then the Court is next to consider whether, in the case of an Act passed by a Legislature of a State, its operation extends beyond the boundaries of the State, for under the provisions conferring legislative powers on it, such legislature can only make a law for its territories or any part thereof and its laws cannot, in the absence of a territorial nexus, have any extra-territorial operation. If the impugned law satisfies both these tests, then finally the Court has to ascertain if there is anything in other part of the Constitution which places any fetter on the legislative powers of such Legislature. \n 15. There is no generic difference between a tax and a fee but our Constitution has for legislative purposes, made a distinction between them. While there are various entries in the legislative lists as regards various forms of taxes, there is an entry at the end of each one of the three lists as regards fees which could be levied in respect of any of the matters that is included in it. (Vide the Sirur Mutt Case; Commr. of Hindu Religious Endowments v. Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, . \n 16. Article 366 Clause (28) gives an inclusive definition of 'taxation.' It reads: \n \"Taxation -- includes the imposition of any tax or impost, whether general or local or special, and 'tax' shall be construed accordingly.\"", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-9", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "17. The Constitution has given an enumeration of the subjects into three categories: List 1 with reference to matters which fall exclusively within the competency of the Union; List 2 with regard to matters which fall exclusively within the competency of the State; and List 3 with regard to matters in respect of which the Union and the Stale have concurrent powers. \n 18. The power to enact a law with respect to a tax on a subject must, to be intra vires, be one relating in fact to that subject. Entries 82 to 92-A of List I enumerate various kinds of taxes which the Union is competent to legislate upon. Entry 97 of the said List vests a residuary power in the Union Legislature in respect of any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists. Similarly entries 45 to 63 of List II give an enumeration of the various impositions which are within the legislative competence of the State. Entry 96 of List I, entry 66 of List II and entry 47 of List III (Concurrent List) specifically provide for the imposition of fees in respect of any of the matters enumerated in the three lists. The absence of a similar provision in regard to the levy of taxes in respect of any of the matters enumerated in the Lists gives a strong indication that the levy of tax was not meant to be exercised as an ancillary or incidental power. \n 19. The subjects dealt with in Lists I and II are meant to be exclusive, and all residuary power with regard to taxation is vested in the Union under Entry 97. Where the power of taxation is intended to be conferred on the Union or State, the Lists specify the subjects with regard to which that power can be exercised. We find it difficult to extract the power of taxation as ancillary or incidental to the subjects specified in the Lists.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-10", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "20. We are fortified in this conclusion by a recent decision of their Lordships of the Supreme Court in Sundararamier and Co. v. State of Andhra Pradesh, , where it was observed: \n \"The above analysis -- and it is not exhaustive of the entries in the Lists -- leads to the inference that taxation is not intended to be comprised in the main subject in which it might on an extended construction be regarded as included, but is treated as a distinct matter for purposes of legislative competence.\" \n 21. It is next contended by the learned Advocate-General that regarded as a tax, it is within the legislative competence of the State by reason of Entry Nos. 52, 54 and 60 in List II. The entries read: \n \"52. Taxes on the entry of goods into a local area for consumption, use or sale therein. \n X X            X            X           XX", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-11", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "54. Taxes on the sale or purchase of goods other than newspapers. \n \n\n X X              X              X             X\n \n\n 60. Taxes on professions, trades, callings and employments.\"", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-12", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "22. Under Section 11 the market committee is empowered to levy fees on the notified commercial crop or crops brought and sold in the notified area at such rates as it may determine, and ordinarily they are to be paid by the purchaser of the commercial crop concerned. It is not, therefore, a tax on the entry of goods into a local area, within the meaning of Entry No. 52. It is not a tax on the sale or purchase of goods nor is it a lax on a profession, trade, calling or employment. It is impassible, therefore, to bring the impost under Section 11 of the Act within any of the subjects enumerated in Entry Nos. 52, 54 and 60. \n 22A. Another submission made by the learn--ed Advocate-General is that the Act was passed in 1933, before the Government of India Act of 1935 was passed, at a time when there was no distinction between a tax and a fee and the only requirement was that where it was a tax the sanction of the Governor-General was necessary, and that requirement was satisfied. The impugned section was substituted for the original section by the Madras Commercial Crops Markets (Amendment) Act (XXII of 1945). The original Section ran: \n \"The market committee shall, subject to such rules as may be made in this behalf, levy fees on the commercial crop or crops bought and sold in the notified area.....\" \n It will be seen that the power to levy fees' on the notified commercial crop or crops was introduced in the section in 1945. Section 11 in its present form was placed on the statute book after the Government of India Act of 1935 came into force. The Government of India Act of 1935 made a distinction between a fee and a tax. We arc therefore unable to accede to this contention of the learned Advocate-General.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-13", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "23. The point for determination is whether the levy is a tax or a fee? As already stated, the Division Bench of the Madras High Court, consisting of Rajamannar, C.J., and Venkatarania Ayyar, J. have held in that the amounts collected under Section II are taxes notwithstanding that they are not brought into the consolidated fund of the State, but constituted a separate fund and the levy is only on a section of the public. It is, no doubt, true that the legality of the levy under Section 11 did not directly arise for determination in the proceedings before the learned Judges and may in that sense be considered to be obiter. Even as an obiter dictum their opinion is entitled to the highest respect. \n 24. The question has, however, assumed a new orientation consequent upon two recent decisions of the Supreme Court rendered on 16-3-1954, where this question as to whether a particular levy is a fee or a tax has been elaborately considered. The first of the decisions is the Sirur Mutt Case and the .other is Sri Tagannatli Ramanuj Das v. State of Orissa . In the tost of these cases, their Lordships of the Supreme Court held that the contribution levied under Section 76 of the Madras Hindu Religious and Charitable Endowments Act, is a tax and not a fee and consequently it was beyond the power of the State Legislature to enact that provision. In the latter case their Lordships upheld the constitutionality of Section 49 of the Orissa Hindu Religious Endowments Act. \n 25. Now, it will be useful to set out Section 76 of the Madras Act, and Section 49 of the Orissa Act.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-14", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "Section 76: \"(1) In respect of the services rendered by the Government and their officers, every religious institution shall, from the income derived by it, pay to the Government annually such contribution not exceeding five per centum of its income as may be prescribed. \n (2) Every religious institution, the annual income of which, for the fasli year immediately preceding as calculated for the purposes of the levy of contribution under Sub-section (1), is not less than one thousand rupees, shall pay to the Government annually, for meeting the cost of auditing its accounts, such further sum not exceeding one and half per centum of ifs income as the Commissioner may determine. \n (3) The annual payments referred to in subsections (1) and (2) shall be made, notwithstanding anything to the contrary contained in any scheme settled or deemed to he settled under this Act for the religious institution concerned. \n (4) The Government shall pay the salaries, allowances, pensions and other beneficial remuneration of the Commissioner, Deputy Commissioners, Asst. Commissioners and other officers and servants (other than executive officers of religious institutions) employed for the purposes of this Act and the other expenses incurred for such purposes including the expenses of Area Committees and the cost of auditing the accounts at religious institutions.\"  \n Section 49: (1) Every Math or temple and every specific endowment attached to a math or temple the annual income whereof exceeds Rs. 250 shall, for meeting the expenses of the Commissioner and the other officers and servants working under him pay annually a contribution at the following rates: \n Explanation -- A math or temple or a specific endowment attached to a math or temple, the annual income whereof does not exceed Rs. 250/- shall not be liable to pay any contribution for meeting the expenses of the Commissioner:", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-15", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "Provided that the Provincial Government, may, for special reasons, increase or decrease the rates of contribution payable under this sub-section as they deem fit. \n (2) Religious endowments, the administration of which is governed by a scheme settled under Section 92 of the Code of Civil Procedure, 1908, shall notwithstanding anything to the contrary contained in such scheme, he liable to pay the contribution under this Section.\"  \n 26. There was no provision in the Madras Act that the money raised by levy of contributions should be earmarked or specified for defraying expenses that the Government has to incur for performing the services. All the collections made under Section 7G went into the consolidated fund of the State and all the expenses had to be met not out of these collections but out of the general revenues. What is more, there was a total absence of any correlation of the expenses incurred by the Government and the amounts raised by contribution. \n In the Orissa Act, on the other hand, the contribution levied by Section 49 is demanded only for the purpose of meeting the expenses of the Commissioner and his office and the collections made are not merged in the general public revenue and are not appropriated in the manner laid down for appropriation of expenses for other public purposes. They are constituted into a fund which is specifically set apart for the rendering of services involved in carrying out the provisions of the Act. On the basis of this distinction, it was held that the levy of contributions under Section 76 of the Madras Act was a tax while the levy under Section 49 of the Orissa Act was a fee. The former was held to be unconstitutional and the latter was upheld. \n 27. These two decisions of the Supreme Court read in juxtaposition bring out in bold relief the essential distinction between a tax and a fee. In the words of their Lordships:", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-16", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "\"There is no generic difference between a tax and a fee and both are different forms in which the taxing power of a State manifests itself. A tax is undoubtedly in the nature of a compulsory exaction of money by a public authority for public purposes, the payment of which is enforced by law. But the essential thing in a tax is that the imposition is made for public purposes to meet the general expenses of the State without reference to any special benefit to be conferred upon the payers of the tax.... Thus, a tax is a common burden and the only return which the tax-payer gets is the participation in the common benefits of the State. \n Fees, on the other hand, are payments primarily in the public interest but for some special service rendered or some special work done for the benefit of those from whom payments are demanded. Thus in fees there is always an element of Quid Pro Quo which is absent in a tax. Two elements are thus essential in order that payment may be regarded as a fee. In the first place, it must be levied in consideration of certain services which the individuals accepted either willingly or unwillingly. But this by itself is not enough to make the imposition a fee, if the payments demanded for rendering of such services are not set apart or specifically appropriated for that purpose but are merged in the general revenue of the State to be spent for general public purposes. Judged by this test, the contribution that is levied by Section 49 of the Orissa Act will have to be regarded as a fee and not a tax.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-17", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "The payment is demanded only for the purpose of meeting the expenses of the Commissioner and his office which is the machinery set up for the administration of the affairs of the religious institution. The collections made are not merged in the general public revenue and are not approoriation of expenses for other public purposes. They go to constitute the fund which is contemplated by Section 50 of the Act and: this fund, to which also the provincial Government contributes both by way of loan and grant, is specifically set apart for the rendering of services involved in carrying out the provisions of the Act.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-18", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "We think, therefore, that according to the principles which this Court has enunciated in the Madras appeal mentioned above, the contribution could legitimately be regarded as fees and hence it was within the competence of the Provincial Legislature to enact this provision. The fact that the amount of levy is graded according to the capacity of the payers though it gives it the appearance of an income-tax, is not by any means a decisive test.\"  \n 28. The question for consideration then is, whether Section 11 is ultra vires or unconstitutional. It is not contended that the Act is ultra vires in the sense that it is beyond the competence of the State Legislature. Having regard to the object of the Act, as stated in its preamble, and its broad scheme, which is to regulate the buying and selling of commercial crops in specified areas, the Act undoubtedly comes within the purview of the subjects enumerated in Entry No. 14 of List II, viz., \"Agriculture, including agricultural education and research, protection against pests and prevention of plant diseases;\" Entry 28, which provides for weights and measures except establishment of standards, which is also one of the purposes for which provision is made in the Act, and entry 32 viz., \"Incorporation, regulation and winding up of corporations, other than those specified in List I, and universities; unincorporated trading, literary, scientific religious and other societies and associations; co-operative societies.\" Every one of the provisions of the Act would be within the ambit of the legislative power on the assumption that the vires of the Act is to be judged with reference to the Constitution. \n 29. The concept of a welfare State is that the State is entitled to make a levy even against the will of the people sought to be benefited. Therefore, the fact that the person sought to he benefited by the Act, does not consider it to be so, is of no relevance.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-19", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "30. There are various kinds of fees which it is not possible to enumerate and a scientific or mathematical formulae to distinguish a tax from a fee is not possible. The levy of a fee under Section 11 of the Act is correlated to the purposes mentioned in Section 13. The provision in Section 13 that \"the market fund shall be expended for the following purposes only\", emphasises the fact that the fund cannot he expended for any other purpose. \n 31. Now, the purposes mentioned in Section 13 are: \n \"(i) the acquisition of a site or sites for the market; \n (ii) the maintenance and improvement of the market; \n (iii) the construction and repair of buildings which are necessary for the purposes of such market and for the health, convenience and safety of the persons using it; \n (iv) the provision and maintenance of standard weights and measures; \n (v) the pay, pensions, leave allowances, gratuities, compassionate allowances and contributions towards leave allowances, pensions or provident fund of the officers and servants employed by the market committee; \n (vi) the expenses of and incidental to elections; \n (vii) the payment of interest on loans that may he raised for purposes of the market and the provision of a sinking fund in respect of such loans; \n (viii) the collection and dissemination of information regarding all matters relating to crop statistics and marketing in respect of the commercial crop or crops concerned; \n (ix) schemes for the extension or cultural improvement f the commercial crop or crops concerned within the notified area, including the grant, subject to the approval of the State Government, of financial aid to schemes for such extension or improvement within such area, undertaking by other bodies, or individuals; \n (x) propaganda in favour of agricultural improvement and thrift;", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-20", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "(x) propaganda in favour of agricultural improvement and thrift; \n (xi) such other purposes as may be authorised by the State Government in this behalf by general or special order.\"  \n 32. All of them arc related, and none of them is extraneous to the object and intendment of the Act. If it is postulated that the existence or a market committee is necessary for the purpose of regulating the buying and selling of commercial crops, it follows that that committees must have a habitation. Purposes (i) to (iii) mentioned In Section 13, which provide for the acquisition of a site or sites for the market, the maintenance and improvement of the market and the construction and repair of buildings which are necessary for the purposes of such market and for the health, convenience and safety of the persons using it, are all correlated to the main, purpose. \n The provision and maintenance of standard weights and measures is also in the interests of the buyer and the seller. The market committee must have a staff. Clause (v) provides for the payment of salaries of the officers and servants employed by the Committee. The committee is to be elected. The expenses of and incidental to the election are also comprised within the purposes of the Act. The payment of interest on loans that may be raised for purposes of the market is undoubtedly within the scope of the Act.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-21", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "The collection and dissemination of information regarding all matters relating to crop statistics and marketing in respect, of the commercial crop or crops concerned, is conceived in the interests of both the seller and the buyer. The schemes for the extension or cultural improvement of the commercial crop or crops concerned are intended to improve the standard of the produce. This is in the interests of both the buyer and the seller. Propaganda in favour of agricultural improvement and thrift is an ancillary provision. Therefore, it is seen that all the purposes mentioned in Section 13, for which the funds of the market committee are to be expended, have an element of quid pro quo or service to the persons from whom the fee is collected fee in the sense that it is a sort of return to the persons from what it is levied and collected. \n 33. The complaint of the petitioners is that most of the purposes mentioned in Section 13 are beneficial to growers of commercial crops and that they do not benefit the buyer. It is not necessary that every one of the purposes should be beneficial to both the seller and the buyer. It may benefit one or the other. The quid pro quo which the buyer receives from the market committee may not. be in the same sense in which the expression is used in the Contract Act. The contention that the service rendered should be in the mathematical proportion to this amount paid, is not a correct concept. If it can be justified as a sort of return, which certainly it is, then it is valid. Again, the wishes of the person from whom the fee is collected, are not decisive of the question. The purposes enumerated in Section 13 are beneficial because the Legislature thinks them to be so, not because the concerned individual requires them.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-22", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "34. Undoubtedly, the Government does some positive work for the benefit of persons and fees are levied as the return for the work done or services rendered. The money thus paid is set apart and appropriated specifically for the purpose' of such work and is not merged in the public revenues for the benefit of the general public. There is no doubt that the market committee fund is earmarked for the particular purposes enumerated in Section 13; and even ii' the amount is to be collected by the Government, it would still be a fee. It is an a fortiori case where the fund is to belong to a corporate body distinct from the Government, to be expended for specified purposes. \n 35. It is then contended by the learned counsel appearing for the petitioners that some of the market committees have not been established yet and the fee sought to be collected is unrelated to any present service rendered or contemplated to be rendered by the market committees. In other words, the contention is that there is no direct, proximate Or immediate service. The fees collected by the market committee are paid into a fund, known as the market committee fund. From out of the moneys in this fund the market committee has to purchase a site and the acquisition of a site is a pre-requisite for the construction of a building for the habitation of the market committee and its officers and servants and also for facilitating the transactions of buying and selling. If so much is conceded, it follows that the fund is utilised for the purpose mentione3 in Section 13. The contention that the benefit must be proximate, contemporaneous or immediate has no valid basis. Without the constitution of the fund, the purposes mentioned in Section 13 cannot be achieved.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-23", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "36. It is then suggested that the committee can profitably raise loans from the Government in the First instance and redeem those loans at a later date from the moneys collected under the Act. This may be a useful suggestion to make but it has no relevancy in the matter of deciding the validity of the levy and collection of fees under Section 11 of the Act. \n 37. It is finally argued that if the levy under Section 11 is to be construed as a fee, it is so excessive that it does, not bear a reasonable relation to the services rendered or intended to be rendered. The proviso to Section 11 provides that until the market committee has determined the rates of such fees to be levied thereunder, it shall levy fees at the rates specified in the Schedule to the Act. The schedule gives the following rates:\n \"I. Cotton kapas per candy of 784 lb.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-24", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "or part thereof.....                                                                 3 annas.\nCotton lint -- Loose or pressed in\nbales per candy of 784 lb.  or\npart thereof.....                                                                    5 annas.\nII. Groundnut pods (unshelled nuts)\nper bag of 80 lb. or part thereof....                                                2 pies. \nGroundnut kernels per bag of 177\nlb. or part thereof.....                                                             6 pies.\nIII. Tobacco.\nSuncurcd leaf per candy of 500 lb.\nor part thereof.....                                                                 2 annas.\nFlue cured leaf per candy of 500\nlb. or part thereof.....                                                             4 annas.\nDust and primings per candy of\n500 lb. or part thereof  .....                                                       1 anna.\nJutty  flue cured gulla scrap per\ncandy of 500 lb. or part thereof....                                                 1 anna.\nSuncured-Strips per candy of 500\nlb. of part thereof.....                                                             3 annas.\nFluecured-Strips  per  candy  of\n500 lb. or part thereof.....                                                         5 annas.\"\n \n \n\n 38. The rale of Fees provided in this schedule can by no means be termed excessive or unreasonable. We are, therefore, unable to accede to this contention. \n \n\n 39. It is argued that there are a plethora of fees under various names provided under the Act, viz., licenses fee under Section 5(1), the fee contemplated by Section 5(3), the registration fee provided under Section 18(2),", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-25", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "weighrnent and licence fee and eventually the fee under Section 11. We are here concerned only with the question as to whether the fee levied under Section 11 is valid and it is no part of our present purpose to pronounce upon the wisdom of the Legislature. In fact, that other fees are collected does not render the levy of fee under Section 11 unconstitutional. \n 40. Before concluding, it is necessary to refer to another contention raised by the petitioners, which was not ultimately persisted in and that is that the levy amounts to a double taxation and is therefore prohibited under Article 265 of the Constitution. A similar contention was raised in Cantonment Board, Poona v. Western India Theatres Ltd., where it has been held that there is nothing in the Constitution which prevents double taxation being levied and that instances are not wanting in this country in which taxes are levied twice upon the same thing, once for the benefit of the State Government and in the second instance for the benefit of the Local Self-Government bodies, for example, the Dist. Local Board or the Municipality, Indeed Article 276 of the Constitution preserves that right, in the following words: \n \"(1) Notwithstanding anything in Article 246, no law of the Legislature of a State relating to taxes for the benefit of the State or of a municipality, district board, local board or other local authority therein in respect of professions, trades, callings, or employments shall be invalid on the ground that it relates to a tax on income.\" \n 41. This disposes of all the common contentions of law raised in the Writ petitions and they will be posted for consideration on the merits.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "35c4dd61e4b6-26", "Titles": "Garimell Satyanarayana And ... vs East Godavari Coconut And Tobacco ... on 13 September, 1958", "text": "42. The learned counsel for the petitioners in W. P. Nos. 42, 62. 63, 64, 65 and 718 of 1955 and 739 of 1956 state that they are not raising any further contentions. They are therefore dismissed with costs.", "source": "https://indiankanoon.org/doc/928120/"}
+{"id": "94fd89ce82a9-0", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "JUDGMENT Sriramulu, J. \n1. Nagavarapu Cheuchaiah and his son, Krishna Prasad, constituted members of a Hindu undivided family, governed by Mitakshara school of Hindu law. Chenchaiah, as the karta of the Hindu undivided family, died on 21st Aagust, 1966, Under Section 53(3) of the Estate Duty Act (hereinafter called \"the Act\"), Krishna Prasad, the accountable person, filed before the Assistant Controller of Estate Duty, an account of the estate of the deceased. The value of the estate was determined by the Assistant Controller of Estate Duty at Rs. 3,32,814 and the half share of the deceased at Rs. 1,66,407. A sum of Rs. 1,000 was allotted for funeral expenses under Section 44 of the Act, and the value of the chargeable estate was determined at Rs. 1,65,407. For the purpose of determining the rate of estate duty, the Assistant Controller of Estate Duty aggregated the same with the value of the interest o! the lineal descendant, Krishna Prasad, so as to form one estate and on the value of the estate so determined at (Rs. 1,65,407 plus Rs. 1,66,407), i.e., Rs. 3,31,814. levied estate duty after allowing rebate on the lineal descendant's share under Section 34(2) of the Act. The estate duty that was payable was determined at Rs. 8,442\"59 after deduction of the provisional duty already paid.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-1", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "2. Krishna Prasad, the accountable person, challenged the legality and the validity of the assessment so made by the Assistant Controller of Estate Duty, on the following; two grounds : (1) Section 34(I)(c) is beyond the competence of the legislative power of the Central Legislature, and (2) Section 34(1)(c) prescribing a different and unique procedure for imposing tax on the share of the deceased in the coparcenary of the Mitakshara joint family is discriminatory and repugnant to Article 14 of the Constitution of India. \n3. In support of the above contentions, the learned counsel appearing for the petitioner invited our attention to entry No. 87 in List I, and the definition of estate duty found in Article 366(9) of the Constitution of India and submitted that estate duty is payable, on the property passing on the death of the deceased. Instead of levying estate duty on the value of the half interest of the deceased in the estate that passed on his death, Section 34(1)(c) brought in the principle of aggregation of the estate of the lineal descendant, over which no estate duty is payable. Parliament is not competent to levy estate duty on the property of the lineal descendant, which did not pass on the death of the coparcener of the Mitakshara Hindu undivided family. \n4. Section 34(1)(c) makes an infoad into the property of another, i.e., the lineal descendant of the deceased, although such property did not pass on the death of the deceased. \n5. The origin and source of the principle of aggregation is the English law. But the. principle of aggregation stated in Section 34(1 )(c) of the Act is something different from the one found in the English law.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-2", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "6. In applying the principle of aggregation to the case of the death of a coparcener in a Hindu undivided family of Mitakshara law, Marumafc-kattayam law and Aliyasantana low and not to the member of a Hindu undivided family in Dayabhaga school of law, amounts to an invidious discrimination. There is no reasonable classification and the application of the principle of aggregation to a member of one undivided family in one school of Hindu law and not to such a member belonging to another school of Hindu law, has absolutely no nexus or relation to the object sought to be achieved. The classification is arbitrary and not reasonable. There is no basis for making such an invidious discrimination. Section 34(1)(c) of the Act is, therefore, repugnant to Article 14 of the Constitution and is void.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-3", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "7. The learned counsel, Sri Srinivasa Murthy, appearing for the revenue contended to the contra. According to him the word \"assessment\" is used in taxing statutes as meaning sometimes computation of income, some-times determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing the liability upon the taxpayer. In this connection the learned counsel relied upon the decision in Commissioner of Income-tax v. Khemchand Ramdas, [1938] 6 I.T.R. 414(P.C.).. Under entry 87 in the Union List, Parliament has got power to legislate on estate duty. For the imposition of estate duty, rates have to be prescribed and for that purpose there must be a provision of law in the Act. That is provided in the instant case under Section 34(1)(c) of the Act. The aggregation is only for the purpose of fixing the rate and it does not levy estate duty on the pro-perty of a person, other than the person whose property passed on the death. The section does not make an inroad into the property of another. The power to make law with regard to estate duty carried with It the power to legislate the manner in which the rates of estate duty are fixed for the purpose of computation of such estate duty imposable on a taxpayer. Section 34(1)(c) of the Act is not discriminatory aad violative of Article 14 of the Constitution. In support of this argument, the learned counsel relied upon the decision of the Madras. High Court in Ramanathan Chettiar v. Assistant Controller of Estate Duty, . A Hindu undivided family governed by Mitakshara Law, Marumakkattayarn or Aliyasantana law is distinct and a different class from the Hindu undivided family governed by Dayabhaga school of law. The impugned section cannot foe struck down merely because varying rates of tax", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-4", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "school of law. The impugned section cannot foe struck down merely because varying rates of tax are imposed on different classes of people. In this connection the learned counsel relied upon the decision of the Supreme Court in Venugopala Ravi Varma Rajah v. Union of India, .", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-5", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "8. Parliament has got exclusive power to make law with regard to any of the matters named in List I, in the 7th Schedule of the Constitution of India, i.e., Union List. Entry No. 87 in the Union List reads as follows : \n \"Estate duty in respect of property other than agricultural land.\" \n9. The expressisn \"estate duty\" has been given the following meaning under Article 366(9) of the Cpnstitution : \n 'Estate duty means a duty to be assessed on or by reference to the principal value, ascertained in accordance with such rules as may be prescribed by or under laws made by Parliament or the Legislature of a State relating to the duty, of all property passing upon death or deemed, under the provisions of the said laws, so to pass.\"", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-6", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "10. From entry No. 87 in the Union List, it is obvious that Parliament is competent to legislate any law imposing estate duty in respect of properties other than agricultural land. In enacting a law for imposition of estate duty, the legislative authority must make provisions for ascertaining the value of the estate or the property, which passed on the death of the deceased, and also a provision relating to the rate at which the said value of the property has to be subjected to tax. Unless the law deals with those two matters, it cannot be said that a complete law on estate duty has been enacted. In the Income-tax Act, \"assessment\" sometimes means computation of income, sometimes determination of the amount of tax payable and sometimes the procedure laid down in the Act for imposing the liability on the taxpayer. (See Commissioner of Income-tax v. Khemchand Ramdas). Similar meaning should be given to an estate duty assessment. Assessment of estate duty must necessarily mean, (1) determination of the property passing on the death or deemed to pass on the death, (2) determination of the amount of tax payable, and (3) the whole procedure laid down for imposing tax liability on the taxpayer. Thus, a power given to Parliament to make law with regard to estate duty necessarily, in our opinion, includes power to fix the rates of estate duty. Section 34(1)(c) of the Act is a section which fixes the rates of estate duty payable in a given case where the property passing on death consists of a coparcenary interest in the joint family property of a Hindu family governed by Mitakshara, Marumakkattayam or Aliyasantana law.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-7", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "11. There is no force in the argument of the learned counsel appearing for the petitioner that the power to make law in regard to estate duty did not include the power to fix the rate. When Parliament is competent to make law on estate duty, it can and should make the law regarding the rate of tax and the manner in which such tax is to be computed. Section 34(1)(c) of the Act does not make an inroad into the property of the lineal descendant, but only takes it into consideration for the purpose of fixing the rate of estate duty, on the value of the property passing on the death of the coparcener by aggregating it with the value of the property of the share of the lineal descendant. There is also equally no force in the argument of the learned counsel that by enacting Section 34(1)(c), the legislature has reduced the property which has been inherited by the lineal descendant. Estate duty is payable on the property of the deceased as at the death of the deceased. The lineal descendant takes the property of the deceased, minus the tax that is leviable on it. That would in fact be the property inherited by the lineal descendant. Tax is paid out of the property of the deceased and not out of the property of the lineal descendant after he has inherited the same.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-8", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "12. There is no doubt that the Estate Duty Act owes its origin to the English law. When our Parliament has got the power or competency to enact a law on estate duty it has also competence to depart from the principles found in English law. The mere fact that the principle of aggregation enunciated by Parliament in Section 34(1)(c) is a slight departure from the principle of aggregation as found in the English law, is no reason why Section 34(1)(c) should be struck down, or be thought of that the legislature did not intend to or cannot make such departure. We, therefore, find no force in the first ground of attack on the validity of Section 34(1)(c) of the Act and and accordingly reject it. \n13. We will then proceed to consider whether Section 34(1)(c) of the Act is discriminatory and violative of Article 14 of the Constitution of India. Article 14 of the Constitution of India provides that the \"State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India\". Equality before the law means that among equals the law should be equal and should be equally administered, that like should be treated alike, i.e., equal protection of all alike in the same situation and under like circumstances. A tangible distinction between the two doctrines, i.e., \"equality before the law\", and \"equal protection of the laws\" for the first time was pointed out by Subba Rao J. in State of U. P. v. Deoman, A.I.R. 1960 S.C. 1124, 1134.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-9", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": ": \n \"All persons are equal before the law is fundamental of every civilised constitution. Equality before law is a negative concept ; equal protection of laws is a positive one. The former declares that every one is equal before law, that no one can claim special privileges and thai all classes are equally subjected to the ordinary law of the land ; the latter postulates an equal protection of all alike in the same situation and undey like circumstances.\" \n14. According to the learned counsel appearing for the petitioner Section 34(1)(c) prescribes a unique procedure for imposing tax on the share of the deceased in the coparcenary of the joint family governed by Mitakshara law, Marumakkattayam law or Aliyasantana law, different from the procedure prescribed for one governed by Dayabhaga school of law. This different treatment accorded to the members of a Hindu undivided family of different schools of Hindu law is, according to him, discriminatory and offends Article 14 of the Constitution. According to him, this discrimination is not based upon reasonable classification and that such discrimination has no nexus or relation to the object sought tp be achieved.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-10", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "15. There is no doubt that \"equal protection of laws\" means right to equal treatment in similar circumstances both in the privileges conferred and liabilities imposed by the law. No one can be subjected to any burden or charge than such as are imposed upon all others under the like circumstances. In other words, there should be no discrimination between one person and another if, as regards the subject-matter of the legislation, their position is the same. A person or class of persons cannot be singled out as a special subject for discriminatory and hostile legislation. The principle of equality does not mean that every law must have universal application for all persons, who are not by nature, attainment or circumstances in the same position, as the varying needs of different classes of persons often require separate treatment. The State has thus the; power to classify persons for legislative purposes. \n16. When a particular provision of law is attacked or challenged as violative of Article 14, it is necessary for the court to ascertain the policy underlying the statute and the object intended to be achieved by it. The object behind the enactment of the Estate Duty Act has been stated to be : \n \"To impose an estate duty on property passing or deemed to pass on the death of a person. Though the levy and collection of income-tax at high rates since the war and the investigations undertaken by the Income-tax Investigation Commission in a number of important cases of tax evasion have, no doubt, prevented to some extent the further concentration of wealth in the hands of those who are already wealthy, yet these do not amount to positive steps in the direction of reducing the existing inequalities ia the distribution of wealth. It is hoped that by the imposition of an estate duty such unequal distributions may be rectified to a large extent.\"", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-11", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "17. The entire problem under the equal protection clause under Article 14 is one of classification or of drawing lines. A classification is reasonable when it is not an arbitrary selection, but rests on differences, pertinent to the subject in respect of which classification is made. Permissible classification must be based on some real and substantial distinction bearing a just and reasonable relation to the objects sought to be attained and cannot be made arbitrarily and without any substantial basis. Classification must be rational. It must not only be based on some qualities or characteristics which are to be found in all persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation, that is to say, the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and that the differentia must have a rational relation to the object sought to be achieved by the Act.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-12", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "18. The doctrine of equal protection of laws in the field of taxation has been considered by the Supreme Court in Venugopala Ravi Varma Rajah v. Union of India. That case arose under the Expenditure-tax Act. The contention raised in that case was that the law which enables the Expenditure-tax Officer to assess tax on the expenditure of all members of a Hindu undivided family governed by the Marumakkattayam law discriminates on the ground of religion between the Hindu undivided family and a Mappilla undivided family governed by Marumakkattayam law, resident in North Malabar. Under the Expenditure-tax Act, the charging section imposes tax on individuals as well as Hindu undivided families. An undivided family, which consisted of Hindus, was treated as a unit of assessment, whereas an undivided family, whose members are not Hindus, was assessed to tax as an individual. In a Hindu family governed by Marumakkattayam law, the total expenditure incurred by all the members of the undivided family was clubbed together for the levy of expenditure-tax, because the unit of tax under Section 3 was a Hindu undivided family. A Mappilla, on the other hand, is an undivided family governed by the same Marumakkattayam law and was liable to be assessed to tax as an individual and on that account at a lower rate. \n19. Dealing with the contention raised, Shah J., speaking for the Supreme Court, explained thus :", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-13", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "\"Equal protection clause of the Constitution does not enjoin equal protection of the laws as abstract propositions. Laws being the expression of legislative will intended to solve specific problems or to achieve definite objectives by specific remedies, absolute equality or uniformity of treatment is impossible of achievement. Again tax laws are aimed at dealing with complex problems of infinite variety necessitating adjustment of several disparate elements. The courts accordingly admit, subject to adherence to the fundamental principles of the doctrine of equality, a larger play to legislative discretion in the matter of classification. The power to classify may be exercised so as to adjust the system of taxation in all proper and reasonable ways ; the legislature may select persons, properties, transactions and objects, and apply different methods and even rates for tax, if the legislature does so reasonably. Protection of the equality clause does not predicate a mathematically precise or logically complete or symmetrical classification : it is not a condition of the guarantee of equal protection that all transactions, properties, objects or persons of the same genus must be affected by it or none at all. If the classification is rational, the legislature is free to choose objects of taxation, impose different rates, exempt classes of property from taxation, subject different classes of property to tax in different ways and adopt different modes of assessment. A taxing statute may contravene Article 14 of the Constitution if it seeks to impose on the same class of property, persons, transactions, or occupations similarly situate, incidence of taxation, which leads to obvious inequality. A taxing statute is not, therefore, exposed to attack on the ground of discrimination merely because different rates of taxation are prescribed for different categories of persons, transactions, occupations or objects.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-14", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "It is for the legislature to determine the objects on which tax shall be levied, and the rates thereof. The courts will not strike down an Act as denying the equal protection of laws merely because other objects could have been, but are not, taxed by the legislature : (Raja Jagannath Baksh Singh v. State of Uttar Pradesh, .", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-15", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "'......A classification must not be arbitrary, artificial or evasive and\nthere must be a reasonable, natural  and substantial distinction in the nature of the class or classes upon which the law operates.    In respect to such distinction, a legislative body has a wide discretion and an Act will not be held invalid unless the  classification is clearly unreasonable and arbitrary.'......But the mere fact that the law could have been extended to\nanother class of persons, who have certain characteristics similar to a section of the Hindus but have not been so included, is not a ground for striking down the law. In treating a Hindu undivided family as a unit of taxation under the Expenditure-tax Act and not a non-Hindu undivided family, Parliament has not attempted an 'obvious inequality'.\"", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-16", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "20. After explaining the doctrine of equal protection of the laws, the learned Judge pointed out at page 56, that the Mappilla families governed by the Marumakkattayam law reside in a small part of the countty and form numerically a small community. Parliament has again been accustomed in enacting tax laws to make a distinction between a Hindu undivided family consisting of Hindus and undivided families of Mappillas. By the taxing Acts Parliament could have treated Mappilla tarwads as units of taxation. But the mere fact that the law could have been extended to another class of persons, who have certain characteristics similar to a section of the Hindus but have not been so included, is not a ground for striking down the law. In treating a Hindu undivided family as a unit of taxation under the Expenditure-tax Act and not a non-Hindu undivided family, Parliament has not attempted an \"obvious inequality\". \n21. The same contention which is now put forward by the petitioner's counsel before us was also raised before the Madras High Court in Ramanathan Chettiar v. Assistant Controller of Estate Duty. In that case the validity of Section 34(1)(c) of the Estate Duty Act was challenged as being violative of Article 14 of the Constitution. A Division Bench of the Madras High Court rejected that contention. \n22. There are basic differences in the incidents attached to a joint Hindu family in the Mitakshara and the Dayabhaga schools of Hindu law. In the Mitakshara school of Hindu law a son acquires at his birth an equal interest with his father in all the ancestral property held by the father and on his death the son takes the property not as his heir, but by survivorship.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-17", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "23. According to the Dayabhaga school of Hindu law, the sons do not acquire any interest at birth in the ancestral property. Their rights for the first time arise on the father's death. On the death of their father, sons take such of the property as is left by their father, whether separate or ancestral, as heirs and not by survivorship. Since the sons do not take any interest in the ancestral property in their father's lifetime, there can be no coparcenary in the strict sense of the word, between a father and the sons according to the Dayabhaga law as regards the ancestral property. Sons under the Dayabhaga law have no right of ownership in the wealth of their living parents, but only in the estate of both when deceased.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-18", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "24. The vital distinction between Dayabhaga and Mitakshara schools of Hindu law, in the rights possessed by the fathers in the ancestral property, establishes that the fathers in one school of law belong to a class different from the fathers in the other school of law. Section 34(1)(c) of the Act applies to one and not to the other. Is it discriminatory and violative of Article 14 of the Constitution, is the question that arises for consideration. The classification is not arbitrary, but based on a rational and substantial basis depending upon the incidents attached to the joint families in the respective schools of law. The principle of aggregation provided in Section 34(1)(c) cannot be applied to the property passing on the death of a father of a Hindu undivided family governed by Dayabhaga school of law. An illustration will make it clear. A joint Hindu family consists of a father and son. The family possesses ancestral properties of the value of rupees one lakh. In Mitakshara school of Hindu law, the son acquires a right by his birth along with his father in all the ancestral properties worth one lakh. On the death of the father the soil does not take those properties of rupees one lakh, or any portion thereof, by inheritance as the heir of his father, but by survivorship. The coparcenary interest of the father ceases on his death and the son acquires it by survivorship. The value of the coparcenary interest of the father ceasing on his death would be Rs. 50,000. \n 25. In Dayabhaga school of law the father during his lifetime is the owner of the property worth rupees one lakh. The son does not possess any interest in all or any of those properties during the lifetime of his father. He gets the right of ownership to the entire property on the death of his father as his heir and not by survivorship.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-19", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "26. The value of- the properties that passed on the death of the father would be Rs. 50,000 if he was a member of the Hindu undivided family under Mitakshara law and rupees one lakh if he was a member of the Hindu undivided family of Dayabhaga school of law. \n27. The estate duty is levied on Rs. 50,000 in the case of the deceased who died as a member of the Hindu undivided family governed by Mitakshara school of law, but on rupees one lakh, if the father died as a member of the Hindu undivided family governed by Dayabhaga school of law. It, therefore, follows that the estate duty is levied on Rs. 50,000 or rupees one lakh as the father who died, belonged to the Mitakshara or the Dayabhaga school of law. If the principle of aggregation was not made applicable to a deceased father of Mitakshara school of Hindu undivided family, he would have paid only half the estate duty, which would have been paid, if he had belonged to Dayabhaga school of law. It is only to remove this obvious inequality that Parliament has in its wisdom enacted Section 34(1)(c) and made the principle of aggregation applicable to the death of a coparcener of a Hindu undivided family governed by Mitakshara school of law. \n28. By reason of these basic differences in the incidents attached to joint Hindu family under the Mitakshara and Dayabhaga schools, it is evident that a father in the Hindu undivided family in Mitakshara school of law belongs to a class different from the father in the Hindu undivided family under Dayabhaga school of law. The classification, as has already been stated above is based on substantial and reasonable grounds.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "94fd89ce82a9-20", "Titles": "N. Krishna Prasad vs Assistant Controller Of Estate ... on 24 June, 1971", "text": "29. The classification has also a nexus and reasonable relationship with the object for which the Estate Duty Act has been enacted. One. of the objects for enacting the Estate Duty Act was to reduce the existing inequalities in the distribution of wealth. If the principle of aggregation for fixing the rate of estate duty was not made applicable to the father in a Hindu undivided family governed by Mitakshara school of law, the net wealth which would have been acquired by the sons would have been more than the net wealth which they would have acquired in the case of the Dayabhaga school of law. Precisely, in order to get over this inequality, Section 34(1)(c) of the Act has been enacted. \n30. The classification is based upon intelligble differentia which distinguishes one group of fathers from another group of fathers under the two , schools of Hindu law, i.e., Mitakshara and Dayabhaga. \n31. We respectfully agree with the decision of the Madras High Court in Ramanathan Chettiar v. Asst. Controller of Estate Duty, and hold that Section 34(1)(c) of the Act is neither violativc nor repugnant to Article 14 of the Constitution. \n32. Both the contentions raised by the petitioner fail and are rejected. The writ petition is accordingly dismissed with costs. Advocate's fee Rs. 100.", "source": "https://indiankanoon.org/doc/1523858/"}
+{"id": "de38fc10da9b-0", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "JUDGMENT Anantanarayana Ayyar, J.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-1", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "1. Each of these appeals have been filed by the Public Prosecutor against the acquittal of both the accused concerned in the lower appellate Court. There are two accused in each of these cases. The first accused is Abdul Hameed Khan, He was the Central Excise Inspector alias Range Officer in charge of Puttur Range with head-quarters at Puttur during the relevant period i. e., 1951-52. The second accused in each of these cases is a tobacco merchant residing at Kuchivaripally about two miles from the town of Rajampet, Cuddapah District and held a wholesale licence which is called L-2 licence. The following tabular statement gives the details:\n Appeal No. in the      C. C. No. in the trial  Appeal in the lower        Name of the 2nd\nHigh Court             Court.                  appellate Court.           accused.\nCrl. Appeal No.        C. C. No. 213/1957.     Cr. A. Nos. 13 & 14 of     A. Pitchayya. T.\n509/1958. Crl. A.      C. C. No. 214/57.       1958. Crl. A. Nos. 15 &    Pitehayya. K.\nNo. 510/58. Crl. A.    CO. No. 215/57. C.      16/58. Crl. A. Nos. 17 &   Vemayya. K. V.\n511/58. Crl. A.        C. No. 216/57. C. C.    23/58. Crl. A. Nos. 18 &   Subbayya. D.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-2", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "512/58. Crl. A.        No. 217/57.             19/58. Crl. A. Nos. 20 &   Pallayya.\n513/58.                                        21/58.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-3", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "The police charge-sheet was filed in each of the cases by the Delhi Special Police Establishment, Hyderabad Branch, charging the accused with various offences before the District Magistrate, Chittoor. These cases ultimately came to be tried by the Judl. Special First Class Magistrate, Chittoor. He framed three charges against the accused in each of the cases. He convicted and sentenced them to various terms of imprisonment. Each of the accused filed an appeal against his convictions and sentences in the Court of the Sessions Judge, Chitoor. The latter allowed each of the appeals in full and set aside the convictions and sentences on each charge and completely acquitted each of the accused in each appeal. The Public Prosecutor has thereupon filed these appeals against the acquittal. \n\n2. The charges in all the cases are similar. The nature of the evidence is also similar, The evidence, especially the official evidence which proves the background of the alleged offences including the law and rules as well as official routine and practice is substantially similar in all the cases. But, there is some difference as between the various cases regarding the details of facts. Also, the offences in each case relate to certain permits concerned in that particular case. Several of the witnesses, especially the Excise Officers, who spoke to the law and rules, the procedure which has to be followed according to law and the procedure which was in fact followed as well as the investigation done into the various offences, are the same. But, in view of the fact that the permits are different and relate to different persons in each case, there are some witnesses deposing in that case alone without deposing in the other cases. All the appeals were heard together by common consent. This common judgment is also written by common consent,", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-4", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "3. Criminal Appeal No. 509 of 1958 has ultimately arisen out of the trial in C. C. No. 213/j 1957. That C, C. contains evidence in a most elaborate form. Most of the documents, which have been marked in all the other cases, have been marked in C. C. No. 213 of 1957 also. For purposes of convenience, the arguments of the learned Public Prosecutor as well as the Advocates for the accused in all the appeals were concentrated and centred on Criminal Appeal No. 509 of 1958 as the main appeal, in dealing with the features common to all the appeals. In addition, the special features in evidence in the other appeals were individually dealt with by them. Accordingly, for purposes of convenience, I am dealing with Criminal Appeal No. 509 of 1958 in the first instance as representative of all the appeals. In the later portion of the judgment, I deal with the various other appeals briefly one by one with reference to the features in evidence and law special to them. The findings and conclusions in each appeal are based on the evidence relating to the appeal.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-5", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "4. Criminal Appeal No. 509 of 1958. The charges framed in this case are as follows:\nFirstly:", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-6", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "That you A-1, formerly Inspector of Central Excise, of Puttur Range, Chitoor District, during the years 1951-52 and A-2 a tobacco Hcencee L-2 No. 41/46 of Kuchivaripalle, Rajampet Taluk have conspired together at Puttur and Kuchivaripalli during the said period 'to deprive the' Central Government of its legitimte revenue by A-1 of you issuing 'bogus T. P, is No. 801924 dated 4-9-1952 for 3800 lbs of tobacco, No. 801933 dated 16-9-1962 for transport of 5785 lbs of tobacco, No. 801963 dated 21-10-1952 for 2932 lbs and No. 81996 dated 26-11-1952 for 2914 lbs. of tobacco in the name of K. Laxmana Chetty L-2 No. 3/46 Keelapet, Puttur Range, Chittoor District, by quoting false documents as payment of duty and handed over them to A-2 of you and on the said bogus documents No. 2 of you obtained fresh T. P. .i's, Nos. 585376, 585385 and 585387 and transported non-duty paid tobacco noted in the said T. P. is to the premises of V. C. Pannappi Chetti, P. Bhoopathy Chetty and V. A. Nataraja Chetty of Madras and thereby contravened the provisions of Section 9 of the Central Excises and Salt Act (I of 1944) and further conspired to cheat the aforesaid persons by making them part with monies on false representation that the said T. P. is are valid and tobacco covered thereunder are duty paid as detailed in the charges", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-7", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "T. P. is are valid and tobacco covered thereunder are duty paid as detailed in the charges below and thereby committed an offence punishable under Section 120-B of the Indian Penal Code and within my cognizance.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-8", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "Secondly:\nThat in pursuance of the said conspiracy No. 1 of you being an Inspector of the Central Excise of Puttur Range during the years 1951-52 and holding the said post issued false T. P. is No. 801924 dated 14-9-1952 and 801933 dated 16-9-1952, 801963 dated 21-10-1952 and 801996 dated 26-11-1952 and gave them to A-2 Pitchayya at Puttur abetted the commission of offence of cheating by the said T. Pitchayya which was committed in consequence of your abetment and you thereby committed an offence punishable under Section 109 of the Indian Penal Code read with Section 420 of the Indian Penal Code and within my cognizance. \n\nThirdly:\nThat in pursuance of the said conspiracy you A-2, a tobacco licensee L-2 No. 41./.56 while holding, the licence cheated by false representation. V. C. Ponniah Chetty, P. Bhoopathy Chetty and V. A. Nataraja Chetty of Madras by selling to the above said persons non-duty paid tobacco as if duty paid, particulars of which have been noted in charge No. 1 and dishonestly made them part with as follows: V. C. Poonappa Chetty Rs. 1686-8-9. Rs. 1895-14-0 and Rs. 746-11-9, V, A. Nataraja Chetty Rs. 1512-7-8 and P. Bhupathy Chetty Rs. 2253-9-3, Rs. 1888-7-6 and Rs. 600-11-9 and thereby committed an offence punishable under Section 420 of the Indian Penal Code and within my cognizance.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-9", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "In charge No. 1, the objects of the conspiracy are stated, as follows:\n1. To deprive the Central Government of its legitimate revenue by the method mentioned in the charge; and\n \n\n2. To cheat the merchants of Madras mentioned in the charge. \n\nCharge No. 2 relates to alleged abetment by A-1 of the offence concerned in the third charge which was committed by A-2. The offence committed under Charge No, 2 is also mentioned to have been committed by A-1 in pursuance of the conspiracy. \n\nCharge No. 3 relates to what is said to have taken place (Offences committed by A-2) in pursuance of the second object of the conspiracy. \n\n5. (After narrating the- prosecution evidence and the case put forward by it. and referring to the defence evidence His Lordship proceeded:) The learned Special First Class Magistrate believed the evidence of the P. Ws. especially the evidence of P. W. 7 and the official witnesses and held that all the three charges were proved against the respective accused. He accordingly convicted and sentenced them to various terms of imprisonment. \n\n6. On appeal, the learned Sessions Judge disagreed with the finding of the trial Court and acquitted each accused of the charges framed against him. In particular, the learned Sessions Judge held that P, W. 7 was not a reliable witness and rejected the contention made on behalf of the prosecution that the mention of the various sale notes in each of Exs. P-2, P-4, P-5, P-6, P-7 and P-8 was an interpolation which did not exist originally at the time of the enquiry by the officers and at the time when they were marked in the trial Court and were introduced some time after the trial was over and the appeals were heard.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-10", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "7. In this Court, a preliminary objection was raised by the learned Counsel for the accused that the prosecution was barred by Section 40 (2) of the Central Excises and Salt Act (Central Act I of 1944). This point had not been raised in the trial Court or in the appellate Court, but it was allowed to be raised here, as it was a question o\u00a3 law based on facts which were already on record and beyond dispute and because it was an important point. \n\n               x                         x                           x\n \n\n8-9. Section 40 (1) and (2) of the Central Excises and Salt Act (Central Act I of 1944) runs as follows:\n Bar of suits and limitation of suits and other legal proceedings:\n \n\n40. (1) No suit shall lie against the Central Government or against any officer of the Government in respect of any order passed in good faith or any act in good faith done or ordered to be done under this Act.\n \n\n2. No suit, prosecution, or other legal proceeding shall be instituted for anything done or ordered to be done under this Act after the expiration of six months from the accrual of the cause of action or from the date of the act or order complained of. \n\n10. The learned Public Prosecutor has contended that Section 40 (2) does not apply to prosecution by the State and that it would apply only for prosecution by private parties, that is, not the State. I am unable to accept this contention for the following reasons:\n1. The wording of Section 40 (2) does not I show that it is meant to apply only to prosecution ( by private parties and not by the State.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-11", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "2. Rule 207 specifically mentions that a complaint shall be made only by an officer not inferior in rank to an Inspector, that is, by a public servant. Consequently, the prosecution contemplated under this rule- is only by the State. \n\n3. Offences under Section 9 (b) and other offences are liable to detrimentally affect the revenues of the State. It is quite natural that the State would be primarily interested in enforcing the Central Excise Act and its provisions and in proceeding against persons who contravened provisions of the Act or rules framed tinder the Act 01 notifications issued under the Act. \n\n4. Regarding the provision under Section 53 of the Madras District Police Act which is substantially similar to Section 40 (2) of the Central Excises and Salt Act in relevant aspects, prosecution by the State was held to be barred by time (Vide In Re Venugopal, Unreported decision of a Full Bench of this Court in Criminal Appeal Nos. 551 of 1958 and 74 of 1959 : (now ).", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-12", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "11. In C. A. No. 509 of 1958 the thing which was done under this Act and which is concerned in the charges is the issue of the various permits, Exs. P-2 to P-5 by A-1 in favour of P. W. 7. The permits were issued between the dates 4-9-1952 and 26-11-1952. The other subsidiary permits which are concerned in Criminal Appeal Nos. 510 to 513 namely, Exs. P-6 to P-8 and Exs. P-18 to P-21 were issued between the dates 8-9-1951 and 27-8-1952, The Charge-sheets in all these cases were filed on 7-7-1956, that is, after lapse of much more than the six month's period mentioned in Section 40 (2). Consequently, if Section. 40 (2) applies to the prosecution, either as regards A-1 or as regards A-2, to that extent, the prosecution would be barred and the convictions and sentences would be untenable. \n\n12. The learned Counsel for each accused contends that the prosecution is barred as against that accused. On the other hand, the learned Public Prosecutor contends that Section 40 (2) is not applicable to this case. \n\n13. The wording of Section 40 (2} is similar to the wording in Section 53 of the Madras District Police Act in relevant particulars. The latter section runs as follows:\n All actions and prosecutions against any per-son, which may be lawfully brought for anything done ... under the provisions of the Act ... shall be commenced within three months after the act complained of shall have been committed....", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-13", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "14. The question of application of Section 53 of the Madras District Police Act came up for consideration in an Unreported decision of a Full Bench of this Court in Criminal Appeal Nos. 551 of 1958 and 74 of 1959 (now ). In that case, two questions were referred to the Full Bench, as follows:\n1. In what circumstances could the bar of limitation prescribed by Section 53 of the Madras District Police Act be available to an accused officer? \n\n2. In the circumstances of this case, is the prosecution of the appellants barred by limitation by reason of the provisions of Section 53 of the Madras Police Act? \n\nThe facts of that case related to something which was alleged to have been done by some police officers- viz., extortion of a confession and wrongful confinement of a person, in the course of investigation. The Full Bench answered the first question in the following terms:\n We would, therefore, answer the first question referred to us by saying that the bar of limitation prescribed by Section 53 of this Act would be available to an accused officer only when the act complained of has been committed in the discharge of his official duties.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-14", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "They also laid down 'that the question as to whether a particular act would be regarded as having been done in the discharge of one's duties would have to be determined on the facts and particular circumstances of the case'. Consequently we have got to decide as to whether the act which is alleged to have been done by A-1 was done in the discharge of his official duties. To decide that point, the relevant facts and particular circumstances of the case have to be considered. The question whether a person was acting in the discharge of his duties is directly concerned in Section 197 Cr. P. C. which required previous sanction of the Government for prosecution. That Section relates to cases 'when any public servant ............... is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty'. The question as to when and under what circumstances a public servant can be said to have acted in the discharge of his official duty has been the subject of many decisions, which are, therefore, available for guidance of this Court in coming to a decision. \n\n15. In Hori Ram Singh v. Emperor, AIR 1939 FC 43 it was observed as follows (at page 56):\n I would observe at the outset that the question is substantially one of fact, to be determined with reference to the act complained of and the attendant circumstances, it seems neither useful nor desirable to paraphrase the language of the section in attempting to lay down hard and fast tests. \n\n16. Though there are no hard and fast tests, a perusal of the various decisions indicate as to what are the features which can be usefully considered in deciding this question of fact and the correct approach.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-15", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "17. In AIR 1939 FC 43, the Federal Court laid down the following test (at page 51):\n The test appears to be not that the offence is capable of being committed only by a public servant and not by any one else, but that it is committed by a public servant in an act done or purporting to be done in the execution of his duty. \n\n18. In H. H. B. Gill v. The King, AIR 1948 PC 128, the Privy Council observed as follows (at page 133):\n A public servant can only be said to act or purport to act in the discharge of his official duty, if his act is such as to lie within the scope of his official duty ... The test may well be whether the public servant, if challenged, can reasonably claim that, what he does, he does in virtue of his office,\n \n\n19. In Ramayya v. State of Bombay, , the Supreme Court observed (at page 292) thus:-\n ... But it is not the duty we have to examine so much as the act, because an official act can be performed in the discharge of official duty as well as in dereliction of it. \n\n X X X ... Therefore, whatever the intention or motive behind the act may have been, the physical part of it remained unaltered, so if it was official in the one case it was equally official in the other, and the only difference would lie in the intention with which it was done; in the one event, it would be done in the discharge of an official duty and in the other, in the purported discharge of it.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-16", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "20. In Amrik Singh v. State of Pepsu, , it was stated that the test to apply is whether the acts with which the appellant ' is charged directly bear on the duties which he has got to discharge as a public servant. Therein, it was observed as follows (at page 312):\n ... If the act complained of is directly concerned with his official duties so that, if questioned, it could be claimed to have been done by virtue of the office ...; and that would be so irrespective of whether it was, in fact, a proper discharge of his duties.... \n\nThe Supreme Court held that the acts complained of should be integrally connected with the duties' attaching to the office and should hinge on his duties as a public servant. \n\n21. In Matajog Dobey v. H.C. Bhari, , the following principles were laid down by the Supreme Court (at page 45):\n(a) there must be a reasonable connection between the act and the discharge of official duty;\n(b) it does not matter even if the act exceeds what is strictly necessary for the discharge of the duty, as this question will arise only at a later stage when the trial proceeds on the merits. What the Court must find out is whether the act and the official duty are so inter-related that one can postulate reasonably that it was done by the accused in the performance of the official duty, though possibly in excess of the needs and requirements of the situation. \n\n22. In Satwant Singh v. State of Punjab, , the Supreme Court laid down the following principle:\n ... The act must bear such relation to the duty that the public servant could lay a reasonable but cot a pretended or fanciful claim, that he did it in the course of the performance of his duty....", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-17", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "23. In AIR 1939 FC 43 the facts were as follows: A Sub-Assistant Surgeon was charged under Section 409 I.P.C. with having dishonestly removed certain medicines from a hospital which was under his charge, to his own residence, and under Section 477-A with having failed to enter them in the stock book. It was found as a matter of fact that the accused had committed secret misappropriation or conversion to one's own use. It was held by the Federal Court that 'when a public servant simply embezzles some property entrusted to him and thereby commits a criminal breach of trust under Section 409, he is not doing an act, nor even purports to do an act in execution of his duty; when he commits the act, he does not pretend to act in the official discharge of his duty. In the same decision, the learned Judges have shown the distinction between an offence under Section 477-A I.P.C. and the offence like Section 409 I.P.C. As regards Section 477-A it was observed that, 'the official capacity is involved in the very act complained of as amounting to a crime, because the gravamen of the charge is that the accused acted fraudulently in the discharge of his official duty'. Therein, it was further observed as follows:", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-18", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "... But an offence under Section 477-A I. P. C, is committed if an officer or servant or anyone employed or acting in such capacity, wilfully and with intent to defraud falsifies any book or account. Thus, where it is his duty to maintain a record or a register, and in maintaining that register he makes some entries which are false to his knowledge, he is certainly purporting to act; though not actually acting, in the execution of his duty because he is making certain entries in the register, knowing them to be false. He is ostensibly professing to be discharging - his official duty in maintaining the register, which he is bound to maintain correctly. In making the entries he pretends or purports to act in the execution of his duty; but in point of fact he is acting in direct dereliction of it, On the other hand, as regards an offence under Section 409 I.P.C. the learned Judges pointed out that 'the official capacity is material only in connection with the entrustment and does not necessarily enter into the later act of misappropriation or conversion, which is the act complained of. The learned Judge also made observations which are of some importance and help in the present case (at page 52) as follows:-", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-19", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "It is possible to conceive of a case where a criminal breach of trust may be committed in conspiracy with other servants and payment of money is dishonestly ordered ostensibly in execution of duty. The question whether the act purported to have been done in execution of duty or not must depend on the special circumstances of each case ... If the present case had merely been that medicines were openly removed from the hospital dispensary to the house on some pretence, it might have remained ambiguous whether the act purported to be done in execution of duty or not. But apparently the case as put forward in the compounder Din Mohammad's application submitted with the police report, and also as found proved by the Magistrate at the trial was one of secret misappropriation or conversion to one's own use, That case related to an offence under Section 409 I. P. C, in which the act of disposal would come under the category of offences in which the sole act or any one of the acts necessary to constitute the offence can or cannot be done by the public servant in discharge of his official duty, depending upon the facts and circumstances of the case.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-20", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "24. In AIR 1948 PC 128, the accused was charged under Section 161 I.P.C. with taking bribes and under Section 120-B I.P.C. with conspiracy. On the question whether sanction was necessary under Section 197 (1) Crl. P. C. it was held by the Privy Council that, as the acts with which the accused was charged could not be justified by virtue of his office, no sanction was necessary. \n\n25. In each, of the present cases, as the act concerned in the first object .of the conspiracy if only by way of issue of permit it would come under the category of offences regarding which the sole act of the public servant concerned which constitutes the offence and every act which is necessary to constitute the offence cannot but be done by him in his official capacity or in discharge of his duties. Consequently, Section 40 (2) would be applicable. \n\n26. In the accused, who were Government servants, were in charge of the stores which were kept in the Military Engineering Stores Depot. They had been entrusted with the stores in various capacities, entered into a conspiracy to defraud Government of these properties and in pursuance of this conspiracy 'they arranged to sell them to the approver (P. W. 1) for a sum of RSection 4,000/-. The money is said to have been paid and then the stores were passed out of the depot. The money is alleged to have been pocketed by the three accused and not credited to the Government. A number of charges were framed including criminal breach of trust in furtherance of the common intention of all under Section 409 I, P. C. read with Section 34 I.P.C. The Supreme Court observed as follows in para 19 (page 293):\nWe have, therefore, first to concentrate on, the word offence.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-21", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "Now an offence seldom consists of a single act. It is usually composed of several elements and, as a rule, a whole series of acts must be proved before it can be established.... \n\nTherefore, the act complained of, namely the disposal could not have been done in any other way. If it was innocent, it was an official act; if dishonest, it was the dishonest doing of an official act, but in either event the act was official because accused 2 could not dispose of the goods save by the doing of an official act, namely official permitting their disposal; and that he did. He actually permitted their release and purported to do it in an official capacity, and apart from the fact that he did not pretend to act privately, there was no other way in which he could have done it ... \n\nIn the present case, the concerned act committed by A-1 was in effect, permitting transport just as in that case the concerned act was permitting disposal. \n\n27. The same view has been followed in a number of other decisions -- and Dhannjay Ram v. M. S. Uppadaya, .", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-22", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "28. In the relevant facts were: After the evacuation of Burma the Government was located at Simla. In response to a Notification by the Government of Burma, one Satwant Singh submitted certain claims on the basis of having executed some works and contracts and supplied some materials in Burma. The Government of Burma sent these claims to one Major Henderson of Jhansi in March and May 1943 for verification, as he was the officer who had knowledge of these matters. Major Henderson certified many of these claims to be correct, with the result that Satwant Singh was able to collect money on the claims from the Government. The appeal was filed by Satwant Singh alone and not by Major Henderson. It was contended that the absence of sanction under Section 197 Cr. P. C. vitiated the trial. The Supreme Court observed as follows at page 271:", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-23", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "... Henderson was charged with intentionally aiding the appellant in the commission of an offence punishable under Section 420 of the Indian Penal Code, by falsely stating as a fact in his report that the appellant's claims were true and that statement had been made knowing all the while that the claims in question were false and fraudulent and that he had accordingly committed an offence under Section 420/109 Indian Penal Code. It appears to us to be clear that some offences cannot by their very nature be regarded as having been committed by public servants, while acting or purporting to act in the discharge of their official duty. For instance, acceptance of a bribe, an offence punishable under Section 161 of the Indian Penal Code is one of them and the offence of cheating or abetment thereof is another. We have no hesitation in saying that where a public servant commits the offence of cheating or abates another so to cheat, the offence committed by him is not one while he is acting or 'purporting to act in the discharge of his official duty, as such offences have no necessary connection between them and the performance of the duties of a public servant, the official status furnishing only the occasion or opportunity for the commission of the offences. The act of cheating or abetment thereof has no reasonable connection with the discharge of official duty ..................... It is however to be remembered that Henderson was not prosecuted for any offence concerning his act of certification. He was prosecuted for abetting the appellant to cheat. We are firmly of the opinion that Henderson's offence was not one committed by him while acting or purporting to act in the discharge of his official duty.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-24", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "29. The position of law can be summed up thus:\nThere are various statutory provisions giving protection to public servants; some by way of requiring sanction by Government or other higher authority for prosecution and some by way of imposing a period of limitation within which action has to be taken. Some of the statutory provisions postulate specified offences being committed in execution of duty or discharge of official duty. Some other provisions specify the act being done by the public servant under a statute. Both types of provisions are substantially to the same effect and the important criterion is whether the act was done in the discharge or purported discharge of official duty and the act must be an official act. It has got to be seen whether the act was integrally connected with the duties and was inseparable from the duties and that the duties did not furnish a mere occasion or an opportunity for committing the act. The mere fact that the act is an offence is not sufficient to decide the question whether the protection is available. \n\n30. An alleged act committed by a public servant concerned can come under three categories:\n1. Act which cannot but be done in official capacity and in discharge of duty. See AIR 1939 FC 43. \n\n2. Act which from its very nature cannot be done in discharge of duty. \n\n3. Act which may or may not have been committed in the discharge of duty dependent on the relevant facts and circumstances of the case, See Albert Westmeads v. The King, AIR 1948 PC 156.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-25", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "31. When it comes to a question as to whether an offence was committed by the public servant in discharge or purported discharge of his duties, such offences themselves can come under three categories similar to the act:\n1. Offences regarding which the sole act of the public servant concerned which constitutes the offence and every act which is necessary to constitute the offence cannot but be done by him in his official capacity or in discharge of his duties (e.g. an offence under Section 477-A, I. P. C.)\n \n\n2. Offences regarding which the sole act or any one of the acts which is necessary to constitute the offence cannot be done in the discharge of his duties (e.g. offences under Sections 420 and 161 I. P, C. mentioned in ). \n\n3. Offences in which the sole act or any one of the acts which are necessary to constitute the offences can or cannot be done by the public servant in the discharge of his official duties according to the facts and circumstances of the case. \n\n32. Where the basic question is about an act done by a public servant, one has to see under what category it falls. If it comes under category 1 or category 2, the answers will be obvious. If it comes under category 3, the answer will have to be made with reference to surrounding facts and circumstances. \n\n33. When the question is as to whether the statutory protection is applicable to an offence, the following procedure appears to be indicated by various decisions:\n1. It has to be seen what are the elements which constitute the alleged offence. \n\n2. It has to be seen as to whether the acts of the accused make out the elements necessary to constitute the offence. \n\n3. Where the acts committed by him do not constitute all the necessary elements for making out the offence, then obviously the offence would not be made out.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-26", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "4. If it is found that he committed all that acts or the sole act which constitutes the offence it has to be seen as to under what category, the offence fails. If it falls under category (1) o: category (a), the inference will be obvious. If i falls under category (3), then correct finding ha to be arrived at by careful study of the relevan facts and circumstances. \n\n34. In the present case, Charge (3) agains A-1 is for an offence under Section 420 read wit Section 109 I.P.C. This would come under category (2). For, the : offence of abetment of cheating, under Section 420 read with Section 10 I.P.C. concerned in Charge (3) has been specifically mentioned as, such in AIR 1960 SC 261 One element concerned in this offence, namely, issuing of the permits by itself is of the nature of category (i) because such issue can be done by A-1 only in his official capacity. But, that will not bring the offence under category (i) because that element alone cannot make out the offence of abetment of cheating under Section 420/109 I.P.C. There are other elements involved which do not come under category (1) or category (2). Those elements depend on facts and circumstances of the case. \n\n35. Charge No. 1. is under Section 120-B I.P.C. That charge specifically mentions the following two subjects:\n1. To deprive the Central Government of its legitimate revenue by A-1 issuing false T. P. is. \n\n2. To cheat the specified persons by making them believe through false representations that the T. P. is were valid and thereby making them part with money.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-27", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "So far as the second object is concerned, it is cheating which is mentioned in Charge No. 2 against A-2 and in Charge No. 3 against A-1, The offence of cheating comes under category (2). So far as the first object is concerned, the object of depriving the Central Government of its legitimate revenue is an act contemplated in the offence under Section 9 (b) and (d) of Act I of 1944 which comes under category (1) The specific act which A-1 is alleged to have committed by issuing the bogus permits comes under category (1) because he could or could not have issued the permits except in his official capacity and beyond doubt or dispute he did issue them in the discharge of his official duties, irrespective of his motive or intention in issuing them. \n\n36. So far as Section 40 (2) of Act I of 1944 is concerned, the question of intention or motive does not come in, to decide whether the act of the issue of permits was under Act I of 1944. For, as observed in ; if the issue was innocent it was the innocent doing of an official act; and if it was dishonest it was the dishonest doing of an official act.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-28", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "37. In Raleigh Investment Co., Ltd. v. Governor-General-in-Council, 1947-2 Mad LJ 16 : AIR 1947 PC 78 the question arose as to what was the meaning of the phrase \"assessment made under the Act\" and their Lordships of the Privy Council observed as follows: (at page 19 of Mad LJ): (at p. 81 of AIR):\n ... The obvious meaning and in their Lordships' opinion the correct meaning of the phrase 'assessment made under the Act' is an assessment finding its origin in an activity of the assessing officer acting as such. The circumstance that the assessing officer has taken into account an ultra vires provision of the Act is in this view immaterial in determining whether the assessment is 'made under the Act'. The phrase describes the provenance of the assessment; it does not relate to its accuracy in point of law. The use of the machinery provided by the Act, not the result of that use is the test. \n\n38. Rule 32 provides that tobacco is not to toe transported except under a permit issued by a competent officer. Beyond doubt, the permits are issued by A-1 using the machinery of the Act. \n\nConsequently, the act done by him in issuing the permits comes clearly under the category of a thing- done under Act 1 of 1944. \n\n39. So far as A-1 is concerned, the only act which is proved against him is the issuing of the permits. For the purpose of holding that A-1 entered into a conspiracy with A-2 and abetted cheating, the trial Court has relied on certain facts other than the fact of A-1 issuing the permits. They are as follows:\n1. That P. W. 7 did not transport any tobacco under Exs. P-2 to P-5.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-29", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "2. That A-2 utilised these Exs. P-2 to P-5 as parent permits for obtaining subsidiary permits in transporting the non-duty-paid tobacco from Rajampct to Madias as if it was duty-paid tobacco and thereby defrauded the Government of its revenue. \n\n3. That A-2 induced the Madras merchants P. Ws. 13, 15 and 16 to receive the tobacco and deal with it by an implied representation that it was duty-paid tobacco and thereby cheated those Madras merchants. \n\nThese various acts were not proved by direct evidence to be connected with A-1. If A-1 had really been guilty in getting these various acts (other than issue of permits) committed, then they would not have been committed by him in his official capacity. In this respect, whether he was guilty of such conspiracy and liable for the offence depends on the evidence. The trial Court has also observed in para 27 of its judgment, as follows:\n There is no evidence to show that A-1 and A-2 met at any time or corresponded with each other. But the circumstances of, the case are that a safe conclusion as to the association between A-1 and A-2 could be drawn and that a conspiracy existed between A-1 and A-2. \n\nI agree with the lower appellate Court that this conclusion from the circumstances of the case is not justified or correct. In effect the only act o\u00a3 A-1 which is proved was committed by him in his official capacity and there is no act proved against him which was or could have been committed by him in any capacity other than official, which could show that he had the object of cheating the Madras merchants. \n\n40. As regards charge 2 also, the only act which has been proved against A-1 is the issue of the permits which was certainly done in the discharge of his official duties.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-30", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "41. In effect, the additional elements which are necessary to prove the second object of the conspiracy and the abetment of cheating under Charge No. 3 as regards A-1, have not been proved. I have already pointed out that as regards the first object of the conspiracy, Section 40 (2) applies. On these findings alone, it was obvious that the charges 1 and 3 as against A-1 are not proved. Strictly speaking, it is not necessary to go into the facts on merits to find out whether it is proved that the subsidiary permits issued by A-1 are all false permits. All the same, I am going into that question and considering the largo volume of facts with reference to elaborate arguments adduced before me. Case regards Accused 2:-\n42. It is contended on behalf of A-2 that he Is also entitled to the benefit of Section 40 (2) of the Act, Reliance is sought to be placed on Rule 207 of the Act which runs:\n A charge of an offence under Section 9 of the Act shall not be made except by an officer not inferior in rank to an Inspector and every such complaint shall be preferred within six months after the 'commission of the offence to which it refers. \n\nIt is argued that the prosecution is not for an offence under Section 9 of Act I of 1944. Section 9 of that act runs thus:-\nWhoever commits any of the following offences viz. \n\n              X                  X                   X\n \n\n(b) evades the payment of any duty payable under this Act;\n              X                  X                   X", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-31", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "(d) attempts to commit, or abets the commission of any of the offences mentioned in clauses (a) and (b) of this section; Shall, for every such offence be punishable with imprisonment, for a term which may extend to six months, or with fine which may extend to two thousand rupees, or with both.\" The first object of the conspiracy as stated in Charge No. 1 viz., of depriving the Central Government of its legitimate revenue, substantially amounts to an offence under Section 9 (b) viz., evasion of payment of duty payable by A-2 and an object to commit an offence under Section 9 (d) by A-1 and abetment by A-1 of the commission of an offence by A-2 under Section 9 (b).", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-32", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "43. The learned Public Prosecutor contends that Rule 207 is meant only for the protection of a public servant who is an excise officer and that it does not apply to the case of a private merchant like A-2. This contention is not tenable in view of the fact that Rule 207 clearly contemplates an offence under Section 9 of the Act and evasion of payment of duty under Section 9 (b) of the Act can be done only by non-public servant like A-2 and can only be abetted by a public servant like A-1. The contention of the learned advocate for A-2 is that as the complaint is not preferred within the time prescribed tinder Rule 207, A-2 cannot be lawfully prosecuted under Section 9 (b) for defrauding Central Government of its revenue and A-1 cannot be charged for abetting. Section 107 I. P. C, defines 'abetting' as follows:\nA person abets the doing of a thing who--\n X X X Secondly -- Engages with one or more other person or persons in any conspiracy for the doing of that thing, if an act or illegal omission takes place in pursuance of that, conspiracy, and in order to the doing of that thing.", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "de38fc10da9b-33", "Titles": "Public Prosecutor vs Abdul Hameed Khan And Ors. on 20 September, 1960", "text": "Consequently, if A-1 had conspired with A-2 with the object of defrauding the Government of its duty under Section 9 (b) then A-1 would have committed an offence under Section 9 (d) by abetting the offence under Section 9 (b). The case of the prosecution under Charge No. 1 is substantially that A-2 was abetted by A-1 in commission of the offence under Section 9 (b) by A-1 issuing the permits. If the alleged facts in the prosecution evidence were true, a completed offence under Section 9 (b) would have been committed. When; A-2 cannot be charged of such a completed offence under Section,9 (b) because of the protection under Rule 207, it does not appear to be legally tenable\" to hold that he (A-2) can be .charged for an offence under Section 120-B I. P, C. with the object of committing an offence under Section 9 (b) of the Act after the period mentioned in Rule 207. Therefore, the charge under Section 120-B I.P.C. is not tenable so far as the first object in conspiracy is concerned as the complaint was not preferred within time. But, so far as the second object in the conspiracy in charge No. 1 is concerned, Rule 207 does not apply and the prosecution is not barred by Section 40 (2) of the-Act. Similarly, charges 2 and 3 are also not barred because they involve certain acts which are not things done under the Act and need not be done by A-2 in his official capacity. I find accordingly on the preliminary objection. \n\n(His Lordship proceeded to discuss the evidence and then dismissed all the appeals on merits).", "source": "https://indiankanoon.org/doc/1279708/"}
+{"id": "16835aba1f19-0", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "ORDER", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-1", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "1. These writ petitions have been referred to a Full Bench on the ground that the main point arising therein is the same as the case in W.A.No. 144/1986. The point raised in W.A.No. 144/1986 is regarding the point of time from which limitation for reference u/S. 18 of the Land Acquisition Act, 1894 (hereinafter referred to as the Act) would commence. The said Writ Appeal could not be heard by us for other reasons. But inasmuch as the same point is involved here, we propose to decide the same in W.P. No. 13203/1985. So far as W.P. Nos. 11940, 11764 and 11938 of 1985 are concerned, we shall deal with them separately, at the end of this judgment. We shall first refer to the facts in W.P. No. 13203/1985 initially.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-2", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "2. In W.P. No. 13203/85, the relief claim-ed is for the issue of a writ of Mandamus directing the respondent (the Special Deputy Collector, Land Acquisition, Unit I, Sriram-sagar Project) to refer to the civil court u/S. 18 of the Act the matter in respect of the compensation in respect of Ac.50-00 of land covered by the single Award No. 10/1976-77 dated 9-12-1976. The writ petition in filed of 18-11-1985 by 75 petitioners. It is alleged that the petitioners are owners of Ac.60-00 of land in Komatpally village, Nandipet Mandal, Armoor Taluk, Nizamabad District and the entire land is submerged in the Sriramsagar Project. It is stated that a meagre compensation of Rs. 2,66,215-44 was awarded in the Award No. 10/76-77 on 9-12-1976, It is further stated that the petitioners are 'not aware' as to the date of the award inasmuch as 'no notice what-so-ever' was given of the fact of the award being passed. Reliance is placed on S. 12(2) to say that there is a statutory obligation imposed on the Collector under S. 12(2) and the said obligation not having been discharged, limitation has not started under the proviso to S. 18(2) of the Act. It is alleged that as the notice u/S. 12(2) was not served, the petitioners were not in a position to submit any application for reference. Reliance is placed on a Division Bench judgment in Spl. Deputy Collector, Land Acquisition v. L. Sai Reddy, . In that case is was held that the Land Acquisition Officer is bound to issue and", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-3", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "Reddy, . In that case is was held that the Land Acquisition Officer is bound to issue and 'send a copy of the award' to the claimants and if such a copy is not sent, the limitation under proviso to S. 18(2) of the Act would not commence. It is stated that the petitioners 'have made several requests' to the respondent to refer the matter to the Civil Court u/S. 18 but that the respondent has not made any reference and has not given any reply to the 'requests' of the petitioners. It is further alleged that when some other villagers sought a reference, the Land Acquisition Officer made a reference and then the Addl. District Judge, Nizamabad enhanced the compensation in O.P. No. 2935 of 1981 and batch on 16-12-1983. It is therefore prayed that a writ of, Mandamus be issued to the respondent to make a reference.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-4", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "3. A counter-affidavit is filed by the Special Deputy Collector, stating that the writ petition filed for a reference 8 years after the award is belated. It is pointed out that among the writ petitioners, only a few were the claimants and the award does not show the names of the other petitioners. Such of those who filed claims before the Land Acquisition Officer were 'served' with notice of award under S. 12(2) in accordance with the rules prescribed under the Land Acquisition Act and their signatures or thumb impressions were obtained. It is also stated that the said claimants received the compensation, 'without any protest' and the statutory requirement is fulfilled. It is always open to the party aggrieved, either to apply for the copy of the award or peruse the same. The notice of award under S. 12(2), it is stated, does not contempiate the service of the copy of the award itself. The notices served in the case give the details of the award i.e., S. No. and sub-division, extent, amount awarded and the names of the persons for whom the award is made. The allegation that the claimants applied for reference is not correct and there were no reminders. The total land covered by the award is Ac.91-11 guntas and the cases of the petitioners 67 to 75 have been referred under S. 31 to the Civil Court. It is not correct to say that the petitioners are not aware of the award. The petitioners have admitted in para 3 of the writ petition that they did not seek any reference under S. 18. The cases of such of the claimants who filed protest petitions in time have been referred and not the cases of others. Names of petitioners 4,5,7,8,32,35,36 to 38 and 59 are not found in the award. The writ petition is therefore", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-5", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "to 38 and 59 are not found in the award. The writ petition is therefore liable to be dismissed.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-6", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "4. At the hearing of the case, the learned Advocate General has produced the record and it is noticed that not all the writ petitioners are claimants in the award and in respect of those who figured as claimants, notice of award under S. 12(2) in Form 9 (as shown in the Land Acquisition Manual containing the Revenue Board's proceedings) was served on the claimants giving details of Award Number, S. No. or Sub-Division, Extent, Amount and Name of claimant and the thumb impression of the claimant obtained. No protest is recorded therein. The notice requests the claimants to receive the compensation before a particular date and there is no proof of protest by any of the claimants now in the writ petition at any point of time. Admittedly, no application is made by any of the petitioners seeking a reference under S. 18 of the Act. The reason given namely, that no notice under Form 9 was served on the claimants cannot in our opinion, be accepted in view of the above material. We accordingly hold that notice in Form 9 was served on the claimants. These are our findings of fact, based on the record of the case.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-7", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "5. It is, however, argued for the petitioners that in view of the judgment of the Division Bench of this Court in Spl. Deputy Collector v. L. Sai Reddy , it cannot be said that service of Form 9 notice and payment of compensation to the claimants, even if it be without protest, is not sufficient for purposes of S. 12(2) and that unless the award or other essentials viz., the reasons contained in the award, are served on the claimants, limitation under the proviso to S. 18(2) does not commence. As the limitation has not commenced, there can be no objection, it is argued, for directing the respondent to refer the matter under S. 18(1). The notice in Form 9, even if it is to be treated as served on claimants, is ineffective as neither the award nor the the reasoning part of the award has been communicated to the claimants as required by the decision in Spl. Deputy Collector v. L. Sai Reddy.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-8", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "6. On the other hand, it is argued by the learned Advocate General that Form 9, even though it is not made under the rule-making authority of the Government, still it gives the Award No., S. No. or Sub-division, extent amount awarded and name of claimant and these are the main essentials of the Award. The reasoning part of the Award or the Award is not required to be served even though it is so held in Spl. Deputy Collector v. L. Sai Reddy . The notice in Form 9 being sufficient notice under S. 12(2), the compensation having been received by the claimants as per the receipts containing their thumb impressions and there being no protest at any time, no applications for reference under S. 18(1) can be made and in fact, no applications were filed nor reminders given. The limitation period prescribed in proviso to S. 18(2) has expired long back and no mandamus can be issued straightway to the respondent without any application for reference being filed at any time -- whether within the prescribed time ot even later and there is no question of extending the time. \n 7. On the basis of the above contentions and findings arrived at by us, the following point arises for consideration : \n \"Point Whether for purposes of notice of award under S. 12(2) of the Land Acquisition Act, 1894 it is necessary to serve a copy of the Award or the reasoning part of the Award on the persons interested and whether the service of notice in Form 9 (containing the Award number, S.No. or Sub-division, extent, amount awarded and names of persons for whom the award is made) can be held to be sufficent compliance of S. 12(2) so that the limitation prescribed in the proviso to S. 18(2) can start to run?", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-9", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "8. We shall initially refer to the statutory provisions. Section 18 of the Central Act dealing with 'Reference to court' reads as follows : \n \"S. 18. Reference to Court:-- (1) Any person interested who has not accepted the award may, by written application to the Collector, require that the matter be referred by the Collector for the determination of the Court, whether his objection be to the measurement of the land, the amount of the compensation, the persons to whom it is payable, or the apportionment of the compensation among the persons-interested. \n(2) The application shall state the grounds on which objection to the award is taken : \n Provided that every such application shall be made,", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-10", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "(a) if the person making it was present or represented before the Collector at the time when he made his award, within six weeks from the date of the Collector's award; \n (b) in other cases, within six weeks of the receipt of the notice from the Collector under Section 12, sub-section (2), or within six months from the date of the Collector's Award, whichever period shall first expire.\"   \n 9. However, the Andhra Pradesh Legislature passed A. P. Act XX of 1959 by which, for clause (b) of proviso to sub-section (2), the following clause is substituted :-- \n \"(b) in other cases within two months from the date of service of the notice from the Collector under Section 12 sub-section (2).\" \n 10. It will be noticed therefore that under the Central Act, the application for reference can be made 'within six weeks from the date of the Collector's award' under clause (a). It can also be made under clause (b) within (i) six weeks of the receipt of notice from the Collector under S. 12, sub-section (2) or (ii) within six months from the date of the Collector's award, whichever period shall first expire. But under the Act, as amended in Andhra Pradesh in the first part of the proviso (b) to S. 18(2), the period is 'two months' rather than 'six weeks' and so far as the second part of the proviso (b) to S. 18(2) is concerned, the same is altogether dropped. In effect, therefore, the words 'within six months from the date of the award, whichever period shall first expire do not exist in the State of Andhra Pradesh. The proviso to S. 18(2) therefore reads in A. P. as follows :", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-11", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "\"S. 18(2): \n Provided that every application shall be made", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-12", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "(a) if the person making it was present or represented before the Collector at the time when he made his award, within six weeks from the date of the Collector's award,", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-13", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "(b) in other cases, within two months from the date of service of the notice from the Collector under Section 12, sub-section (2).\"  \n 11. We are here not concerned with the case of a person who was present or was represented before the Collector at the time when the latter made an award. Therefore we are not concerned with clause (a) of the proviso. We are concerned with clause (b) of the proviso as existing in Andhra Pradesh and this corresponds to the first part of sub-clause (b) of the proviso of the Central Act. As the above said sub-clause (b) of the proviso to S. 18(2) uses the words \"from the date of service of the notice from the Collector\" under S. 12(2), it becomes necessary to refer to Section 12(2) of the Act. Section 12(2) reads as follows : \n \"S. 12(2) : The Collector shall give immediate notice of award to such of the persons interested as are not present personally or by their representatives when the award is made.\"", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-14", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "12. The crucial question therefore is what is meant by the words 'notice of award'. As already stated according to the decision in Spl. Deputy Collector, L.A. v. L. Sai Reddy the Division Bench of this Court took the view that the notice of award in S. 12(2) meant the service of a notice along with a copy of the award. It was observed therein that for the purpose of seeking a reference the person interested \"must know on what grounds his claim for a higher amount of compensation has been rejected. He must also know whether the Collector has determined the compensation with reference to the date of notification. If there is a dispute as to the apportionment, on what grounds his claim has been rejected or accepted only in part, as the case may be, should be made known to the claimant.\" It was further held that \"without knowing the basis on which the lesser amount is awarded, he would not be in a position to seek a reference. The law would not expect the claimant to seek a reference in every case irrespective of whether the amount awarded is reasonable or not.\" Finally the Division Bench held (para 4)- \n\"The Legislature in incorporating sub-section (2) of S. 12 could not have intended only the substance of the award to be intimated to the claimants. In our view the expression 'notice of award' occurring in sub-section (2) of S. 12 clearly postulates that the award as such should have been communicted to the claimants\". \n The Division Bench then referred to the observations of the Supreme Court in State of Punjab v. Qaisar Jehan Begum, , which in its turn followed the decision of the Supreme Court in Harish Chandra v. Deputy L.A. Officer, . It is the correctness of the above view that is questioned in the reference.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-15", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "13. It will be noticed that in the award enquiry under S. 11, the Collecor is to enquire into the objections, if any, which any person interested has stated pursuant to the notice given under S. 9, to the measurement made under S. 8 and to the value of the land at the date of publication of the notification under S.4, sub-section (1) and into the respective interests of the persons claiming the compensation. The Collector then makes an award under his hand of- \n \"(i) the true area of the land,", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-16", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "(ii) the compensation which, in his opinion, should be allowed for the land, and", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-17", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "(iii) the apportionment of the said compensation amoung all the persons known or believe to be interested in the land.....\"  \n Section 12(1) provides that such an award shall be filed in the Collector's office and shall, except as provided, be final and conclusive evidence of (i) the true area; (ii) value of the land and (iii) apportionment of the compensation and (iv) the persons interested. Section 18(1) of the Act states again that any person interested who has not accepted the award may seek a reference whether his objections be to (i) the measurement of the land; (ii) the amount of compensation and (iii) the persons to whom it is payable and (iv) the apportionment thereof. \n 14. A reading of the provisions of Sections 9(2), 11(1), 12(1) and 18(1) of the Act in our opinion, show that the enquiry before the Collector for the purpose of making of the award is only in relation to the four items (i) the measurement of the land, (ii) the amount of compensation and (iii) the persons to whom it is payable and (iv) the apportionment thereof, and it is these four items that have to find place in the award published under S. 11 and in the reference under S. 18(1). The award made under S. 11 being in the nature of an offer, if it contains the above factors or items, it must be treated as complete in itself. The purpose in requiring the award to contain reasons, in our view, is meant to be a check on the Collector so that his award may not be arbitrary. The reasons therefore need not be communicated under S. 12(2).", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-18", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "15. It is, however, argued for the writ petitioners, relying on the observations in the decision in Spl. Deputy Collector, L.A. v. L. Sai Reddi, that it is not sufficient if the notice of award under S. 12(2), (read with proviso (b) to S. 18(2) communicates merely the above three factors and that unless the reasons for the award are also communicated, it is not possible for the person interested to seek a reference mentioning his objections.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-19", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "16. In our opinion, this argument though attractive on its face, cannot be accepted on a deeper scrutiny of the provisions of the Land Acquisition Act. The award enquiry before the Collector, is only for the purpose of making an offer to the person interested. Though the award must contain reasons it is not necessary that those reasons must be communicated to the persons interested. This is because once a reference is made to the Court upon an application filed within the time limited by S. 18(2), the Collector in his statement to the Court under S. 19 will then come forward, under sub-clause (d) to S. 19(1) with the grounds on which the amount of compensation is determined. In his statement to the Court he will further mention, for the information of the Court, the situation and extent of the land with particulars of any trees, buildings or standing crop, the name of the persons who he has reason to think are interested in such land and the amount awarded for damages and paid or tenders and the amount of compensation awarded. The Court shall then serve notice under S. 20 of the Act to the persons to file their objections in respect of the area of the land and the amount of compensation. While filing such objections in the Court, after the reference under S. 18 and after notice under S. 20, the persons interested will have the benefit of the grounds communicated to the Court by the Collector under S. 19(1) and they can file effective objections in the civil court. The argument that unless a copy of the award or at least the reasons of the award are communicated to the persons interested under S. 12(2), the said persons cannot claim an effective application for reference under S. 18(1), cannot be accepted. In the application for reference under S. 18(1) it is not necessary for the persons interested to say anything more than that they are objecting to the measurement of", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-20", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "not necessary for the persons interested to say anything more than that they are objecting to the measurement of land, the amount of compensation or the persons to whom it is payable or the apportionment thereof. Even if they do not mention any particular reasons the application seeking reference under S. 18(1) does not become invalid. They will have a real opportunity before the Court, after the reference and after the Collector's Statement under S. 19(1), when they file their objections in the Court in regard to the area or the amount of compensation or other factors. It is these objections with reasons therefor, then filed that are normally registered as an O.P. It is thereafter that the Land Acquisition Officer files a counter thereto in the Court. The scheme of the Act, in our view, is for giving to the interested persons an opportunity to know the reasons for the award when the matter comes before the Court after the reference under S. 18(1) and not at the stage of service of notice of the award under S. 12(2).", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-21", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "17. The above position appears to be clear from two judgments of the Privy Council to which we shall presently refer. In Pramatha Nath v. Secretary of the State, AIR 1930 PC 64 : 57 IA 100 : ILR 57 Cal 1148, it was held that the jurisdiction of the civil Court under the Land Acquisition Act is a special one and is strictly limited by the terms of Sections 18, 20 and 21. It only arises when a specific objection has been taken to the Collector's award and it is confined to a consideration of that objection. Once therefore it is ascertained that the only objection taken is to the amount of compensation, that alone is the 'matter' referred and the Court has no power to determine or consider anything beyond it e.g., question of measurement raised for the first time three years after the references were duly made by the Collector. Referring to S. 18(1) and splitting up the factors into four rather than three, Sir George Lowndes observed as follows :-- \n \"The section clearly specifies four different grounds of objections viz. (i) to the measurement of the land; (ii) to the amount of compensation; (iii) to the persons to whom it is payable; and (iv) to the apportionment. The distinction between objection to area and to amount of compensation are also borne out by other sections of the Act; see Sections 9, 11 19(d) and 20(c).\" \n The position is more clearly elaborated by the Privy Council in Mt. Bhagwati v. Ram Kali, AIR 1939 PC 133 : 66 IA 145 : ILR 1939 All 460 as follows :", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-22", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "There it is stated while referring to S. 18(1), that the particulars of the reason for the objections are riot required to be given in an application for reference under S. 18(1). The Act requires only the grounds of objection to be given and by 'grounds' is meant such of the four grounds mentioned in S. 18(1) as are relied upon and no further particulars are required in order to comply with the terms of the sub-section. Lord Porter observed- \n \"The difficulty in the present case arises from the form by which the appellant required the Collector to submit the matter to the Judge.... \n ...It was however suggested that the requirement was not complete unless particulars of the reasons for the objections taken were given. But the Act does not require particulars to be given it requires only the grounds of objections to be given and by 'grounds' their Lordships think is meant such of the four grounds mentioned in S. 18(1) as are relied upon. The same view as to the meaning of the word 'grounds' appear to have been entertained by their Lordships' Board in Pramatha Nath v. Secretary of State (4).\"", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-23", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "18. If there is any doubt, the same, in our opinion, is set at rest by the clear observations of the Privy Council in Mt. Bhagwati v Ram Kali (AIR 1939 PC 133). Therefore even if an application for reference is made under S. 18(1) without mentioning any reasons for the said objections, such an application is to be treated as valid. All that is required in the said application is to mention the 'grounds' of objections by which is meant, the objections in respect of the four factors, viz., (i) the measurement of the land, (ii) the amount of compensation, (iii) the persons to whom it is payable and (iv) the apportionment. No reasons or further particulars are required to be given in the application for reference under S. 18(1). Therefore the entire basis of the contention of the writ petitioners and the entire reasoning in the judgment of the Division Bench in Spl. Deputy Collector, L.A. v. L. Sai Reddi falls to the ground and cannot be accepted. \n 19. It is true that the Division Bench relied upon the two decisons of the Supreme Court viz., Harish Chandra v. Deputy L.A. Officer and State of Punjab v. Qaisar Jehan Begum . In our view the said decisions of the Supreme Court have been delivered in connection with the second part of the proviso (b) to S. 18(2) available in the Central Act (and in some States) and which part has been dropped in Andhra Pradesh by the A.P. Act 20 of 1959. So far as the second part of the proviso (b) to S. 18(2) is concerned, that part uses the words- \n \"or within six months from the date of the Collector's award whichever period shall first expire.\"", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-24", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "It will be noticed that so far as the unamended provisions of the Central Act are concerned (and as in vogue in some States other than Andhra Pradesh) the Supreme Court observed that if the notice under S. 12(2) is not served, it would be open to the persons interested to seek a reference within six months from the date of Collector's award. In such cases because of the absence of notice under S. 12(2), the persons interested are kept in the dark about the file number of the award, the measurement, the amount of compensation, the names of persons to whom the compensation is granted as well as the apportionment. A question had arisen before the Supreme Court whether in such cases, they could be compelled to file their application for reference within six months from the date of filing of the award by the Collector under S. 12(1). It was argued that unless the award itself or the substance of the award was communicated, it will not be possible for any person interested to file any objections even in regard to the four items referred to earlier. The Supreme Court construed the words 'date of Collector's award' and interpreted the same to mean date of knowledge of the award by the party affected either actual or constructive. It meant either the date when the award was communicated or was known by him actually or constructively. The above aspect was elaborated a little more in State of Punjab V. Quisar Jehan Begum . There also the Supreme Court was concerned with the second part of proviso (b) to S. 18(2). Knowledge of the award, their Lordships observed, did not mean a mere knowledge of the fact that an award had been made, (at 1607 of AIR):", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-25", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "\"The knowledge must relate to the essential contents of the award. These contents may be known either actually or constructively. If the award is communicated to a party under S. 12(2) of the Act, the party must be obviously fixed with knowledge of the contents of the award whether he reads it or not. Similarly when a party is present in Court either personally or through his representative when the award is made by the Collector, it must be presumed that he knows the contents of the award. Having regard to the scheme of the Act, knowledge of the award must mean knowledge of the essential contents of the award.\"", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-26", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "20. It is therefore clear that in cases falling under the second part of proviso (b) to S. 18(2) wherein the words 'date of the Collector's award' have been used, it must be the date of the knowledge of the award itself if communicated or the date of knowledge of the \"essential contents\" thereof. Unfortunately, so far as Andhra Pradesh is concerned, the second part of proviso (b) to S. 18(2) has been omitted by Act 20 of 1959 and therefore it is not possible, so far as Andhra Pradesh is concerned, for the interested persons to rely on the above said two decisions of the Supreme Court and contend that limitation does not start until either the award is communicated or atleast the essential contents thereof are communicated. So far as Andhra Pradesh is concerned, the first part of proviso (b) to S. 18(2) alone governs and limitation will start after the expiry of two months from the date of service of 'notice from the Collector under S. 12, sub-sec. (2).' This part of the provision requires interpretation of another set of words i.e. 'notice of award' in S. 12(2). Those words, in our view, mean notice of the award containing the offer of the Government, such award referring, in terms of S. 11 merely (i) the true area of the land, (ii) the compensation which should be allowed for the land, (iii) the apportionment of the said compensation (iv) the persons known or believed to be interested in the land. If the above four factors are mentioned in the notice of award it would, in our opinion, be sufficient compliance with the provisions of S. 12(2) as to notice of award even though the reasons for the award are not communicated. As already stated an application for reference made under S.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-27", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "the reasons for the award are not communicated. As already stated an application for reference made under S. 18(1) need not contain the reasons for which the applicant contends that the award is bad. After a reference is catted for, the Collector is to give his reasons for the award in his Statement to the Court under S. 19(1). Once the reasons given by the Collector are before the Court as contained in his Statement to the Court given under S. 19, there will be no difficulty for the applicant to file his reasoned objections in the Court by looking into the said Statement.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-28", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "21. The view of the Division Bench in Spl. Deputy Collector, L. A. v. L. Sai Reddi that unless the award or the reasoning part of it is communicated, no effective application for reference can be filed under S. 18(1) is, in our view, not correct. \n 22. In Andhra Pradesh and particularly in this Court, the notice under S. 12(2) is given in Form 9 which is contained in the Land Acquisition Manual. The said Form has been evolved by the proceedings of the Board of Revenue, Madras and is still being followed in Andhra Pradesh. The Form is as follows : \n\"Form 9. \nNotice of award under S. 12(2) of Act 1 of 1894. \n The following award has been passed by the undersigned in the matter of the acquisition of the lands noted below and situated in Village.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-29", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "Taluk. \n\n Survey No. & Sub-Division. \n\n Extent. \n\n Amount Persons to whom awarded, award is made. \n\nis/ are hereby informed that he/ they should appear either or by an authorised agent before the undersigned within days after the issue of this notice, and receive the amount specified above, failing which the said sum of money will be kept in Revenue deposit and will bear no interest. \n Station : \n Date :             Land Acquisition Officer. \n \n\n Note :-- The paragraph below the statement in this notice should be deleted when the notice is served on those who are not awardees.\"  \n \n\n 23. We have perused the forms which have been served on the claimants in the present case and we find that Column 1 further gives the award number also. The above details, in our opinion, would be clearly sufficient compliance with the requirement of\n\n'notice of award' contained in S. 12(2) of the Act read with the first part of proviso (b) to S. 18(2).", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-30", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "24. Reliance is however placed by Sri B. Sudarshan Reddy for the writ petitioners on the following passage (in para 7) of Harish Chandra v. Deputy L.A. Officer  in the context of S. 12(2) : \n \"This requirement itself postulates the necessity of the communication of the award to the party concerned the Legislature recognised that the making of the award under S. 11 followed by its filing under S. 12(1) would not meet the requirement of justice before bringing the award into force. It thought that the communication of the award to the party concerned was also necessary and so by the use of the mandatory words an obligation is placed on the Collector to communicate the award immediately to the party concerned. It is significant that the section requires the Collector to give notice of the award immediately after making it. This provision lends support to the view which we have taken about the construction of the expression 'from the date of the Collector's award' in the proviso to S. 18. It is because communication of the order is regarded by the Legislature as necessary that S. 12(2) has imposed an obligation on the Collector and if the relevant clause in the proviso is read in the light of this statutory requirement it tends to show that the literal and mechanical construction of the said clause would be wholly inappropriate.\"", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-31", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "A casual reading of the said passage may, no doubt, suggest that even under S. 12(2), it is necessary to communicate the award to the party. But, in our view, the Supreme Court did not lay down an absolute proposition that a notice containing the details referred to in Form 9 (viz., those containing the award number, the measurement, the extent of compensation and the person to whom it is payable and apportionment) is not sufficient. In our opinion, the words 'communication of the award' used in paragraph 7 of the judgment of the Supreme Court do not mean any more than communication of the above said particulars mentioned in Form 9 as contained in the award. It mast be noted that the Supreme Court was mainly dealing with the second part of the proviso (b) to S. 18(2). If, by the word 'award' is meant nothing more than the four factors mentioned by the Privy Council, the details in Form 9 would, in our view, be sufficient compliance with S. 12(2). The question of submitting reasons for the objections arises, as stated by the Privy Council, only after reference and notice under S. 20(1). It cannot be assumed that the Supreme Court intended to lay down a rule different from the one laid down by the Privy Council earlier.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-32", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "25. Several decisions of this Court as well as those of other High Court have been cited before us for the view that even under the first part of the proviso (b) to S. 18(2) actual or constructive communication of the award is necessary. These cases, in our view, can be divided into two categories. In these cases falling under both the categories, the Land Acquisition Act as applicable in the relevant State contain both the parts in the proviso (b) to S. 18(2) and not merely the first part as in Andhra Pradesh. In the first category fall cases where no notice what-so-ever has been issued under S. 12(2) as visualised by the first part of proviso (b) to S. 18(2). In the second category fall cases where notice was issued under S. 12(2) without a copy of the award or what the Supreme Court considered to be the essential contents of the award and it was held that the limitation did not start to run.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-33", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "26. So far as the first category of cases wherein no notice what-so-ever was served under the first part of proviso (b) to S. 18(2) (that is, where no notice under S. 12(2) was served) there is no difficultly in holding that the period of limitation did not start. In this category of cases once it is noted that there is no notice as contemplated under the first part of proviso (b) to S. 18(2) by communication of notice under S. 12(2), it will be incumbent for the authority to bring the knwoledge of the award to the person interested as contemplated in the decisions of the Supreme Court in Harish Chandra v. Deputy L.A. Officer and in State of Punjab v.Qaisar Jehan Begum . Such knowledge should be brought home either actually or constructively as stated in those decisions. Therefore, the first category of cases does not create any difficulty. To this category belong Seshachalam v. District Collector, Guntur, 1955 Andh LT 755 : (AIR 1957 Andh Pra 687); Mahmoddunnisa v. Government of Hyderabad, AIR 1958 Andh Pra 42; C. Venkatramayya v. Land Acquisition Officer, (1968) 1 Andh Pra WR 113; Farhatullah v. Spl. Tahasildar, Land Acquisition, 1975 Andh LT 492; Ram Singh v. State, ; Jaswant Rai v. Land Acquisition Collector, P.U.L.D., Mohali, ; Ramahari v. L.A. Officer, ; Gram Seva Mandal v. Collector, Wardha, and Ghulam Shah v. State of J. & K., AIR 1965 J & K 58. In so far as in the above said decisions the courts held that the communication of the award", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-34", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "In so far as in the above said decisions the courts held that the communication of the award or its essential contents either actually or constructively was necessary having regard to the second part of proviso (b) to S. 18(2) the said decisions, in our view, are in accord with the two decisions of the Supreme Court above mentioned. These cases as already stated, therefore do not present any difficulty and they do not help the writ petitioners in the present case before us.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-35", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "27. The difficulty arises in regard to the second category of cases which are the following : Mangilal Jawanmal v. Spl. L.A. Officer, ; Keshav v. State, ; Spl. L.A.O., Ghatap-pabha v. A. K. Gadakari, AIR 1973 Mys 22; Rasulkhanji Sardar Mahomad Khanji v. H.P. Rathod, (1975) 16 Guj LR 911; R. Hirabhai v. Dy. Collector, L.A. & R Panam Project, Godhra, ; Ishabhai Umarbhai v. State, ; Gopalbhai Becharbhai v. State, . The best exposition of the law supporting the view of the writ petitioners, according to us, is contained in the judgment of the Bombay High Court in Mangilal Jawanmal v. Spl. L.A. Officer . Though a notice in the form prescribed in Anderson's Manual giving three particulars (i.e., true area, amount of compensation and apportionment) was served on the persons interested, it was held, it was not sufficient. In so far as learned Judges applied the two decisions of the Supreme Court earlier referred to, while interpreting the first part of the proviso (b) to S. 18(2), we do not with great respect, accept the said approach, as the Supreme Court cases had occasion to consider only the second part of proviso (b) and not the first part. Again in so far as they stated that the reasons contained in the award should be communicated to the interested persons so that the latter could file an effective reference, we again disagree respectfully, for the said view runs contrary to the two Privy Council cases. In fact, the more important ruling of the Privy Council, namely the one in Mt. Bhagwati v. Ram Kali", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-36", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "the Privy Council, namely the one in Mt. Bhagwati v. Ram Kali (AIR 1939 PC 133) was not brought to the notice of the learned Judges. If the learned Judges, however, thought that the provisions of the Bombay Court-Fees Act, 1959 (contained in Art. 15 in Schedule I which required one half of the advalorem Court fee payable on the compensation to be paid at the stage of application for reference) necessitated the communication of reasons, so that the party could decide what to claim in the reference application, the case becomes wholly distinguishable. In fact, at one stage (see para 22) the learned Judges refer to the Court-fee aspect as one of the 'compelling factors' for the view they are taking regarding the first part of proviso (b) to S. 18(2). The Bombay decision has to be understood in the light of the pecular provision in the Bombay Court Fees Act, 1959. There Art. 15 of Schedule I fixes \"one half of ad valoram\" as Court-fee in respect of \"Application to the Collector for a reference to the Court under S. 18 of the Land Acquisition Act, 1894\" and on account of that special provision, the Bombay case is clearly distinguishable, We may, however, add that the said provision in the I Schedule is rather incongruous in the light of the decisions of the Privy Council already referred to. So far as the other ruling in the second category of cases referred to above are concerned, they 'merely apply the two Supreme Court judgments for construing the first part of proviso (b) without noticing that the Supreme Court was concerned with the second part of the proviso (b) to S. 18(2). We are, therefore, unable to accept their reasoning. We, therefore, dissent respectfully from the rulings in the second category of cases", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-37", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "to accept their reasoning. We, therefore, dissent respectfully from the rulings in the second category of cases grouped above.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-38", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "For the aforesaid reasons, we hold that under S. 18(2) of the Land Acquisition Act, 1894 (as amended by A.P. Act XX/1959) notice of award under proviso (b) to S. 18(2) (which corresponds to the first part of proviso (b) to S. 18(2) in the Central Act, does not mean that it is necessary that the award copy or the reasoning part of the award need to be communicated to the persons interested. If the Form 9 as per the A.P. Land Acquisition Manual is served, giving the Award No., the true area acquired, the compensation allowed, the persons known or believed to be interested and the apportionment, it would be sufficient for the commencement of the limitation of two months. Thus in W.P. No. 13203/1985, limitation commenced soon after service of notice in Form 9, and as no application under S. 18(2) was filed, as found by us, no writ of Mandamus can be issued directing reference under S. 18.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "16835aba1f19-39", "Titles": "Maddela Narsimlu And Others vs The Special Deputy Collector, ... on 12 September, 1990", "text": "29. Coming to the other writ petitions, the position is that the awards in W.P. No. 11938/85 are dated 31-10-64, 29-3-1965, 24-8-1965, 22-11-1965, the award in W.P. No. 11940/85 is registered in 1962, the award in W.P. No. 11764/85 is of 26-2-1960. the writ petitions are filed for issue of a writ of Mandamus in 1985 and none of the petitioners filed any application under S. 18 at any time. No Mandamus can be issued unless the party has filed application under S. 18 in time. There is delay of nearly 20 years in the filing of the writ petitions. The writ petitions are hopelessly belated. The counter reveals that most of the petitioners are not even claimants nor are their names found in the award. The writ petitions, therefore, deserve to be dismissed. \n 30. All the writ petitions are, therefore, dismissed. In the circumstances, there will be no order as to costs. Advocates fee will be Rs.2,000/- one set. \n 31. Petitions dismissed.", "source": "https://indiankanoon.org/doc/593732/"}
+{"id": "2de54f26505d-0", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "THE HON'BLE THE ACTING CHIEF JUSTICE PINAKI CHANDRA GHOSE AND THE HONOURABLE  THE HONOURABLE SRI JUSTICE VILAS V. AFZULPURKAR                   \n\nWRIT PETITION No.22317 of 2012   \n\n04.09.2012 \n\nSmt Sajida Begum.  \n\nState Bank of India, SARC Nampally, Hyderabad, Rep. by its authorized officer.\n\nCounsel for the Petitioner: MR. T.C. KRISHNAN \n\nCounsel for the Respondent: MR. AMBADIPUDI SATYANARAYANA          \n\n<GIST: \n\n>HEAD NOTE:    \n\n? Cases referred\n\n1. AIR 2011 MP 205  \n2. (2011) 6 SCC 739 \n3. 2012 (7) TMI 641\n4. 2008 (4) MHLJ 424 = LAWS (BOM) 2008 (2) 173   \n5. (2004) 11 SCC 472 \n6. (2004) 11 SCC 456 \n7. (1975) 4 SCC 22 \n8. AIR 1995 SC 1111 \n9. (2003) 8 SCC 431 \n10. IV (2009) BC 635\n11. (2008) 14 SCC 445 \n12.  (2009) 5 SCJ 774\n13.  (1995) 5 SCC 5 = AIR 1995 SC 2272  \n\nORDER: (per Hon'ble Sri Justice Vilas V. Afzulpurkar)", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-1", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "ORDER: (per Hon'ble Sri Justice Vilas V. Afzulpurkar)\n\n\n        Petitioner herein has challenged the order dated 04.05.2012 passed by the\nDebts Recovery Appellate Tribunal (DRAT), Chennai dismissing the application\nfiled by the petitioner, being I.A.No.1654 of 2010 in AIR(SA).No.1012 of 2010.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-2", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "2.      The aforesaid appeal and the interlocutory application were preferred\nbefore DRAT against order of the Debts Recovery Tribunal-II (DRT), Hyderabad in\nS.A.No.142 of 2010 dated 27.08.2010. In the said appeal before DRT, the\npetitioner had questioned the possession taken over by the respondents with\nregard to the secured asset i.e. house bearing No.18-12-419/941/A/1 situated at\nHafez Baba Nagar, Kanchan Bagh, Hyderabad.  Petitioner asserts that she is the\nabsolute owner and possessor of the said house property by virtue of a\nregistered gift deed dated 27.02.2009 executed by her husband, Mohd. Nazeer \nKhan, whereas the respondent bank asserts that it is a secured asset, which was\nmortgaged by Smt Khaiser Begum by depositing the registered Gift Deed dated \n04.02.1995 executed by her husband Mohammed Arif Khan and the said mortgage was     \ncreated in favour of the respondent bank on 14.11.1995 by virtue of term loan\nand working capital limit availed by M/s. Bio Vet Formulations represented by\nits proprietor, Sri Arif Khan. While we are not for the present concerned with\nthe merits of the rival claims, as above, S.A.No.142 of 2010 preferred by the\npetitioner was, however, dismissed on merits by DRT under order dated 27.08.2010\nand questioning the correctness of the said order, petitioner had preferred\nfurther appeal before DRAT along with an application seeking condonation of\ndelay of 16 days in filing the said appeal. The application, being I.A.No.1654", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-3", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "of 2010, has since been dismissed by DRAT under the impugned order by placing  \nreliance upon a decision of the Madhya Pradesh High Court in SETH BANSHIDHAR     \nKEDIA RICE MILLS PVT. LTD v. STATE BANK OF INDIA1 holding that under Section 18      \nof the Securitization and Reconstruction of Financial Assets and Enforcement of\nSecurity Interest Act, 2002 the appellate tribunal has no power to condone the\ndelay in presentation of the appeal. The correctness of the said view is\nquestioned in this writ petition.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-4", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "3.      We have heard the learned counsel for the petitioner and the learned\nstanding counsel appearing for the respondent bank.\n\n4.      Learned counsel for the petitioner has placed reliance upon a decision of\nthe Supreme Court in THIRUMALAI CHEMICALS LTD. v. UNION OF INDIA2 and a Full       \nBench judgment of the High Court of Calcutta in UNION OF INDIA v. JAGADISH   \nPRASAD JALAN NANDALAL3 to which one of us is a party (the Hon'ble the Acting    \nChief Justice). He also placed reliance upon a Division Bench judgment of the\nBombay High Court in UCO BANK, MUMBAI v. M/s. KANJI MANJI KOTHARI AND CO.4 and a           \ndecision of the Supreme Court in FAIRGROWTH INVESTMENTS LTD. v. CUSTODIAN5.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-5", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "5.      Per contra, learned standing counsel for the respondent bank placed\nreliance upon a decision of the Supreme Court in L.S. SYNTHETICS LTD. v. \nFAIRGROWTH FINANCIAL SERVICES LTD.6; THE COMMISSIONER OF SALES TAX, U.P.,                 \nLUCKNOW v.   \nM/s. PARSON TOOLS AND PLANTS, KANPUR7; BIRLA CEMENT WORKS v. G.M. WESTERN                    \nRAILWAYS8; PRAKASH H. JAIN v. MARIE FERNANDES9; a judgment of the Kerala High          \nCourt in JAYAN v. HONG KONG AND SHANGHAI BANKING CORPORATION LTD.10; NOHARLAL                  \nVERMA v. DISTRICT CO-OPERATIVE CENTRAL BANK LIMITED11 and lastly the decision of          \nthe Supreme Court in COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE v. HONGO INDIA                \nP. LTD.12.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-6", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "6.      Before we appreciate the rival contentions, the legislative environment\nspread over the Securitization and Reconstruction of Financial Assets and\nEnforcement of Security Interest Act, 2002\n(for short 'SARFAESI Act'); the Recovery of Debts Due To Banks and Financial\nInstitutions Act, 1993 (for short 'the DRT Act') and the Limitation Act, 1963,\nmay be noticed so far as is relevant.  Section 17 of the SARFAESI Act provides a\nforum for adjudication of claim of any person challenging any of the security\nmeasures taken by the secured creditor and the said forum is provided before the\nDRT constituted under the DRT Act.  For the sake of convenience and relevance,\nSections 17(1) and (7), 18(1) and (2), 36 and 37 of the SARFAESI Act are\nextracted as under:\n\n17. Right to Appeal. - (1) Any person (including borrower), aggrieved by any of\nthe measures referred to in sub-section (4) of section 13 taken by the secured\ncreditor or his authorised officer under this Chapter, may make an application\nalong with such fee, as may be prescribed, to the Debts Recovery Tribunal having\njurisdiction in the matter within forty-five days from the date on which such\nmeasures had been taken.  \n\n(7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall,\nas far as may be, dispose of application in accordance with the provisions of\nthe Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of\n1993) and the rules made thereunder.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-7", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "18. Appeal to Appellate Tribunal. - (1) Any person aggrieved, by any order made\nby the Debts Recovery Tribunal under Section 17, may prefer an appeal along with\nsuch fee, as may be prescribed to an Appellate Tribunal within thirty days from\nthe date of receipt of the order of Debts Recovery Tribunal.\n\n(2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far\nas may be, dispose of the appeal in accordance with the provisions of the\nRecovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993)\nand rules made thereunder.\n\n36. Limitation. - No secured creditor shall be entitled to take all or any of\nthe measures under sub-section (4) of section 13, unless his claim in respect of\nthe financial asset is made within the period of limitation prescribed under the\nLimitation Act, 1963 (36 of 1963).\n\n37. Application of other laws barred. - The provisions of this Act or the rules\nmade thereunder shall be in addition to, and not in derogation of, the Companies\nAct, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of\n1956), the Securities and Exchange Board of India Act 1992 (15 of 1992), the\nRecovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993)\nor any other law for the time being in force.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-8", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "Though Section 17 of SARFAESI Act is styled as a right to appeal, it is,\nin fact, a forum for original proceedings against the security measures.  Sub-\nsection (7) of Section 17 provides that any application made under Section 17 of\nSARFAESI Act shall be disposed of in accordance with the provisions of the DRT\nAct and the Rules made thereunder. Section 18 of SARFAESI Act provides a right \nto appeal to DRAT against orders of DRT passed under Section 17 of SARFAESI Act.  \nSuch appeal is also required to be disposed of in accordance with the provisions\nof the DRT Act and the Rules made thereunder. \n\n7.      The following provisions of the DRT Act may also be noticed.\nThe DRT and DRAT are established under Section 3(1) and 8(1) respectively and\nthe respective exclusive jurisdiction of the tribunal and the appellate tribunal\nare provided for under Section 17 of the DRT Act. The procedure and powers of\ntribunal and appellate tribunal are governed by Section 22 of the DRT Act, which\nis extracted hereunder:\n22. Procedures and powers of the Tribunal and the Appellate Tribunal. -\n(1) The Tribunal and the Appellate Tribunal shall not be bound by the procedure\nlaid down by the Code of Civil Procedure, 1908\n(5 of 1908), but shall be guided by the principles of natural justice and,\nsubject to the other provisions of this Act and of any rules, the Tribunal and\nthe Appellate Tribunal shall have powers to regulate their own procedure\nincluding the places at which they shall have their sittings.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-9", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "(2) The Tribunal and the Appellate Tribunal shall have, for the purposes of\ndischarging their functions under this At,\nthe same powers as are vested in a Civil Court under the Code of Civil\nProcedure, 1908, (5 of 1908) while trying a suit, in respect of the following\nmatters, namely: -\n\n(a) summoning and enforcing the attendance of any person and examining him on \noath;\n(b) requiring the discovery and production of documents;\n(c) receiving evidence on affidavits;\n(d) issuing commissions for the examination of witnesses or documents;\n(e) reviewing its decisions;\n(f) dismissing an application for default or deciding it ex parte;\n(g) setting aside any order of dismissal of any application for default or any\norder passed by it ex parte;\n\n(3) Any proceeding before the Tribunal or the Appellate Tribunal shall be deemed\nto be a judicial proceeding within the meaning of Secs. 193 and 228, and for the\npurposes of Sec.196 of the Indian Penal Code (45 of 1860) and the Tribunal or\nthe Appellate Tribunal shall be deemed to be a Civil Court for all the purposes\nof Sec.195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).\n\n        It would be noticed from the above that the tribunal and the appellate\ntribunal while discharging their functions exercise same powers as are vested in\ncivil Court under the Code of Civil Procedure, 1908 while trying a suit in\nrespect of specified matters, as above.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-10", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "8.      Section 24 of the DRT Act, extracted below, provides that the provisions\nof the Limitation Act apply to an application made to the tribunal.\n24. Limitation.- The provisions of the Limitation Act, 1963\n(36 of 1963) shall, as far as may be, apply to an application made to a\nTribunal.\n\n9.      Section 29 of the Limitation Act, to the extent relevant,\nis necessary to be noticed as follows:\n29. Savings:- (1) Nothing in this Act shall affect Section 25 of the Indian\nContract Act, 1872 (9 of 1872).\n\n(2) Where any special or local law prescribes for any suit, appeal or\napplication a period of limitation different from the period prescribed by the\nSchedule, the provisions of Section 3 shall apply as if such period were the\nperiod prescribed by the Schedule and for the purpose of determining any period\nof limitation prescribed for any suit, appeal or application by any special or\nlocal law, the provisions contained in Sections 4 to 24 (inclusive) shall apply\nin so far as, and to the extent to which, they are not expressly excluded by\nsuch special or local law.\n\n\n        As would be noticed from sub-clause (2) above that Sections 4 to 24\n(inclusive) of the Limitation Act would apply to any special or local law, if\nsuch special or local law does not expressly exclude the applicability of\nSections 4 to 24 of the Limitation Act.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-11", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "10.     The interpretation of Section 29 of the Limitation Act is considered in\nseveral decisions and it would be apt to notice a decision of the Supreme Court\nin MUKRI GOPALAN v. CHEPPILAT PUTHANPURAYIL ABOOBACKER13 wherein the question               \nthat fell for consideration is whether the appellate authority constituted under\nSection 18 of the Kerala Rent Control Act has power to condone the delay and\nwhether Sections 4 to 24 of the Limitation Act are applicable thereto, which\nincludes Section 5 of the Limitation Act. Paras 10, 11, 13, 15 and 22 are\nrelevant for our purpose and are extracted hereunder:\n10. In the light of the aforesaid analysis of the relevant clauses of Section\n29(2) of the Limitation Act, let us see whether Section 18 of the Rent Act\nproviding for a statutory appeal to the appellate authority satisfies the\naforesaid twin conditions for attracting the applicability of Section 29(2) of\nthe Limitation Act. It cannot be disputed that Kerala Rent Act is a special Act\nor a local law. It also cannot be disputed that it prescribes for appeal under\nSection 18 a period of limitation which is different from the period prescribed\nby the schedule as the schedule to the Limitation Act does not contemplate any\nperiod of limitation for filing appeal before the appellate authority under\nSection 18 of the Rent Act or in other words it prescribes nil period of\nlimitation for such an appeal. It is now well settled that a situation wherein a\nperiod of limitation is prescribed by a special or local law for an appeal or\napplication and for which there is no provision made in the Schedule to the Act,\nthe second condition for attracting Section 29(2) would get satisfied. As laid", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-12", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "the second condition for attracting Section 29(2) would get satisfied. As laid\ndown by a majority decision of the Constitution Bench of this court in the case\nof Vidyacharan Shukla Vs. Khubchand Baghel and Ors.   \n(AIR 1964 SC 1099), when the First Schedule of the Limitation Act prescribes no\ntime limit for a particular appeal, but the special law prescribes a time limit\nfor it, it can be said that under the first schedule of the Limitation Act all\nappeals can be filed at any time, but the special law by limiting it provides\nfor a different period. While the former permits the filing of an appeal at any\ntime, the latter limits it to be filed within the prescribed period. It is\ntherefore, different from that prescribed in the former and thus Section 29(2)\nwould apply even to a case where a difference between the special law and\nLimitation Act arose by the omission to provide for limitation to a particular\nproceeding under the Limitation Act.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-13", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "11. It is also obvious that once the aforesaid two conditions are satisfied\nSection 29(2) on its own force will get attracted to appeals filed before\nappellate authority under Section 18 of the Rent Act. When Section 29(2) applies\nto appeals under Section 18 of the Rent Act, for computing the period of\nlimitation prescribed for appeals under that Section, all the provisions of\nSections 4 to 24 of the Limitation Act would apply. Section 5 being one of them\nwould therefore get attracted. It is also obvious that there is no express\nexclusion anywhere in the Rent Act taking out the applicability of Section 5 of\nthe Limitation Act to appeals filed before appellate authority under Section 18\nof the Act. Consequently, all the legal requirements for applicability of\nSection 5 of the Limitation Act to such appeals in the light of Section 29(2) of\nLimitation Act can be said to have been satisfied. That was the view taken by\nthe minority decision of the learned single Judge of Kerala High Court in Jokkim\nFernandez Vs. Amina Kunhi Umma (AIR 1974 KER 162). The majority did not agree on    \naccount of its wrong supposition that appellate authority functioning under\nSection 18 of the Rent Act is a persona designata. Once that presumption is\nfound to be erroneous as discussed by us earlier, it becomes at once clear that\nminority view in the said decision was the correct view and the majority view\nwas an erroneous view.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-14", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "...\n13. As per this sub-section, the provisions contained in certain sections of the Limitation Act were applied automatically to determine the periods under the special laws, and the provisions contained in other sections were stated to apply only if they were not expressly excluded by the special law. The provision (Section 5) relating to the power of the court to condone delay in preferring appeals and making applications came under the latter category. So if the power to condone delay contained in Section 5 had to be exercised by the appellate body it had to be conferred by the special law. That is why we find in a number of special laws a provision to the effect that the provision contained in Section 5 of the Limitation Act shall apply to the proceeding under the special law. The jurisdiction to entertain proceedings under the special laws is sometimes given to the ordinary courts, and sometimes given to separate tribunals constituted under the special law. When the special law provides that the provision contained in Section 5 shall apply to the proceedings under it, it is really a conferment of the power of the court under Section 5 to the Tribunals under the special law-whether these tribunals are courts or not. If these tribunals under the special law should be courts in the ordinary sense an express extension of the provision contained in Section 5 of the Limitation Act will become otiose in cases where the special law has created separate tribunals to adjudicate the rights of parties arising under the special law. That is not the intension of the legislature.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-15", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "15. After repealing of Indian Limitation Act, 1908 and its replacement by the present Limitation Act of 1963 a fundamental change was made in Section 29(2). The present Section 29(2) as already extracted earlier clearly indicates that once the requisite conditions for its applicability to given proceedings under special or local law are attracted, the provisions contained in Sections 4 to 24 both inclusive would get attracted which obviously would bring in Section 5 which also shall apply to such proceedings unless applicability of any of the aforesaid Sections of the Limitation Act is expressly excluded by such special or local law. By this change it is not necessary to expressly state in a special law that the provisions contained in Section 5 of the Limitation Act shall apply to the determination of the periods under it. By the general provision contained in Section 29(2) this provision is made applicable to the periods prescribed under the special laws. An express mention in the special law is necessary only for any exclusion. It is on this basis that when the new Rent Act was passed in 1965 the provision contained in old Section 31 was omitted. It becomes therefore apparent that on a conjoint reading of Section 29(2) of Limitation Act of 1963 and Section 18 of the Rent Act of 1965, provisions of Section 5 would automatically get attracted to those proceedings, as there is nothing in the Rent Act of 1965 expressly excluding the applicability of Section 5 of the Limitation Act to appeals under Section 18 of the Rent Act. ...", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-16", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "22. As a result of the aforesaid discussion it must be held that appellate authority constituted under Section 18 of the Kerala Rent Act, 1965 functions as a court and the period of limitation prescribed therein under Section 18 governing appeals by aggrieved parties will be computed keeping in view the provisions of Sections 4 to 24 of the Limitation Act, 1963 such proceedings will attract Section 29(2) of the Limitation Act and consequently Section 5 of the Limitation Act would also be applicable to such proceedings. Appellate authority will have ample jurisdiction to consider the question whether delay in filing such appeals could be condoned on sufficient cause being made out by the concerned applicant for the delay in filing such appeals. The decision rendered by the High Court in the present case as well as by the appellate authority taking contrary view are quashed and set aside. The proceedings are remanded to the court of the appellate authority, that is, District Judge, Thalassery. Rent Control Appeal No.9/94 filed before the said authority by the appellant is restored to its file with a direction that the appellate authority shall consider I.A.56/94 filed by the applicant for condonation of delay on its own merits and then proceed further in accordance with law. Appeal is allowed accordingly. In the facts and circumstances of the case there will be no order as to costs. \n\n(emphasis supplied)", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-17", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "(emphasis supplied)\n\n11. It is not in dispute that there is no express exclusion of the Limitation Act under the SARFAESI Act and so far as DRT Act is concerned, under which the DRT and DRAT function and entertain original and appellate proceedings under the SARFAESI Act, clearly exercise powers of a civil Court under CPC and in addition, the Limitation Act is expressly made applicable under Section 24 of the DRT Act. \n12. In view of that, we are of the view that Section 29(2) of the Limitation Act is clearly attracted and thereby Sections 4 to 24 (inclusive) of the Limitation Act would be applicable to proceedings under Sections 17 and 18 of the SARFAESI Act before the DRT as well as DRAT. Consequently, therefore, the order impugned passed by the DRAT rejecting the petitioner's application for condonation of delay for want of jurisdiction is liable to be set aside. \n\n13. The decision in SETH BANSHIDHAR KEDIA RICE MILLS PVT. LTD.'s case (1 supra) which is the basis for passing of the impugned order by DRAT, with respect, does not lay down correct law and as shown above is, in fact, contrary to the ratio of the Supreme Court in MUKRI GOPALAN's case (13 supra) quoted above. With respect, therefore, we are unable to subscribe to the view of the Madhya Pradesh High Court in the aforesaid decision.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-18", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "14. Now coming to the decisions cited by the learned counsel for the petitioner, the decision in THIRUMALAI CHEMICALS LTD's case (2 supra) is totally inapplicable to the present case, as it dealt with a case under the Foreign Exchange Management Act, 1999 which provides power of appeal under Section 19(1); procedure for appeal under Section 19(2) and the power of tribunal to condone the delay in filing of an appeal under proviso to Section 19(2). The question involved herein, therefore, did not arise in that case. Similarly, the decision in JAGADISH PRASAD JALAN NANDALAL's case (3 supra) is also distinguishable, on facts, as in the said decision Section 35 of the FEMA r/w Section 34 of the Arbitration and Conciliation Act, 1996, were considered and Section 35, which provides the limitation of not exceeding 60 days, was held indicative of exclusion of Section 5 of the Limitation Act in terms of Section 6 of the General Clauses Act. \n\nIn the decision in UCO BANK's case (4 supra), the aforesaid similar question was considered and answered by holding that Section 5 of the Limitation Act would be applicable to the appeal or application under Section 17(1) of the Act. The decision of the Supreme Court in FAIRGROWTH INVESTMENTS LTD's case (5 supra), which dealt with the provisions of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, is not applicable to the facts and question of law arising in the present matter.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-19", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "15. The decision of the Supreme Court in L.S. SYNTHETICS LTD's case (6 supra) relied upon by the learned counsel for the respondent bank is already considered by the Supreme Court while considering the provisions of the Special Court (Trial of Offences relating to Transactions in Securities) Act, referred to supra and is distinguishable from the present case. The decision in THE COMMISSIONER OF SALES TAX's case (7 supra) relates to applicability of Section 14 of the Limitation Act and does not deal with the question involved herein. Similarly, the decision in BIRLA CEMENT WORKS's case (8 supra) deals with the question of applicability of the Limitation Act to the Railway Claims Tribunal, which is, admittedly, not a civil Court; that case also has no application to the present case. The decision in PRAKASH H. JAIN's case (9 supra) considered as to whether the competent authority under the Maharashtra Rent Control Act, 1999 is not a civil Court and on holding so, consequently, Section 151 of CPC was held not applicable. The decision of the Kerala High Court in JAYAN's case (10 supra) is clearly distinguishable, as it does not take into consideration Section 29 of the Limitation Act or the decision of the Supreme Court in MUKRI GOPALAN's case (13 supra). With respect, therefore, we express our inability to agree with the said view. Similarly, the decision in NOHARLAL VERMA's case (11 supra) is also distinguishable as it considered, on facts, as to whether sufficient cause was made out.", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "2de54f26505d-20", "Titles": "Smt Sajida Begum vs State Bank Of India, Sarc ... on 4 September, 2012", "text": "The last of the decisions in COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE's case (12 supra) considered the provisions of the Central Excise Act, 1944 wherein the Act itself provided for the forum for appeal and revision etc. together with power of the appellate and revisional authority to condone the delay for the respective periods provided for appeal and revision. It was, on those circumstances, held that no further power of condonation under Section 5 of the Limitation Act is available. Obviously, that decision has no application to the statutory environment in the present case. \n\n16. In the result, therefore, we hold that the provisions of the Section 5 of the Limitation Act are applicable to the proceedings before DRAT under Section 18 of the SARFAESI Act. Consequently, the impugned order is set aside and the Debts Recovery Appellate Tribunal, Chennai is directed to consider the petitioner's application for condonation of delay afresh on merits and pass appropriate orders in accordance with law preferably within a period of two (2) months from the date of receipt of a copy of this order. \n\n The writ petition is accordingly allowed. As a sequel to the disposal of the writ petition, the miscellaneous applications, if any, shall stand disposed of as infructuous. There shall be no order as to costs. \n\n_________________________ PINAKI CHANDRA GHOSE, ACJ _____________________ VILAS V. AFZULPURKAR, J", "source": "https://indiankanoon.org/doc/137384840/"}
+{"id": "4b27ca994aad-0", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "JUDGMENT Anakthanarayana Ayyar, J. \n 1. Ten petitioners have filed this writ petition praying that this Court may call for the records relating to the order of the Sub-Collector, Parvatipuram in I. A. C. R. A. 10 of 1962 dated 9-7-1952 and issue 3 writ of certiorari or any other appropriate writ quashing that order. \n 2. The relevant facts are as follows: Certain lands in the village of Neelakanthapurarn wero leased out by the owners in favour of certain lessees under cowle (Ex. D.5) dated 5-2-1906 for a period of 3 years. \"It provided for a rent of RS. 51-4-0 per year. Though the period of lease under it expired in 1909, beyond doubt or dispute, the tenants continued to be in possession as lessees holding over and cultivated the lands up to date. On 10-5-1927 the owners of the lands executed a mortgage deed (Ex, P-5) in favour of the persons who were then lessees. It provided as follows :-", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-1", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "\"I have to-day borrowed from you Rs. 666.10.8 repayable with an annual interest of Rs. 40/- thereon and as A security for the due discharge of the above debt I have given you possession of our lands situate in Neelakantapuram alias Chinnayavaiase.....which have been in your occupation and cultivation since a very long time..... Possession of the above lands is given to you for the stipulated annual rent of Rs. 65/- and so cercefartoe you can enjoy the said lands and be appropriating Rs. 40/- from out of the above stipulated ren[ yourself every year towards the interest due to you on this mortgage debt and from out of the balance be paying Rs. 5/-every year to the Government towards the quit rent and kattubadi on these lands and be paying the remaining Rs. 19/- to us by the 15th of Kerteekam every year and obtain receipts from us. \n After thus enjoying for a period of 15 years from this 'Prabha' to 30th of Phalguna of 'Vrusha' if your principal amount of Rs. 1000/- is paid by 30th of Phalguna in any year, you give back this deed, quit rent etc., receipts and the lands to us.....\"  \n The persons, who claim to be interested in these lands as mortgagees and lessees or their successors-in-interest, are petitioners 7 to 10.", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-2", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "2-a. Similarly the owner leased out cerain other lands by lease deed [Ex. D-1) for a period of 3 years for lands situate in the same village. Subsequently, the owner executed a mortgage deed (Ex. D-2) on 13-5-1927 in favour of the persons who were holding the lease for a sum of Rs. 1000/. This document contained recitals as follows :- \n \"I have today borrowed Rs. 1000/- (Rupees one thou-sand) from you repayable with an annual interest of Rs. 60/-thereon and as a security far the due discharge of the above debt I have given you possession of the lands called Chavaka Polam covered by Inam T. D. No. 394, situate in Neelakantapuram ..... which have been in your occupation and cultivation since a very long time ana .....possession of the above said lands was given for the stipulated annual rent of Rs. 97.8.0 and so henceforth you can cullivate and enjoy all cultivated and cultivable lands and be appropriating every year Rs. 60/-yourself from out of the above stipulated rent towards the interest payable to you on this mortgage amount by the 15th of Pushya every year, and from out of the balance, be paying Rs. 9 every year towards the quit rent and kattu-badi payable to the Govt. during the month of Sravana each year obtaining receipts in my name and be paying us the balance of Rs. 28.8.0 by the 15th of Karteekam every year and obtain receipts from us.", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-3", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "After thus enjoying for a period of 15 years starting from the year Prabha to 30th of Phalguna of the year Vrusha, if the principal amount of Rs. 1000/- is paid to you by 30th of Phalguna of any year, you must give back this deed, quit-rent etc. receipts and lands to us.\"  \n Petitioners 1 to 6 in the writ petition are the persons who are either lessees or mortgagees or their successors-in-interest. Similarly, the owner of the land in the same village executed lease deed (Ex. D-3) on 14-2-1932 for a period of three years in favour of certain lessees for an annual rent of Rs. 36A. The owner later on executed a mortgage deed (Ex. D-4) in favour of the lessees under lease deed (Ex. D-3). The mortgage (Ex, D-4) is dated 25-4-1933 for a sum of Rs. 300/-. It runs as follows:-", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-4", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "\"As  a  security  for the  due  discharge  of  the  amount\nstill due to you under a promissory note for Rs. 300/- dated\n14th February  1932    executed in your favour,    we have\nstipulated that our lands called Dandasi Polam  situate in\nNeelakantapuram,   irrigated   by   Yarakanna   Banda.....\nare given possession to ycu with stipulation that from out of our stipulated rent of Rs. 37/- payable on the above lands, you have to appropriate Rs. 36/- every year towards your interest on Rs. 300 and pay Rs. 1/- to the Government towards quit rent etc., payable for these lands. \n After thus enjoying for a period of three years from \"Srimukha\" to \"Uva\", if your principal amount of Rs. 300/-is paid by 30th of Phalgunam of any year you have to give back this deed, quit rent etc., receipts and the lands to us.\"  \n The lands concerned in these documents are inam lands in an inam village. Beyond doubt or dispute, the provi-sions of the Andhra Inams (Abolition and Conversion into Ryotwari) Act (Andhra Act XXXVII of 1956) are applicable to all these lands. It is also beyond doubt or dispute that the various petitioners are either lessees or their succes-sors-in-interest and also mortgagees or their successors-in-interest and that the respective petitioners have been in possession, all along, of the lands concerned in the respective leases.", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-5", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "The Inam Deputy Tahsildar held a suo motu enquiry under Section 4 (1) of the Act in which Karri Padmanabham Bhukta inamdar was shown as petitioner. The latter is first respondent in this writ proceeding. There were fourteen respondents. They include either the present petitioners or their predecessors-in-interest. Respondents 1 to 3 and 14 in the proceedings before the Tahsildar are not parties in this writ petition and they were concerned with lands with which we are not concerned in this writ proceeding. in the proceeding before the Inam Deputy Tahsildar, various contentions were raised on the basis of which he framed four points for decision. Only two points related to the present petitioners or their predecessors-in-interest namely, points 3 and 4 which are as follows:- \n 3. Whether respondents 4 to 9 are in occupation of C schedule lands and respondents 3, 6, 7 and 8 are in occupation of D schedule lands as mortgagees only or as tenants in spite of the mortgages? \n 4. Whether respondents 10 to 13 are in occupation of E schedule lands as mortgagees or as tenants by the data of Act 37 of 1956?  \n The Inam Deputy Tahsildar held as follows:-", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-6", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "The Inam Deputy Tahsildar held as follows:- \n \".....I am of the opinion that then is no incompatibility between the tenancy and the mortgage so as to attract the doctrine of surrender and in the absence of surrender of tenancy, the tenancy continues and these respondents are admittedly in occupation of the schedule lands prior to and by the date of coming into force of Act 37 of 1956. I, therefore, hold that respon-dents 4 to 9 are entitled to pattas for 2/3rds of the C and D schedule lands and respondents 10 to 13 are en-litled to ryotwari patta for 2/3rds of E schedule lands.\" \n 3. The inamdar filed appeal in I. A. C. R. A. No. 10/52 before the Sub-Collector, Parvatipuram. Two points were framed by him. Point No. 1 related to respondents 1 to 3 and 14 with whom we are not concerned in this writ proceeding. Point No. 2 was substantially the same as Point Nos. 3 and 4 before the Inam Deputy Tahsildar. That point was as follows :- \n (2) Whether the fact that the remaining respondents became mortgagees subsequently implies that they are no longer tenants and are, therefore, not entitled to 2/3rd share of the pattas?", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-7", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "4. Various rulings were cited by both sides before the Inam Deputy Tahsildar and the Sub-Coilictor. The latter observed that the learned Inam Deputy Tahsildar had merely mentioned the rulings in his order without discussing them. The learned Sub-Collector discussed the law as laid down by the rulings and held on Point No. 2 in favour of the inamdar as against respondents 4 to 9 alone and accordingly allowed the appeal against them. But, he directed both parties to bear their own costs. It is against that order that this writ petition has been filed. \n 5. The question which arises for consideration in this writ petition is the point which has been framed by the learned Sub-Collector in his order. \n 6. Shri A. Gangadhara Rao, the learned Counsel for the petitioners, has raised the following contentions: \n (1) That the mortgages, Ex. D-2 and Ex. D-5 are not usufructuary mortgages. \n (2) Section 111(f) of the Transfer of Property Act does not apply to the leases concerned in this case as they were leases for agricultural land. \n (3) Even if Section 111 (f) were to be applicable, there was no implied surrender of the leases under that provision o1 law.  \n 7. Section 58 (d) of the Transfer of Property Act as it originally stood (before amendment by Central Act XX of 1929) was as follows:-", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-8", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "\"Where the mortgagor delivers possession of the mortgaged property to the mortgagee, and authorizes him io retain such possession until payment of the mortgage-money and to recaive the rents and profits accruing from the property and to appropriate them in lieu of interest, or in payment of the mortgage-mcney, or partly in lieu of interest and partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.\" \n This provision was amended by the Central Amending Act (Act XX of 1929) and the amended provision runs is follows :- \n \"Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mort-gage-money, and to recede the rents and proiits accruing from the properly or any part of such rents and profits end to appropriate the same in lieu of interest, or in payment of the mortgage money, or partly in lieu of interest or partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.\"", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-9", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "Ex. D-2 and Ex. P-5 were executed in 1927 that is before the Amending Act came into force. Each of these two mortgage deeds provides that the mortgagee was to pay only a portion of the rent and profits with the result that he could in effect receive the remaining portion of the rents and profits in lieu of interest. This is sufficient to make them 'usufructuary mortgages' under the defini-tion in force after the amendment of 1929 but was not sufficient to comply with the requirements of Section 56 (d), as it stood before the amendment of 1929. Therefore each of Ex. D-2 and Ex, P-5 was not a usufructuary mortgage as that term was defined on the date on which the documents, Ex. D-2 and Ex. P-5 were executed. This contention is not made regarding the other mortgage (Ex. D-4) which was executed after the amendment of 1929 came into force. The question as to whether Ex. D-2 and EX-P-5 could in law be called usufructuary mortgages by name does not affect the contents, substance and nature of the mortgages which are substantially similar in material particulars to the mortgage (Ex. D-4). \n 8. Contention Nos. 2 and 3 : Section 117 of the Transfer of Property Act tuns as follows: \n \"None of the provisions of this Chapter (Chapter V consisting of Sections including Section 111) apply to leases for agricultural purposes, except in so far as the State Government may, by notification published in the Official Gazette, declare all or any of such provisions to be no applicable in the case of all or any of such lease, together with or subject to, those of the local law, if any, for the time being in force.", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-10", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "Such notification shall not take effect until the expiry of the six months from the date of its publication.\" It is beyond doubt or dispute that no notification under Section 117 was issued in the State making any provisions of Chapter V applicable to agricultural leases. \n 9.    In   Umar   Pulavar  v..   Dawood   Rowther,   AIR   1947 Mad 68 it was held to the following effect :    (Head Note)  \n  \"Section 111 (g) as amended in 1929 embodies a principle of justice, equity and good conscience, and must be held   to   govern   even   agricultural   leases.....\"", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-11", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "10.   Section 111(f) and  (g)  run as follows :-   \n \n   \n\n \"111.   A   lease   of   immovable   property   determines- \n   \n\n (f) by   implied   surrender; \n \n\n (g) by forfeiture;  that  is to  say..... \n  (1) in   case   the lessee   breaks    an   express  condition\nwhich  provides that,  on  breach  thereof the  lessor may  :\nenter;   or  (2)  in  case   the   lessee   renounces  his  character\nas such by setting up a title in a third person or by claim-\ning title  in  himself;  or (3) the  lessee is adjudicated  an in-\nsolvent   and   the   lease   provides   that   the   lessor   may  re-\neither on the happening of such event; and in any of these\nCASES  the   lessor  or  his transferee  gives  notice  in writing\nto the lessee of his intention to determine the lease;\"", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-12", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "In Brahmayya    v.    Sundaramma,  AIR   1948  Mad   275   (F5)\nthe learned Judges of the Full Bench observed as follows\n(at page   279) \n \"Whilst that section (Section 106) does not apply to leases for agricultural purpose, by virtue of Section 117 of the Act nevertheless, it has been observed and laid down in a series of decisions of this Court that the rules in Section 106 and in the other sections [Sections 105 to 116) in Chap. V of the Act are founded upon reason and eauity; they are the principles of English Law and should be adopted as state-ment of the law in India applicable to agricultural leases .....\" \n 11.    In   Namdeo   v.   Narmadabai,    their Lordships  of the Supreme  Court  observed  as follows: \n \n\n (at   page   232)", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-13", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "(at   page   232) \n   \n\n \"In  our opinion, the provision  as to  notice  in writing as a preliminary to a suit for ejectment based on forfeiture of a   lease   (Section   111 (g)   of  the   Transfer  of  Property  Act) 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  Transfer  cf  Property Act,   1882 or  to   leases  executed  prior to  1-4-1930.    The  lights  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   off   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.....", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-14", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "Considerable reliance was placed by Mr. Daphthary on the   decision  of Chandrasekhara  Aiyar,  J.   sitting singly  in the case of AIR 1947 Mad 68 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.....     In\nour judgment, this case was wrongly decided and we are unable  to support It.", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-15", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "Mr. Daphtary also placed reliance on certain observations contained in the Full Bench decision In AIR 1948 Mad 275 (FB). There it was said that although Section 105, T. P. Act does not 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 116) in Chap. V of the Act are founded upon reason and equity and they are the principles of 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 to a wide a language.\"  \n Their Lordships proceeded to show that the provisions con-tained in Sections 107, 108(i), parts of Sees. 109, 110 and 111 contained mere rules of procedure which were rules of a technical nature and cannot he said to be based on any principles of equity. Their Lordships observed as follows: (at page 233) \"Parts of Sections 109, 110, 111 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 T. P. Act, an 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 re cognition to principles of justice, equity and good con science they are applicable also to cases not government by the Act.\"", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-16", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "Their Lordships then observed that certain portions of Section 111 contained mere rules of procedure or rules of a technical nature but they did not decide the question as to whether the provisions contained in Section 111 (f) in particular was a mere rule of procedure or was, on the other hand, based on any principle of justice, equity and good conscience. \n 12. It has to be decided whether the provision in Section 111(f) is cased on principle of justice, equity and good conscience. \n 13. In Venkayya V. Subbarao, AIR 1957 Andh-Pra 619, the question arose whether, where a later lease was executed regarding the same property, there was an implied surrender of an earlier lease of the same property under Section 111 (f), Transfer of Property Act. Viswanatha Sastri, J. observed as follows: (at page 624) \"Implied surrender is, however, recognised and provided for by Section 111, Clause (f) of the Transfer of Property Act and the illustration thereto, which refers to a lessee accepting from his lessor a new lease of the property leased, to take effect during the continuance of an existing lease. The illustration is obviously not exhaustive of cases of implied surrender .....\" \n The learned Judge, after considering various decisions, held that there was an implied surrender.", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-17", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "The learned Judge, after considering various decisions, held that there was an implied surrender. \n 14. In G. Valia Raja v. Tharappan Vareed, , the question arose whether, when there cams into existence a later usufructuary mortgage, there was an implied surrender af an earlier lease under Section 111 of the Transfer of Property Act. The learned Judge relled on the decision In Veiu v. Lekshmi, AIR 1953 Trav-Co 584, wherein it was laid down \"the principle is that, whenever a certain relationship exists between two parties in respect of a subject-matter and a new relationship arises as regards the identical subject-matter, if the two sets of relationships cannot co-exist as being inconsistent and incompatible, that is to say, if the latter can come into effect only on the termi-ation of the earlier, that would be deemed to have been terminated in order to enable the latter to operate\". \n The learned Judge formulated the question as follows : (at page 294) \"The question is, whether under Exts. A and B, the parties stand to each other in two inconsistent and in-compatible relationships or in other words, whether the rela-tionship between them after the date of Ext. B, was that mortgagor and mortgagee and not that of lesser and lessee.\"", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-18", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "The learned Judge stated thus: (at page 295) \"..... the question has to be answered pri-\nmarily on the terms of Ex. B, understood in the light of the surrounding circumstances ..... The contents of Ex. B winch are important in this connection, are the description of the mortgaged properties in the schedule, the 'statement' in it 'that possession of the properties was handed over to the mortgagee on the date of the document', the direction to the mortgagee io enjoy the properties directly or indirectly, the 'reference' to 720 paras of paddy as the annual income from the properties 'in contradistinction with the description as rent in Ext. A,' together with the provision for accounting relating to it, by appropriating part of it towards interest on the mortgage amount and by paying the balance to the mortgagor, the provision in it for the release of the mortgaged propar-ties on payment of the mortgage amount, the repetition of the provision for the payment of tax amcunting to Rs. 48-8-1, as if Ex. B is self-contained, and 'the provision for the sale of the mortgaged properties as described.' These indicate to my mind, that after the date o1 Ex. B, the only relationship that subsisted was, that of mortgagor and mortgagee.....\"", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-19", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "Two important recitals on which the learned Judge based his conclusion are (a) that the document (mortgage) contained references to annual income from the properties in contradistinction with rent mentioned in the lease deed and (b) that there is a provision for sale of the mortgaged properties. In the mortgages with which we are concerned in the present case, there is no provision for sale of the property for realisation cf the mortgage money. There is, on the other hand, a clear provision in each of the three mortgages that the persons who took the mortgage were to make payments out of the stipulated rent. It not only means that rent was due from those persons but also that rent had been stipulated and agreed upon. This is a clear indication regarding each mortgage that, though the mortgage was executed, relationship of lessor and lessee existed at the same time and remained unaffected. It means that such relationship of lessor and lessee continued as it had existed up to ths date of the mortgage. \n 15. The learned Judge (Velu Pillai, J.) has himself observed in , as follows : [at page 294) : \n \"It was contended for the defendants, that ths acceptance of a mortgage does not always nut an end to the earlier lease, and it was urged, that, though under Ext. A, the immovable properties were leased, under Ext. B, what was mortgaged was only the lessor's reversion, meaning not only his right to recover the leasehold, but also the right to the rent and all other rights which he may possess under the lease.", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-20", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "As an instance, Markose v. Godar Namboodiripad, 39 Cochin 400, may be referred to, where the provision in the mortgage document was to appropriate the interest on the mortgage amount from the 'Pattom' or 'rent' payable under the lease, the balance of the pattom alone, being payable in the mortgagor which was held to be a conclusive circumstance for coming to the conclusion, that the lease subsisted notwithstanding the mortgage.\"  \n Thus, Velu Pillai, J. himself approved of that earlier decision in 39 Cochin 400, where it had been stated that the provision for payment of interest on mortgage money from out of rent was held to be a conclusive circumstance for holding that the lease subsisted. Such a provision-is actually found in the three mortgages which are concerned in this case. The learned Judge did not specifically consider the question as to whether Section 111 (f) of the Transfer of Property Act was applicable to agricultural leases by way of being based on principles of justice, equity and good conscience. But, he proceeded to decide the case on the principle of implied surrender which he referred to as a principle whose applicability to leases cannot be doubted and which was founded in English law upon the rule of estoppel. He also stated that Section 111 (f) of the Transfer of Property Act only codified that principle. \n 16. In Ramrao Govindrao v. Pahumal, , it was observed as follows: (at page 297) \"It is then argued that Section 101 of the Transfer of Property Act is exhaustive of the cases where there would be no merger, so that where a tenant accepts a mortgage, tenancy rights merge in the mortgagee lights. We cannot accept this to be the negative aspect of Section 101 of the Transfer of Property Act.", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-21", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "However, it seems clear to us that the relationship, of landlord and tenant came to an end when the usufructuary mortgage was effected. It is stated in the mortgage deed tnat the mortgagor is in possession and occupation of the house (Qabiz wa Mutasarrif), that he is delivering possession to the mortgagee, that the mortgage is possessory (Rahabil-Qabz), that the mortgagee will not be entitled to any interest nor will Ihe mortgagor be entitled to rent, and that on redemption only the principal amount of Rs, 1000/- will be repaid by the mortgagor to the mortgagee. It is, therefore, clearly a pure usufructuary mortgage.\"  \n The learned Judges approved of the decision in AIR 1951 Kerala 293. \n 17. In S. A. No. 270 of 1962, Kinta Avutaram v. Vsrada Eangara Raju, Unreported judgment of this Court, DA. 19-6-1963 (A. P.), which came up for decision before cur learned brother, Chandrasehhara Sastry, J. the relevant facts were as follows: There was a lease of building hot agricultural land) and subsequent usufructuary mortgage of the same property in favour of the lessee. The concerned recitals were :", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-22", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "\"So your shall adjust the monthly rent of the terraced shop in our possession by the 20th day of every month towards the monthly interest due under this document without reference to me and also pay to me by the 20th of every month Rs. 15/-. In this manner, you can make use etc. of the said shop in lieu of interest for three years. Thereafter, if at any time I intend to get the house released, I shall inform you three months in advance and pay you the principal sum of Rs. 6,000/- in one instalment.\" \n The learned Judge observed in his judgment dated 19-6-1963 that, in that document cf usufructuary mortgage, it was not mentioned as to v.'hat the agreed rent of the shop was but he held, after discussing the relevant evidence, as follows : \n \"On a fair reading of the deed of possessory mortgage, it appears to me that the tenancy of defendants 1 and 2 with respect to the suit shop continued even during the pendency of the usufrirctuary mortgage. They had to pay rent and out of the rent, they had to pay each month Rs. 15/- to the mortgagor and adjust the balance towards the interest payable on the principal amount secured by the mortgage. I am of the view that, as and when the mortgage is redeemed, the tenancy continues. From that time onwards the defendants 1 and 2 would have to pay the entire rent to the mortgagor or the transferee from him, the plaintiff ..... Therefore, I am unable to accept the contention of Mr. Dikshitulu that on the execution of the possessory mortgage deed, Ex. B-1 the parties themselves put an end to the tenancy.\"", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-23", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "It will be observed that our learned brother also strongly relied for his conclusion and finding on the fact that the usufructuary mortgage provided that the mortgagee had to pay rent and that, from out of the rent, a portion had to be adjusted towards interest and another portion had lo be paid to the mortgagor. \n 18. The question whether the tenancy continues after execution of a mortgage depends upon the question whether it can co-exist with usufructuary mortgage and it has to be decided with reference to the provisions in the documents, particularly the usufructuary mortgage, in that respect, we agree with the view of the learned Judge in . On the provisions contained in the documents of that case, the learned Judges in and , came to their conclusions. We have got to decide on the basis of the contents gf the documents concerned in the present case. As indicated in , the mention of a stipulated rent under a mortgage deed and provision for payment of such rent and for adjustment of interest due on the mortgage amount from out of such rent is a very strong feature. Such feature is contained in all these three documents. They do not contain any provision for sale of the mortgaged property for payment of the amount such as contained in the usufructuary mort-page concerned in .", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-24", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "19. Shri Raghavarao for the respondents relies on certain recitals in these documents to show that there was an implied surrender. He points out that in the document, there is mention that possession was delivered. This is not very conclusive because it is undisouted that the persons who took the mortgage were already in pos-session even up to the date of the mortgage. In the mortgage (Ex. D-2), the mortgagor mentions \"I have given you possession of the lands\" but, in the same sentence, later he says about the lands as \"which have been in your occupation and cultivation since a very long time.\" further below, it is mentioned 'possession of the above-said lands was given for the stipulated annual rent of Rs. 97-8-0\". Possession was held as tenant paying rent up to mortgage and possession was continued after mortgage also as a tenant paying rent. Sri Raghava Rao points out that there Is provision in these mortgages that, when the persons paid the principal amount, the mortgagee was bound to deliver possession not only of the mortgage deed as well as receipts for quit rents etc., but also the mortgaged land. This provision is not conclusive and does not prevail as against the recital that the persons, who took the land on the mortgage, had to pay stipulated rent. \n 20. We find as follows: Merely because Section 111 (f) is contained In Chapter V of the Transfer of Property Act, it cannot be deemed to be based upon a principle of justice, equity and good conscience. It has to be decided whether that provision of Section 111 (f) is In fact rested on principle of justice, equity and good conscience irrespec-", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-25", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "tive and independent of the fact that Section 111 (f) is contained in Chapter V of the Transfer of Property Act Considering the provision in Section 111 (f) in that light, we find that it embodies a principle based on justice, equity and good conscience and applies to agricultural leases concerned in the present case. We find accordingly on the second contention. \n 21. We find that on the facts and circumstances of this case and, in particular, the recitals contained in the document of mortgages [Exs. D.2, D.4 and D.5) that the taking of those mortgages by the respective lessees did not amount to an implied surrender by them of their respective leases and that the leases were capable of co-existing and did in fact co-exist with the respective mortgages. The third contention of the learned advocate for the petitioner is acceptable and we agree with it,", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "4b27ca994aad-26", "Titles": "Cheekati Kuriminaidu And Ors. vs Karri Padmanabham Bhukta And Ors. on 20 February, 1964", "text": "22. In the result, we quash the order of the Revenue Divisional Officer and restore the order of the mam Deputy Tahsildar. The writ petition is accordingly allowed with costs. Advocate's fee Rs. 100/-.", "source": "https://indiankanoon.org/doc/597936/"}
+{"id": "018c8eff5187-0", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "JUDGMENT S. Obul Reddy, C.J.", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-1", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "1. The assessee, S. R. Y. Ankineedu Prasad, is an individual. He purchased during the year of account ending with March 31, 1966, 48,123 equity shares of a public limited company called \"Challapalli Sugars Ltd.\" from his brother for Rs. 6,58,804, i.e., at Rs. 13'69 per share. This purchase of equity shares in Challapalli Sugars Ltd. was made by him in order to obtain controlling interest in the said company in which he (the assessee) and his another brother had substantial shareholdings. The consideration paid by him for purchasing the shares in Challapalli Sugars Ltd. consisted partly of cash of Rs. 1,00,000 and partly by transfer of 12,724 equity shares in K. C. P. Ltd., Vuyyur, another public limited company. He transferred the equity shares in K. C. P. Ltd. at the face value of Rs. 10 per share and for the balance of consideration of Rs. 4,34,346, he executed a promissory note in favour of his brother. In the return filed for the assessment year 1966-67, the assessee declared a capital gain of Rs. 15,756 on the transfer of the shares of K. C. P. Ltd., which he himself had acquired earlier at Rs. 1,08,702. The Income-tax Officer, A-Waid, Vijayawada, having regard to the fact that the market value of a share of K. C. P. Ltd. was Rs. 22'30 issued a notice to the assessee to show cause why he should not be assessed to tax invoking Section 52(1) of the Income-tax Act. It was explained by the assessee on December 16, 1968, that the transaction was only for", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-2", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "explained by the assessee on December 16, 1968, that the transaction was only for the purchase of shares of Challapalli Sugars in order to acquire controlling interest of that company and for that purpose, he had also exchanged K. C. P. Ltd. shares for a value which was less than the market rate. That explanation of his was not accepted by the Income-tax Officer on the ground that there was substantial difference between the market rate and the face value of the shares of the K. C. P. Ltd. Before initiating action, the Income-tax Officer had obtained the prior approval of the Inspecting Assistant Commissioner. The Income-tax Officer determined the lair market value of 12,724 equity shares of K. C. P. Ltd. transferred by the assessee at Rs. 2,83,745 and deducting the cost of those shares, i.e., Rs. 1,08,702, determined the capital gains for the transaction at Rs. 1,75,043. That assessment order was carried in appeal and the Appellate Assistant Commissioner held that the correct provision that should have been applied to the facts of the case is Section 52(2) and not Section 52(1). In that view, he confirmed the order of the Income-tax Officer and dismissed the appeal. The assessee further carried the matter in appeal to the Income-tax Appellate Tribunal. The Tribunal, in the light of the construction put upon Sub-section (2) of Section 52 by it, held that the requirements of section 52(1) or Section 52(2) were not satisfied. In so coming to the conclusion, the Tribunal recorded a finding of fact that \"there was no question of the assessee transferring the shares of K. C. P. Ltd. with the object of avoiding or reducing the liability to capital gains\". It also observed that \"it is not the department's case that the assessee actually received", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-3", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "gains\". It also observed that \"it is not the department's case that the assessee actually received consideration at more than Rs. 10 per share for the shares of K. C. P. Ltd. transferred to his brother\". It is against the order of the Tribunal that the Additional Commissioner of Income-tax moved the Tribunal for reference under Section 256(1) of the Income-tax Act, the following question for our opinion:", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-4", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "\"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that neither the provisions of Section 52(1) nor the provisions of Section 52(2) are applicable and that the correct amount of capital gain to be assessed was not Rs. 1,75,043 as computed by the Income-tax Officer but Rs. 15,756 declared by the assessee ?\" \n2. Mr. Rama Rao, the learned counsel for the revenue, contended that the Tribunal was in error in holding that Section 52(2) is not attracted. According to the learned counsel for the revenue, if the Income-tax Officer comes to the conclusion that the fair market value of a capital asset transferred by an assessee on the date of the transfer exceeds the full value of consideration declared by him in respect of the transfer and that the difference in amount is not less than 15% of the value so declared, Section 52(2) is automatically attracted. It is also his stand that the question of a bona fide transfer of an asset is irrelevant in construing Section 52(2) of the Act. According to him, even on the assessee's own showing, he would not have transferred the shares to his brother at the face value of Rs. 10 per share, but for the advantage he would gain by purchasing the shares of Challa-palli Sugars Ltd., to get the controlling interest in Challapalli Sugars Ltd. In other words, it is his case that the controlling interest, which is expected to accrue to him, makes up the difference between the face value and the market value of the assets transferred.", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-5", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "3. Mr. Parvatha Rao, appearing for the assessee, contended that, in view of the findings of fact recorded by the Tribunal, the case does not fall either under Section 52(1) or under Section 52(2) and that there is no warrant for interfering with the construction placed upon Sub-section (2) of Section 52 by the Tribunal. \n4. So, what has to be considered by us iu this reference is whether the transfer of equity shares of K. C. P. Ltd. by the assessee to his brother was effected with a view to avoid the tax liability or to have the tax liability reduced. We have also to see whether the fair market value of the shares transferred by the assessee exceeds the full value of consideration by an amount of not less than 15% of the value so declared. In other words, we have to examine whether the case falls under Section 52(1) or Section 52(2). \n5. Section 2(14) defines \"capital asset\" as to mean property of any kind held by an assessee, whether or not connected with his business or profession, but does not include items (i) to (iv) referred to therein. Section 2(22A) defines \"fair market value\" and it means, in relation to a capital asset, (i) the price that the capital asset would ordinarily fetch on sale in the open market on the relevant date; and (ii) where the price referred to in sub- Clause (i) is not ascertainable, such price as may be determined in accordance with the rules made under the Act. Section 2(24) defines \"income \"to include profits and gains and any capital gains chargeable under Section 45. Section 45 is the charging section for capital gains and, to the extent relevant, it reads :", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-6", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "\"45. (1) Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in Sections 53, 54, 54B and 54D be chargeable to income-tax under the head 'Capital gains', and shall be deemed to be the income of the previous-year in which the transfer took place.\"", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-7", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "6. Another section, which we may notice before we reproduce Section 52, is Section 48. It deals with the mode of computation and deductions and it reads: \n \"48. The income chargeable under the head 'Capital gains' shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely : \n (i) expenditure incurred wholly and exclusively in connection with such transfer; \n (ii) the cost of acquisition of the capital asset and the cost of any improvement thereto.\"   \n7. Section 52 is in these terms: \n \"52. (1) Where the person who acquires a capital asset from an assessee is directly or indirectly connected with the assessee and the Income-tax Officer has reason to believe that the transfer was effected with the object of avoidance or reduction of the liability of the assessee under Section 45, the full value of the consideration for the transfer shall, with the previous approval of the Inspecting Assistant Commissioner, be taken to be the fair market value of the capital asset on the date of the transfer. \n (2) Without prejudice to the provisions of Sub-section (1), if in the opinion of the Income-tax Officer the fair market value of a capital asset transferred by an assessee as on the date of the transfer exceeds the full value of the consideration declared by the assessee in respect of the transfer of such capital asset by an amount of not less than fifteen per cent. of the value so declared, the full value of the consideration for such capital asset shall, with the previous approval of the Inspecting Assistant Commissioner, be taken to be its fair market value on the date of its transfer.....\" (Proviso not necessary).", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-8", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "8. As already stated by us, the first question to be considered is whether the transactions in question were entered into for bona fide reasons on account of the relationship between the assessee and his brother and whether the assessee effected the transfer with the object of avoidance of tax or reduction of tax liability.", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-9", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "9. For avoidance of payment of tax, it should be shown that the assessee has tried to avoid payment of tax or to have the tax liability reduced by some device or design. The Supreme Court, while approving the decision of the Gujarat High Court in Commissioner of Income-tax v. Sakarlal Bala-bhai [1968] 69 ITR 186 (Guj), observed in Commissioner of Income-tax v. Vadilal Lallubhai , that legal fictions are only for a definite purpose ; they are limited to the purpose for which they are created and should not be extended beyond their legitimate field. The subject is not to be taxed unless the charging section clearly imposes the obligation. It is well settled lhat it is not permissible to construe any provision of a statute, much less a taxing provision, by reading into it more words than it contains. But, if a section of a statute is considered as ambiguous, it will not be inappropriate to find out the reasons which persuaded the legislature to recommend the inclusion of that section. Section 52(1) postulates two main conditions before it could be invoked: (1) the transferee should be a person directly or indirectly connected with the assessee ; and (2) the Income-tax Officer should have reason to believe that the transfer effected by the assessee was with the object of avoidance of tax or reduction of his tax liability under Section 45 on capital gains. So far as the first requirement is concerned, there is no controversy in view of the direct relationship as brothers between the transferor and the transferee. As regards the second requirement, the Tribunal has given a finding of fact that the transfer of shares was not effected by the assessee with the object of reducing the tax liability under Section 45. We are afraid we cannot interfere with this finding of fact, though Mr. Rama Rao tried to persuade us that the object of avoiding capital gains is apparent on the face of the transaction,", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-10", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "tried to persuade us that the object of avoiding capital gains is apparent on the face of the transaction, viz., that the assessee sought to gain advantage by getting controlling interest in Challapalli Sugars Ltd., which also formed part of the consideration for the transfer. The finding of fact recorded by the Tribunal is final. That finding of fact is open to attack only when it is erroneous in law or when there is no evidence to support it or if it is perverse. The fact that the finding of fact is an inference from other basic facts will not alter its character as one of fact (see Sree Meenakshi Mills Ltd. v. Commissioner of Income-tax [1957] 31 ITR 28 (SC) and I.C.I. (India) Private Ltd. v. Commissioner of Income-tax . In LC.L (India) Private Ltd. v. Commissioner of Income-tax [1972] 83 ITR 710, the Supreme Court, construing Section 52 of the Act, opined that the question whether the object of the assessee in transferring assets was to avoid or reduce his liability to tax on capital gains by making the transfer, does not involve the application of any legal principles to the facts established by the evidence and that the intention with which the particular transfer is made and the object which is to be achieved by such transfer is essentially a question of fact, the conclusion relating to which is to be arrived at on a consideration of the relevant material.", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-11", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "10. As has been pointed out by the House of Lords in Inland Revenue Commissioners v. Brebner [1970] 76 ITR 436, where there are two ways of carrying out a genuine commercial transaction, one by paying the maximum amount of tax, and the other by paying less, it would be wrong, as a necessary consequence, to draw the inference that, in adopting the latter course, one of the main objects was, for the purposes of the section, avoidance of tax. It is, therefore, obvious from the findings recorded by the Tribunal that the case of the assessee does not fall under Section 52(1). Now, it has to be considered whether the case falls under Sub-section (2) of Section 52. It is argued by Mr. Kama Rao that Section 52(2) operates independently of Sub-section (1) and in an area not covered by Sub-section (1) and that the findings of fact recorded by the Tribunal have no place when construing Sub-section (2). All that is necessary in order to attract Sub-section (2), according to the learned counsel, is, it is enough if the Income-tax Officer forms opinion on the facts that the fair market value of the assets transferred by the assessee on the date of the transfer exceeds the full value of the consideration declared by him in respect of the transfer by an amount of not less than 15%. In support of his contention, he relied upon the statement of the assessee that he transferred the shares in question not only for the consideration of Rs. 10 per share, but also for the advantage he was to gain by getting control over the management of Challapalli Sugars Ltd. The advantage, which the assessee may get or was likely to get, depends upon several imponderable circumstances. Unless the advantage can be brought within the sweep of the definition of \"capital asset\" (Section 2(14)), which means property of any", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-12", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "of the definition of \"capital asset\" (Section 2(14)), which means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include the items (i) to (iv) referred to in Section 2(14), it cannot be said to come within the meaning of \"fair market value\" (section 2(22A)). What Sub-section (2) of Section 52 speaks of is the fair market value of a capital asset transferred by the assessee. The advantage of the controlling interest, which the assessee hoped to have, cannot be said to constitute the difference between the value of the shares declared by him on the date of the transfer and the fair market value. Therefore, for forming an opinion in accordance with the requirements of Section 52(2), the possible controlling interest in Challapalli Sugars Ltd., which the assessee hoped to secure at a future date, cannot be taken into account. It is thus manifest that the \"controlling interest\" cannot be construed as income chargeable under the head \"Capital gains\".", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-13", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "12. The words \"full value of the consideration\", which also occurred in Section 12B(2) of the 1922 Act, came to be construed by the Supreme Court in Commissioner of Income-tax v. George Henderson and Co. Ltd. [1967] 66 ITR 622. The Supreme Court said that the expression \"full consideration\" in the main part of Section 12B(2) cannot be construed as having a reference to the market value of the asset transferred but the expression only means the full value of the thing received by the transferor in exchange for the capital asset transferred by him and that the main part of Section 12B(2) provides that the amount of capital gain shall be computed after making certain deductions from the \"full value of the consideration for which the sale, exchange or transfer of the capital asset is made\". Therefore, the full value of the consideration of the capital asset, in this case, \"shares\", is the consideration received by the assessee for their transfer to his brother. It is not the case of the department that the assessee had received more than what was declared by him as the full value of the consideration received by him. The object of introducing Sub-section (2) in the Finance Act of 1964 was to deal with cases of transfers for less than the market value with the object of avoidance of tax or reduction of tax liability. In our view, it does not cover cases where the consideration recorded and declared for transfer of the capital asset is the same as the consideration actually received. As already adverted to by us, it is not the case of the department that anything more than what was actually declared was received by the transferor-assessee. We are unable to agree with Mr. Rama Rao that because of the opening words in Sub-section (2) of Section 52, namely, \"without prejudice to the provisions of Sub-section (I)\", the object of the transfer effected is irrelevant", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-14", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "\"without prejudice to the provisions of Sub-section (I)\", the object of the transfer effected is irrelevant when construing Sub-section (2) of Section 52. There is no separate marginal note for subsection (2). Both the Sub-sections, in our opinion, form one code when construed in the light of the object of inserting Sub-section (2). Sub-section (2), therefore, cannot be divorced from Sub-section (1) and construed literally. As already pointed out, Sub-section (1) deals with a case of transfer for consideration less than the market value for the avoidance of tax or reduction of the tax liability. It is with the same object in view that Sub-section (2) has also been enacted. If we are to construe Sub-section (2) literally, as contended by Mr. P. Rama Rao for the revenue, it would apply to cases where the full consideration received by the assessee is bona fide disclosed resulting in taxing on a consideration which he had not in fact and actually received. The meaning of the word \"income\" as stated by S. R. Das J. (as he then was) in Navinchandra Mafatlal v. Commissioner of Income-tax indicates that \"its natural meaning embraces any profit or gain which is actually received\". The Supreme Court while so expressing its view endorsed the observations of Lord Wright in Kamakshya Narain Singh v. Commissioner of Income-tax [1943] 11 ITR 513 (PC). This view of the Supreme Court in Navinchandra Mafatlal's case [1954] 26 ITR 758 was again affirmed by the Supreme Court in Navnit Lal C. Javeri v. K. K. Sen, Appellate Assistant Commissioner of Income-tax [1965] 56 ITR 198, that the word \"income\" used in Entry 54 of List I of the Seventh Schedule must be given its ordinary, natural and", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-15", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "used in Entry 54 of List I of the Seventh Schedule must be given its ordinary, natural and grammatical meaning and, that is, income is a thing that comes in The revenue cannot choose to tax as income ah item which in no rational sense can be regarded as a citizen's income.", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-16", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "13. We have also in this case a circular issued by the Central Board of Revenue. In this circular, the attention of the income-tax authorities was invited to the speech of the Finance Minister in the Lok Sabha at the time of insertion of the provisions of Section 52(2). In this circular, the Central Board of Revenue has clearly told the officers that Sub-section (2) of Section 52 is not to levy tax on perfectly bona fide transactions where the full value of consideration received has been correctly declared by the assessee. A circular like this issued by the Board is binding on the department. The speech of the Finance Minister which is extracted in the circular for the benefit of the taxing authorities reads : \n  \"Today practically every transaction of the sale of  property is for a much lower  figure than what is actually received.    The deed of registration mentions a particular amount; the actual money that passes is considerably more. It is to deal with these classes of sales that this amendment has been drafted..... It does not aim at perfectly bona fide transactions.....\nbut essentially relates to the day-to-day occurrences that are happening before our eyes in regard to the transfer of property. I think, this is one of the key Sections that should help us to defeat the free play of unaccounted money and cheating of the Government.\"", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-17", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "14. The Supreme Court has recently taken the view that the speech of a Minister may be used as an aid to correct interpretation. Justice Beg (as he then was) in Sole Trustee, Loka Shikshana Trust v. Commissioner of Income-tax , after referring to the speeches in Parliament, observed at page 252 : \n  \"It was not just the speech of any member in Parliament. It was the considered statement of the Finance Minister who was proposing the amendment for a particular reason which he clearly indicated. If the reason given by him only elucidates what is also deducible from the words used in the amended provision, we do not see why we should refuse to take it into consideration as an aid to a correct interpretation. It harmonises with and clarifies the real intent of the words used. Must we, in such circumstances, ignore it ?\"", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-18", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "15. The view expressed by Beg J. was again endorsed by the Supreme Court in Indian Chamber of Commerce v. Commissioner of Income-tax [1975] 101 ITR 796. Therefore, on a true construction of the language of the provisions of Section 52( 1) and (2) in the light of the Board's circular and the speech of the Finance Minister, we are of the opinion that these provisions are attracted only where the transfer of a capital asset is effected with the object of avoidance or reduction of the tax liability under Section 45 and not where the full value of the consideration received is declared.", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-19", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "16. The learned counsel for the revenue, however, sought to rely upon the view expressed by Gopalan Nambiyar J. (as he then was), in Income-tax Officer v. K. P. Varghese [FB] on behalf of himself and Viswanatha Iyer J. He was of the opinion that the consideration indicated by Sections 48 and 52 is one and the same, viz., the consideration for the transfer of capital assets. He so concluded on the reasoning that the heading and marginal note of a section cannot control the language in the main body of the section, and that it is not open to the court to look into the speeches of a Minister in Parliament or the instructions issued by the Board for understanding the object and purpose in enacting a particular provision of law. According to him, the instructions of the Central Board of Revenue and the speech of the Minister should not have the effect of controlling the meaning of the plain words in the section. We are unable to say that the words are so plain in Section 52(2) as to straightaway hold that the legislative intent is amply borne out by the language employed therein. Section 52 is intended only to cover cases where the assessee does not declare the full value of the consideration received or accruing to him with the object of avoidance of tax or reduction of tax liability. There is nothing in the language of Section 52(1) or 52(2) to suggest that Parliament intended to tax as income something which in no rational sense can be regarded as income by the assessee. The likely advantage which the asses-see was to gain by the transfer of the shares cannot be construed as coming within the ambit of profits and gains of business or profession. The intention of Parliament could not have been to levy tax where no right to profits or gains accrues or arises on the transfer of capital assets. Section 52, therefore, applies to cases of understatement of", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "018c8eff5187-20", "Titles": "Addl. Commissioner Of Income-Tax vs S.R.Y. Ankineedu Prasad on 26 August, 1977", "text": "on the transfer of capital assets. Section 52, therefore, applies to cases of understatement of consideration, that is to say, where consideration received is more than what was declared and not to cases of bona fide transfers of capital assets where nothing more than what was declared was received. The view expressed by us is in conformity with the view taken by the High Court of Madras in Sundaram Industries Private Ltd. v. Commissioner of Income-tax [1969] 74 ITR 243, Sivakami Company Private Ltd. v. Commissioner of Income-lax [1973] 88 ITR 311 and Commissioner of Income-tax v. Rikadas Dhuraji [1976] 103 ITR 111 and the Karnataka High Court in Additional Commissioner of Income tax v. M. Ranga Pai [1975] 100 ITR 413. For the reasons recorded, the reference is answered in the affirmative and in favour of the assessee. The revenue shall pay costs to the assessee. Advocate's fee Rs. 250.", "source": "https://indiankanoon.org/doc/1486196/"}
+{"id": "15ac4f1fca33-0", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "JUDGMENT Chandra Reddy, J.  \n 1. These appeals arise out of O. S. No. 45 of 1947 on the file of the Addl. Subordinate Judge, Guntur and the parties are the same. A. S. No. 118 and 173 of 1951 are by the 1st defendant and the third defendant, who is the proprietor of the 4th defendant firm, while A. S. No. 485 of 1951 is by the plaintiff. The material facts may be briefly set out. \n 2. In 1946, nine merchants trading in ghee formed themselves into a private limited company called Amrut Ghee and Co., Guntur, the present plaintiff, for trading in ghee. They obtained a permit to export 330 tons of ghee to Calcutta, Kharagpur and Midnapur, on the 14th of October, 1946. As they were not acquainted with the market conditions of Calcutta etc., they sought the assistance of the 1st defendant, one Purushottam Hari Das also a ghee merchant of Guntur, who has two brothers at Calcutta, defendants 2 and 3, the 3rd defendant being the sole proprietor of the 4th defendant firm.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-1", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "It was agreed between the parties that the 1st defendant should arrange for sale of the ghee to be exported to the above mentioned place on commission basis at Rs. 2/- per tin and also secure a financier who could make advances on the security of the stock sent to them, effect sales thereof on commission basis, and appropriate the sale proceeds towards their advances and take interest, commission and incidental charges etc. In accordance with these terms, the 1st defendant arranged with his brother, the 3rd defendant, who was trading in Calcutta in the name of the 4th defendant firm for advancing money with interest at 9 % per annum on the security of the ghee tins sent to the latter. \n The 3rd defendant could sell the tins for which he would be paid a commission of 1 1/2 per cent and he could apply the sale-proceeds in discharge of the amounts paid by him. As the duration of the permit originally granted was to expire on the 10th of November. 1946. the plaintiff had it extended up to 35th of December 1946. Between 14th October, 1946 and 15th December, 5604 tins of ghee were exported to Shalimar. Calcutta by the plaintiff and they were taken delivery of by the 4th defendant firm whereof the 3rd defendant was the sole proprietor as mentioned supra.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-2", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "There is dispute between the plaintiff and the 1st defendant regarding the ownership of 779 tins out of these and that forms the subject-matter of A. S. 119/1951. The first consignment of these tins arrived at Shalimar on the 28th of October. Most of the ghee tins received by the 3rd defendant in the name of the 4th defendant were sold through P. Ws. 1 to 5 who were themselves commission agents between the dates of arrival and the 31st of March, 1947. It appears they sold 3167. tins of new ghee and 1258 1/2 tins of deteriorated ghee. The 3rd defendant was sending reports of sales of the ghee periodically. \n On several occasions, the plaintiff protested against the low prices at which their ghee was being disposed of by the 3rd defendant and demanded that it should be sold at not less than a particular figure mentioned by them. But the 3rd defendant did not pay any heed to the remonstrances of the plaintiff and continued to sell at prices which, according to the plaintiff, were far below the market rate. \n There was voluminous correspondence between the parties and as they could not settle the matter amicably, the plaintiff laid this action for rendition of accounts and for payment of the amounts ascertained to be due to them, and for a direction to deliver up all the unsold tins of ghee to them, on the allegations that defendants 1 to 3 who constituted members of a joint family and for whose benefit the 1st defendant took up the agency colluded with a view to make wrongful gain and to defraud the plaintiff, and the 4th defendant sent false reports about the market rates and the price for which plaintiff's ghee was sold and also made several fictitious transactions.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-3", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "It was also the plaintiff's case that the 1st defendant, their authorised agent mainly responsible for accounting to the plaintiff and therefore to maintain accounts, instead of protecting their interests, conspired with his brothers and they jointly put forth sales at very low rates, while much higher price was obtained thereof, and thereby made large secret profits. \n 3. The 1st defendant contested the suit by filing a written statement. His Answer was that at the request of the plaintiff he found a financial who was to be paid interest and commission at the rates mentioned in the plaint that the plaintiff's partners themselves had to deal directly with the 4th defendant through their representatives stationed on the spot and that he should he paid a commission of Rs. 2/- per tin extending the same to the entire quantity of 330 tins, that he should have no liability whatsoever for any profit or loss that the plaintiff might sustain. \n It was added that he was to keep in touch thereafter by way of general guidance and superintendence and by way of pushing up sales when it became necessary. He was merely kept informed of the various details and sales thereof by the 4th defendant and he was also in touch with the same on occasions when he had to go to Calcutta. The allegations of collusion and conspiracy or of making secret profits were denied by him. It was contended by him that he was not liable to account to the plaintiff's firm. \n 4. The 2nd defendant contested his liability to the plaintiff. According to him, he had no concern with the plaintiff's transactions either with the first or 3rd defendant nor had he even knowledge thereof.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-4", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "5. The defence of the 3rd defendant was that he sold the ghee tins of the plaintiff for proper price and at the rates then prevailing in the market with the knowledge of the plaintiffs representatives and under the directions and advice of the 1st defendant, their selling agent, that he acted in the best interests of the plaintiff and that neither he nor the other defendants made any profit at the expense of the plaintiff. It was also pleaded that there being no direct relations between him and the plaintiff he was not answerable to it and hence he was under no obligation to render it any account. All the three defendants were agreed that they were not members of a joint family and that the agency taken up by the 1st defendant and 3rd defendant was for their individual benefit. \n 6. During the trial, there was a change of front by defendants 1 and 3 and they adopted the attitude in the witness-box as D. Ws. 1 and 4 respectively that the several ghee tins were purchased by the 3rd defendant for his firm. Some of them were sold to him by the plaintiff and some by the 1st defendant. \n 7. Pending the suit, a Commissioner was appointed for the purpose of seizing the ghee tins not disposed of. He proceeded to Calcutta in May, 1947 and in spite of the opposition and obstruction caused by the 3rd defendant he could seize 786 tins of ghee, sold it for Rs. 57,801-3-6 and after deducting the poundage and other charges deposited Rs. 56,464-5-0, the balance of sale proceeds into Court.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-5", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "8. The Subordinate Judge, who tried the suit, granted a decree against defendants 1, 3 and 4 jointly and severally for Rs. 1,20,218-1-6 together with interest thereon at 9 per cent per annum from 1-10-1947 which had accumulated to Rs. 36,756-10-10 up to the date of decree. Out of this decretal amount was to be deducted a sum of Rs. 60,001-2-0 made up of Rs. 56,464-5-0 deposited by the Commissioner to the credit of the suit in the circumstances mentioned above and Rs. 3,536-13-0 interest earned thereon by investment. \n The plaintiff could withdraw this amount and the balance of the decree money was to carry interest at 6 p.c. per annum. No decree was passed against the 2nd defendant as the trial Court found that the 2nd defendant was in no way concerned with the suit transactions. The Subordinate Judge found that defendants 1 to 3 were not members of a joint family and even if there could be such there was no joint business and that their trades were separate, unconnected with each other and that the agency of the 1st defendant was not a joint family concern.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-6", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "In his view, the 1st defendant was to arrange for a financier, give general directions and exercise general supervision etc., and receive commission of Rs. 2/- on the tins sold, that the defendants 3 and 4 were to render account to the plaintiff, they being the substituted agents of the plaintiff and that the liability of the 1st defendant arose by reason of his conspiracy with defendants 3 and 4 in bringing about fraudulent transactions and causing loss to the plaintiff and that he was entitled to a commission at Rs. 2/.- per tin on the sale of 2,539 tins. Defendants 1 and 4 filed two separate appeals against the judgment disputing their liability to render account to the plaintiff. \n 9. The plaintiff by his appeals A. S. 485/1951 assails the judgment in so far as the 2nd defendant was absolved from all liability and in so far as it allowed commission to the 1st defendant on some of the tins of ghee sold and did not allow a higher price in respect of some tins remained unsold either through P. Ws. 1 to 5 or by the Commissioner.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-7", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "10. We will first take up A. S. 118 of 1951 which covers the issue relating to the liability of the 1st defendant to account to the plaintiff. In support of this appeal, it is contended for the appellant that he was only a broker who was requested to arrange a financier and a commission agent in consideration of which he would be paid a commission of Rs. 2/- per tin and the moment he had brought the plaintiff and the 3rd defendant together, he had no more obligations to the plaintiff, he had only to receive commission from the plaintiff on the basis mentioned above not only in regard to the ghee tins sold but it had to extend to the 330 tins covered by the permit. \n It was also submitted that having found that the appellant was not liable to account and that he could be made liable for the losses sustained by the plaintiff as a result of his fraudulent conduct in regard to the sale of certain number of tins, a decree should not have been passed against him for all the losses said to have been sustained by the plaintiff. The learned counsel also maintained that if as found by the trial Court the 3rd and 4th defendants were substituted agents no liability could attach to the 1st defendant assuming he joined the 3rd defendant in defrauding the plaintiff of his dues. \n 11. On the other hand, the stand taken by the plaintiff is that the appellant was the chief agent, the 3rd and 4th defendants being his sub-agents and that he was primarily responsible to the principal, namely, the plaintiff for all nets of commission and omission by the sub-agents and that the sub-agents' liability arose only by reason of their fraud and wilful wrong. Counsel for the respondents has also attacked the finding of the Subordinate Judge that the 3rd and 4th defendants were substituted agents.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-8", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "12. The problem thus posed has to be solved with reference to the voluminous correspondence that passed between the parties, the oral evidence and the surrounding circumstances. Before we launch 011 a discussion of the evidence and the legal position of the parties, it is useful to refer to the attitude adopted by the defendants in their written statements. While in one breath it is asserted by the 1st defendant in his statement that it was specifically agreed between him and the plaintiff in the beginning that the appellant should put the plaintiff in contact with the 4th defendant and that the former should station their own representatives to effect and supervise sales and should deal directly with the 4th defendant through his representatives stationed on the spot, the appellant beyond receiving a commission ot Rs. 2/-per tin not having any more liability in the matter, it was stated in the next breath that he had to give general guidance and supervise the sales and push up the sales when it became necessary. \n It was also admitted in the answer that he was the authorised agent for the sale of the plaintiff's ghee on the terms of his being paid a commission of Rs. 2/- per tin. There is the further recital in the written statement that he was kept informed of the various sales and details thereof by copies of letters of the 4th defendant to the plaintiff and he was also in touch with the same on occasions when he had to go to Calcutta. It is difficult to reconcile the two positions taken by him.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-9", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "Further, the case of the 3rd defendant and the 4th defendant as disclosed in the written statement is inconsistent with the 1st defendant being a mere broker. The contents of paragraphs 7 and 21 of 4th defendant's written statement amply hear out the plaintiff's case that the 1st defendant was his commission agent and that defendants 3 and 4 were only sub-agents. It is stated inter alia in paragraph 7 that the goods were sold under the general guidance, advice and instructions of the 1st defendant or of some directors of the company and that they were corresponding with the plaintiff about the sales and market rates only to help the plaintiff and his direct representatives on [he spot to obtain quick sales. The last sentence occurring in paragraph 21 is thus : \n \"But one thing is definite that the plaintiff represented and held out the 1st defendant as the representative under whose advice and instructions his goods sent to Calcutta may be sold.\" \n 13. These passages leave little room for the contention of the 1st defendant that he was no more than a broker entitled to receive the commission at Rs. 2/- per tin.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-10", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "14. We shall next trace the facts bearing on this issue. At the outset, it may be remembered that the case for the appellant is that it was only on the 27th or 28th of October 1946 that the main terms and conditions of the contract between the parties were settled at Calcutta after P. W. 8 and other representatives of the plaintiff went to Calcutta whereas the case for the plaintiff is that the terms of agency of the 1st defendant as well as those relating to the 3rd defendant were agreed upon at Guntur, the 1st defendant having fixed up with his brother probably by talking to the latter over the trunk-phone (as suggested by the plaintiff to the 1st defendant in his cross-examination) and it is only subsequently that the ghee tins were despatched to Calcutta.  \n P. W. 8 testified to the main terms of agency having been settled at Guntur on or about the 16th of October. This version is confirmed by other witnesses for the plaintiff. It appears from the material on record that the first two consignments were sent on the 21st and 22nd of April, 611 and 772 tins respectively and they were received at Calcutta only on the 28th. It is also evident from the testimony of P. Ws. 2 to 4 that arrangements for the sale of ghee to be exported by the plaintiff were made even about ten days before the arrival of the plaintiff's goods at Calcutta. This is not in consonance with the appellant's case, but is explicable only on the hypothesis that they had already reached an understanding in respect of these sales.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-11", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "It is unlikely that the plaintiff would have despatched the goods to the 3rd defendant without there being any prior engagement especially when the 3rd defendant was not acquainted with any of the directors of the plaintiff company. It is significant that the appellant was in Calcutta by the time the goods reached the place to make arrangements for the sale of the ghee and immediately he arrived at Calcutta a telegram was sent on his behalf that money was being remitted. In this connection P. W. 8 deposed that 1st defendant was there because he had to take delivery and have the goods sold. It is unlikely that these tins would have been despatched without fixing the terms and conditions upon which entrustment was to be made to the parties and the sales to be effected. \n 15. We shall now turn to the correspondence that passed between the parties. The earliest letter which throws light on the jural relations between the plaintiff and defendants 3 and 4 is Ex. A-111, a letter written by the plaintiff to the 3rd defendant on 26-10-1946. It says that after the tins are taken delivery of they should be credited to the plaintiff's account and the addressee should consult the 1st defendant on his arrival at Calcutta. It is clear from this that from the inception the 1st defendant was regarded as the person responsible for the sale of the goods.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-12", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "Another letter which points to the same inference is Ex. A-113. This is by the 4th defendant to the plaintiff informing the latter inter alia that a sum of Rs. 20,000/- was being sent with P. W. 8 and the balance shortly thereafter and they would try their best to sell the ghee at a high rate. A copy of this was sent to the 1st defendant, an indication that the 3rd and 4th defendants were only the sub-agents and the 3rd defendant was conscious of his duty to keep his principal, namely, the appellant informed of the particulars of the transactions. \n 16. By Ex. B-195 written on 8-11-1946 the third defendant was directed inter alia by the plaintiff to consult Sri Purushottam Babu. That letter also recited that specimens were sent through Purushottam Babu. Another letter written by the plaintiff to the 3rd defendant on 13-12-1946, Ex. B-24 has the same effect. One of the recitals there was: 'We have consulted with our Purushottam Babu here about the selling of our old and new stocks with you'.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-13", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "17. Copies of letters written by the 3rd defendant to the plaintiff intimating either about the sales or about the steps being taken by them in regard to the disposal of the goods or other matters touching the plaintiff's ghee tins were almost invariably sent to the 1st defendant. (See Exs. A-113, A-251, A-252, A-284, A-250, A-248, A-374, A-114, A-249, A-124, B-229, A-253, A-258, A-254, B-240, B-306, A-255, A-256, A-118, A-119, B-247, A-153, B-309, B-370 and B-311). \n In all these letters the 3rd defendant assures the plaintiff that they would do their best for sale of the latter's goods at a high price. Though the fact that the 3rd defendant furnished copies of these letters to the appellant by itself may not establish conclusively that the 1st defendant was the agent of the plaintiff and that the 4th defendant was only a sub-agent, it probablises the cases of the plaintiff. \n There are some letters written by the 4th defendant company which afford clinching material as regards the relations between the plaintiff and the 1st defendant on the one hand, the plaintiff and defendants 3 and 4 on the other. The correspondence was occasioned by the plaintiff remonstrating with the fourth defendant for selling the ghee tins at a very low price even as against their specific requests to sell them for reasonable prices.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-14", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "18. As early as 8-11-1946, the 4th defendant by letter Ex. A-252 informs the plaintiff that they were trying to act according to the instructions left by Purushottam Babu. That the 3rd defendant was looking to 1st defendant for guidance is apparent from the conversation reported to have taken place between P. W. 7 and the 3rd defendant as embodied in Ex. B-223 dated 10-1-1947. That letter refers to the statement of the 3rd defendant dant that it was advisable for the 1st defendant to release stocks for sale but that so far the 1st defendant had not written to him about it. Ex. A-143 a letter dated 6th January, 1947 by the 4th defendant to the plaintiff is also useful in that it shows that it is on the advice of the 1st defendant that the third and 4th defendants were acting in regard to the sales in question. The relevant contents of this document are: \n \"But, by pursuance and advice of Mr. Purushottarn Babu we have given you the above rate, i.e., Rs. 110/-.\" \n 19. In reply to a telegram sent by the plaintiff to the 4th defendant requesting him not to sell the stocks without reference to them and calling upon him tp explain why he sold 250 old tins without a letter, this is what the 3rd defendant writes (Ex. A-153):", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-15", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "\"On the arrival of your Mr. Purushottam Haridas we wired you on the first instant which runs as follows: 'Amruth, Guntur:-- Arrived safely. Dont draw hundi. Market very dull, 163 old 110, to which you are up to date, silent. Then we sold 100 tins old under instructions from your Purushottam Babu. Your Mr. Subbarao did not leave instructions to us while leaving Calcutta and since he left that we received your wire yesterday and the letter under reply today. We are concerned with your sailing agent here only and we are not at all concerned with your purchase price and moreover admittedly your old stack is of far inferior quality. We have every apprehension about our money lying in block after returning your hundi and as a businessman you should not stop our hands to sell the goods at imaginary higher rates for which there might be no market hereafter. When your selling agent is here we fail to understand why your are apprehending the loss to the company.\"", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-16", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "20. On the same day a telegram was sent by the 3rd defendant to the plaintiff saying that they were selling under the instructions of the 1st defendant. The contents of Ex. A-153 are consistent only with the plaintiff's case that the 1st defendant was their agent and that 3rd and 4th defendants were his sub-agents. Another significant feature of this letter is that the 1st defendant was described as the selling agent of the plaintiff which lends considerable support to the plaintiff's case. It is not as if the 1st defendant was unaware of it, because a copy of it was communicated to the 1st defendant. It is admitted by the 1st defendant as D. W. 1 that he had received it. The 1st defendant did not repudiate the part attributed to him in Ex. A-153. On the other hand, he admitted in the witness-box in his cross-examination that he did give the instructions as alleged in that document. \n 21. The same position is established by Ex. A-250. (It may be mentioned here that a statement was made at the Bar by Mr. Sambasiva Sastry who appeared for the plaintiff in the lower Court that all the documents exhibited for the defendants were marked at the instance of the 1st defendant and this is not contradicted by the counsel who appeared for the 1st defendant in the trial Court and who is also present here). This letter was written by one of the directors of the company, Gangadhara Rao, to P. W. 11 in which the eon-tents of a letter written from the 3rd defendant were set out, and they are as follows:--", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-17", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "\"At first we sent a telegram to you that the market was dull and the rate for the new stock was rupees one hundred and sixty five and for the old stock rupees one hundred and ten. But, there was no reply from you. So, as directed by your selling agent Purushotham Babu Garu, wel sold, the old stock at rupees one hundred and ten. Then as your man Suhba Rao Garu gave us Information we fixed up as high a rate as possible in the market, and after informing Purushotharn Babu Garu also, sold two hundred and fifty tins of old stock at rupees one hundred and twelve after Babu Gam consented.\" \n 22. There is another document which has the same significance. This is a letter written by P. W, 7 to the plaintiff company on 30-11-1946 (Ex B-212). It conveys to the addressee the conversation that took place between P. W. 8 and the 1st defendant. \n \"Viswanadham Garu's questions.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-18", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "Purushotham Garu's answers. \n\nWe said \"we have sent our 2.497 tins of ghee. Have all tins been sold or not? \n\nYou have nothing to do with our 779 tins. Your 1,112 tins excluding 271 tins sold as well as the waggon of 335 tins which arrived yestetday, in all 1,447 tins remain. \n\nI said that the goods remaining should be sold quickly. We sent superior goods. You should Immediately sell them. \n\nHe said that old stock could not be disposed of so quickly. We are not persons who throw dust fn the eyes. You do not know what goods were put. \n\n one of your directors told us that, your directors themselves weigh all and filted. \n\nIf old stock is not sold quickly we will sustain loss. \n\nIt is not possible for me. I did not give guarantee to you that I would sell.\"", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-19", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "23. The talk between P. W. 8 and D. W. 1 as reported in that letter clearly indicates that it was the 1st defendant that was chiefly responsible for the sale of the goods. \n 24. We may now turn to some correspondence that passed between the plaintiffs clerk P. W. 7 and plaintiff bearing on the attitude of the 1st defendant which furnishes positive evidence that the 1st defendant was directing the sales of the goods and also that he was acting in unison with the 3rd defendant in perpetrating fraud upon the plaintiff. P. W. 7 was a clerk of the plaintiff stationed at Calcutta to report to the plaintiff about the market conditions and also about the sale of the plaint ghee tins. The letters written by him disclose that he was absolutely kept in the dark, of the transactions relating to the ghee tins in question or about the persons through whom sales were being effected and that he was never informed of any of the transactions and much less consulted, Reference may be made in this context to Ex. A-144 written by him on 6-1-1947. \n 25. This document was proved by P. W. 7 and the truth of the contents thereof testified to by him. There does not seem to have been any cross-examination in regard to it. It contains the following conversation purported to have taken place between the writer and the 1st defendant.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-20", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "\"I told Purushotham Babu Garu that if it was sold at that rate the company would fall down and that therefore he should not sell it at that rate. Purushotham Babu said that we should repay the advance paid by them and then we might sell as we liked. He further said if tomorrow we keep it without selling and thereby loss is sustained, and if after excluding the advance given by us, there should be still loss, show me the man who will pay. What does it matter to you? There is no use if you speak as you like.\" \n 26. It was also mentioned in that letter that the 1st defendant told him that the plaintiff sent the 1st defendant a telegram questioning him as to why he sold at Rs. 110/- and that after receiving a reply from him etc., 1st defendant said \"let them come. I shall talk to any one who comes.'' The author of the letter also complained that his words carried no weight and no useful purpose would be served by his remaining at Calcutta. \n 27. Ex. B-308 another letter written by the same person three days earlier which also reports the talk between him and the 1st defendant is on the same lines. Ex. B-235 dated 30-10-1946 written by the plaintiff to P. W. 8 one of the directors and Ex. B-200 dated 8-11-1946 written by P. W. 14 to the plaintiff indicate that even the financial transactions which the plaintiff had with the defendants went through the 1st defendant whenever he was in Calcutta.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-21", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "28. In the face of this documentary evidence, it is futile for the 1st defendant to contend that he was not the agent of the plaintiff and was there fore not liable to account to them. The several documents referred to above clearly prove that the position occupied by him in relation to these goods was that of an agent and that he cannot absolve himself of all responsibility. \n 29. The oral evidence adduced by both the sides does not in any way conflict with the plaintiff's case. P. W. 6 the managing director of the company during the relevant period, deposed among other things that by the terms of the contract entered into between the 1st defendant and the plaintiff at Guntur the former was to go to Calcutta, Kharagpur and Midnapur, to sell ghee and was to be paid a commission of Rs. 2/- per tin of ghee, sold through him, and that the goods were sent in the name of the 4th defendant as per the directions of the 1st defendant and that the 1st defendant was responsible for all the goods the plaintiff parted with and also for the money advanced.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-22", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "In this respect, he is supported by P. W. 8 Chairman of the Board of Directors of the plaintiff company who testified to 1st defendant stating to them that he would get the goods sold through his brother at Calcutta. This version was confirmed by P. W. 11 another member of the plaintiff company. He stated that the 1st defendant was to be paid Rs. 2/- per tin which he sold at Calcutta. He also added that he asked defendants 1 and 3 in January 1947 as to why they had stated that the price of the stock was Rs. 155/- or two rupees more than that while in fact their inquiries showed that the price was Rs. 172/- and that 1st defendant was very angry with him and stated to him \"why do you talk that we are committing fraud in season and out of season.\" \n He at once replied and asked hint to state if this was not fraud, what else was fraud. D-1 then became angry and they then left the place. The witness also said that when Raghavayya asked defendant 1 to render an account, to state how many tins have still to be sold and what the sum was with them, 1st defendant became angry and said \"Shut up. Do not talk nonsense\". It also appears from his evidence that the 3rd defendant tried to explain away the outburst of temper of the 1st defendant as due to the contents of the letter written by Gangadhara Rao.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-23", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "The evidence of P. W. 7 who was sent to Calcutta by the plaintiff to keep a watch over the transactions is in consonance with the version of the plaintiff. In the course of his deposition he said that he along with some others went to the 1st defendant and the 1st defendant said that he would sell plaintiff's goods properly, that on another occasion he stated that Calcutta was not Guntur for selling away rotten goods for good prices and that in Calcutta no one could be imposed, that on 6-1-1947 when he asked 1st and 3rd defendants to tell him how much stock was sold and how much money was due they did not give any reply. He also stated that defendants 1 and 3 were selling the suit stock. \n 30. The oral evidence let in by the defendants does not very much advance their case. On the other hand, the admissions contained in their evidence lend support to the plaintiff's case. D. W. 1 stated that he was no more than a broker, that direct relations were established between the plain tiff and the 3rd and 4th defendants, that tie had no responsibility in the matter, but had a right to receive commission but also denied the conversation between himself and P. W. 7 and P. W. 1 as stated by the latter two. But the case of his being a broker is not consistent with portions of his deposition.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-24", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "He said that by December 1946 price of ghee was going down further, that he went to Calcutta then, that 3rd defendant told him that other kinds of ghee better than plaintiff's ghee were being sold in the market and that he would see that his stock was sold and so he went on 31-12-1946. He admitted that he must have given the instructions to the 3rd defendant in respect of 100 tins on behalf of plaintiff, that the 3rd defendant described him as selling agent and that he did not repudiate this. It was further stated by him in cross-examination that he was at Calcutta on behalf of the plaintiff to give advice to plaintiff or his representatives in respect of sale of their ghee. The same result is reached by his statement that he told the plaintiff that the 3rd defendant was purchasing all these stocks. \n 31. Another set of the 1st defendant which also makes the case of the plaintiff probable is the transaction relating to the sale of 1500 tins by him to the 3rd defendant. It is true that he tried to justify this alleged sale pleading that he was authorised by P. W. 11 to effect a sale of these tins to the 3rd defendant who was pressing for the re-payment of the money and who was apprehensive of his reimbursing himself the advances made by him to the plaintiff.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-25", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "The case of the 1st defendant in this behalf is that on 3-3-1947 he bad a letter from the 3rd defendant complaining of the delay in the plaintiff repaying the 3rd defendant large sums of money still due to him, that he showed this letter Ex. B-311 to P. W. 11 on that very day and that thereupon P. W. 11 requested him to sell away 1500. tins to the 4th defendant and thus got the plaintiff's liability reduced and it was thereafter he sent a telegram to the 3rd defendant offering 1500 tins for sale and that this offer was accepted by the 3rd defendant. This story of the 1st defendant has to be rejected for various reasons. \n For one thing, there is no material to substantiate this case of his. If there is any truth in it, the plaintiffs themselves would have made the offer; secondly, the story of the 3rd defendant feeling apprehensive of repayment of the money is a very unconvincing one for the reason that there was ample security for any small sum of money that might be due to them from the plaintiff. Again, it appears from the evidence that the 3rd defendant was not advancing any money of his, but that he was merely passing on a substantial portion of the sums which he got from P. Ws. 1 to 3 through whom the goods of the plaintiffs were sold.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-26", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "The appellant's story also is belied by the fact that the envelope which is supposed to contain the letter alleged to have been received by him and showed to P. W. 11 is stamped 4-3-1947. If that is so, it is useless to pretend that he had received a letter on the 3rd and that was responsible for the transaction relating to 1500 tins of ghee. It this case of his is rejected, the inference is that the 1st defendant acted on his own authority in offering to sell 1500 tins which means he proceeded on the assumption that it was within Ms competence to sell the goods of the plaintiff which can only be on the basis of his being a commission agent. \n 32. Now, the evidence of D. W. 4 his brother completely destroys the case of the 1st defendant in this behalf, He stated among other things that the plaintiff gave a telegram on 31st December 1946 of which Ex. A-8 is a copy intimating that the 1st defendant would be coming and that the 1st defendant was sent by the plaintiff to sell the old stock of ghee, and that 250 old tins were sold by the 1st defendant on behalf ot the plaintiff. He also deposed that the 1st defendant was the selling agent of the plaintiff and that he had every right to sell the goods as plaintiffs representative.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-27", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "It was in the capacity that 1500 tins of the plaintiff were sold by the 1st defendant to him. The evidence of this witness was also to the effect that some of the tins were sold to him by the 1st defendant after consulting Subbarao. The witness also added that the 1st defendant was the representative of the plaintiff and he had the right to sell the goods of the plaintiff. He further said that he was not acquainted with the plaintiff and that it was the 1st defendant that introduced the plaintiff to him. \n Thus, there is satisfactory evidence on the side of the plaintiff that the 1st defendant was employed by the plaintiff as their agent, that the former had appointed as his sub-agents defendants 3 and 4 and that the latter always looked to him for all the details as to their disposal, that they were taking orders from him and that the 1st defendant had not ceased to occupy the position of an agent at any time during the relevant period and therefore rendered himself liable for the acts and defaults committed by the 3rd and 4th defendants. The evidence also discloses that not only he was aware of the fraudulent conduct of the 3rd defendant in reporting fictitious sales but even encouraged him to do so.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-28", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "In his deposition as D. W. 1, D-1 said that except 786 tins delivered Mm to the commission, (sic) the 3rd defendant purchased all other tins. This statement discloses an anxiety on the part of the 1st defendant to enable the 3rd defendant to make as much illegal gain as possible. The material on record establishes beyond doubt that the 1st defendant was acting in concert with the 3rd defendant and both of them were parties to several make-believe transactions which were calculated to deprive the plaintiff of their legitimate dues. There can therefore be little doubt that the 1st defendant was guilty of fraud as much as the 3rd defendant. \n 33. This position is controverted by the counsel for the 1st defendant. It is argued that the direct correspondence between the plaintiff and the 1st defendant could only he consistent with the plaintiff treating the 3rd and 4th defendants as his agents, and this correspondence justifies the finding of the Judge that the 3rd and 4th defendants were constituted substituted agents of the plaintiff, that he was merely a broker whose only duty was to supervise and superintend the sale of the plaintiffs stock and had the right to receive remuneration at Rs. 2/- per tin. We do not think that this contention is substantial.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-29", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "The mere fact that the 3rd defendant was writing directly to the plaintiff and that the latter was requesting the 3rd defendant to sell the goods at a profitable rate and not to dispose of at a low price does not create the relationship of principal and agent between the 3rd and 4th defendants and the plaintiff. As the 1st defendant was also a resident of Guntur like the members of the plaintiff's concern and for the sake of convenience and quicker despatch, this procedure must have been adopted between the parties, But the 1st defendant was appraised of all the transactions and copies of letters were sent to him of almost all the letters. The reason for the direct correspondence is also given in the written statement of the 4th defendant. The relevant passage occurring in paragraph 7 is as follows: \n \"This defendant was corresponding with the plaintiff about the sales and market rates only with a view to help the plaintiff and his direct representatives on the spot to obtain quick sales and with a view to repay himself as early as possible.\" \n 34. This factor does not in any way alter the position of the parties and the subordinate agency which the 3rd and 4th defendants held would not be converted into that of the agent and principal. The exchange of letters directly between the plaintiff and the 3rd defendant does not operate to discharge the 1st defendant from his liability to his principal. If a person is initially appointed as agent and if the latter engages his own sub-agent for carrying through certain transactions, the mere circumstance that the sub-agent corresponded not with his employer but with the main principal, does not divest the main agent of his character as such.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-30", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "35. There is clear authority for this position. In Lockwood v. Abdy, (1845) 60 ER 428, the plaintiff who had real estates in the county of Essex appointed one Abdy as his agent with full power to manage his estates and with express authority to appoint proper person to act as agent under him. A solicitor by name Andrews was employed by Abdy to receive the plaintiff's rents and he in the management of the estates. A bill was filed by the principal against Abdy and also Andrews who was charged with various acts of mis-conduct in the management of the estate. The answer of Abdy was that it was not sustainable against him. \n It was laid down by the Vice-Chancellor Sir L. Shad well that Andrews was responsible to Abdy and that the bill was to be dismissed as it was unsustainable against Andrews in spite of the fact that in Andrew's books items were entered and charged as against the plaintiff and that the evidence showed that Andrews had prepared the power-of-attorney and had various interviews with the plaintiff and advised him as to the management of the affairs, that the accounts between the plaintiff and Abdy had never been settled, but they had been made Out and rendered by Andrews and were intituted as accounts between Abdy and Andrews as the agents by power-of-attorney of the plaintiff Mr. Lockwood.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-31", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "36. Hugh Francis Hoole v. Royal Trust Co., AIR 1930 PC 274, also illustrates this principle. This was an appeal from a judgment of the Supreme Court of Newfoundland. A firm R entered into an arrangement with H that the latter was to act as agent to R for sale of their fish in South European countries. The remuneration payable for their services consisted of a commission of 2 per centum and a discount of one and one-fourth per centum on the proceeds of sales. By a cable and letter posted the same, day the firm H negotiated with R for a consignment of fish for Genoa per S. S. \"Kriton\" saying: \n  \"We have cabled you this morning that if you would  consign  500 casks  of Labrador to  Genoa, our  agents  will     guarantee   a  minimum price   of 88s. c.i.f., Genoa.....with an advance of 20s. on\ndocument. We await your reply and hope we may be able to arrange this business with you.\"", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-32", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "R accepted the offer by a letter dated 21st October 1921 and sent the consignment per S. S. \"Kri-ton\" on 7th November 1921.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-33", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "On 15th November the firm H wrote guaranteeing a minimum of 38s. c.i.f., with an advance of 15s. against documents. This was approved by the consignors as follows: Labrador minimum guarantee approved, have drawn 20s. suppose accounts food for difference\", M/s. Zurlo and Co., were the agents fit Genoa referred to by the H firm. Subsequently, the firm H tried to repudiate its liability by pleading that the responsibility was that of M/s. Zurlo and Co: \n In an action by R against H the defence was that the firm H merely negotiated between the R firm and Zurlo and Co., direct and that therefore they were not liable for any receipts by M/s. Zurlo and Co., which had not in fact reached their hands. This defence was negatived and the claim of R was allowed by the Judicial Committee of the Privy Council in the view that the firm H was liable to account to the R firm for the balance of the proceeds of the God-fish consigned to Genoa. \n In the opinion of their Lordships the fact that some correspondence passed directly between the plaintiff and Zurlo and Co., or that the plaintiff asked Zurlo and Co., if the latter would guarantee a minimum price minus 1 1/4 par cent discount only and would advance 30s. cash on documents and the Zurlo and Co., replied by letter that they would guarantee 38s. minimum price, could not advance the plaintiff 30s. per hundredweight asked for, but assured them that the account sale would be remitted to them promptly did not make any difference for the determination of the jural relations between the parties.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-34", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "37. The principle underlying these decisions is that if a person is employed as the agent for sale of some goods and the agent engages a third party to carry out the instructions of the principal, the mere fact that the sub-agent corresponds not with the agent but with the principal does not create any change in the relations of the parties and privity of contract does not arise between him and the principal. Therefore, the appointment of a sub-agent to put through some sales would not indicate that ipso facto privity of contract was created between the principal and the sub-agent. A passage from Bowstead's Law of Agency (11th Ed.) p. 71 is in favour of the view indicated above. \n \"There is no privity of contract between a principal and sub-agent as such, whether the sub-agent was appointed with the authority of the principal or not; and the rights and duties arising out of the contracts between the principal and agent, and between the agent and sub-agent, respectively, are only enforceable by and against the immediate parties thereto. Provided, that the relation of principal and agent may be established by an agent between his principal and a third person if the agent be expressly or impliedly authorised to constitute such relation and it is the intention of the agent and of such third person that such relation should be constituted\". \n 38. It is illustration 3 at p. 72 that bears out the proposition stated above: \n \"An agent appointed a sub-agent to manage the principal's affairs. The sub-agent took over the entire management thereof, and communicated with the principal direct. Held that the sub-agent was not liable to render an account of his agency to the principal.\" \n 39. The authority relied on in support of this (sic) (1845) 60 ER 428 cited supra.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-35", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "40. When once the position is established that a particular individual was appointed as commission agent for sale of goods and the latter arranged with a third party for carrying through the sale transaction, the agent is responsible to the principal for the negligence and other breaches of duty of the sub-agent in the course of employment. Sec Peacock v. Baijnath, ILR 18 Cat 573; Purkhit Panda v. Ananda Gaontia, 12 Cal WN 1036 and Nen-sukhdas v. Birdichand, 43 Ind Cas 699: (AIR 1917 Bom 19),", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-36", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "41. The rule mentioned above is stated in Section 192 of the Contract Act which enacts: \n \"Where a sub-agent is properly appointed thc principal is, so far as regards third persons, represented by the sub-agent and is bound by and responsible for his acts as if he were an agent originally appointed by the principal.  \n The sub-agent is responsible for his acts to the agent and the agent is responsible to the principal for the acts of the sub-agent\".  \n 42. Another argument put forward by the counsel for the 1st defendant was that as the goods were not consigned to him but sent direct to the 4th defendant and were endorsed by the plaintiff's representatives to the 4th defendant direct and not to him he never had the custody of the goods. Therefore, there could he no scope for describing him as the agent. His position was only that of a broker. \n 43. For this proposition, support is sought in the judgment of a Full Bench of the Madras High Court in Radhakrishna v. Province of Madras, 1952-1 Mad LJ 494: (AIR 1952 Mad 713) (FB). The passage on which reliance is placed by the learned counsel for the 1st defendant is found at p. 500 (of Mad LJ): (at p. 722 of AIR).", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-37", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "\"A broker is an agent employed to make a bargain for another and receives a commission on the transaction which is usually called brokerage. He has usually neither the custody, nor the possession of the goods. It is the broker's duty to establish privity of contract between the principal and the third party. The broker cannot sell in his own name nor can he sue on the contract. A commission agent, on the other hand, of the class to which the plaintiffs belong, is not like a broker. He has almost invariably custody or possession of the goods, actually or constructively.\" \n 44. The doctrine of the case cited above does not govern the present case, for, the 1st defendant's position cannot be equated to that of a broker for the various reasons mentioned above. A broker, when once he brings two parties together and receives his remuneration for it, (sic) nothing more to do with the transactions between the parties. That is not the case here. Even, according to the 1st defendant he \"had to keep in touch by way of general guidance and supervision.'' He had also to push up sales whenever it became necessary and he was kept informed of the various sales and the details thereof by copies of letters. \n It is also admitted that he had also to go to Calcutta on some occasions in connection with the sales of the plaintiff's goods. Thus, he had not ceased his connections with the principal after putting the 3rd defendant in touch with the plaintiff. The agent's custody also can be constructive. When under His instructions, the goods are despatched to his sub-agent and the latter is having custody thereof that would be deemed to be the custody of the principal. AIR 1930 PC 274 shows it is not necessary that the goods should be placed in the physical possession of the agent.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-38", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "In the nature of things, the ghee tins could not be consigned to the 1st defendant because he was himself residing at Guntur and he had no office at Calcutta. It is under his instructions and as desired by him, as per the case of the plaintiff and accepted by us, that the goods were sent to Calcutta, that the sub-agent, his brother, was always looking to him for instructions in regard to sales and that the latter refused to recognise the plaintiff as his principal. It may not be out of place to mention here that in his letter dated 30th November, 1946 to plaintiff P. W. 8 writes that he gave the passes to D- 1. \n 45. An attempt was made by the counsel for the 1st defendant to bring the case within the purview of S. 194 of the Indian Contract Act which is in the following words: \n \"Where an agent, holding an express or implied authority to name another person to act for the principal in the business of the agency, has named another person accordingly, such person is not a sub-agent, but on agent of the principal for such part of the business of the agency as is entrusted to him.\" \n 46. This section embodies the theory of what is generally known as substituted agency. What this section envisages is an agent nominating another person to act for the principal in the business of the agency with the knowledge and consent of the principal. It is applicable only where the agent names another and when that is accepted the agent has no concern thereafter with the business transactions between the principal and the person named; in other words, he walks out of the scene. The naming of the person does not amount to delegation of the duties of the principal.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-39", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "In such a case, direct relations are established between the principal and the person nominated and the latter becomes an agent substituted for the person who was authorised to nominate another. But, that is not the situation in this case. As already stated the 1st defendant had not severed his connections with these transactions as indicated above in several places. Therefore, he cannot disown his responsibility to render an account to his principal, the plaintiff. To quote the words of Theslger, L. J., in Pe Bussche v. Alt, (1878) 8 Ch. D. 286 at p. 310: \n \"As a general rule, no doubt, the maxim 'delegatus non potest delegare' applies so as to prevent an agent from establishing the relationship of principal and agent between his own principal and a third person but this maxim when analysed merely imports that an agent cannot, without authority from his principal devolve upon another obligations to the principal which he has himself undertaken to personally fulfil; and that, inasmuch as confidence in the particular person employed is at the root of the contract of agency, such authority cannot be implied as an ordinary incident in the contract.\"", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-40", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "47. The conduct of the parties to the original contract of agency throughout the relevant period can only lead to one inference namely that the original agent, namely, the 1st defendant in order to fulfil his obligations to his principal, had to appoint a sub-agent to sell the goods of his principal at Calcutta and there was no direct privity of contract between the plaintiff and the 3rd defendant. Nor does the mere fact that the plaintiff had accepted the terms on which the sub-agent would sell the goods and advance money against goods would ipso facto put an end to the relations between the plaintiff and the 1st defendant. Hence the 1st defendant cannot escape liability by pleading that the plaintiff had to look to the sub-agents as substituted agents. \n 48. The opinion of the lower court that the 3rd and 4th defendants were substituted agents of the plaintiff is erroneous and unsustainable. The trial court held that the 1st defendant could be made liable for the sale-proceeds of the 1500 tins of ghee since he had sold them to the 4th defendant and latter had not accounted to the plaintiff for the same. Our foregoing discussion shows that this view is erroneous and unsustainable.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-41", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "According to the learned Judge, by reason of the theory of substituted agency and also because fraud could not be attributed to the 1st defendant except in regard to certain transactions, his liability could not be made co-extensive with that of the 3rd and 4th defendants and he would be only responsible for the sale-price of 1500 tins and for the difference in price in regard to fictitious sales of which he had knowledge and was privy to it. He, however, thought that a decree could be passed against the 1st defendant also for a sum which represents the loss sustained by the plaintiff as a result of the fraudulent conduct of the defendants, that amount being less than what the 1st defendant would have to make good to the plaintiff on the basis indicated above. \n 49. Lastly, it was submitted by Mr. Rajeswararao that no liability could he fastened on his client with regard to the sale of 1500 tins in the suit which is for a rendition of accounts on the fooling of his being an agent of the plaintiff. What is urged by him is this. The plaintiff's case is that by a resolution dated 4-3-1947 the 1st defendant was removed from the agency and this was communicated both to the 1st defendant and the 3rd defendant. \n Feeling that they have no further chance of making secret profit by indulging in fictitious sales, the 3rd and 4th defendants brought about this fraudulent transaction. If the 1st defendant had lost the character of an agent and thereafter sold the goods to the 3rd defendant, he had only committed a fort and there would be misjoinder of causes of action to claim this amount in a suit for accounts as between an agent and a principal.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-42", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "50. Firstly, this is not the case of the 1st defendant either in his written statement or in his evidence. The attitude adopted by him throughout was that there was in fact no resolution to remove him from the agency, nor was any such communication sent to him. It is not necessary for us to decide whether really the resolution was passed by the directors of the plaintiff company removing him from the agency and whether copies of the resolution were sent to the 1st and 3rd defendants. \n If the agent purports to act as such and in that capacity enters into 3 transaction on behalf of the plaintiff his liability to account does not cease and he will have to render an account to the principal if the latter chooses to require him to give an account on the footing of his being an agent. This legal position cannot be disputed. For these reasons we hold that despite the appointment of the 4th defendant for the actual sale of the goods en the terms and conditions set out above, the primary liability to the plaintiff was that of the 1st defendant and his liability is co-extensive with that of the 3rd and 4th defendants. Consequently, A. S. No. 118 of 1951 is dismissed with half costs. \n A. S. No. 173 of 1951.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-43", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "A. S. No. 173 of 1951. \n 51. In this appeal, the conclusions of the trial court are challenged on behalf of the 3rd and 4th defendants on various grounds: (1) No decree can he granted as the plaintiff has not set out in the plaint the exact relationship that subsisted between them and the plaintiff; (2) there being no direct relations between them and the plaintiff (hey were not accountable to the plaintiff; (3) the stock of the plaintiff was purchased by them with the consent and approval of the plaintiff's representatives and this they were entitled to do as financiers; (4) they were not liable' to pay interest on the sums realised by the Commissioner by sale of 786 tins of ghee and invested in Government securities; and lastly, there should have been a preliminary decree instead of for a definite sum a decree straight way. We shall now dispose of these points seriatum. \n 52. It is true that the plaint does not describe the relations that subsisted between the plaintiff and defendants 3 and 4 in legal terms. But the plaint throughout proceeds on the assumption that defendants 3 and 4 were the sub-agents of the 1st defendant. It is recited in the plaint that under the instructions of the 1st defendant, the ghee was despatched to Calcutta and delivered to the 4th defendant for being sold and the averments in the plaint are explicable - only on this basis. \n The plaint has only to state facts which constitute the cause of action against a particular defendant. It is not necessary that the legal effect thereof should be mentioned in the plaint. The plaint should only contain the recitals that would form the basis of the claim. The legal position created thereby need not he described. This contention is therefore Overruled.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-44", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "53. Coming to the second objection, it is in-controvertible that a sub-agent is responsible only to his principal, namely, the agent but not to the principal. But the position is different if he is guilty of fraud or wilful wrong. This is not only on the general principles but by reason of third paragraph of Section 192 of the Indian Contract Act. The responsibility of the sub-agent to the principal to account to the latter arises only in cases where fraud or wilful wrong is attributed to him. In this case, the various acts of commission and omission committed by the 3rd defendant have given rise to this liability. \n Though it was pretended in the correspondence that passed between the 1st defendant on behalf of the 4th defendant and the plaintiff that the goods were being sold at a particular price, the 3rd defendant had to admit in the witness-box that all these goods were sold through P- Ws. 1 to 5, having regard to the overwhelming evidence furnished by these five witnesses of Calcutta, who, it appears, were originally unwilling to disclose the real state of affairs to the plaintiff or to court. \n Their evidence and the account hook filed into court reveal that the ghee tins of the plaintiff fetched a much higher price than those quoted in the letters written by the 3rd defendant. In fact, it is the accounts of P. Ws. 1 to 5 in relation to the plaintiff's goods that formed the basis of a decree against these defendants. With this background, if we consider the conduct of the defendants as disclosed in the correspondence and the attitude adopted by them in the witness-box, there can be little doubt that these defendants were guilty of fraud and wilful wrong and consequently come within the scope of paragraph 3 of Section 192 of the Contract Act.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-45", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "54. In view of the evidence of P. Ws. 1 to 5 and their account books which could not be impeached by the defendants and which have completely proved the fraudulent conduct of the defendants, the latter fell back upon the theory of purchase of the whole goods in question. Here again, they have miserably failed to make out their case. Excepting the interested testimony of the 1st defendant and the 3rd defendant which is completely at variance with the correspondence, there is not a little of evidence that the 3rd defendant had purchased these goods. \n No doubt, on the 6th of August, defendants 1 and 3 sought to lay claim to 1500 tins by exchange of telegrams between 1st and 3rd defendants. That this again is not a genuine transaction appears from the account books of P. Ws. 1 to 5 and the admissions of defendants 1 and 3. As admitted by both of them, the 3rd defendant could not purchase for the 4th defendant the goods of their principal - without their consent. There is absolutely nothing to show that such consent or even ratification of the principal was given. Nor could they sell the goods to themselves at a price much lower than that prevailing in the market and to the disadvantage of the principal.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-46", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "It is no doubt true that a sub-agent who is also a financier or even an agent who advances money against goods could purchase the goods with the consent and approval of the principal and there is no impediment in the way of their doing it, but it is essential that either they should be offered for sale by the principal to the agent or the offer made by the agent for purchasing the goods should be accepted by the principal. Without either of the two conditions, the agent or the sub-agent could not acquire any title to the goods. The 1st defendant admitted that without an offer from the plaintiff's representatives the 3rd defendant cannot purchase on his own accord. \n 55. The question now is whether any such offer was made by the plaintiff or their representatives or whether the 3rd defendant on behalf of the 4th defendant ever offered to purchase these goods from the plaintiff and the latter agreed to the proposal. Our attention was not drawn to any piece of evidence in proof of either sale of the tins to the 4th defendant or even an offer by the plaintiff to sell them to that defendant. Nor is there any evidence of subsequent acquiescence to it. Far from there being any material to prove this claim of the 3rd defendant, the letters written by the 3rd defendant to the plaintiff clearly indicate that they sold the ghee tins of plaintiff in the market and not that they purchased them.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-47", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "This is the purport of the letters, In Ex. A-113, the 4th defendant assured the plaintiff that they would do their best to sell the ghee at a high rate. See also Exs. A-114 dated 23-11-1946, B-229 dated 28-11-1946, A-145, a telegram on 15-1-1947, B-25S dated 9th December 1946, A-255, dated 21st December 1940, A-118 dated 27th December 1946, B-247 dated 31st December 1946, A-151, a telegram by the plaintiff to the 4th defendant sent 18th January, 1947, A-152 and A-153 dated 18th January 1947 a telegram and a letter respectively, B-309 and B-310 dated 2-5-1-1947; B-369 dated 31st January 1947, B-730 dated 3rd February 1947 and B-311 dated 1st March 1947. \n In all these letters, it was categorically stated by the 4th defendant that the 4th defendant had either sold or that they were trying their best to sell the plaintiffs goods at particular rates. Throughout, the expressions used were either \"sell or sold\" or 'dispose or disposed of'. In fact, in Ex. A-165 dated 6-2-1947, the plaintiff asked the 3rd defendant to sell the goods at a particular rate. Ex. \nA-143 written by the 4th defendant on 6-1-1947 completely disproves the present case of the defendants. It was recited inter alia therein:", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-48", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "\"Every buyer is expecting that Guntur ghee will be sold at Rs. 150/-. At present, there is no price and no sale. So we do not advise you to sell at Rs. 150/- until you can keep that ghee for some time more but you will not keep your old stock very longer which please note.\" \n There is not a whisper in the documents referred to above that the 3rd defendant himself was the purchaser of the goods. The various letters written by the representatives of the plaintiff at Calcutta to the plaintiff or by the plaintiff to its representatives at Calcutta are not in tune with the 3rd defendant being a purchaser. The story that either P. W. 7 or P. W. 11 sold the ghee tins to them does not merit any consideration. \n In one of the letters by the 3rd defendant to the plaintiff, it was specifically stated that P. W. 7 left the place without giving any instructions with regard to the sales, Both P. Ws. 7 and 11 deny having sold any ghee tins to the 4th defendant. D. W. 4 asserted in the witness-box that after the departure of Panakalu, P. W. 11 he purchased in small quantities and intimated the same to the plaintiff, but no evidence in support of this assertion of the intimation to the plaintiff was presented to us.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-49", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "56. It was argued by Mr. Chandrasekhara Sastry for the 3rd defendant that his client used the word \"sale\" indiscriminately and much significance could not he attached to that expression and that it should be understood as purchase. We do not think we can give effect to this argument. The language used by him with reference to the purchase of 779 tins in Ex. A-124 in reply to Ex. A-123 wherein it was slated that 779 tins were sold to the 4th defendant does not convey any such impression. \n It is also noteworthy that when these 779 tins were sold to the 4th defendant an invoice was sent by the plaintiff to the 3rd defendant and the same procedure would have been adopted if really there were sales in regard to other tins. Even the telegram sent by the 4th defendant in regard to the alleged sale of 1500 tins by the 1st defendant does not give any support to this contention (Ex. B-352 dated 6-3-1947 which says: \"accepted 1500 rate 152''). \n 57. In this context, another significant circumstance is the failure of the 3rd defendant to produce the account books maintained by them. Nothing would have been easier for them to file the account books in support of their case. It was in evidence that they have been maintaining account books and if so what is the reason for the non-production of these account books if there is an iota of truth in his claim in this behalf? The inference is irresistible that the 3rd defendant did not want to bring his accounts to the court as they would not lend any colour to his theory of purchase.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-50", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "There is also another flaw in their case. The written statement of the 4th defendant which was also adopted by the 3rd defendant proceeds on the assumption that the ghee tins of the plaintiff were sold through third parties. It is stated in para 7 which has also, been referred to above that the 3rd defendant was corresponding with the plaintiff about the sales etc., to obtain quick sales with a view to repay himself as early as possible. The language used in the written statement in this regard in paragraphs 8, 9 and 15 only connotes that that they were sold to third parties in the market. \n In paragraph 13, with reference to ghee tins shown in D schedule annexed to the plaint, it is stated: \n \"This defendant was accordingly obliged to purchase the same from time to time when other prospective purchasers at Calcutta on inspection would not oifer proper prices\" etc. These allegations contrasted with those relating to other tins make it abundantly clear that even at the time of the written statement the case of purchase by 3rd defendant was not conceived and the one set up in the witness-box was an after-thought. Surely, the advocates who drafted the written statement could not be said to have missed the distinction between sale and purchase.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-51", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "Whatever might be said of the powers of the comprehension of the 3rd defendant in these respects, if really the case of purchase of all the tins was put before him, he would have certainly given effect to it by employing proper language. We are inclined to agree with the suggestion of the plaintiff that when the fraud committed by them was discovered by the plaintiff and was exposed by the evidence of P. Ws. 1 to 5 who were examined on commission and had to disgorge the illegal gains, the defendants were hard put to the necessity of coming forward with some story to escape from the situation thus created. In these circumstances, we have little hesitation in rejecting the defendants' case on this aspect of the matter.  \n 58. The fourth contention relates to the payment of interest on the proceeds of sales of 78G tins effected by the Commissioner and brought into court. It is maintained by Mr. Chandrasekhara Sastry that the direction in this regard is invalid since his client did not have the use of this money. We are unable to agree with this contention. It is conceded by him that his client put forward a claim to this money on the ground that these tins belong to him and that the plaintiff had no manner of right thereto and insisted that the money should be in court pending the determination of the rights of the parties to this amount. \n For this reason, the court invested it in Government securities which earned an amount of Rs. 3000/- and odd and which went in reduction of the liability of the defendants. In such a setting, it is useless to contend that the 4th defendant could not be made liable for interest that accrued on the sums in court till the date of the decree. When a person prevents another from having use of some money and is instrumental in keeping it idle in court, he is liable to pay interest on such money by way of damages.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-52", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "59. Mr. Chandrasekhara Sastry pressed upon us the argument that it was not competent to the lower court to grant interest as his case does not fall within the ambit of the Interest Act. The instant case does not fall under any of the catego-\nries enumerated in Section 1 of the Act, continues the learned counsel. That being the case, there is no discretion vested in the court below to allow interest at 9 per cent on the amount deposited by the Commissioner. \n 60. This argument overlooks the proviso to that section. That proviso saves cases in which interest was payable before the passing of the Act. This is made clear by Section 34, C. P. C. There if ample discretion inhering in a court to award interest by way of damages in cases where the plaintiff has to be compensated for any loss sustained by him consequent on the conduct of the defendant. \n The counsel for the appellants contends that the defendant could not be directed to pay interest by way of damages when ho had not retained money in his hands and made a profit out of it. In our opinion there is no difference between a case of that type and where by his acts he had deprived the plaintiff of the use of the money, which amounts to the defendant wrongfully withholding the money. If the plaintiff was not prevented from drawing out the money he could have put it to use.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-53", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "As it is, the plaintiff had suffered loss by being denied the use of money for a considerable time and has therefore to be compensated in the shape, of interest. Nor could any exception be taken to the award of interest at 9 p.c. because the plaintiff had to pay interest to the appellants at 9 p.c. per annum for his advances. After all, the rate of interest as damages varies with the value of money to the parties. That being the case, he cannot make a grievance in regard to this part of the decree. \n 61. Coming now to the last contention, there is no rule or principle of law which requires a court to pass a preliminary decree invariably in every suit for accounts. Normally, a preliminary decree is granted in such suits because it would be necessary to go into the accounts and a court may think it advisable to appoint a Commissioner to ascertain the state of account between the parties. But that is not a rigid rule which should be followed in every case irrespective of its circumstances. \n In simple cases which do not involve much scrutiny of accounts, a court is not bound to pass a preliminary decree but could straightway give a decree for a certain amount if the material on record enables it to do so. The present case falls under this category. The statement of accounts prepared by the plaintiff with reference to the account books of P. Ws. 1 to 5 which could not be impugned clearly showed what sums were paid to the 4th defendant in regard to the ghee tins entrusted to the latter by the plaintiff and sold by P. Ws. 1 to 5 as commission agents.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-54", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "The defendants are made liable only for the sums which were actually paid by P. Ws. 1 to 5 to them after deducting the commission payable to them and other incidental charges out of the sale-price of the ghee tins. The defendants have not produced their own accounts presenting a conflicting version in regard to the sale-prices. They have no case as to the rates at which ghee tins in question were disposed of, different from that revealed in the evidence of the witnesses and their account books. \n So, it was not a case where different versions had to he considered with different sets of account books, but a case which could be easily decided in the light of the material placed in the shape of the account books and the oral evidence of disinterested witnesses like P. Ws. 1 to 5. When the accounts could be ascertained and settled without passing a preliminary decree and resorting to the procedure necessitated thereby, a court is at liberty and also well advised in giving a decree to the plaintiff. \n Even before us, the defendants could not show in what respects the judgment is wrong or what allowable items were disallowed or what was the defect in the statements furnished by the plaintiff prepared in the light of accounts of P. Ws. 1 to 5 or in what respects the account books were unacceptable. To repeat it, the defendants have not chosen to file their account books and could not also repudiate the various payments made to the 4th defendant in the account books of P. Ws. 1 to 5.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-55", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "62. The trial court remarked that there was no need to pass a preliminary decree and that no purpose will be served by passing 3 preliminary decree by referring the matter to the Commissioner for ascertainment of the amount due to the plaintiff as it was not the case of defendants 3 and 4 that they had got any account hooks which will show the amounts actually realised by them. \n 63. It was faintly argued that certain deductions have to be made by way of transport charges, from 3rd defendant's godowns of P. Ws. 1 to 5, godown charges and cooly paid at the railway station etc. There is no substance in this submission either for the reason that the 4th defendant had not placed my evidence before court as to the charges incurred under any of these heads. Nor are they able to tell us now what expenditure was incurred in that respect. The trial court allowed a lump sum of Rs. 1,000/- by way of estimated unloading and transport charges. It does not appear that anything more was claimed. This contention also fails. In the result, this appeal is dismissed with half costs.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-56", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "64. There remains the appeal A. S. No. 485/1951 filed by the plaintiff contesting the validity of the judgment in certain respects. Two grounds of attack are put forward by the plaintiff against the judgment: firstly, that the trial court ought to have allowed a higher rate in regard to 178 tins of new ghee which were not disposed of by the 4th defendant by the time the Commissioner disposed of the 786 tins. The contention urged in this behalf was that at the time the Commissioner went, there was a large number of tins of ghee with the 4th defendant not yet sold and with great difficulty the Commissioner could seize only 786 tins and the rest of the tins amounting to 393 tins remained with the 4th defendant and which were sold subsequently for a higher price. \n The plaintiff-appellant restricts his claim only to 178 new tins out of the lot of 364 tins. In support of this claim, reliance is placed by the plaintiff on abstract No. 2 filed on his behalf on the basis of actual realisations from P. Ws. 1 to 5. What is maintained is that while an average rate of Rs, 81-4-4 for tins of new ghee was got by P. Ws. 1 to 3 in the sales effected by them up to the end of March 1947, the average price which was realised by the Commissioner in regard to the 786 tins made by him subsequently was much higher and. the plaintiff should have had the benefit of at least that rate because the 4th defendant would have sold these tins later and got a much better rate.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-57", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "65. This is sound logic and the argument has to be accepted if the position was as envisaged in the argument of the counsel for the piaintiff. But this is contested by the defendants who pointed out with reference to statement No. 18 filed on behalf of the plaintiff. This statement shows that in all 5910 tins were despatched to Calcutta out of which the plaintiff sold to one Chokmal Tez Raj and Co., 306 tins. These 306 tins were subsequently obtained by the 3rd defendant and he sold 670 tins including the 306 tins to the 2nd defendant. In regard to the tins given to the 2nd defendant out of the stocks of the plaintiff the plaintiff was allowed a rate at which P. Ws. 1 to 5 sold the goods to the plaintiff. \n The statement No. 8 makes it abundantly clear that 364 tins were already disposed of before the Commissioner went to Calcutta. Therefore, there is no force in the statement that 393 1/4 tins remained unsold. If 364 tins are thus accounted for, there remains only 291/4 tins. There is no clear evidence with regard to these tins as to when exactly they are sold and it is profitless to pursue this matter having regard to the trivial nature of the difference in price with regard to these 29 1/4 tins the trial court having given for these tins also the same rate as in regard to the others.", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-58", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "66. The second complaint is that the trial court allowed commission to the 1st defendant on the tins sold by the 4th defendant through P. Ws. 1 to 5 except in regard to 1500 tins alleged to have been sold by the 1st defendant to the 4th defendant and 779 tins sold to the 4th defendant. The learned Subordinate Judge thought that the 1st defendant was disentitled to commission on the sale of the first item, because the 1st defendant had colluded and conspired with the 3rd defendant and on the second because it was not a sale in the agency. In his opinion, the case of the 1st defendant stood on a different footing in respect of the other tins inasmuch as there was no evidence to indicate that he had neither know-ledge of nor was privy to the fraud committed by the 3rd defendant. \n 67. We are in disagreement with this conclusion of the learned Judge. On the foregoing discussion, there is no ground for any differentiation between one transaction and another so far as the participation of the 1st defendant in the fraudulent design of the 3rd defendant is concerned. His dealings even in regard to the other set of sales also resemble those relating to the sales in regard to which commission was disallowed by the trial court. \n If in fact the 1st defendant acted to the detriment of his principal, the plaintiff, throughout the transactions he is not entitled to any remuneration for the business which was conducted through him. Apart from the long chain of authority which has established this position, there is the statutory disability attaching to an agent who misconducts himself in the business of his principal and this is enacted in S. 220 of the Indian Contract Act. The section says:", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-59", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "\"An agent who is guilty of misconduct in the business of the agency is not entitled to any remuneration in respect of that part of the business which he has misconducted.\" \n 68. The only thing that has to be established before the agent could be put out of court in regard to the commission is that he has been guilty of misconduct in the business of the agency. The principle underlying this section is that a principal is entitled to have an honest person as his agent and not a person whose actions are calculated to prejudice his interest and it is only an honest agent who is entitled to commission. \n 69. In this context, a passage in Story's Law of Agency which was extracted with approval in the judgment of Varadachari, J., who gave the Opinion of the Bench in Sirdhar Vasanta Kao v. Gopala Rao, AIR 1940 Mad 299 is pertinent: \n \"It is a condition precedent to the title of the commission, that the contemplated services should be fully and faithfully performed. If therefore the agent does not perform his appropriate duties, or if he is guilty of gross negligence or gross misconduct, or gross unskilfulness, in the business of his agency, he will not only become liable to his principal for any damages, which he may sustain thereby, but he will also forfeit of his commissions. Slight negligence, or slight omission of duty will not indeed, ordinarily, be visited with such serious consequences; although if any loss has occurred thereby to the principal, it will be followed by a proportionate diminution of the commission.\"", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "15ac4f1fca33-60", "Titles": "Purushotham Haridas And Ors. vs Amruth Ghee Co. Ltd., Guntur And ... on 16 August, 1956", "text": "It is to this doctrine that statutory recognition is given hi Section 220. On the material on record, no doubt could be entertained as regards the misconduct of the 1st defendant who throughput acted in league with is brother the 3rd defendant. Such being the case, Section 220 could be properly invoked in this case and all commission disallowed to the 1st defendant. In other words, the 1st defendant will not get any commission on the sales effected by the 3rd defendant through P. Ws. 1 to 5. To that extent, A. S. 485 is allowed. \n 70. Mr. Krishnaswami Iyer has not pressed his appeal as against the 2nd defendant as the plaintiff has no direct evidence to prove either that the 2nd defendant was also guilty of fraudulent conduct in regard to the sales or that even knowledge of the fraud of the 3rd defendant could be attributed to him. The decree of the trial court in O. S. No. 485/1947 is accordingly modified. (The rest of the judgment is not material to the report).", "source": "https://indiankanoon.org/doc/11240/"}
+{"id": "602af7edf54f-0", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "ORDER Jeevan Reddy, J.  \n1. Condition 28 of the terms and conditions notified by the A.P. Slate Electricity Board under Section 49 of the Electricity (Supply) Act, 1948 (hereinafter referred to as 'the Act') provides that every consumer shall deposit with the Board a sum in cash equivalent to estimated three months' consumption charges. According to the petitioners all of whom are High Tension consumers of electricity in the State of Andhra Pradesh -- the said condition is unreasonable and arbitrary, and that is the main contention arising herein. W.P. No. 11732 of 1984 and four other writ petitions came up for hearing before a learned single Judge, Y.V. Anjaneyulu, J. He was inclined to agree with the petitioners. The learned Judge was of the opinion that in the circumstances of the case, Board is not justified in framing the said condition, and that a deposit of two months' consumption charges would suffice. But since the learned Judge was faced with earlier Bench decisions of this Court upholding the said and similar conditions, he felt it desirable to refer the matters to a Full Bench. In his order of reference the learned Judge has indicated the reasons for which the earlier Bench decisions ought not to be followed. The learned Judge agreed as well with the other contention raised by the petitioners viz. that condition 28.3 in so far as it provides interest at the rate of 3% per annum on such deposits, is equally unreasonable. He was of the opinion that interest on such deposits should be paid at the same rate as is paid by Scheduled Banks of Fixed Deposits. The learned Judge has given reasons in suport of his opinion on this aspect as well.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-1", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "2. The learned Chief Justice before whom the papers were placed for appropriate orders, thought it fit to post the matter before a Division Bench in the first instance. When the said five writ petitions came up before us, it was represented to us that there are number of writ petitions on the same point, and it would be proper to hear all of them together. \n3. The A.P. State Electricity Board, constituted under S. 5 of the Electricity (Supply) Act, is engaged in generation, distribution and supply of electricity in the State. Energy is supplied for industrial, commercial, agricultural, and domestic purposes. To industries using energy above a particular level, energy is supplied at a higher voltage. They are classified as H.T. Consumers. All the petitioners herein belong to that category. \n4. Section 49 empowers the Board to notify terms and conditions upon which it will supply electricity to a person. It is also empowered to frame uniform tarrifs in that behalf. Sub-sec. (2) specifies the factors which must be kept in mind while fixing the uniform tarrifs, in that behalf. Sub-sec. (3) empowers the Board to enter into a special agreement with any consumer, and prescribe different tarrifs for him. Sub-sec. (4), however, creates an obligation upon the Board not to show undue preference to any person while fixing the tariff, and terms and conditions for the supply of electricity. In this case, we are not concerned with special agreements under sub-sec. (3). All the petitioners are governed by the general terms and conditions notified under S. 49( I). The terms and conditions now in force were notified by the Board in B.P.Ms. No. 690, dt. 17-9-1975. While it is not necessary to refer to the several terms and condi-", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-2", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "tions, it would suffice to note that these terms and conditions, contemplate every consumer executing an agreement in the prescribed form, agreeing to abide by the terms and conditions prevailing on the date of agreement, and also agreeing to be bound by the terms and conditions as may be notified by the Board from time to time; (Condition No. 26), In other words, the Board is empowered to alter the terms and conditions of supply unilaterally (vide condition No. 25). Condition 32.1 provides, \"the Board shall as far as possible within 15 days after the expiration of each calendar month cause to be delivered to every consumer a bill of charges stating the amounts payable by the consumer towards charges for energy supplied and any other sum in connection with supply of energy by the Board......\". Condition 32.2.1 obliges the consumers to pay the amount shown in the bill within 15 days of the date of the bill, in default whereof they are liable to pay \"an additional charge of 2% per month or part thereof for the period of delay\" in paying the bill. Condition 32.3 empowers the Board to disconnect the supply in case of default in paying the bill, without prejudice to its right to recover the amount due. Condition 24.3 also says that the consumer shall pay to the Board every month the charges for electrical energy supplied to him during the preceding month at the tariff in force from time to time. Condition 28 obliges the consumer to deposit an amount equivalent to three months consumption charges with the Board. It would be appropriate to set out condition No. 28, omitting the unnecessary portions. It reads: \n\"28. Consumption deposits: \n28.1 : Initial consumption deposit.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-3", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "\"28. Consumption deposits: \n28.1 : Initial consumption deposit. \n28.1.1: The consumer shall deposit with the Board a sum in cash equivalent to estimated three months' consumption charges. The consumer coming under the L.T. Category 'domestic' shall however pay at Rs. 30.00 per Kilowatt on part thereof connected load : \n Provided that the Board may, in the case of industrial; consumers, accept by way of consumption deposit a sum equivalent to two months' consumption charges during a period of three years from the date of first release of supply of electricity. \n28.1.2: in the event of the consumer failing to pay to the Board any sum that may become due for payment to the Board on the dates fixed for payment thereof, the Board may, in addition to and without prejudice to the other rights of the Board, appropriate a part or whole of such deposit towards the sum due from the consumer. \n28.2 Additional consumption Deposit: \n All consumers other than these L.T. Domestic consumer whose monthly bills are less than Rs. 500/- for a continuous period of six months, shall keep with the Board an amount equivalent to charges for three months demand and energy charges as consumption deposit. The adequacy of the Consumption Deposit shall be reviewed by the Board usually once in every year and/or at any time during the year if so warranted due to upward revision of tarrifs, enhancement of the contracted demand by the consumer, changes in the pattern of consumption by the consumer, relaxation of power restrictions or such other factors which in the opinion of the Board, warrant review of the adequacy of the existing consumption deposit..... \n                xx                      xx                                xx", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-4", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "28.3 Interest on consumption Deposit: \n Interest shall be paid by the Board on deposits of more than Rs. 60-00 made in cash at the rate of 3% per annum or such other rate as may be fixed by the Board from time to time. Full calendar months only shall be taken into account for the purpose of calculating interest and interest shall be calculated to nearest five paisa. The interest accruing to the credit of the consumer shall be adjusted every year in the month of April in the electricity supply bills. \n \n\n28.4: Disconnection for non-payment of Consumption Deposit: \n If the consumer does not make payment of\n\namount of consumption deposit or additional consumption deposit or where the deposit is given in Government Security or National Saving Certificate Bank Guarantee etc., he fails to replace them by deposit in cash when so demanded by Board within the notice period of 30 days, supply of the consumer shall be liable for disconnection. \n \n\n28.5: The Consumption Deposit so calculated as per the Cl. 28.1 and/or 28.2 above shall not be less than three times the monthly minimum charges, applicable to the consumer under the category to which he belongs. \n \n\n28.6: All consumers shall pay the Consumption Deposit or additional consumption deposit within thirty days from the date of the demand notice. If there be any delay in payment, the consumer shall pay surcharge thereon equal to 1 1/2% per month or such other percentage to be fixed by the Board from time to time, of the demanded amount for each month of delay or part thereof. This will be without prejudice to the Board's right to disconnect supply of electricity.\"", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-5", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "5. Clause (1) of condition 28 is general in nature. It applies to all consumers. Cl. (1,2) enables the Board to appropriate a part or whole of the said deposit towards any amount due to the Board and not paid within the prescribed period. Cl.(2) applies to all consumers, except those L.T. Domestic consumers whose monthly bills are less than Rs. 500/- per month for a continuous period of six months. Such consumers are obliged to keep with the Board an amount equivalent to three months' demand and energy charges, as consumption-deposit. This deposit is liable to be reviewed by the Board from time to time, having regard to the factors mentioned in the said clause. Cl (3) prescribes interest which the Board has to pay on such deposit. It is 3% per annum. Cl. (4) empowers the Board to disconnect the supply if consumption deposit/additional consumption deposit, is not made, or is not replaced whenever called upon to do so. Cl. (5) prescribes a certain 'floor' below which consumption deposit shall not go. Cl. (6) says that the consumption-deposit, or additional consumption deposit shall be paid within thirty days of the notice demand-\ning such deposit. In default, not only interest is payable but the supply also is liable to be disconnected.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-6", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "6. The terms and conditions notified in B.P.Ms.690 dt. 17-9-1975 were issued in supersession of the terms and conditions prevailing on that date, which we shall refer to as \"previous conditions of supply\". The previous conditions too obliged the consumer to deposit three months' consumption charges in cash, towards security deposit. The said condition was questioned as beyond the competence of the Board in W.P. No. 3468 of 1968, filed by \"the Mahalakshmi Glass Works Pvt. Ltd.\" The said challenge was negatived and the writ petition dismissed by V.K. Vaidya, J. on 18-7-1969. The agreement entered into between the Board and the petitioner therein stipulated that Security Deposit shall be in the form of cash/Post Office National Savings Certificates, or Government Bonds. The choice rested with the consumer, Subsequently, however, the Board altered the Conditions and directed the petitioner to furnish the said security deposit in cash, which was questioned by the consumer as incompetent. Vaidya, J. observed : \n\"under S. 49 the Board is also empowered to lay down terms and conditions. So, the revised terms and conditions will also override the pre-existing contractual terms and conditions. Under Cl. 16 of the General Terms and Conditions and Board is empowered to demand security deposit in cash......\" The other argument advanced before, and dealt with by Vaidya, J. is also relevant, since a similar argument is advanced before us also. It is in the following words:", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-7", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "\"It was then contended by the learned counsel for the petitioner that the demand of the security in cash is for an ulterior motive because it is with a view to provide capital. The only act and purpose of demanding security is to safeguard the interest of the Board in case the consumer does not pay the charges. The Board cannot demand security in cash so that it may be used in capital formation. Merely because the Board uses the security deposit for purposes of capital formation, it docs not mean that it has not accepted the amount by way of security. The amount remains with the Board by way of security and the consumer can always get it back on terms and conditions stipulated. A consumer cannot lay down the manner in which the security has to be used by the Board. I do not see any force in this argument and it therefore fails. I hold that the Board is competent to demand security in the form of cash.....\"", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-8", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "7. A few years later, another industry revived the very same attack in the form of W.P. No. 2122 of 1971 (filed by Chittivalasa Jute Mill Co. Ltd.). It was argued by the counsel for the petitioner therein that the view taken by Vaidya, J. in W.P. No. 3468 of 1968 requires reconsideration. The attack in this writ petition was upon Condition No. 6.17 of the terms and conditions notified by the Board, which obliged the consumer to deposit three months' charges in cash, as security deposit. It was argued that the said condition is unreasonable. The Board justified the reasonableness of the said condition stating \"the readings of the meter are taken at the end of the month and by the time the bill is issued to the customer, sometime, say one or two weeks, may elapse. Thereafter the consumer is given one month's time for payment of the bill. If the bill is not paid, the supply of electricity is not straightway stopped. More often, a warning is given to the consumer before the supply is stopped. All this process takes two to three months. That is the reason why the Board insists on security being given for three months' consumption charges.\" The learned Judge accepted the said reasons as sufficient to justify the said condition. It was again argued that the security deposit need not be in cash but should be allowed to be furnished in some other form. This argument also was rejected in the following words: \"The learned counsel for the Board points out that, where other forms of security are given, the Board is compelled to file suits to recover the amounts. The Board need not accept security in some form which may enable it to realise the amount due to it with certainty at a later date. It is open to the Board to insist on security in a form in which it may be easily realizable. A public utility concern like the Electricity", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-9", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "security in a form in which it may be easily realizable. A public utility concern like the Electricity Board cannot launch into litigation all over the State for the purpose of recovery of consumption charges from defaulting consumers. It is, therefore, not unreasonable for the Board to insist upon cash being deposited by way of security.....\"The learned Judge also rejected the argument of the petitioner that the interest provided on such deposits, viz. 3% is too meagre and unreasonable. The learned Judge pointed out that even in the case of compensation under the Land Acquisition Act the interest payable is 4%, and that even in the case of private landlords and tenants, very often three months rent is stipulated to be paid in advance, and no interest is paid thereon. The learned Judge observed: \"I cannot say that payment of 3% interest is so low that the insistence on cash deposit must he held to be unreasonable.\"", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-10", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "8. Against the Judgment of Chinnappa Reddy, J. in W.P. No. 2122 of 1971 dt. 12-12-1972, Writ Appeal No. 346 of 1973 was preferred by the petitioner. The Writ Appeal was heard and disposed of by a Division Bench comprising 8. Obul Reddy, C.J. and Madhusudan, Rao J. on 19-11-1974. The learned Judge broadly agreed with the views expressed by Chinnappa Reddy, J. Tnter alia the Bench observed: \n \"The Board is empowered under the Act to enter into a contract on such terms and conditions as it thinks fit. Therefore, it cannot be said that the Board has acted in violation of the power vested in it under S.49 of the Electricity (Supply) Act. All that the appellant can insist upon is supply of electrical energy; but so far as the terms and conditions are concerned, it cannot say that it will receive supply of electricity on its terms. The consumer is bound to accept such terms and conditions as the Board may impose subject, of course, to his right to get supply of electricity.....\" \nThe Bench also observed that the said condition cannot be said to be unrelated to the collection of dues or arrears from a consumer, nor can it be said to be unreasonable.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-11", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "9. After a few years, the attack was again revived by yet another industry, Andhra Paper Mills, Ltd. in W.P. No. 2359 of 1975. This writ petit ion came up before S.H. Sheth, J. who dismissed the same on 25-11-1976, following the decision of the Bench in W.A. No. 346 of 1973. The learned Judge refused to be pursuaded to refer the matter to a larger Bench. He found no weighty or substantial reasons to disagree with the reasoning of the Division Bench in W.A. No. 346 of 1973. Against the decision of Sheth, J. an appeal being Writ Appeal No. 156 of 1977 was filed by the petitioner in the said writ petition. The said Writ Appeal was heard along with W.P. No. 2224 of 1976 : () filed by another High Tension consumer (Krishna Cement Works), by a Division Bench comprising A. Sambasiva Rao, C.J., and P. Ramachandra Raju, J. It was argued by the petitioner-appellant that the judgment of the earlier Division Bench in W.A. No. 346 of 1973 practically confers upon the Board, an unbridled and arbitrary power to nofity such terms and conditions of supply as it thinks appropriate which, according to the petitioner, was unsustainable in law. This argument was dealt with by Sambasiva Rao, C.J., who spoke for the Bench, in the following words (at p. 294 of AIR):", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-12", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "\"We do not understand this passage in the same manner as Sri Srinivasamurthy construes it. This particular observation of the Division Bench does not say that the Board has unguided, uncontrolled and unbridled power to fix whatever rate of deposit it wants. Undoubtedly whatever security deposit which the Board fixes upon, should be reasonable and should have a reasonable nexus to the requirements of the situation. The Division Bench did not say anything which is contrary to the aforesaid principle If the security deposit which is required under the conditions by the Board is very unreasonable, certainly it is open to the Court to interfere with it. It is open to the Court to examine the reasonableness or otherwise of the requirement made under the conditions or insisted on by the Board. It is not to preclude a Court of law from examining the reasonableness of the deposit required. As we understand, what all the Division Bench decided was that the Board has power and discretion in what shape the security should be furnished and whether the security should be in the form of a Bank guarantee or a cash deposit...\". \nThe Bench then look up the question whether the condition requiring three months' cash deposit as consumption deposit, was un-' reasonable. For this purpose they referred to the following averment in the counter-affidavit filed by the Board (at p. 294 of AIR):", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-13", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "\"The consumer is billed for each month separately. The consumer's electricity consumption during the month is billed at the end of the succeeding month and 30 days time is given to him for paying of the bill. If he docs not pay the bill his supply is liable to be disconnected after giving one week's notice under S. 24 of the Indian Electricity Act, 1910. Meanwhile he will be consuming the power. So by the time the supply is disconnected to a defaulting consumer he would have consumed energy for 3 months. The Board's interest requires that there should be some protection by way of security of advance payment in respect of the consumption of this three months period.\" \nThe Bench opined that in view of the facts stated by the Board, it cannot be said that the condition requiring three months' consumption charges in cash as consumption deposit, is unreasonable. It observed that for a period of three months a consumer can go on consuming electrical power without paying any charges therefor and, therefore, it was eminently reasonable for the Board to require the consumer to furnish security for three months' charges. It was then argued that the three months' deposit need not be in the form of cash, but can be partly in cash and partly in some other form of security. This argument also was rejected accepting the explanation of the Board that other forms of security have landed the Board in several difficulties, inconvenience, and protracted litigation. Yet another argument urged before the Division Bench was that the appellant and the petitioner before them were very prompt in paying their bills, and that just because there are some defaulters, it would not be reason-\nable to punish all the consumers by catling upon them to make three months' cash deposit. The Bench observed (at p. 295 of AIR):", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-14", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "\"As matter of fact it may be that the writ appellant and the writ petitioner before us are prompt in paying their electrical dues, but the Board deals with lakhs and lakhs of consumers and it should have a uniform policy in demanding security. It cannot make a distinction or discrimination from one consumer to another. That is why a uniform policy has been laid down by incorporating it in the conditions aforesaid. For those reasons we are satisfied that the requirement of security for three months' average consumption charges by way of cash deposit is reasonable.\" \nThe Court also rejected the further contention that the payment of a mere 3% interest on such deposit is too meagre and unreasonable. Ultimately, the Bench observed: \"From the above reasoning it follows that Sri Srinivasa Murty's contention that the consumer should have an option in respect of the payment of electricity charges and that he should not be insisted upon to deposit cash of three months' average consumption charges cannot be accepted. As has been pointed out, cash deposit is necessary in order to run the Board's affairs on a sound commercial basis.....\". Accordingly, the writ petition and the Writ Appeal were dismissed. This decision is reported at . \n10. Again, after a few years a fresh attack is mounted upon the said condition in the form of the present batch of Writ Petitions. It is again argued that condition No. 28, in so far as it requires the consumers to deposit three months' average consumption charges as consumption deposit, is unreasonable and unjustified, and that payment of a mere 3% interest on such deposit is equally unreasonable. According to the petitioners, the decision of the Division Bench in K.C. Works v. Secretary, APSEB, Vidyut Spudna, is erroneous and requires reconsideration for the following reasons:", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-15", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "(a)The reasoning of the Division Bench that the previous condition No. 6.7 and the present condition No. 28 is reasonable is based upon an erroneous factual assumption. The Bench accepted the statement in the counter-affidavit filed by the Board that the , bill for a month is sent at the end of the succeeding month, and further that thirty days' time is given for paying the bill. On this basis the Bench observed that \"for three months consumer can go on consuming electrical power without paying any charges\" and held that the said condition is \"eminently reasonable\". It is pointed out that according to condition No. 32.1, the bill is served within 15 days of the expiration of each calendar month, and further that the bill amount is payable within 15 days of the date of the bill. It is pointed out that the period of 15 days for payment is calculated not from the date of service of the bill, but from the date of the bill. It is also pointed out that a bill can be served even on the very first day of the succeeding month, and it would be payable within 15 days of the date of the bill. In such a situation, it is argued, it is not correct to say that a consumer goes on availing and enjoying energy for a period of three months without paying for it. It does not exceed six weeks or at any rate, two months, it is submitted. Yet another point urged is that according to condition 32.3 supply of energy can be disconnected without seven days notice, required by S. 24 of the Indian Electricity Act, 1910. For all these reasons, it is argued that the consumption deposit should in no event exceed two months' average consumption charges; and", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-16", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "(b) the said Bench decision, in so far as it holds that payment of 3% interest by the Board on such deposit is reasonable, is no longer good law in view of the latter decision of the Supreme Court in M/s. Jagdamba Paper Industries (P.) Ltd. v. H. S. E, Board, . The Supreme Court has now held that interest on such deposits should be paid at the same rate as is paid by the Schedule Banks on Fixed deposits.  \n11. Besides the above two reasons, it is argued generally that the Board being a 'State' within the meaning of Art. 12 has to act reasonably, and that the terms and conditions notified by it under S. 49 ought to be reasonable and fair. Any arbitrary condition, it is argued, would be violative of Art. 14 of Constitution and this Court would be entitled to interfere. Support for this proposition is sought to be drawn from the decision of the Supreme Court in M/s. Jagdamba Paper Industries (P.) Ltd. v. H. S, E. Board, and also from the recent decision of the Supreme Court in Central Inland Water Transport Corporation Ltd. v. Brojo Nath, .", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-17", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "12. On the other hand, it is contended by Sri V. R. Reddy the learned Standing Counsel for the Electricity Board, that the previous Bench decisions conclude the issue so far as this Court is concerned; that there was no mistaken assumption of facts in the decision in K. C. Works v. Secretary APSEB, Vidyuut Soudha, , and that even if there is any such factual error, it does not effect the merits or the principle of the decision. It is pointed out that, notwithstanding Condition 32.3 seven days' notice is obligatory under S. 24 of the Indian Electricity Act, 1910 before effecting disconnection, which would mean that at least for a period of two months and 7 days a consumer would be availing and enjoying the electricity without paying for it. He further submits that condition No. 28 provides not for security deposit but for consumption deposit. Both are not the same, he says. It is true that consumption deposit is mainly security deposit, but that is not its only content or object. Counsel explains that the Electricity Board generates energy and supplies it to the consumers for a period of more than two months, on credit. For generating electricity, it undergoes huge expense, for which purpose it is obliged to incur loans from several bodies. It has to pay interest on such loans. The Board has, therefore, taken this aspect also into consideration while issuing condition No. 28. The Court too should take note of this aspect, which goes to justify the said condition. Learned counsel brings to our notice the following averments in the counter-affidavit filed by the Board:", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-18", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "\"..... The normal billing for a consumer is one month. After the expiry of each billing period the bill is prepared and sent to the consumer within 15 days (see condition 32.1). Under the terms and conditions of supply consumers have to remit the bill amount within 15 days. If payment is not made within the time allowed a surcharge for delayed payment becomes payable. The, Board has in addition armed itself with the power to disconnect supply where there is default in payment. Disconnection involves considerable hardship to the consumer and so it is not resorted to as a matter of course immediately a default occurs. Only when there is persistent default resort is had to this course. Hasty disconnections may be frustrating to consumers and excessive resort to this coercive procedure may lead to malpractices and be self-defeating in the long run. It may sometimes be that the consumer defaults due to oversight or some difficulty. In such cases the arrears are carried over to the next bill. Further, the default of any consumer is not noticed the very moment the period allowed for payment expires. The payments are usually remitted at the offices set up by the Board or sent through cheques or drafts. Necessary entries in the consumer's ledger are made after sometime. When these are periodically checked by the relevant official, non-payment comes to light. A verification is to be made and if in any case it is desired to effect disconnection, an intimation will be given by the Accounts Department to the concerned Assistant Engineer and disconnection is thereafter effected, if meanwhile no payment is made, Perior to this, however, one week's notice has to be given. Sometime elapses between every one of these \"stages. During this time the consumer is continuing to avail supply and further dues accumulate. These dues will usually be in excess of three months charges. Having regard to this system, from practical experience it has been found that a stipulation for a deposit of three months charges", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-19", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "system, from practical experience it has been found that a stipulation for a deposit of three months charges is the minimum protection required for the Board. A requirement like this is also not oppressive to the consumer. In this context it may be borne in mind that the Board expends large monies to manufacture electricity and the supply is on credit, i.e., goods are first supplied over a month and then price collected. The rates charged seldom cover even the production cost. Because the supply of electricity is not a mere business in goods but also the provision of a public amenity, while sound business principles have to be adopted the charges are fixed not with a view to earn the maximum profit but to keep the institution going, after taking into account the subsidies given by the State Government. The Board requires huge sums as rotating capital. It also borrows large amounts from organisations like the L.I.C. and Banks. The entire activity of the Board is for the benefit of consumers of electricity and it is well entitled to require consumers to cooperate by paying their bills regularly, by giving security deposits and by conforming to the terms and conditions of supply. More than a decade ago, consumers were permitted to give security as cash or by way of Bank guarantees or Government Bonds or other Government securities. This procedure was found in actual practice to be irksome and inconvenient. When there was default and the security has to be enforced considerable delays occurred. Even Banks took their own time to comply with their guarantees and in some cases this Board was constrained to launch legal proceedings to enforce these guarantees. While the Board is not desirous of inconveniencing consumers, it cannot prejudice its interests to assist consumers. All the major consumers are availing electricity for conducting business operations with a view to earn large profits and there is no warrant for imperilling the interests of a public body like the Board to facilitate the self-interest of some consumers. The Board has therefore prescribed a statutory term for provision of security in the form of cash.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-20", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "consumers. The Board has therefore prescribed a statutory term for provision of security in the form of cash. This term is well within it's statutory power is reasonable and does not conflict with any provision of law...\"", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-21", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "13. Before we proceed to deal with the rival contentions, it would be appropriate to notice the scope of judicial scrutiny by this Court in such matters. Acting under Art. 226 of the Constitution, this Court does not sit as an appellate authority over the Electricity Board. Indeed, the Act has not chosen to provide an appeal against the terms and conditions under S. 49. The jurisdiction exercised by this Court under Art. 226 is supervisory in nature. It is to ensure the observance of fundamental right the rule of law, and to keep the authorities within their bounds, Undoubtedly, the Electricity Board is a 'State' within the meaning of Art. 12, and hence it is subject to Parts III and IV of the Constitution. The scope of enquiry, therefore, would be to examine whether the power conferred upon the Board by S. 49 of the Act has been exercised so unreasonably and arbitrarily that interference by this Court is called for. \n14. For the purpose of this enquiry it is not necessary for us to go into the question whether the terms and conditions notified under S. 49 are statutory in nature or not. We shall proceed on the assumption that they are not statutory. We shall also proceed on the assumption that the terms and conditions notified under S. 49 ought to be reasonable, in the sense that they must be related to the object and purpose for which they are issued. We are equally aware that the power under S. 49 cannot be allowed to be used for oblique purposes, or for purposes unrelated to the one sought to be achieved by a given condition. Bearing the above principles in mind and the scope of judicial scrutiny by this Court in such matters, we proceed to deal with the rival contentions.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-22", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "15. What is the object behind condition No. 28? That is the first question to be answered. A reading of condition No. 28 shows that the primary purpose behind the said condition is prompt realisation of the amounts due to the Board. The amounts due to the Board normally include the monthly consumption charges. Whenever any amount falls due to the Board and is not paid within the period prescribed therefor, an equivalent amount out of the consumption deposit is appropriated towards that amount. The consumer will thereafter be called upon to make good the deficit in the consumption deposit. Consumption deposit is calculated on the basis of, and is tacked on to the average monthly consumption. This amount is subject to revision from time to time and, at any rate, once every year, having regard to the revision in tariffs, enhancement of the contracted demand by the consumer, changes in the pattern of consumption by the consumer, \"relaxation of the power restrictions, or such other factors as may, in the opinion of the Board, warrant review of the adequacy of the existing consumption deposit. It also provides that where the consumer fails to make the consumption deposit, or the additional consumption deposit, or fails to make up the deficit when so demanded by the Board, supply of energy shall be stopped. The previous condition, corresponding to condition. No. 28, was condition 6.7. It also appears-from the Judgment of this Court referred to above that, at an earlier point of time, it was clause/condition 16. At all points of time thus, the requirement was deposit of three months' average consumption charges. At any rate, from 1968, it appears the requirement was that the deposit should be in the form of cash. The challenge to the said condition has been mounted from time to time, commencing from 1968, and at all points of time it has been negatived. It is not as if the only raison d'etre for the said condition", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-23", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "been negatived. It is not as if the only raison d'etre for the said condition is that for three months a consumer can go on consuming electrical power without paying for it. That may be one of the reasons assigned in one of the judgment upholding it, but that is not the only reason. This was not the reason for which the said condition was upheld by the Bench comprising S.Obul Reddi, C. J. and Madhusudan Rao, J. in Writ Appeal No. 346 of 1973, nor was it the reason for which the condition was upheld by Chinn-appa Reddy, J. in W.P. No. 2122 of 1971, or by V. K. Vaidya, J. in W.P. No. 3468 of 1978. We cannot ignore or dismiss the several reasons stated in the counter-affidavit of the Board which we have quoted in extenso hereinabove. It is true that, according to condition 32, the bill for monthly consumption charges has to be delivered to every consumer within 15 days of the expiration of that particular month. Condition 32.1 itself employs the expression \"as far as possible\". It is thus clear that the said condition is merely directory. It may be that in a given case the bill is served on the very next day of the expira-", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-24", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "tion of the month; but, it may also happen that in another case it may be served a month later. For that reason, the bill does not become bad, or unenforceable. It is equally true that the consumer is given 15 days time for paying up the bill amount and condition 32.3 says that if the bill amount is not so paid supply of energy may be stopped on the expiry, of the 15 days without further notice under S. 24 of the Indian Electricity Act, 1910. But this is what the conditions provide. These conditions merely refer to the power of the Board. Existence of power is distinct from exercise of power. A strict compliance with condition 32.3 is neither practicable nor realistic. The Board cannot blindly act upon condition 32.3 and disconnect the supply the moment 15 days' time (from the date of the bill) expires. It too has to take a realistic view of the situation. After all, these industries are engaged in production of goods essential to the community. A blind and mechanical adherence to condition 32.3 (instant disconnection) may indeed prove counterproductive in larger sense, as rightly pointed out in the counter-affidavit of the Board. The counter specifically states \"disconnection involves considerable hardship to the consumer and so it is not resorted to as a matter of course immediately a default occurs. Only when there is persistent defaults, resort is had to this course. Hasty disconnections may be frustrating to consumers and excessive resort to this coercive procedure may lead to malpractices and be self-defeating in the long run. It may sometimes be that the consumer defaults due to oversight or some difficulty. In such cases the arrears are carried over to the next bill.....\" We see no reason why we should ignore this realistic approach and assessment of the situation. The Board has further pointed out that the non-payment is not immediately noticed, that having regard to the", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-25", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "The Board has further pointed out that the non-payment is not immediately noticed, that having regard to the number of consumers and the extensive nature of the organisation, it takes some time for the default to be noticed and action to be initiated in that behalf. Though condition 32.3 says that the supply of energy can be stopped without giving notice contemplated by S. 24 of the Indian Electricity Act, 1910, the counter rightly states that the requirement of S. 24 has got to be observed by the Board, since a condition notified under S. 49 cannot override the specific requirement of the statute. The counter further states that having regard to all these circumstances, the \"dues will usually be in excess of three months' charges\" and proceeds to state further that \"having regard to this system from practical experience it has been found that a stipulation for a deposit of three months charges is the minimum protection required for the Board.....\" There is no material before us to show that the aforesaid facts stated in the counter are not true, and that in every case the Board is disconnecting the supply on the very next day of the expiry of 15 days from the date of bill.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-26", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "16. It is also stated by the Board that huge sums are required by it as rotating capital; that it borrows large amounts from organisations like L.I.C. and Banks; that it pays interest to them, and that in such circumstances it is well entitled to require the consumer to co-operate by paying their bills regularly, by giving security deposits, and by conforming to the terms and conditions of supply. It is argued that this consideration was also one of the bases of condition No. 28. We do not think it necessary to express any Opinion on this question, though the truth of the matter cannot be denied. There are two views upon the matter. The petitioners say that the interest burden should be reflected in the tariffs, while the Board says that interest burden can be reflected in consumption deposits, and not necessarily in tariffs. All that we can say is that there is no hard and fast rule in this bahalf. The interest burden can be reflected either in tarrifs, or can be sought to be set off by calling upon the consumers to make deposits. In this case, however, it is unnecessary to go into this aspect, since the requirement of three months' deposit, in our opinion, cannot be said to be unreasonable and unjustified having regard to the facts mentioned above. It cannot be said that the said condition is so unreasonable and arbitrary as to call for interference by this Court under Art. 226 of the Constitution. We reiterate that even if this court comes to the conclusion that the deposit should not be 3 months, but 2 months 7 days, or 2 1/2 months, it would not be entitled to interfere in the matter, not being an appellate authority. It cannot substitute its own opinion for the opinion of the Board. It can interfere only when the exercise of power is shown to be arbitrary, and unrelated to the object sought to be achieved. Learned counsel for the Board, indeed, agrees with the proposition that", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-27", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "the object sought to be achieved. Learned counsel for the Board, indeed, agrees with the proposition that the Board has to act reasonably. He gave an illustration rightly in our opinion, where the Board would say that such deposit should be equal to the annual consumption charges. He points out that in such a situation, it would cease to be consumption deposit. Such a condition would be unrelated to the object underlying consumption deposit, viz. securing prompt payment of monthly bills and other amounts due to the Board. It would cease to be consumption deposit and would become contribution, it can no longer be called consumption deposit. Not that we are saying that this Court will not interfere unless such extreme situation arises. What we are emphasizing is that a slight difference of opinion as to the basis of calculation of such deposit would not entitle this court to interfere, or to amend the conditions of supply. Now take an ordinary case. For the whole month the consumer avails energy without paying for it. The bill it served, normally speaking, within about 15 days of the expiry of the month. Another 15 days is given for payment of the bill amount. If it is not paid a 7 days notice has to be given as required by S. 24 of the 1910 Act. All this takes 2 months 7 days. Apart from this, there are the practical difficulties stated in the counter-affidavit. The Board says that it takes some time for it to discover the default and that at any rate, no immediate disconnection is effected mechanically, but that a realistic approach is adopted and the amount is included in the next month's bill. It is pointed that only when the default is repeated, would they resort to disconnection. All this would bring the three months' deposit perfectly within the realm of reasonableness. It cannot be termed as arbitrary or unreasonable, nor can it be said that the said requirement is unrelated to the object for which the said condition was issued.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-28", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "17. Since we are satisfied on the material placed before us that condition 28.1 is reasori-able and cannot be termed as arbitrary, or disproportionately high, we do not think it necessary to analyse the judgment Of this court in K.C. Works v. Secretary, APSEB Vidyut Soudha, , As we have stated above it is not the only judgment upholding the reasonableness of such condition there have been number of previous judgments to the same effect. We refuse to be drawn into an agreement relating to the correctness of the factual basis of the said decision. We are not sitting in judgment over that decision. If we look broadly at the principle of the said decision, it clearly indicates that this court will interfere only where the condition \"is very unreasonable\", but not otherwise. The aforesaid decision is not the one that creates the liability. The liability was created by condition No. 28. The decision, which is one of the several decisions upholding such a condition, merely refuses to quash it. Even if there is any error in the factual basis of the said decision, it is no ground for us to declare condition 28 as bad. We are entitled to examine the reasonableness of the said condition ourselves, and that is precisely what we have done hereinabove. We may in this connection refer to the decision of the Supreme Court in M/s. Jagdamba Paper Industries (P) Ltd. v. H. S. E. Board, , Clause22 of the Standard Contract prescribed by the Haryana State Electricity Board provided for security deposit to be made by the consumer. The security deposit was, however, not calculated with reference to, nor was it based upon the monthly consumption charges. It was calculated on an altogether different basis viz. on the basis of each KW of connected load. After the contract was entered into, tariff was enhanced almost by four-times. Consequently, Board also enhanced the amount of security", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-29", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "entered into, tariff was enhanced almost by four-times. Consequently, Board also enhanced the amount of security deposit. On calculation it was found that the security deposit demanded by the Board was equal to the energy bill of \"two months or little more\". It was upheld by the Court. While doing so, the Supreme Court pointed out \"once we reach the conclusion that the Board has the power to unilaterally revise the conditions of supply, it must follow that the demand of higher additional security for payment of energy bills is unassailable, provided that the power is not exercised arbitrarily or unreasonably.\" Counsel for the petitioners want us to read the last words in the said extract as entitling this court to sit as an appellate authority over the decision of the Board. We are not prepared to agree. The said words cannot be read or understood in the manner suggested by the petitioners. The Supreme Court merely recognised the power of this Court to interdict where the power is exercised unreasonably or arbitrarily, but it does not mean that this court would substitute its own opinion for the opinion of the Board merely because it thinks that instead of three months' deposit it should be 2 months 7 days, or 2 1/2 months, as the case may be. The said observation is not an authority for the proposition that this Court should ignore the nature of the power under Art. 226 and convert itself into an appellate forum over the Board.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-30", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "18. Now coming to the other argument, viz. the reasonableness of the rate of interest provided by condition 28.3 on such deposits (3% per annum), there are two Bench decisions of this Court upholding its reasonableness, i.e., the decision in W. A. No. 346/1973 dated 19-11-1974, and the decision in K.C. Works v. Secretary, APSEB Vidyut Soudha, . They are binding upon us. It is, however, argued that the said decisions are no longer good law in view of the decision of the Supreme Court in M/s. Jagdamba Paper Industries (P.) Ltd. v. H.S.E. Board, . The question is whether it is so. The entire reliance of the petitioners' counsel is upon paragraph 11 of the judgment in Jagdamba Paper Industries, , which paragraph reads as follows: \n \"On the security amount interest at the rate of 4% was initially payable. The same has already been enhanced to 8% per annum. Since the amount is held as security, we indicated to the counsel for the Board that security amount should bear the same interest as admissible on fixed deposits of Scheduled Banks for a term of years and we suggested keeping the present rate of interest in view that it should be enhanced to 10%. Board's counsel has now agreed that steps would be taken to enhance the present rate of interest of 8% to 10% with effect from October 1, 1983\".", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-31", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "The petitioner's counsel say that the said paragraph amounts to a decision of the Supreme Court declaring that payment of any interest below the rate of interest paid by Scheduled Banks on Fixed Deposits is impermissible. On the other hand, the Board's counsel says that the said paragraph 11 cannot be read as a decision. According to him, it was a case where the Court's suggestion was accepted by the Board, and thereupon it was not necessary for the Court to render a decision. This position really confronts us with a delicate and difficult situation. After giving our earnest consideration, we are of the opinion that the said paragraph cannot be read as a decision of the Supreme Court on the basis of which we can declare that the earlier Bench decisions of this Court are no longer binding. In this view of the matter, we reject the contention relating to reasonableness of the rate of interest provided by condition 28.3, inasmuch as it is concluded by earlier Bench decisions of this Court.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-32", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "19. During the course of arguments, one of the counsel suggested that the Board has been following a discriminatory practice, inasmuch as it is insisting only upon two months consumption deposit in cash in the case of power intensive units. Reliance is placed upon Cl. (i) of paragraph 7 of the counter-affidavit, where it is stated \"even though three months' consumption deposit is payable, the Electricity Board has shown some concession to the power intensive units by asking them to pay only two months' consumption deposit in cash and furnish Bank guarantee for the third month, since they are consuming huge blocks of power and since they have to pay large amounts by way of consumption deposit in cash. From March 1982 the Board was insisting and collecting two months' consumption deposit and one month's consumption deposit by way of bank-guarantee from all power intensive units.....\". The submission of the counsel-war' that this distinction is not provided by the terms and conditions notified by the Board, and that such a favour shown to power intensive units is discriminatory as illegal. Though there appears to be some substance in this grievance, it is not possible for us to make any declaration, or give any direction in this behalf without hearing the affected parties. All that we can say is that the terms and conditions have to be obeyed and followed by all concerned, including the Board.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-33", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "20. Mr. S. Parvatha Rao brought to our notice the terms and conditions notified by Tamil Nadu Electricity Board in 1977, according to which the security deposit in the case of H. T. consumers is equivalent to 1 1/2 times the average monthly consumption of the preceding 12 months. He also brought to our notice the terms and conditions notified by the Maharashtra Electricity Board relating to security deposit, which provide for security deposits at varying rates; in the case of consumers whose monthly bill is Rs. 1000/- it is three months; in the case of consumers whose monthly bill is between Rs. 1000/- and Rs. 5000/- it is two months; in the case of consumers whose monthly bill is between Rs. 5000/- and Rs. 25000/- it is one month. In the case of consumers whose monthly bill is above Rs. 25,000/- it is even less than one month. The top-bracket comprises those consumers whose monthly bill is Rs. 2 lakhs. In their case the security deposit is 70% of the estimated monthly bill, subject to a minimum of Rs. 1,60,000/-. We do not see any relevance of the terms and conditions notified by other Electricity Boards on the question of reasonableness of the conditions notified by the A. P. State Electricity Board. Each Electricity Board may have its own policy and procedures, and it would not be proper to just pick out one condition and compare it with the corresponding condition notified by the A. P. Board. The petitioners have not placed before us all the terms and conditions notified by the Tamil Nadu, or Maharashtra Electricity Board and, therefore, it is not possible for us to compare or contrast the conditions relating to security deposit notified by those Boards with condi-\ntion No. 28 notified by the A. P. Board and say that the latter condition is unreasonable.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-34", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "21. For the above reasons, the writ petitions fail and are accordingly dismissed. There shall be no order as to costs. \n22. It is, however, brought to our notice that last year there was a severe power-cut. The power-cut for H. T. consumers was up to 60% or more. Even this year, it is submitted, the power-cut has been reimposed in spite of a good monsoon. It is submitted that this power-cut is playing havoc with the peti-tioners'very subsistence and survival. We can quite understand this problem. It is also submitted that for raising the cash to make the additional one month's deposit, the petitioners will have to approach Banks or other financial institutions, and raise loans at a very high rate of interest which, it is submitted, in the present circumstances casts a severe and unbearable burden upon the petitioners. Having regard to these special facts, and in particular the fact that both for the last year as well as the current year, severe power-cut has been imposed by the Electricity Board for H. T. consumers, we direct that the petitioners shall furnish, consumption deposit, in cash, only in a sum equivalent to two months' average monthly consumption charges (as per the formula prescribed in condition 28) forthwith, if not already furnished. The extra one month's deposit shall be in the form of bank-guarantee to the satisfaction of the Electricity Board. This arrangement shall be for a period of one year. The Bank guarantee shall be furnished effective from 1-5-1989 and ending with 30-4-1990. Bank guarantees shall be furnished within three weeks from today. Before the expiry of the said period i.e. on or before 30-4-1990, the petitioners shall deposit cash in lieu of bank guarantee representing one month's monthly consumption charges so as to comply fully with condition No. 28.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "602af7edf54f-35", "Titles": "Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State ... on 28 April, 1989", "text": "23. Order accordingly.", "source": "https://indiankanoon.org/doc/1222303/"}
+{"id": "871b9d911e5d-0", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "JUDGMENT Jeevan Redddy, J.  \n 1. Three questions are referred to us under s. 256(1) of the I. T. Act by the Income-tax Appellate Tribunal, Hyderabad. They are :  \n \"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in disallowing the assessee's claim for deduction of guest house expenses in terms of section 37(3) of the Income-tax Act, 1961, and rule 6C(3) of the Income-tax Rules, 1962, for the assessment years 1968-69 and 1969-70 ?  \n (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in not allowing the assessee's claim for deduction of the sum of Rs. 6,000 towards entertainment expenditure and Rs. 74,604 towards business promotion expenses for the assessment years 1968-69 and Rs. 1,69,280 for the assessment year 1969-70 under section 37(1) of the Income-tax Act, 1961, holding that the said amounts constituted entertainment expenditure not allowable in terms of section 37(2A) of the Act ?  \n (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was not an industrial company for the assessment year 1969-70 within the meaning of section 2(6) (c) of the Finance Act, 1969, and as such not entitled to the benefit of lower rate of tax ?\"", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-1", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "2. The assessee is a private limited company engaged in the export of tobacco and other commodities with its head office at Hyderabad and branches at Gunture, Cochin, Delhi and Calcutta. For the assessment years 1968-69 and 1969-70, the assessee claimed deduction of Rs. 1,34,578 and Rs. 2,06,227 respectively, on account of business promotion expenses. The amount of Rs. 1,34,578 claimed in 19680\\-69 comprised of three items, viz. :     \n-                                              Rs.\n(1) Entertainment expenditure                24,806\n(2) Guest house maintenance expenditure      24,793\n(3) Business promotion expenses              87,081", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-2", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "3. Promotion expenses claimed for the assessment year 1969-70 represented the expenditure on maintenance of guest house, expenditure on entertainment of foreign and other visitors, expenditure on air tickets and hotel accommodation, etc. The ITO held that the entire expenditure claimed for the assessment year 1968-69 was in the nature of entertainment expenditure and accordingly disallowed it in terms of s. 37 of the Act. He added back the entire amount of Rs. 1,34,578 in the assessment of that year. So far as the assessment year 1969-70 is concerned, the ITO allowed Rs. 36,947 on account of air tickets to foreign guests, subscription paid to Indian Institute of Foreign Trade, conveyance charges and petty cash expenses. The balance amount of Rs. 1,69280 was held to be in the nature of entertainment expenditure and wa accordingly disallowed under s. 37 of the Act.", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-3", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "4. The assessee appealed. So far as the assessment year 1968-69 is concerned, the AAC allowed : (i) on account of business promotion expenses, a sum of Rs. 5,302 out of Rs. 38,302 spent at Gunture branch as normal business expenditure; the balance of Rs. 33,000 was held to be entertainment expenses; (ii) with respect to the Delhi branch, he allowed the entire amount claimed, viz., Rs. 27,451 minus Rs. 5,000 as business expenditure; the treated this sum of Rs. 5,000 as entertainment expenditure; (iii) with respect to Cochin branch, in respect of which Rs. 20,045 was claimed, he allowed only Rs. 2,000 as business expenditure and held the balance to be entertainment expenditure; (iv) so far as Calcutta branch is concerned, where an amount of Rs. 1,283 was claimed, he allowed it in entirety. The AAC affirmed the ITO's order in so far as he disallowed the expenses on maintenance of guest house. So far as the assessee's claim for deduction of \"entertainment expenditure\" of Rs. 24,806 is concerned, the AAC allowed the whole of it except Rs. 6,000 which was treated as entertainment expenditure.  \n 5. For the assessment year 1969-70, the AAC affirmed the orders of the ITO allowing only Rs. 36,944 as business expenditure and disallowing the balance of Rs. 1,69,280, which was treated as entertainment expenditure. Against the orders of the AAC, three appeals were preferred before the Income-tax Appellate Tribunal - two appeals for the two assessment years by the assessee and one by the Department with respect to the assessment year 1969-70. It would be appropriate to notice the findings of the Tribunal :", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-4", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "(1) The expenditure on maintenance of guest houses cannot be allowed for the reason that the assessee has not maintained the register as required by r. 6C(3) of the I. T. Rules.  \n (2) For the assessment year 1968-69, out of a total amount of Rs. 87,081 claimed by the assessee as business promotion expenses, only an amount of Rs. . 12,477 can be allowed. viz., (a) Rs. 2,100 paid towards market survey expenses; (b) Rs. 2,377 spent on conveyance; and (c) Rs. 8,000 on air tickets.  \n The rest was treated as entertainment expenditure.  \n So far as the claim of \"entertainment expenses\" in the sum of Rs. 24,806 for this year was concerned, the Tribunal affirmed the order of the AAC. In other words, the Tribunal held that only Rs. 18,806 was allowable as business expenditure and the balance of Rs. 6,000 had to be disallowed as entertainment expenditure.  \n (3) For the assessment year 1969-70, the Tribunal affirmed the AAC's finding, viz., that only an amount of Rs. 36,947 is allowable as business expenditure and the balance is to be disallowed as entertainment expenditure. (For this year, the assessee mad no distinction between \"entertainment expenditure\" and \"business promotion expenditure\" - a distinction put forward for the previous assessment year 1969).", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-5", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "(4) The Tribunal held that the assessee cannot be held to be an \"industrial company\" for the assessment year 1969-70 for the reason that it cannot be said to be engaged in the \"manufacture... of goods\" within the meaning of the definition of \"industrial company\" in s. 2(6) (c) of the Finance Act, 1969, being Act No. XIV of 1969.   \n On the above findings and reasoning, the Tribunal dismissed both the appeals preferred by the assessee and partly allowed the appeal preferred by the Department. Thereupon, the assessee applied for referring certain questions framed by it for the opinion of this court; but the Tribunal has referred only the questions stated by us at the inception of this judgment. We shall now proceed to consider the same.  \n 6. So far as the first question is concerned, Mr. S. Parvatha Rao concedes that inasmuch as the assessee has not maintained the register as required by r. 6C(3) of the I. T. Rules, 1962, the expenditure claimed on account of maintenance of guest house for both the assessment years has rightly been disallowed by the authorities under the Act including the Tribunal, and that he has no case to urge in this behalf. Accordingly, question No. 1 is answered in the affirmative and in favour of the Department and against the assessee.", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-6", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "7. For the sake of convenience, we shall deal with question No. 2 year wise, i.e., separately for the assessment years 1968-69 and 1969-70. For the assessment year 1968-69, the Tribunal has allowed the amounts spent on market survey expenses, conveyance and air tickets as permissible expenditure under s. 37, Mr. Parvatha Rao's complaint is that the Tribunal has picked out the figures on the above counts from the Delhi branch only and has failed to allow the amounts expended in other branches under the same heads. This complaint seems to be true. The Tribunal ought to have allowed the amounts spent on market survey expenses, conveyance and air tickets in all the five branches of the assessee.", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-7", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "8. The next aspect which is common to both the assessment years is, what is the meaning of the expression \" in the nature of entertainment expenditure\" occurring in sub-s. (2A) of s. 37. It is brought to out notice that there is a divergence of opinion among the High Courts upon the meaning and content of this expression. One view taken by the Full Bench of the Punjab and Haryana High Court in CIT v. Khem Chand Bahadur Chand , is that all expenditure incurred on account of hospitality, whether frugal or lavish, must be understood as falling within the ambit of the expression \"in the nature of entertainment expenditure\". The court emphasised the words \"in the nature of \" in the above expression and held, on that basis, that not only entertainment expenditure stricto sensu but all expenditure in the nature of entertainment expenditure also fell within the said expression. The court observed further that by holding that hospitality which is not lavish may be expended without any limits would virtually frustrate the object of the Legislature in enacting sub-ss. (2) and (2A) of s. 37, viz., curbing excessible business entertainment at the cost of the public exchequer. Beyond the prescribed limits, of course, business expenditure is left to the discretion of the businessmen themselves but, they are told, not at the cost of public exchequer. It was accordingly held that the expenditure incurred on supply of food and drinks to customers of the assessee, for which purpose the assessee was itself running a regular kitchen, constitutes expenditure \"in the nature of entertainment expenditure\" irrespective of the fact whether it is lavish or frugal. A Full Bench of the Kerala High Court in CIT v. Veeriah Reddiar [1977] 106 ITR 610, took a similar view. On the other had, the Gujarat High Court in CIT v. Patel Brothers & Co. Ltd. , held that providing or", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-8", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "the Gujarat High Court in CIT v. Patel Brothers & Co. Ltd. , held that providing or catering to ordinary human needs like food, drink tea or coffee cannot be called entertainment and that such provision falls within the realm of ordinary courtesy. But where the expenditure is generous and lavish, that is to say, on holding banquets or on dinners on a lavish scale, it would fall within the meaning of the said expression. Four broad tests were evolved, namely,", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-9", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "(a) if the provision of food, drinks or any amusement to a client, constituent or customer is on a lavish and extravagant scale, or is of wateful nature, it is entertainment per se.  \n (b) If the provision of food or drinks to a client, constituent or customer is in the nature of bare necessity, or by way of ordinary courtesy, or as an express or implied term of the contract of employment spelled out from long-standing practice or custom of trade or business, it will not amount to entertainment.  \n (c) If the provision of food or drinks to a client, customer or constituent is in a liberals and friendly way, it may amount to entertainment having regard to the place, item and cost of such provision.  \n (d) The provision of amusement to a client, customer or constituent by way of hospitality or otherwise will always be entertainment.", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-10", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "9. Practically, the same view has been taken by the Bombay, Madhya Pradesh and Karnataka High Courts to which we do not think it necessary to refer in any detail, for the reason that the principle of the Gujarat High Court in Patel Brother's case , has been followed and applied by a Division Bench of this court in Addl, CIT v. Maddi Venkataratnam & Co. Ltd. [1979] 119 ITR 514. That was a case where the assessee engaged in export of tobacco maintained two guest houses for the purpose of arranging lodging facilities to the customers coming from foreign countries. Certain amounts were claimed as business expenditure on account of providing food and lodging facilities to foreign customers which was partly disallowed by the Department. On a reference, this court held, applying the four principles evolved by the Gujarat High Court in Patel Brothers' case , that the amount claimed by the assessee was expenditure incurred on the guests. This court observed that it was nobody's case that the guest houses were run on a lavish scale looking particularly to the needs of customers from abroad and held that because the said amount was spent on putting up and providing reasonable facilities for the accommodation of foreign guests and for their food and drink, etc., within reasonable limits, the expenditure so incurred had to be allowed. We must, however, observe that the expenditure incurred by an assessee on the maintenance of a guest hous is covered by sub-s. (3) of s. 37 which does not fall for our consideration. We are concerned only with the meaning of the expression expenses incurred \" in the nature of entertainment expenditure\" occurring in sub-ss. (2) and (2A) only and the decision of this court in Maddi Venkataratnam's case [1979] 119 ITR 514, is relevant only in so far as it approves the principles enunciated by the Gujarat High Court in Patel Brother's case . In view of", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-11", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "approves the principles enunciated by the Gujarat High Court in Patel Brother's case . In view of the fact that a Bench of this court has already taken a view agreeing with the view taken by the Gujarat High Court in Patel Brother's case, we shall proceed on the basis that the tests evolved by the Gujarat High Court are the correct tests, though left to ourselves we may have preferred to adopt the view of the full Bench of the Punjab & Haryana High Court in Khem Chand's case . Now, applying the tests laid down in patel Brothers' case, if the expenditure is incurred on providing food and drink only to a client, constituent or customer, which is in the nature of bare necessity or by way of ordinary courtesy, it would not amount to entertainment expenditure. But if a party is arranged or a banquet is given or some amusement is provided to or in connection with the visit of such a client, constituent or customer, as the case may be, it would fall within the ambit of the said expression. The expenditure claimed by the assessee has to be examined in the light of this legal position.", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-12", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "10. Mr. M. Suryanarayana Murthy, the learned standing counsel for the Department, contends that inasmuch as the assessee has failed to furnish particulars of expenditure and has merely shown lump sums, there was no occasion for any further investigation of this aspect. We are, however, of the opinion that, since the legal position was not clear at the relevant time, the Tribunal had also not approached the problem from the correct legal standpoint, and, that should be done now. We are not saying that the Tribunal should admit any additional evidence at this stage. What we are saying is that the material already on record should be examined from the above legal standpoint and it should be determined which part of the expenditure is permissible expenditure and which part is entertainment expenditure. This observation will apply to amounts claimed both under the head \"Business promotional expenses\" as well as under the head \"Entertainment expenses\".  \n 11. Now, coming to the assessment year 1969-70, the amounts claimed by the assessee on account of business promotional expenses have also to be scrutinized from the standpoint of the above legal principles to determine what part thereof has to be allowed as business expenditure and what part thereof has to be allowed as business expenditure and what part disallowed or dealt with, as the case may be, under s 37 of the Act. Accordingly, so far as the second question is concerned, we refuse to answer it in the terms in which it is couched except to clarify the legal position and leave it to the Tribunal to re-determine the amounts in the light of the above principles.", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-13", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "12. Now, coming to the third question referred, the contention of the assessee is that it is an industrial company as defined in clause (c) of sub-s. (6) of s. 2 of the Finance Act, 1969, being Act No. XIV of 1969. The definition of \"industrial company\" reads as follows :  \n \"(c) 'Industrial company; means a company which is mainly engaged in the business of generation or distribution of electricity or any other from of power or in the construction of ships or in the manufacture or processing of goods or in mining.  \n Explanation. - For the purposes of this clause, a company shall be deemed to be mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining, if the income attributable to any one or more of the aforesaid activities included in its total income of the previous year (as computed before making any deduction under Chapter VI-A of the Income-tax Act) is not less than fifty-one per cent, of such total income.\"", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-14", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "13. The assessee's case before the Tribunal appears to be that it was engaged in the manufacture of goods and that contention has been negatived by the Tribunal. Before us, however, it is contended by Mr. Parvatha Rao that the assessee is an industrial company for the reason that it is mainly engaged in the processing of goods. He submits that this ground too was urged before the Tribunal and that, in any event, it being only an aspect of the question already referred, it is open to him to urge in this referred case. He contends that for the previous assessment year, the Department has, on an examination of the activity undertaken by the assessee, held that it is mainly engaged in the processing of goods and has extended, the benefit of s. 2 of the Finance Act, i.e. lower rate of corporate tax, but, he contends, so far as the assessment year 1969-70 is concerned, the Department has taken a contrary view. He also brings to our notice the order of the Income-tax Appellate Tribunal, Hyderabad Bench \"A\", dated June 9, 1980, in I.T.A. No, 530/Hyd/79 relating to the assessment year 1966-67 where this very assessee has been held to be an \"industrial company\" within the meaning of s. 2(6)(c) of the Finance Act on the ground that it is engaged in processing of tobacco. He contends that since the re-drying process is the same for every year, the assessee must be held to be an industrial company for this assessment year as well.", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-15", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "14. For holding that the assessee is an \"industrial company\" as defined in s, 2(6)(c) of the Finance Act, 1969, it must be held that it is \"mainly engaged in the processing of goods\". This is essentially a question of fact. Mr. M. Suryanarayana Murthy, the learned standing counsel for the department, contends that the main activity of the assessee is export and sale of tobacco and not processing. According to him processing is only incidental to the sale or export, as the case may be, whereas according to Mr. Parvatha Rao, the learned counsel for the assessee, processing is the main activity of the assessee-company. This is a question which can be decided only on the basis of the facts placed before the authorities. We must, however, express our opinion on the construction and application of the Explanation in the said definition because the Tribunal seems to be under the impression that unless the income attributable to the \"specified activity\" (in short for \"for the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining\") is not less than fifty-one per cent, of the total income of the assessee, a company cannot be an industrial company. We do not think so. According to the main limb of the definition, \"industrial company\" is a company which is mainly engaged in a specified activity, while the Explanation says that the company shall be deemed to be mainly engaged in a specified activity if the income attributable to the specified activity is not less than fifty per cent, of its total income computed in accordance with the Explanation. Two views are urged before us. Mr. Suryanarayana Murthy, learned standing counsel for the Department, submits that in every case the test prescribed by the Explanation has to be satisfied and that unless it is so satisfied,", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-16", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "every case the test prescribed by the Explanation has to be satisfied and that unless it is so satisfied, an assessee would not be called an \"industrial company\". The other view urged by Mr. Parvatha Rao is based upon a circular of the Central Board of Direct Taxes which is found printed in para. 507 of Taxman's Direct Taxes Circulars, Vol.I, at p. 851. The circular referred to is Circular No. 103 (F. No. 166/1/73-II (AI) dated 17-2-1973 (see [1973] 88 ITR (St.) 80). It reads :", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-17", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "\"Interpretation of the term 'industrial company' as given in the Explanation to sub-section (7)(d) of section 2 of the Fiance Act, 1966.  \n \"....'industrial company' means a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power in the construction of ships or in the manufacture or processing of goods or in mining. According to the Explanation to clause (d) of sub-section (7) of section 2 of the above Act, a company shall be deemed to be mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining, if the income attributable to any of the aforesaid activities included in its total income for the previous year is not less than fifty-one per cent. of such total income.  \n 2. The question as to the exact meaning of the Explanation to sub-section (7)(d) of section 2 of the Finance Act, 1966, came up for consideration and the Board are advised that an 'industrial company' would mean -  \n (i) a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining even if its income from such activities is less than 51% of its total income; and", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-18", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "(ii) a company which, even though not mainly so engaged, derives in any year, 51% or more of its total income from such activities.\"     \n 15. We are of the opinion that the construction placed by the Central Board of Direct Taxes upon the definition represents the correct view. Adopting the view contended for by the Department would result in anomalous and inequitable result. Take the case of a company which is engaged in generation of electricity. Its investment in that behalf is ten crores of rupees. It also engages itself in trading activities, which is not one of the specified activities. Suppose in a given assessment year, its income from generation of electricity is 'nil' while its income from trading activities is one lakh of rupees. According to the Department's contention, it would not be an industrial company. In other words, according to the Department, it would not be a company mainly engaged in the generation of electricity, which is, ex facie and from any point of view, untrue and untenable. We, are, therefore, of the opinion that the company which is mainly engaged in the specified activity shall be deemed to be an industrial company notwithstanding the fact that its income from such activity is less than fifty-one per cent. of its total income, and that the Explanation applies only where the company is not mainly engaged in the specified activity but still the income attributable to the specified activity is fifty-one per cent. or more of its total income.", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "871b9d911e5d-19", "Titles": "Nava Bharat Enterprises (P) Ltd. vs Commissioner Of Income-Tax, ... on 27 December, 1982", "text": "16. Another aspect which needs to be clarified in view of the controversy raised before us is the meaning of the word \"attributable\", occurring in the Explanation to sub-s. (6) of s. 2 of the Finance Act, 1969. As pointed out by the Allahabad High Court in Addl. CIT v. Abbas Wazir (P.) Ltd. , the words \"attributable to\" are wider in scope than the words \"derived from\". In that case it was held that the assessee who has engaged in the manufacture and sale of carpets and who derived certain amount of income by sale of import licences which were granted to it on the basis of its export performance, was held to be an industrial company, by treating the income derived by sale of import licences as income attributable to its activity of manufacturing of carpets. Beyond saying that we agree with the reasoning of the Allahabad High Court, it is not necessary for us to say whether, in this particular case, the income derived by the assessee from the sale of import licences granted to it on the basis of its export performance, is to be held attributable to its business of processing or not. The question whether the assessee is mainly engaged in the processing for us to express any opinion on this subsidiary question. The Tribunal may go into this whole question again in the light of the legal position adumbrated above.  \n 17. For the above reasons, we decline to answer the third question in terms it is framed and leave the matter to be re-determined by the Tribunal in the light of the principles set out in this judgment.  \n 18. The referred case is answered accordingly.  \n 19. In the circumstances of the case, there will be no order as to costs.", "source": "https://indiankanoon.org/doc/615480/"}
+{"id": "4b83056fa05c-0", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "JUDGMENT G. Bikshapathy, J.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-1", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "1. The appeal is filed against the judgment and decree passed by the learned Senior Civil Judge, Gudivada in OS No.169 of 1984, dated 21-11-1988 dismissing the suit.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-2", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "2. Appellant is the plaintiff. She filed a suit against the defendant, who is her father for recovery of possession of the plaint schedule property consisting of a total extent of Ac. 10-07 cents. It is the case of the plaintiff that she purchased Item-1 ofthe plaint schedule land having an extent of Ac. 3-07 cents from her brother V. Gopala Krishna for a consideration of Rs.24,500/- under a registered sale deed dated 14-9-1971. It is her case that a sum of Rs.24,000/- was paid as on the date of the agreement of sale and possession was given to her pending registration. On the very same day when the Sale Deed was executed i.e., 14-7-1971, the said Gopala Krishna executed a registered gift deed in her favour in respect of the land of 7 acres and she was put in possession of the said land. Ever since the execution of the gift, she has been enjoying the same. The plaintiff also executed a General Power of Attorney in favour of her father the defendant to look after her properties and he has been looking after the property by virtue of the power conferred under the General Power of Attorney. However, the General Power of Attorney was cancelled on 5-2-1981. It is the case of the plaintiff that in June, 1983, the defendant requested her to make her own arrangements to cultivate the land, but he created some obstructions at the time of harvesting the crop. Therefore, the plaintiff initiated proceedings under Section 144. The learned Magistrate passed Orders on 3-12-1983. Thereupon, the plaintiff filed a suit initially for perpetual injunction, but subsequently, it was amended on 17-1-1988 seeking decree for recovery of possession. The defendant filed the written statement. While denying the averments made in the plaintiff and he submitted that himself, his father", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-3", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "written statement. While denying the averments made in the plaintiff and he submitted that himself, his father and his son Gopala Krishna who was minor of 8 years partitioned the joint family property under a registered partition deed on 25-4-1955 so as to avoid the impending legislation of ceiling on agricultural lands and the said partition was only nominal and it was never acted upon and the entire property was continued to be joint. The cultivation was joint and they were also living jointly. It is also stated that Agreement of Sale dated 25-8-1970, which was executed in favour of the plaintiff by his son Gopala Krishna was also nominal and no consideration was passed and it was ante dated. Similarly, the Sale Deed and the gift deed executed on 14-9-1971 were nominal documents and they were executed on the ill advise to avoid the proposed land Legislation. It is also stated that Sale Deed was not supported by consideration and his son Gopala Krishna was in USA from 1961 to 1971 to pursue higher studies. Therefore, no Agreement of Sale could have executed by him. It is also stated that there was no obligation on the part of the Gopala Krishna, to gift away any property as he was not the father of the appellant or Kartha of Hindu Joint Family. It is also stated that it is not even gift made to her at the time of her marriage. Therefore, there was no obligation to execute Gift Deed in her favour. The possession of the suit land was never given to the plaintiff and the defendant has been in possession and enjoyment throughout in his own right and not as a General Power of Attorney. Sale Deed and Gift Deed were never acted upon. It was also alternatively contended that the defendant has perfected the title by adverse possession.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-4", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "3. The trial Court based on the respective contentions framed the following issues: \n 1. Whether the plaintiff is not entitled to possession of the plaint schedule properties? \n 2. Whether the suit is not barred by time? \n 3. Whether the gift deed dated 14-9-1971 in favour of the plaintiff is only a nominal document never intended to be acted upon? \n 4. Whether the partition between the defendant and his son seen from document dated 25-4-1955 was ever given effect to and the family of Dl and his son continued to be joint as an undivided Hindu Joint Family? \n 5. Whether the gift deed dated 14-9-1971 is void for the reasons mentioned in the written statement? \n 6. Whether the sale deed dated 14-9-1971 is only a nominal document and never intended to be acted upon? \n 7. Whether the plaintiff is entitled to the injunction prayed for? \n 8. Whether the son of Dl is a necessary and proper party to the suit? \n 9. To what relief?", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-5", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "9. To what relief?  \n On behalf of the plaintiff, she was examined as PW1 and Exs.A1 to A24 were marked, eight witnesses were examined for the defendants and Exs.Bl to B13 were marked. The trial Court found that the partition between the defendant, his father and his son in 1955 was only nominal and that the family continued to be joint. It also found that the sale deed was not supported by any consideration. Thus, the sale deed and gift deed were nominally executed documents to avoid the proposed land ceiling Legislation. The trial Court further found that the suit schedule lands were always with the possession and enjoyment of the defendant and he has also perfected his title by adverse possession. Therefore, the trial Court dismissed the suit, against which the present appeal has been preferred by the unsuccessful plaintiff. \n 4.      The    issues    that    arise    for consideration in the appeal are as follows:", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-6", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "1.   Whether the partition effected on 25-4-1955 was nominal and sham transaction? \n \n\n 2.   Whether the Agreement of Sale dated: 25-8-1970 and Sale Deed as well as\n\nthe Gift Deed dated 14-9-1971 are sham and nominal and whether in fact they were not acted upon? \n \n\n 3.   Whether the defendant is estopped from raising the plea against the admitted and proved contents of the documents? \n \n\n 4.   Whether the plaintiff was entitled for possession of the suit schedule property?", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-7", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "5. On the basis of the evidence adduced, it is clear that the joint family of the defendant consisted of himself, his aged father and his son Gopala Krishna. The defendant had one son Gopala Krishna and two daughters. The plaintiff was the second daughter of the defendants. It is also admitted that the partition of the joint family properties was effected in 1955 by virtue of the registered deed of partition.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-8", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "6. The plaintiff as PW1 deposed that she purchased one item of suit schedule property under a registered sale deed Ex.A1 and another item was acquired through Gift Deed Ex.A2 from Gopala Krishna. The sale was effected through registered sale deed and the gift was also a registered Gift Deed and the Sale Deed was preceded by the Agreement of Sale Ex.A24. Consequent on the execution of Exs. Al and A2, the lands were being cultivated by her own father defendant. Even prior to execution of Exs.A1 and A2 she has given General Power of Attorney in favour of her father to manage her properties. Of course, the Sale Deed and the Gift Deed were subsequent to the General Power to Attorney. It is her case that she is entitled for the possession of the suit schedule property by virtue of the aforesaid documents. DW1 is the defendant. He deposed that they partitioned the joint family properties in 1955. He also admitted that some properties were also allotted to the daughter at the time of partition. Even though he stated that he is having a document, he did not produce the same. It was the contention of the defendant that the Partition Deed was a nominal document. It was never intended to be acted upon. It is also not in dispute that the suit schedule property fell to the share of Gopala Krishna in the partition and Ex.A1 and Ex. A2 were executed by Gopala Krishna in favour of the plaintiff and the defendant is an Attestor. It is also seen from the evidence that consequent on the execution of the Sale Deed and the Gift Deed, Exs. Al and A2, the name of the plaintiff was mutated in the revenue records. But, it is sought to be contended that the possession was always with the defendant. The evidence was also adduced to the effect that the possession was with the defendant and he raised", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-9", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "The evidence was also adduced to the effect that the possession was with the defendant and he raised sugar-cane crop and he has sold to the sugar factory and he produced certain documents. He also produced the letters issued by the sugar industry to the effect that the plaintiff did not supply any sugar cane. It is also stated by DW that as on the date when Ex.A24 was executed, the Agreement of Sale dated 28-7-1980, Gopala Krishna was not in the station and he was in the America for pursuing the studies.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-10", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "7. It is to be noted that documents namely Partition Deed, though not produced, the Agreement of Sale Ex.A24 and Sale Deed Ex.A1 and Gift Deed Ex.A2 were executed in accordance with law and it is also admitted by defendant that they were validly executed, but he tries to interdict the documents on the ground that these documents executed nominally and they were never intended to be acted upon. It is only to save the impending Land Legislations, such documents were executed. Therefore, these documents cannot confer any right on the plaintiff to claim the property. It is also to be noted in this regard that the defendant himself has stated that some properties were also given to the daughters and that the Partition Deed was in his possession and the same was not produced for the reasons best known to him and the learned Counsel for the appellant urges that necessarily adverse inference has to be drawn as otherwise, the factum of allotment of land to the daughter would be revealed. More over, the statement of the defendant that some lands were allotted to the daughters has to be believed as in 1962 subsequent to the partition, plaintiff executed a General Power of Attorney in favour of her father defendant to manage the properties. Thus, it goes to establish that the plaintiff was having some property in her favour and that property was sold. It is also\" in evidence that she purchased some more properties from third parties and sold the same before purchasing the property under Ex.A1.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-11", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "8. The learned senior Counsel appearing for the appellant would further submit that adverse inference has to be drawn for not producing the Partition Deed and he relies on the decision of the Supreme Court reported in Gopal Krishnaji Ketkar v. Mohamed Haji Latif, . He also submits that the defendant is estopped from contending that Ex.A1, Ex.A2, Ex.A24 are not true and that they are nominal documents, when he himself attested the documents. He relies on the decision of the Madras High Court reported in Jegannatham Pillai v. Kunjithapatham Pillai, AIR 1972 Mad. 380. The evidence is also available to the effect that Gopala Krishna filed returns under the provisions of the Land Reforms Act before the Land Reforms Tribunal and when the suit schedule lands were included in the computation of his holding on the ground that the Sale Deed and Gift Deed cannot be relied, he filed Appeal No.94 of 1978 and appellate Tribunal recorded a finding that Sale Deed and Gift Deed are bona fide and genuine and the lands covered by the said documents are to be deleted from the holdings of Gopala Krishna and allowed the appeal on 3-8-1978. This order became final. By virtue of this Order, the Gopala Krishna, who contended before the appellate Tribunal that the suit schedule lands were either sold or gifted away to the plaintiffs and they have to be deleted from his holdings is accepted. It is also the case of the plaintiff that she was asked to give an affidavit to the effect that these lands were acquired under the documents. Therefore, having obtained the advantage under the documents, by deleting the suit schedule properties from his holdings and thus becoming non-surplus holder, can it be contended that defendant could put up a contrary contention. The learned Counsel would submit that the said decision of the appellant Tribunal is binding as a judicial precedent and relies on", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-12", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "Counsel would submit that the said decision of the appellant Tribunal is binding as a judicial precedent and relies on the decision of the this Court reported in Chanumolu Nirmala v. Chanumolu Indira Devi, 1994 (1) APLJ 394 (DB). The learned Counsel would thus submit that the defendant is estopped from raising the plea after obtaining the benefit out of the document and then again resile and contend that it is a nominal and sham document. He submits that the doctrine of estoppels operates against the defendant and he relies on the decision of the Supreme Court reported in R.N. Gosain v. Yashpal Dhir, .", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-13", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "9. On the other hand, the learned senior Counsel for the defendant Mr. Chandrasekhar Rao submits that the finding recorded by the trial Court that the Partition Deed was only a nominal document and the same cannot be said to be erroneous finding. He submits that such a plea is always available. He further submits that Ex. A-24 and Exs. Al and Ex. A2 though admitted to have been executed, but they are equally nominal and sham documents and they are invalid as they were never acted upon. He contends that during the period when Ex.A28 was executed, Mr. Gopala Krishna was not in the station and the family of defendant is an affluent family having extensive fertile lands and there was no need for Gopala Krishna to sell away the properties for Rs.24,500/-. The air fare from USA to India was about more than Rs.15,000/-. Therefore, it is incomprehensible that Gopala Krishna came to India to receive Rs.24,000/- by spending Rs.15,000/- towards air fare alone and that no prudent person would act in this manner. The he tries to explain the situation contending that there was no necessity to sell the land. With regard to the Gift Deed, he submits that an extent of 7 acres was gifted away under Ex.A2, it was equally nominal; Gopal Krishna was under no obligation to gift away the property. He submits that to decide whether the transaction is nominal or sham, intention of the parties and their relations and whether they are supported by the considerations and subsequent conduct are all relevant including the custody of the documents and these ingredients are relevant. He seeks to rely on the decision reported in Thakur Bhimsingh v. Thakur Kan Singh, , and Shaik Abdul Khader v. Vakantham Nagabhushana Rao, . He also submits that if the transaction is sham and nominal, it is ab", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-14", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "Rao, . He also submits that if the transaction is sham and nominal, it is ab initio, void and no rights would emanate from that document. He relies on the decision reported in Bandaru Subbaraidu v. Alluri Satyanarayana Raju, AIR 1962 AP 25. He also submits that if the transfer is gratuitous, the burden is upon the donor to prove that it is a real transaction and in this case it was not proved at all. He relies on the decision of the Delhi High Court reported in Raj Narain Aggarwal v. Bay Nath Khanna, . With regard to the possession of the documents Sale Deed and Gift Deed the defendant was in possession through out, but only at a later stage in his absence, the documents were taken away. Therefore, even the possession of the documents is established. He further submits that the judgment of the Land Reforms Tribunal is not binding and it does not constitute either estoppel or res judicata. He relies on the decision of the Supreme Court reported in Bhagwan Dayal v. Mst. Reotidevi, . Even the decision on the incidental matters, it would not constitute res judicata in subsequent proceedings. He relies on the decision of the Supreme Court reported in G. Venkatachala Odayar v. Ramchandra Odayar, , and Siddareddy Chenchu Kami Reddy v. Alaganadhaswamy Temple, by its Executive Officer, 1969 (1) An.WR 228. He also submits that doctrine of approbation and reprobation has no applicability. He relies on the decision of the Supreme Court reported in P.R. Deshpande v. Maruti Balaram Haibatti, . He further submits that the Court has to decide the issue with reference to the evidence on record as to whether the transaction are sham, nominal or invalid applying the decisions laid down in", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-15", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "evidence on record as to whether the transaction are sham, nominal or invalid applying the decisions laid down in Thakur Bhim Singh 's case (supra) and also Shaik Abdul Khader's case (supra). Further, even assuming that there is a collusion between the father and the son i.e., defendant and Gopala Krishna and any documents emanated out of collusion are invalid. Therefore, the property should be allowed to lie where it\" was prior to the execution of the documents as per the decision of the Supreme Court reported in Immani Appa Rao v. Gollapalli Ramalingamurthi, .", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-16", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "10. With regard to the drawing of adverse inference, he submits that the decision relied on by the learned Counsel for the appellant does not apply to the facts of the case and when there is enough evidence to show that the case of the appellant was not true and that the drawing of adverse inference for non-production, depends on the facts of each case. He relies on the decision of the Supreme Court reported in Harpal Singh v. Devinder Singh, , Krishna Kumar Sinha v.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-17", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "The Kayastha Pathshala (Prayag) Allahabad, AIR 1966 All. 570, Smt. Indira Nehru Gandhi v. Raj Narain, , State of Karnataka v. Main Patel, , Ramrati Kuer v. Dwarika Prasad Singh, and Gopal Krishnaji Ketkar's case (supra). \n 11. On the basis of available material both on facts and law, let us consider the issues framed. \n 12. With regard to the partition deed of 1955, defendant as DW1 himself has categorically deposed that the Partition Deed was made in 1955, dividing the property between his father, himself and his minor son. It was also stated by him that his father was allotted 13 acres of land and himself and his son got 30 acres each. He also accepted that the Partition Deed was registered Partition Deed and the document was in his possession. It is also in evidence that the Government records were changed and the names were mutated in accordance with the 1955 partition. It is also in evidence that the name of the plaintiff was figuring in Adangals for Faslies 1391 and 1392. Further, it was also accepted that the lands, which fell to the share of the defendant and also to his son were reflected in the declarations filed by them under the agricultural and ceiling Laws before the Tribunal. Defendant also stated that in the Partition Deed, certain lands were allotted to his daughters namely plaintiff and another.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-18", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "13. The learned Standing Counsel for the appellant, however, submits that for not producing the Partition Deed, even though it was in his possession and he was aware of the contents, adverse inference would be drawn as per the decisions referred to by him in the preceding paragraphs. On the other hand, it is seriously disputed by the learned Counsel for the respondent on the ground that no adverse inference can be drawn for not producing the documents inasmuch as, no notice was issued calling upon the defendant to produce the documents. Therefore, the presumption cannot be successfully raised. He takes assistance from the decisions referred to above. As can be seen from the admission of the defendant himself, that there was in fact a registered Partition Deed in 1955 and the lands were allotted to his father, himself and his son and daughters and necessary mutations were also affected in revenue records. Further, the defendant and his son also filed the declarations under the Agricultural Land Ceiling Laws declaring such of the lands, which fell to their respective share by virtue of the Partition Deed of 1955 and that the defendant has filed declaration as a family unit consisting of himself, his wife and no declaration was filed in the capacity of joint family. When the defendant himself accepts the existence of the document, even though it was in his possession, he did not file the same into the Court, the question of drawing adverse inference would not arise. The contents of Partition Deed as revealed by the defendant himself are not disputed by anybody including the defendant. The only defence which he is trying to put up is that it was only a nominal and sham document. This aspect has to be concentrated rather than drawing adverse inference. The adverse inference can be drawn only when the document is in possession of a person and if such document is filed, the contents would go against the interest of the said person. But, in the instant case, he himself accepting that there was a Partition Deed and that too it is a registered Partition", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-19", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "case, he himself accepting that there was a Partition Deed and that too it is a registered Partition Deed. In such a case, when the contents are admitted even though, such document is not produced, it has to be necessarily presumed that existence of such a document. Therefore, the necessity for drawing adverse inference or issuing notice by the plaintiff calling upon the defendant to produce the documents would not arise. But, how far the claim of the defendant that it was only a sham and nominal and it was never intended to be acted upon has to be considered.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-20", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "14. The burden of proving that Partition I Deed was a sham and nominal is on the defendant. He neither filed the document nor led any evidence on this aspect except his sole testimony. In order to ascertain whether transaction is a sham and nominal, whether any consideration was paid at all, the motive behind entering into such transaction, the possession of the property alleged to be transferred was given to the transferee as also custody of the Deed of Transfer and the conduct of the parties are relevant factors. (Ref: M. Pullaiah v. Guravaiah, 1969 (1) An. WR 209. the question of passing of consideration would not arise in respect of Partition Deed. But, what is the conduct of the parties, whether they have acted upon or not are the crucial questions. As already noticed, the division of property took place between the family members and also their names were mutated in the Government accounts and they have also reflected the lands, which was affected under 1955 Partition Deed in the respective declarations. \n 15. It is also not the case that the suit was filed by the beneficiary namely Gopala Krishna or the defendant seeking declaration that the Partition Deed was sham and nominal and it was never acted upon. Except the sole testimony of the defendant, to say that the property was joint and that the family continued to be a joint and the property being a joint family property, there is no evidence at all either documentary or oral. \n 16. It is also to be noted in this regard that the partition was affected in 1955 and the parties under the Deed kept silent, even till today, without seeking proper declaration. That is yet another militating factor against the defendant and supports the view that the deed was genuine and it was acted upon.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-21", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "17. Under these circumstances, it has to be clearly held that the defence tried to be projected by the defendant that the partition was sham and nominal and it was never intended to be acted upon is absolutely untenable, and there is any amount of clinching evidence to establish that the partition was real, genuine and it was acted upon. Thus, the trial Court failed to consider this aspect and rendered an erroneous finding on this issue. \n 18. Accordingly, I set aside the finding of the trial Court and the Partition Deed is sham and nominal hold that the said Deed was genuine and real. \n 19. The next question that calls for consideration is whether the Sale Deed and the Gift Deed are true and valid or whether they are nominal and sham documents? \n 20. With regard to the issue Nos. 2 and 3, it is to be noted that four pivotal documents are required to be considered. \n 21. First document is Agreement of Sale Ex.A24 and the Sale Deed Ex.A1, Gift Deed Ex.A2 and the certified copy of the document in the appeal Ex.A8.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-22", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "22. It is not in dispute that the defendant was the attesting witness to Exs.A1 and A2 and it is also in evidence that he was aware of the Order Ex.A8 of the Land Reforms Appellate Transaction. DW2 is the scribe of Ex. Al and A2, DW3 is scribe of Ex.A24, Dv/4 is the attestor of Ex.A24. DW6 is the attestor of Exs.A1 and A2 DWs.5 and 1 spoke about the raising of crops by the defendant and DW8 alleged to be lessee, who raised the sugar crop on behalf of the defendant. The evidence of defendant is most essential, which would clinch the issue from the roots. The documents Exs.A1 and A2 are admitted by the defendant, but he only fries to impress upon the Court that they are sham and nominal documents and they were never intended to be acted upon and the evidence was let in by the defendant that no consideration was passed when the Agreement of Sale and Sale Deed were executed. It was also stated that when the Gift Deed was executed, the plaintiff was not present and she had not accepted the gift. Further evidence was sought to be pressed into service to the effect that the lands were in possession of the defendant and they were in fact cultivated by the defendant or through tenants. I have already held that the partition of 1955 was genuine and real and it was acted upon in toto. In the preamble of the document Exs.A1 and A2, it is clearly mentioned that the land, which was sold under Ex.A1 and properties were gifted under Ex.A2 were acquired by the Gopala Krishna by virtue of the Partition Deed of 1955 and the defendant is none-else-than the father has complete knowledge of the situation. It is also admitted by the defendant that after execution of the documents, the Adangals were also issued", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-23", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "is also admitted by the defendant that after execution of the documents, the Adangals were also issued in the name of the plaintiff. But, the contention of the defendant is that even though these documents were executed, yet, they were never acted upon and the possession and continued to be with the defendant and the defendant raised the crops and the General Power of Attorney though issued in favour of the defendant was never utilised at any point of time and it is only a paper transaction.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-24", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "23. It cannot be disputed that Exs. Al and A2 were duly executed in accordance with law. In this regard, it is also necessary to refer to Sections 91 and 92 of the Evidence Act.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-25", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "24. Under Section 91 when a term of contract or the grant or any dispossession of the property was reduced to the form of a document of which is required to be reduced in such form, no evidence, shall be given in proof of the term of such dispossession or contract except document itself or the secondary evidence subject to certain conditions. Under Section 92 of Evidence Act, when a document has been properly executed as required under Section 91, no evidence of any oral agreement or statements shall be admitted as between the parties for the purpose of contradicting or varying or subtracting from the terms subject to certain provisions as contained in Section 92. It is open for the party to prove that the invalidity on the ground of fraud, want of due execution, want of capacity in any contradicting party or failure of consideration etc. But, these exceptions are not present in the instant case. The execution of the document is agreed upon and Exs. Al and A2 were required to be registered and in fact it was admitted that they were registered documents. It was not the case of the defendant that it was vitiated by fraud or any other illegality. But, it was sought to be avoided on the ground that it was only a sham and nominal document. Therefore, even considering the matter under Sections 91 and 92, no evidence contradicting the terms is admissible as it will not fall in any of the exceptions contained in proviso. The requirement of Section 91 of Evidence Act have been complied with and they are compulsorily registrable documents under the provisions of the Registration Act and in such situation, the bar operating under Section 92 would stare at the defendant. He can avoid only if the transaction is fraudulent one or it is a misrepresentation. But, this defence is also cannot be said to be available to the defendant inasmuch as the transaction was between Gopala Krishna and the plaintiff. Admittedly, Gopala Krishna executed the", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-26", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "was between Gopala Krishna and the plaintiff. Admittedly, Gopala Krishna executed the documents in favour of the plaintiff and Gopala Krishna never created any obstructions nor challenged the documents stating that they are nominal and sham documents. Further, when the defendant examined various other witnesses, namely scribes and attestors of these, documents, it is not understood why he did not examine his own son Gopala Krishna to the effect that no consideration was passed on and it is only sham and nominal document. The only appropriate person, who could speak to the nominal nature and the other essential features of the document, is the person, who executed the document. More especially, when he is living and he is very much alive to the situation. For failure to examine Gopala Krishna, creates any amount of suspicion on the evidence of the defendant, who is none-else-than the father. It is also to be noted that defendant has the knowledge that Gopala Krishna has filed declaration in respect of the lands which fell to his share under 1955 Partition Deed. In the said declaration, he also included the lands covered by Exs.A1 and A2 when they were included in the holdings of Gopala Krishna. He filed an appeal before the learned Land Reforms appellate Tribunal contending that they are genuine documents and the ownership vested with his sister, the plaintiff herein. It was contention of the learned Government Pleader in the said appeal that they were sham and nominal documents. But, the appellate Tribunal had categorically held that they are genuine documents and therefore, deleted extents covered by Exs.A1 and 2. Thus, Gopala Krishna had obtained complete benefit of all these documents holding that these are valid and genuine documents and definitely this constitutes estoppel on the part of the Gopala Krishna. The principle of approbation and reprobation applies on all its fours to Gopala Krishna. But, the contention is that the same principle would", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-27", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "on all its fours to Gopala Krishna. But, the contention is that the same principle would not apply to the defendant. This contention has to be negatived at the threshold. When the real beneficiary is barred by principles of estoppel and an unconnected person may be father cannot be said that they will not apply to him. It is a far fetched argument to contend that the father is not bound by the principles of estoppel. It is not in dispute that the defendant was in complete knowledge of the situation by filing the appeal, his son had taken the advantage of the documents and that is the reason why he could not pressed into service, the evidence of his own son as obviously his son Gopala Krishna cannot have any defence except to accept the validity of the documents. As already noticed by me, the father cannot be said to have any locus standi to contend that Exs.A1 and A2 are sham and nominal documents. He is neither the transferor nor transferee. At the most, it may be open for the transferor to contend, it is only a sham and nominal. Therefore, a person who is remotely connected with the property has no right to contend that the document to which he is not a party that they are only sham and nominal documents. The Supreme Court in Desh Pande's case (supra), has succinctly traced out this principle. The cases relied on by the learned Counsel for the defendant would not help, inasmuch as they are criminal cases in which the Supreme Court held that mere non-examination of the listed prosecution witnesses would not lead to the inference that the prosecution failed to establish the case. But, in the instant case, the very principle of estoppel when applicable to the party to the document and the said principle cannot be allowed to be raised or invoked by the third party to the advantage of the executant of the document, in collateral proceedings. Admittedly, in the instant case, the suit was filed", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-28", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "the document, in collateral proceedings. Admittedly, in the instant case, the suit was filed by the plaintiff, who is the daughter of the defendant for possession. In that suit, the father cannot be allowed to take defence that the documents are nominal and sham and they were introduced only to avoid land ceiling laws. But, this defence can only be allowed to be taken by the person, who executed the document, but not the third party. Moreover, the father has kept quite for decades without challenging the documents or seeking declaration that they are nominal and sham. When he felt that his interests would adversely affect by such documents and he has also interest in the said property, he could have impeached these documents, but did not take such steps.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-29", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "25. The learned senior Counsel for the Appellant-plaintiff submits that Exs.A1 and A2 are genuine and bona fide documents covering true transactions and therefore, the defendant is estopped from contending that they are sham and nominal documents. Apart from other evidence, he strongly relies on the judgment of the Land Reforms Tribunal in LRA No.94 of 1978 Ex. A8. The learned Counsel would also submit that the judgment Ex. A8 constitutes res judicata and that general principles of res judicata, the defendant is estopped from contending that it is a sham transaction. The defendant cannot be allowed to approbate and reprobate, even though defendant is not a party, the transaction Ex. A8, which was scrutinised by the appropriate Court constituting a judicial precedent and the same is binding on the defendant also. \n 26. In Sahu Madho Das v. Mukand Ram, AIR 1955 SC 481, the Supreme Court observed that where the Privy Council has construed a certain document namely a Will, though the decision is not binding on a person, not a party to the litigation, yet, the decision operates as judicial precedent. Taking clue from this observation, the learned Counsel would submit that Ex. A8 though not directly binding on the defendant, it operates as a judicial precedent and the finding rendered by the Land Reforms Appellate Tribunal is valid against all the persons. \n 27. The Division Bench of the this Court in Chanumolu Nirmala 's case (supra), held that when once the interpretation placed by the Land Reforms Appellate Tribunal was accepted by the High Court in a civil revision, affirming that a document evidenced partition between 'A' and his son, it constitutes judicial precedent in all subsequent proceedings even between the parties, who were not the parties to the original proceedings.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-30", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "28. In Gosain's case (supra), the Supreme Court observed as follows: \n (10) Law does not permit a person to both approbate and reprobate. This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument and that \"a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say it is void for the purpose of securing some other advantage.\" [See: Verschures Creameries Limited v. Hull and Netherlands Steamship Company Limited, Scrutton, L.J). According to Halsbury's Laws of England, 4th Edn., Vol. 16, \"after taking an advantage under an order (for example for the payment of costs) a party may be precluded from saying that it is invalid and asking to set it aside.\" (para 1508).", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-31", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "(11) In Thacker Hariram Motiram v. Balkrishan Chatrabhu Thacker this Court was dealing with a similar situation. The High Court, while deciding the second appeal in an eviction matter gave the appellant (tenant) one year's time subject to his giving an undertaking within a period of three weeks stating that vacant possession would be handed over within the aforesaid time. The appellant gave an undertaking in accordance with the said terms wherein he undertook that he would vacate and give vacant possession of the suit premises by 31-12-1985, i.e., to say after one year if \"by that time no stay order from the Supreme Court is received as I intend to file an appeal in the Supreme Court.\" It was held that in view of the said undertaking the petitioner could not invoke the jurisdiction of this Court under Article 136 of the Constitution and he should abide by the terms of the undertaking, and it was observed: (pp 655-56): \n \"This undertaking filed by the appellant in our opinion is in clear variation with the oral undertaking given to the learned Judge which induced him to give one year's time. We do not wish to encourage this kind of practice for obtaining time from the Court on one plea of filing the undertaking and taking the different stand, in applications under Article 136 of the Constitution.\" \n (12) Similarly in Vidhi Shanker v. Heera Lap and Ramchandra Jai Ram Randive v. Chandanmal Rupchand this Court declined to exercise its discretion under Article 136 of the Constitution in cases where the petitioner had given an undertaking in the High Court and had obtained time to vacate the premises on the basis of such undertaking,", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-32", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "29. Taking clue from the said decision, the learned Counsel for the appellant submits that when once the Gopala Krishna had obtained the advantage of documents Exs.A1 and A2 on the ground that they are valid documents, then it cannot be turned around and said that it was only a nominal and sham document. \n 30. But, however, the learned senior Counsel for the respondent submits that this view was not accepted by the Supreme Court in P.R. Deshpande's case (supra). In that case, the Supreme Court referred the matter to the Larger Bench opining that the principle laid down in Gosain 's case (supra), cannot preclude the Supreme Court from exercising its jurisdiction under. Article 136 of Constitution of India. The reference was as follows: \n (7) Learned Judges who referred this matter have expressed in the reference order that remedy under Article 136 is a constitutional right which cannot be taken away by legislation, much less by invoking the principles of election or estoppel. The following observations made in the reference order are worthy of quotation here:", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-33", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "\"The principle of 'approbate and reprobate' or the law of election which is the basis of the decision in R.N. Gosain case cannot, in our opinion, be applied appropriately to preclude this Court from exercising its jurisdiction under Article 136. The doctrine of election is founded on equitable principle that where a person persuades another one to act in manner to his prejudice and derives any advantage from that then he cannot turn around and claim that he was not liable to perform his part as it was void. It applies where a vendor or a transferor of property tries to take advantage of his own wrong. This principle cannot, in our opinion, be extended to shut out or preclude a person from invoking the constitutional remedy provided to him under Article 136. The law that there is no estoppel against statute is well settled. Here it is a remedy under the Constitution and no law can be framed much less the principle of election which can stand in the way of the appellant from invoking the constitutional jurisdiction of this Court.\"  \n 31. Therefore, the Supreme Court considering that matter, held as follows:", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-34", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "31. Therefore, the Supreme Court considering that matter, held as follows: \n (8) The doctrine of election is based on the rule of estoppel - the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by election is one of the species of estoppel in pais (or equitable estoppel) which is a rule in equity. But that rule, a person may be precluded by his actions or conduct or silence when it is his duty to speak, from asserting a right which he otherwise would have had. (vide Black's Law Dictionary, 5th Edn.) (9) It is now trite that the principle of estoppel has no application when statutory rights and liabilities are involved. It cannot impede right of appeal and particularly the constitutional remedy. The House of Lords has considered the same question in Evans v. Bartlam. The House was dealing with an order of the Court of appeal whereby Scott, LJ., approved the contention of a party to put the matter on the rule of election on the premise that the' defendant knew or must be presumed to know that he had the right to apply to set the judgment aside and by asking for and obtaining time he irrevocably elected to abide by the judgment. Lord Atkin, reversing the above view, has observed thus: \n \"My Lords, 1 do not find myself convinced by these judgments. I find nothing in the facts analogous to cases where a party, having obtained and enjoyed material benefit from a judgment, has been held precluded from attacking it while he still is in enjoyment of the benefit. It cannot bring myself to think that a judgment-debtor, who asks for and receives a stay of execution, approbates the judgment, so as to preclude him thereafter from seeking to set it aside, whether by appeal or otherwise. Nor do I find it possible to apply the doctrine of election.\"", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-35", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "(10) Lord Russell of Killowen while agreeing with the aforesaid observations has stated thus: \n \"My Lords, I confess to a feeling of some bewilderment at the theory that a man (who, so long as it stands, must perforce acknowledge and bow to a judgment of the Court regularly obtained), by seeking and obtaining a temporary suspension of its execution, thereby binds himself never to dispute its validity or its correctness, and never to seek to have it set aside or reversed. If this were right, no defeated litigant could safely ask his adversary for a stay of execution pending an appeal, for the grant of the request would end the right of appeal. The doctrine of election applies only to a man who elects with full knowledge of the facts.\" \n (11) A party to a lis can be asked to give an undertaking to the Court if he requires stay of operation of the judgment. It is done on the supposition that the order would remain unchanged. By directing the party to give such an undertaking, no Court can scuttle or foreclose a statutory remedy of appeal or revision, much less a constitutional remedy. If the order is reversed or modified by the superior Court or even the same Court on a review, the undertaking given by the party will automatically cease to operate. Merely because a party has complied with the directions to give an undertaking as a condition for obtaining stay, he cannot be presumed to communicate to the other party that he is thereby giving up his statutory remedies to challenge the order. No doubt he is bound to comply with his undertaking so long as the order remains alive and operative. However, it is open to such superior Court to consider whether the operation of the order or judgment challenged before it need be stayed or suspended having regard to the fact that the party concerned has given undertaking in the lower Court to abide by the decree or order within the time fixed by that Court.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-36", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "(12) We are, therefore, in agreement with the view of Sahai and Venkatachala, JJ., that the appeal filed under Article 136 of the Constitution by special leave cannot be dismissed as not maintainable on the mere ground that the appellant has given an undertaking to the High Court on being so directed, in order to keep the High Court's order in abeyance for some time.\"  \n 32. Thus, it is clear that undertaking given by the tenant before the High Court would not create a estoppel for filing an appeal under Article 136 of Constitution of India. In effect, the Supreme Court only clarified that there cannot be estoppel from invoking the constitutional remedy under Article 136. But, the principle on fact remains the same as held in Gosain's case (supra). The principle reiterated in para 10 of Gosain's case (supra) remains the same except to the extent that, it would not operate as an estoppel to invoke the jurisdiction of the Supreme Court under Article 136.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-37", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "33. In this regard it is also necessary to refer to the contentions of the learned Counsel for the respondent that it is a sham document and that the requirement of such document has been stipulated in Faydayal Poddar v. Bibi Hazra and also reiterated in Thakur Bhim Singh's case (supra), while referring to the benami transaction in India, the Supreme Court observed in Meenakshi Mills, Madurai v. The Commissioner of Income-tax as follows: \n \"This view is in accord with the following observations made by this Court in Meenakshi Mills Madurai v. CIT., Madras:", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-38", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "In this connection, it is necessary to note that the word 'benami' is used to denote two classes of transactions which differ from each other in their legal character and incidents. In one sense. It signifies a transaction which is real, as for example when A sells properties to B but the sale deed mentioned X as the purchaser. Here die sale itself is genuine, but the real purchaser, is B, X being his benamidar. This is the class of transactions which is usually termed as benami. But the word 'benami' is also occasionally used, perhaps not quite accurately, to refer, to a sham transaction, as for example, when A purports to sell his property to B, without intending that his title should cease or pass to B. The fundamental difference between these two classes of transactions is that whereas in the former there is an operative transfer resulting in the vesting of title in the transferee, in the latter there is none such, the transferor continuing to retain the title notwithstanding the execution of the transfer deed. It is only in the former class of cases that it would be necessary, when a dispute arises as to whether the person named in the deed is the real transferee or B, to enquire into the question as to who paid the consideration for the transfer, X or B. But in the latter class of cases, when the question is whether the transfer is genuine or sham, the point for decision would be, not who paid the consideration but whether any consideration was paid.\"  \n 34. While reiterating the same view, the Supreme Court observed thus:", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-39", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "\"Two kinds of benami transactions are generally recognized in India. Where a person buys a property with his own money but in the name of another person without any intention to benefit such other person, the transaction is called benami. In that case, the transferee holds the property for the benefit of the person who has contributed the purchase money, and he is the real owner. The second case which is loosely termed as a benami transaction is a case where a person who is the owner of the property executes a conveyance in favour of another without the intention of transferring the title to the property thereunder. In this case, the transferor continues to be the real owner. The difference between the two kinds of benami transactions referred to above lies in the fact that whereas in the former case, there is an operative transfer from the transferor to the transferee though the transferee holds the property for the benefit of the person who has contribution the purchase money, in the latter case, there is no operative transfer at all and the title rests with the transferor notwithstanding the execution of the conveyance. One common feature, however, in both these cases is that the real title is diverted from the ostensible title and they are vested in different persons. The question whether a transaction is a benami transaction or not mainly depends upon the intention of the person who has contributed the purchase money in the former case and upon the intention of the person who has executed the conveyance in the latter case. The principle underlying the former case is also statutorily recognized in Section 82 of the Indian Trusts Act, 1882, which provides that where property is transferred to one person for a consideration paid or provided by another person and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit the person paying or providing the consideration.\"", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-40", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "35. In fact, the transaction would not fall within the definite word benami, as mentioned in the first category, but it falls in the second category namely a person who is the owner of the property executes a conveyance in favour of the another, without intention of transferring the title to the property thereunder, whereby the transferor continues to be the real owner. The difference was also carved out between these two transactions stating that in the former case, the transaction was only a operative transfer from the transferor to the transferee, though the transferee holds the property for the benefit of persons, who contributed purchase money, but in the late case, there is no operative transaction at all and the title rests with the transferor, notwithstanding execution of the conveyance. \n 36. Therefore, Mr. Chandrasekhar Rao contends that the possession was in the hands of the defendant and the motive was to avoid land ceiling laws, the custody of the title deeds was with the defendant, the conduct of the parties was never reflected towards the transfer of the property absolutely in favour of the plaintiff. But, a close reading of the aforesaid decisions would heavily lean towards the plaintiff rather than the defendant.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-41", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "37. The conduct right from 1955 coupled with subsequent transactions under Ex,A28, Al, and A2 clearly and clinchingly establishes that the partition had in fact taken place that the Sale Deed was executed by Gopala Krishna and in those documents it was clearly mentioned that the properties fell to his share by virtue of the Partition Deed. That under Ex.A28 Agreement of Sale was concluded in which a sum of Rs. 24,000/- was paid towards the sale consideration and this was never disputed by Gopala Krishna at any point of time. Therefore, it is not open for the defendant to contend that there was no consideration. Further, the possession as already stated was only a permissive possession by virtue of the General Power of Attorney. Therefore, any acts done by the defendant should only be construed as if they are done under the authority of the General Power of Attorney. It is also to be noted that the relation between the plaintiff and the defendant is daughter and father and the lands are situated in Vuyyur, where the father was residing and after marriage, the plaintiff had to shift to her husband's place. Therefore, it is quite natural to presume that the plaintiff could not have supervised the cultivation activities personally and necessarily, she had to depend on the others. But, in the instant case, she had depended on his father by executing a General Power of Attorney in his favour. Therefore, the possession cannot be said to be exclusively with the defendant as the absolute owner. The defendant had stated that the documents are in his possession, he did not produce the same on the ground that the plaintiff had taken those documents in her absence. If that is so, there is no evidence forthcoming as to why he did not issue notice, when such documents were taken away by her. Therefore, the said contention also cannot be accepted. The conduct already stated, of the parties is clear that they had in fact acted upon documents of 1955 Partition", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-42", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "stated, of the parties is clear that they had in fact acted upon documents of 1955 Partition Deed, Ex.A1 and 2.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-43", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "38. This Court is not satisfied with the method and manner in which the defendant who is the father of plaintiff had conducted himself in the proceedings. His ingenuity has to be deprecated. Right from 1955, he accepted that the documents were properly executed, but when the question of implementation comes, he states that they, are sham and nominal documents. He takes the role of his son in respect of Exs.A1 and A2, but when the question of Ex.A8 comes, he turns himself to be a third party. He suppressed the evidence of his son and tried to protect his son to the disadvantage of his daughter. \n 39. Further, he tried to impress upon this Court that he was in possession of the suit schedule property, but this contention cannot be allowed to stand for the reason that he was already holding General Power of Attorney on behalf of his daughter-Plaintiff to manage the affairs of her property and even by that time, she was holding some properties. That itself indicates that the daughter was having some properties to be managed and subsequently, she acquired properties under Exs.A1 and A2. By virtue of those documents, he was allowed to cultivate the same. That would not constitute possession as a owner, but possession by virtue of the General Power of Attorney. The conduct of the father in changing the sides from time to time itself established that he is an unworthy witness and his statement cannot be relied on. \n 40. The trial Court failed to consider these aspects in a proper perspective and proceeded on mere surmises and conjectures. \n 41. Under these circumstances, I have to necessarily hold that even the ingredients for establishing the benami transactions or a nominal transactions are not present in this case. Thus, I hold that Exs.A1 and 2 are valid, legal and genuine documents and they were acted upon.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "4b83056fa05c-44", "Titles": "Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao on 11 March, 2002", "text": "42. With regard to the limitation, the lower Court has held against the plaintiff, but the said finding is equally untenable inasmuch as the General Power of Attorney was cancelled on 5-2-1981 and the said suit was filed on 6-12-1983 i.e., well within the time. Therefore, the said finding is also liable to be rejected. \n 43. For the aforesaid reasons, the judgment of the lower Court is not sustainable in law and on facts. Accordingly, it is set aside and the suit is decreed as prayed for with costs. \n 44. The appeal is accordingly allowed with costs.", "source": "https://indiankanoon.org/doc/1711664/"}
+{"id": "1439caccc96a-0", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "JUDGMENT K. Ramaswamy, J.", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-1", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "1. The appellants are the successors of the landowners. The lands in a total extent of Acs. 50-10 guntas bearing Survey Nos. 352, 353/1, 354/1, 359/1, 355, 357 and 358 situated in Shaikpet village, Urban Taluk, Hyderabad District were initially requisitioned in the year 1963 under the provisions of the Requisitions and Acquisition of Immoveable Property Act, 1952, hereinafter called 'the Act'. Subsequently, a notification acquiring them was published under Section 7 of the Act on March 4, 1970 for public purpose. The competent authority under the Act offered compensation, but the appellants declined to receive it. As a result, they could not reach an agreement with the Government. Therefore, the Government have appointed the Metropolitan Sessions Judge, Metropolitan Area of Hyderabad and Secunderabad to be the Arbitrator under Section 8 of the Act, by notification issued in G. O. Ms. No. 266, Revenue (K) dt. March 14, 1974. He enquired into the claims; the parties have participated and adduced evidence in support of their respective claims. Before the Competent Authority, the claimants laid claim at the rate of Rs. 20/- per square yard for all the lands. The Arbitrator confirmed the order of the competent authority namely Rs. 10/- per square yard to all the lands except to the extent of Ac. 1-02 guntas in Survey No. 352 for which the compensation was determined at Rs. 5/- per square yard to be the just and reasonable compensation. The appellants also claimed solatium at 15% and also interest at 4% on the amount offered by the Competent Authority. The Arbitrator awarded interest at 4% on unpaid compensation fromt eh date of notification till", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-2", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "The Arbitrator awarded interest at 4% on unpaid compensation fromt eh date of notification till the date of payment, but however, disallowed solatium on the ground that the Act does not provide for payment of solatium. In this appeal, the appellants restricted their claim to Rs. 15/- per square yard and also reiterated their claim for solatium at the rate of 15%. Inthis appeal, Sri Mohd. Mokaramuddin, learned counsel for the appellants contends that the appellants had adduced sufficient evidence to establish that the vlaue of the land prevailing in theneighbourhood ranges from Rs. 30/- to Rs. 18/- per square yard and the grant of compensation at Rs. 10/- is very meagre and at least they are entitled to het com at the rate of Rs. 15/- to which they restricted their claim in this appeal. In support thereof, he relied upon the evidence of P. Ws. 1 to 4 and Exs. A-1 to A-7. He also further contended that though there is no specific power under the Act to provide payment of solatium, since it being in the nature of compulsory acquisition and deprivation of the right to possession and enjoyment of the property against the wishes of the owners of the land, they are entitled under law for payment of solatium as part of compensation as enjoined under Section 7 of the Act. In support of this contention, he relied upon the decision of the Division Bench of Punjab and Haryana High Court reported in Gurucharan Singh v. Union of India, and a judgment of their Lordships of the Supreme Court reported in P. C. Goswami v. Collector of Darrang, . On the other hand, Miss. Lakshmi Devi, learned Government Pleader resisted the claim. She contended that the arbitrator had considered the entire evidence and came", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-3", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "Pleader resisted the claim. She contended that the arbitrator had considered the entire evidence and came to the conclusion that the payment of compensation at Rs. 10/- per square yard to the lands except to the lands in Survey No. 352 at Rs. 5/- per square yard to Ac. 1-02 guntas in Survey No. 352 is just and reasonable. It does not warrant interference in appeal since the facts and circumstances have been fairly considered by the arbitrator in fixing the compensation. She also further contended that there is no express provision under the Act for payment of solatium. The solatium is not part of the value of the land. The Parliament is aware of the existence of Section 23 (2) of the Land Acquisition Act of 1894 and the Legislature did not incorporate it as part of this Act for payment of solatium. Therefore, by necessary implication, the Legislature excluded the award op solatium as part of compensation. Therefore, the Arbitrator is justified in refusing to award solatium. However, in support of this contention, there is no decision cited by the learned Government Pleader.", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-4", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "2. Upon these respective contentions, the questions that arises for consideration are : (1) Whether the compensation awarded by the arbitrator is just and reasonable; and (2) Whether the appellants are entitled to solatium at 15% as claimed by them? \n\n3. In order to appreciate these contentions, it is necessary to read the relevant provisions of the Act in this regard. Section 3 of the Act empowers the competent authority, where the authorities are of the opinion that any property needed or likely to be needed for public purpose, being a purpose of the Union should be requisitioned, to follow the procedure contemplated under Section 4 of the Act. Section 7 gives power to acquire the property requisitioned for the public purpose by publishing in the official gazette a notice to that effect. The property, shall, on and from the day on which the notice is so published, vest absolutely in the Central Government free from all encumbrances and the period of requisition of such property shall end. Section 8 provides the principles and method of determining the compensation which reads as follows:\n \"Section 8 (1) : Where any proeperty is requisitioned or acquired under this Act, there shall be paid compensation the amount of which shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say, -\n(a) Where the amount of compensation can be fixed by agreement, it shall be paid in accordance with such agreement;\n(b) Where no such agreement can be reached, the Central Government shall appoint as arbitrator a person who is, or has been, or is qualified for appointment as a Judge of a High Court,\n \n\n(c) and (d) ............... ............ .............", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-5", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "(c) and (d) ............... ............ ............. \n\n(e) the arbitrator shall, after hearing the dispute, make an award determining the amount of compensation which appears to him to be just and specifying the person or persons to whom such compensation shall be paid, and in making the award, he shall have regard to the circumstances of each case and the provision of sub-sections (2) and (3), so far as they are applicable; \n (2) ........                     ...........                    ................\n \n\n(3) The compensation payable for the acquisition of any property undesr Section 7 shallbe \"the price which the requisitioned property would have fetched in open market.\" If it had remained in the same conditions as it was at the time of requisitioning and been sold on the date of acquisition.\" \n \n\n(Since clauses (b) to (d) of sub-section (1) and sub-section (2) are not relevant for the purpose of this case, they are not extracted).\n \n\n4. A reading of these provisions would show that the arbitrator, after hearing the dispute, makes an award determining the amount of compensation which \"appears to him to be just\". It also provides that the arbitrator shall have regard to the circumstances of \"each case\" and the provisions of sub-section (2) and sub-section (3) of S. 8 so far as they are applicable. sub-section (2) (b) directs that the amount of compensation payable for the requisitioning of any property shall be such sum or sums, if any, as may be found necessary to compensate the person interested for all or any of the following matters namely :\n(i) pecuniary loss due to requisitioning;\n(ii) and (iii) .............  ................       ................", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-6", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "(iv) damages (other than normal wear and tear) caused to the property during the period of requisition including the expenses that may have to be incurred for restoring the property to the condition in which it was at the time of requisition.\" \n \n\n(Clauses (ii) & (iii) omitted as being not relevant).", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-7", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "5. A conjoint reading of these principled would postulate that where there is an agreement between the parties, as contemplated under Section 8 (1) (a), the amount of compensation shall be fixed in terms thereof. Thereby it accords primacy to the contract between willing vendor and vendee, obviating the need to deserve into other principles. But in a case where no such agreement was reached, the arbitrator is empowered to determine \"the amount of compensation which appears to him to be just.\" He was also made to have regard to the circumstances in each case, the provisions of sub-sections (2) and (3) as far as they are applicable. Sub-section (3) also specifies the principle namely, it shall be the price which the requisitioned property would have fetched in the open market had it been sold on the date of the acquisition. Thereby, the Act envisages two modes to determine compensation, which appears to him to be just keeping in view the facts and circumstances and the principles set out above. In the latter process, the Legislature directed the arbitrator while determining just compensation to take into account - (1) the price which the property would have fetched in the open market, but for requisition and acquisition; (2) thereby; and (3) damages the owner incurred for restoration to the former position in which the property was existing prior to rquisition except the normal wear and tear or damages suffered. Yet no principles as such like one in Section 23 (1) of the Land Acquisition Act were laid down. Power was delegated under Section 22 (2) (c) of the Act to the Subordinate Legislation to provide the principles to be followed in \"determining the amount of compensation\". Though the Requisitioning and Acquisition of Immoveable Property Rules, 1953, for short \"the Rules\" have been made, no principles were laid down. Therefore the power of the arbitrator in determining", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-8", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "have been made, no principles were laid down. Therefore the power of the arbitrator in determining the compensation \"to be just\" is of wide amplitude and left unguided, yet his exercise of power could, under no circumstances, be either arbitrary or capricious or irrational. The question that emerges thereby is what is the meaning to be ascribed to theepithet \"to be just\" in awarding compensation. In Chamber's 20th Mid Century dictionary, the word \"just\" has been defined variedly thus : righteous, upright, fair, according to justice, due, in accordance with facts, well ground, .......... Exact, normal....... Therefore the compensation to be determined must be fair as to what the owner of the immoveable property would legitimately be entitled to be due in accordance with the facts and justice. The meaning of the word \"compensation\" would also play vital role in this regard and it would be considered a little alter. It is well known that Section 23 (1) of the Land Acquisition Act has provided the principles upon which market value of the land is to be determined, in the case of compulsory acquisition and several components eater into the arena to make up market value of the land. The arbitrator while exercising his power to determine just compensation is entitled to follow the principles laid down in Section 23 (1) of the Land Acquisition Act, 1894. It is well to remember that there is no express embargo to take those principles into account.", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-9", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "6. It is now repeatedly held that in determining the compensation, the Collector shall take into account the potential value of the land, the sale deeds of the lands situated in the vicinity and comparable benefits and advantages possessed of, as they furnish a rough and ready guide. They are not always conclusive Sometimes the rentals prevailing in the neighbourhood capitalising with appropriate multipliers of number of years' interest is also relevant. The price paid within a reasonable time in bona fide transactions of sale of the lands adjacent to the lands acquired possessing similar advantages is one of the safe guide to determine compensation.", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-10", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "7. It must, therefore, be held that the Arbitrator while determining the just compensation, is entitled to take into consideration mutatis mutandis the principles laid down in Section 23 (1) of the laaa, 1894, apart from the factors mentioned in sub-sections (2) and (3) of Section 8 of the Act. In this case, the parties have adduced documentary evidence claiming to reflect the value foh te properties under acquisitions. The appellants have relied upon Exs. A-1 to A-6, the sale deeds of the lands in the neighbourhood and Es. A-7 the judgment in O. P. No. 188/68 dt. 15-9-1970. Now, in this Court, additional evidence is received by us of the judgment in A. A. O. No. 357/75 dt. March 29, 1976 of this Court. The counsel took us through the entire evidence. We are satisfied that the learned Arbitrator adopted correct approach in evaluating the evidence. He made personal inspection of the lands under acquisition as well as the lands covered by the documents relied on by either party. Ex. A-3 is the sale deed dt. Jan. 20, 1969. Therein, 360-42 Sq yards were sold for Rs. 15,000/- and it worked out at Rs. 18/- per square yard. Ex. A-5 is also a certified copy of the sale deed dt. May, 30, 1969. Hterein, 300 Sq. yards were sold for Rs. 9,000/- and it worked out at Rs. 30/- per sq. yard. These lands are situated at Mehdipatnam cross-roads, a well-developed built-up area. These lands are situated at K. Ms. From the lands under acquisition. Therefore they do not provide any", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-11", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "lands are situated at K. Ms. From the lands under acquisition. Therefore they do not provide any basis to rely on. They were rightly not relied on. Similarly, the lands covered by sale deeds in Exs. A-1, A-4, A-2 and A-6 are situated in Krantinagar House Building Society, a fully developed area. The price varied between Rs. 16/- to Rs. 21/- per Sq. yard. They were situated at a distance of 2 to 3 K.Ms. In between this area and to the area under acquisition, no house building activities were seen by the Arbitrator. Moreover all the sale transactions pertain to small pieces of lands. They cannot reflect correct value and reasonable basis when large area is under acquisition, as held by their Lordships of the Supreme Court in Collector of Lakshmipur v. B. C. Dutta, and M. N. Khan v. Collector (L.A.) , Similarly in Ex. A. 7 the judgment in O. P. No. 188/68 dated September 14, 1970, the arbitrator awarded a sum of Rs. 15/- per square yard. Those lands are situated in a fully built-in and developed area near Mehdipatnam cross-roads and that, threfore, they do not provide any reasonable basis for awarding just compensation to the lands under acquisition. In A. A. O. No. 357/75, etc. dt. 29th March 1976, this Court awarded compensation at Rs. 12, Rs. 13/- and Rs. 15/- per square yard. Those lands are nearer to Mehdipatnam which is fully developed area. We have no material to find the relative situation and therefore, it does not also furnish any conclusive guidance to award compensation at those rates. On the other hand, Ex. B-1 a", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-12", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "conclusive guidance to award compensation at those rates. On the other hand, Ex. B-1 a sale-deed dt. May 30, 1974 executed for an extent of Ac. 16-36 guntas for a total sum of Rs. 4,25,000/- was relied upon by the respondents. That was a sale deed executed by the owner in favour of A. G.'s office Co-operative Society. That land is situated just 100 yards to the south of the lands under acquisition. The sale consideration therein roughly worked out at Rs. 5/- per sq. yard. The competent authority as well as the arbitrator considered this sale deed and held that it reflects the correct value prevailing in the neighbourhood and therefore, relied upon that sale deed and offered to pay at the rate of Rs. 10/- per sq. yard to the entire extent except to the small extent referred to earlier. The lands under acquisition were agricultural lands having potential value of being converted into house sites and to be used as such. They required to be developed and 1/3 of the value thereof is to be spent for development of roads, levelling etc. the arbitrator has considered the entire evidence and the circumstances and has given cogent reasons to award compensation at the rate of Rs. 10/- per sq. yard to all the lands except to Ac. 1-02 guntas situated in Survey No. 352 which is situated at the tail end of the acquired land which does not possess all the advantages which other lands had. We have also independently considered those facts and we fully agree with the fixation of the compensation by the arbitrator. We hold, therefore, that the compensation awarded by the arbitrator and offered by the competent authority is just, fair and reasonable and it does not warrant interference in this appeal.", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-13", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "8. The next question that arises for consideration is whether the appellants are entitled to payment of solatium. \n\n9. Undoubtedly the Act does not provide expressly for payment of solatium, but the question is whether the Legislature, by necessary implication, excluded the application of the principle of solatium in determining just compensation for the land to be acquired. The word \"compensation\" has been defined in Black's Law Dictionary at page 354 thus:\n \"Compensation : Indeminifaction; payment of damages, making amends; giving an equivalent or substitute of equal value; that which is necessary to restore an injured party to his former position; consideration or price of a privilege purchased .......... Equivalent given for property taken or for an injury done to another ............. Recompense in value; recompense or reward for some loss, injury, or service, especially when it is given by statute ...... \"Compensation\" is used merely for lack of a word more nearly expressing the thought of the law which permits recovery for an imponderable and intangible thing for which there is no money equivalent. \nEquivalent in money paid to the owner and occupiers of land taken or injuriously affected by the exercise of the power of eminent domain; Compensation is amends for something which was taken without the owner's choice, yet without commission of tort.", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-14", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "Compensation is of three kinds - legal or by operation of law, compensation by exception and by reconvention.\" In Stroud's Judicial Dictionary at page 524 of 4th Edn., Vol. I, it is stated that the compensation must be reasonable and proportionate to the injury caused. The word 'Compensation' is the subject of consideration by their Lordships of the Supreme Court in a catena of decisions. It is enough to state that in State of Gujarat v. Shantilal, their Lordships of the Supreme Court while considering Art. 31 (2) of the Constitution considered the scope and meaning of the concept \"Compensation\" and held that in ordinary parlance the expression \"Compensation\" means a thing given to or to make amends for loss, recompense, remunerating or pay; it need not therefore necessarily be in terms of money. The word \"Solatium\" has been defined in Black's Low Dictionary thus; injury to the feelings.\" In Stroud's Judicial Dictionary 4th Edn., Vol. 5, at page 2570, the word \"Solatium\" has been defined as \"Solatium is an expression apt to describe an award of some amount to cover inconvenience and, in a proper case, distress caused by compulsory taking. It is quite inapt to describe an amount awarded for probable loss to which the claimant is entitled.\" Under the exercise of the power of eminent domain, the State is entitled to the exercise of eminent domain only for the public purpose, but it is hedged with the condition that the lands of a private citizen can be acquired or requisitioned on payment of just compensation. On the concept of just compensation, Bernard Schwartz, in his Commentary on the Constitution of United States, Part II (The Rights of Property, 1964 Edition), at para 322, at page 241 states that:", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-15", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "\"It is basic, in connection with the two fundamental limitations upon the eminent domain power referred to in the last section - i.e., just compensation and public use or purpose - that the question of whether such limitations have been transgressed in a given case is preeminently a judicial question. This is particularly true of the requirement of public use. In well-nigh countless cases, the courts have articulated the rule that the nature of use, whether the public or private, is ultimately a judicial question.\" \nIn para 328 at page 255 the learned author emphasised that the requirement of just compensation is the second essential organic limitation upon the power of eminent domain. He quoted the Justice Story and stated:\n \"The political ethics reflected in the Fifth Amendment rejects confiscation as a measures of justice ........ Indeed, in a free Government, almost all other rights would become utterly worthless ............ when all property is subject to the will or caprice of the legislature, and the rulers.\" \nAt page 256, he states thus:\n \"Where eminent domain is involved, on the other hand, the individual is compelled to surrender to the public something beyond his due share for the benefit of the community. In such a case, the fundamental principles of an equal distribution among the citizenry, of the costs of Government has been breached at the expense of the individual whose property has been taken. The compensation requirement is aimed at restoring the equality which has thus been upset. As the Supreme Court has phrased it, the organic guaranty \"that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burden which, in all fairness and justice, should be borne as a whole.\" \nAt page 257 he stated thus, \"Where for any reason, property has no market, resort must be had to other data to ascertain its value.\"", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-16", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "10. In a decision reported in Welungaloo Pvt. Ltd. v. Commonwealth, (1948) 75 CLR 495 at page 571 Dixon, J. (as he then was) said that the prupose of compensation under eminent domain is:\n \"To place in the hands of the owner expropriated the full money equivalent of the thing of which he has been deprived. Compensation, prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss, or, in other words, the pecuniary value to the owner contained in the asset it cannot be less than the money value that may attach to his property because it has been compulsorily acquired byt eh Governmental authority for its purposes........... Equally you exclude any diminution of the value arising from the same cause. The hypothesis upon which the inquiry into the value must proceed is that the owner had not been deprived by the exercise of compulsory powers of his ownership and of his consequent rights of disposition existing under the general law at the time of acquisition.\" \nTheir Lordships of the Supreme Court in a decision reported in Union of India v. Ram Mehar, while approving the view of the Law Commission for retention of solatium as integral part of compensation for lands acquired, held:\n \".........As pointed out by Fitzgerald the community has no right to enrich itself by deliberately taking away the property of any of its members in such circumstances without providing adequate compensation for it. This principle has been in force in India ever since the Act of 1870. The Select Committee which examined the Bill of 1893 did not think it necessary to omit the provisions but on the other hand transferred it to S. 23.\"", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-17", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "11. A review of the above position of law would clearly indicate that when the property of a private citizen is acquired or requisitioned in exercise of the power of eminent domain, then the owner thereof shall amend or recompense the loss which he has suffered by reason of compulsory acquisition of his property. It is necessary to note at this stage that the Parliament is aware of the distinction between the words \"Market value of the land\" and \"Compensation\". In the Act,t he Legislature has chosen to use the word \"Compensation\" instead of Market value of the land\". No doubt, a statutory duty has been cast under Section 23 (2) of the Land Acquisition Act 1894 to award solatium at the rate of 15% to the market value, but in the Act, there is no express provision to award solatium. But the question is whether solatium is expressly or by necessary implication excluded for being paid to the claimants or owners of the lands when the immoveable property is sought to be acquired in exercise of the power under the Act. Before embarking upon that enquiry, it is necessary to state that it is well settled that payment of solatium is part of compensation under the provisions of the Land Acquisition Act as held by their Lordships of the Supreme Court in Union of India v. Ram Mehar, (supra). There, their Lordships pointed out the distinction between 'compensation' and the 'market value' and held that these two are distinct concepts. Their Lordships have held that solatium is part of compensation. A Full Bench of this Court in K. A. Swamy v. Land Acquisition Officer, laid down the same principle thus:", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-18", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "\"An examination of the provisions of the Acquisition Act unfettered by any authority would incline us to the view that while solatium under Section 23 (2) may form part of compensation to be awarded by the Collector under Sec. 11, it does not form part of the word award which the Court has to pass under Section 26 though it is required under Section 23 (2) to add 15% on the amount of market value awarded by it, which will be in the nature of a direction to the Collector to pay, the amount just in the same way as he is directed to pay interest.\" \nThis law was laid down by Chief Justice Jaganmohan Reddy (as he then was) speaking on behalf of the Full Bench while considering the question whether the Court-fee has to be paid on the solatium granted by the Court. The same is the view taken by a Division Bench of this Court in B. Ravinder v. Special Deputy Collector, Land Acquisition (Industries), . That is also the view fot he Gujarat High Court in Maganbhai v. Collector, District Mehsana, , of the Karnataka High Court in G. Venkatesh v. Spl. L. A. Officer, Bangalore, AIR 1975 Kant 95 and of Punjab High Court in State v. Kailashwati, .", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-19", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "12. Keeping this principle in view, the next question to be considered is whether the Legislature has excluded the application of payment of solatium under the Act. There is no direct decision of the Supreme Court or of this Court on this point. It is also recognised rule for the construction of statutes that, unless the words of statute clearly so demand, a statute is not to be construed so as to take away the property of a subject without compensation (Vide Attorney-General v. De Keyser's Royal Hotel Ltd., 1920 Ac 508.) the power to take compulsorily raised by implication a right to payment. (Vide Central Control Board (Liquor Traffic) v. Cannon Brewery Co. Ltd., 1919 AC 744.) in a decision repored in Inglewood Pulp Co. v. New Brunswick Electric Etc., AIR 1928 PC 287 at 290 the question that arose was that in a case where a statute did not provide specifically for payment of interest, then the contention was that by necessary implication, the statute excludes the payment of interest. While considering that question, their Lordships of the Privy Council held thus:\n \"It is true that the expropiration under the Act in question is not effected for private gain, but for the good of the public at large, but for all this, the owner is deprived of his property in this case as much as in th eother and the rule has long been accepted in the interpretation of statutes that they are not to be held to deprive individuals of property without compensation unless the intention to do so is made quite clear. The statute in the present case contains nothing which indicates such an intention. The right to receive interest takes the place of the right to retain possession and is within rule.\"", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-20", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "Their Lordshps of the Supreme Court in Satinder Singh v. Umrao Singh, considered the provisions of Requisitioning and Acquisition Act where the statue omitted to pay interest on the land to be acquired. The same contention as herein was raised before the Supreme Court. While considering that question, Gajendragakar, J. (as he then was) speaking on behalf of the Court has held in paragraph 17 at page 915 thus:\n \"Stated broadly the act of taking possession of immoveable property generally implies an agreement to pay interest on the value of the property and it is on this principle that a claim for interest is made against the State.\" \nAt page 916 in the same paragraph, it was held thus:\n \"The question which we have to consider is whether the application of this rule is intended to be excluded by the Act of 1948, and as we have already observed, the mere fact that Section 5 (3) of the Act makes Section 23 (1) OF THE Land Acquisition Act of 1894 applicable we cannot reasonably infer that the Act intends to exclude the application of this general rule in the matter of the payment of interest.\" \nThe problem could be angulated from yet another perspective. The owner is disinclined to part with possession of his land but for compulsory acquisition for a public purpose. Erle, C. J. in Ricket v. Metropolitan Railway Co., (1865) 34 LJQB 257 at 261 held that:\n \"The company claiming to take lands by compulsory powers, expels the owner from his property and is bound to compensate him for all the loss incurred for the expulsion , and the principle of compensation then is the same as in trespass for expulstion .........\" \nCripps in his 'Compensation' 5th Ed. At page 106 states that:", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-21", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "\"The loss to an owner whose lands are required or have been taken omitting all questions of inquiry to adjoining lands, includes not only the actual value of such lands but all damages directly consequent on the taking thereof under the statutory powers.\" \nThese might include cost of removal (Section 8 (2) (b) (iv) loss of profits (S. 8 (2) (b) (i) and other consequential loss (unwillingness to part with). The determination of compensation is based on the principle of price which a willing seller might be expected to realise in an open sale which includes the value for his inclination to sell, and when solatium is being paid under the Land Acquisition Act as a solace at specified rate to make amend for his disinclination to part with possession of the land, there appears to be that the Legislature intended not to exclude solatium as part of compensation. Now their Lordships of ht e Supreme Court have held in State of Kerala v. T. M. Peter, and P. C. Goswami v. Collector of Darrang. (supra) that denial of solatium as part of just compensation is obnoxious to equality clause enshrined under Article 14 of the Constitution of India.", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-22", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "13. In Gurcharan Singh v. Union of India, (supra) the Punjab & Haryana High Court has also taken the same view though for different reasons. \n\n14. THE concept of compensation when exposed to the radiation of the above reasoning thus broached, the conclusions that oculd be reached are that; Solatium is some amount or damages allowed for injury or distress to the feelings of the owner to cover the disinclination caused to the owner due to displacement from his lands. The solatium is part of compensation and the compensation is intended to amend or recompensate the loss occasioned to the owner or injuri9es effected on the owner by exercise of eminent domain. We therefore, hold that the word 'compensation' under Section 8 (1) (e) encompasses within its ambit the payment of solatium under the given facts and circumstances of a case. The Arbitrator while awarding just compensation in considering the facts and circumstances is also competent to award solatium at the rate of 15%. The Act by necessary implication did not exclude the application of this principle of payment of solatium. Accordingly, we direct the Competent Authority on the facts of this case to pay solatium on the total amount of compensation at 15% awarded to the appellants as part of the compensation determing by the authorities below and the appellants are also entitled for payment of interest at 4% per annum on solatium as well. Accordingly, the appeal is partly allowed, but in the circumstances, without costs. \n\n15. The learned counsel for the appellants sought for leave to appeal to the Supreme Court. Questions of law are in favour of the appellants and on facts, we agreed with the learned Arbitrator. Thus, in our view, there is no substantial question of law of public importance fit to be decided by the Supreme Court. Hence the leave sought for is rejected.", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "1439caccc96a-23", "Titles": "Mawahedduddin And Ors. vs The Collector, Hyderabad on 23 December, 1983", "text": "16. Appeal partly allowed.", "source": "https://indiankanoon.org/doc/1367219/"}
+{"id": "ed3b2bcc1e02-0", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "JUDGMENT B.S.A. Swamy, J.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-1", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "1. To my mind if the parties adopted a give and take policy, the issue would have been amicably settled by the well wishers of both the parties. As the second respondent is adamant and not heeding the advice of well-wishers and the judicial forums as well, the parties are in the courts for nearly a decade wasting the precious time of the court. Even in this court the respondents did not heed the advice given to them and invited judgment on the merits. \n 2. To put forth their case both the parties engaged counsel from Madras and arguments in these appeals were heard for nearly three weeks. \n 3. Before considering the merits of the case, I feel it appropriate to refer to certain observations made by Honourable Justice Chinnappa Reddy exposing how corporate giants rush to courts and how they are converting the courtrooms as their battle ground and fight under the attractive banners of fair play and public interest. While considering the conduct of the board of directors in Life Insurance Corporation of India v. Escorts Ltd, . His Lordship observed as follows (page 560 of Comp Cas):", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-2", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"In the case before us, as if to befit the might of the financial giants involved, innumerable documents were tiled in the High Court, a truly mountainous record was built up running to several thousand pages and more have been added in this court. In deed, and there was no way out, we also had the advantage of listening to learned and long drawn-out, intelligent and often ingenious arguments, advanced and dutifully heard by us. In the name of justice, we paid due homage to the causes of the high and mighty by devoting precious time to them, reduced, as we were, at times to the position of helpless spectators. Such is the nature of our judicial process that we do this with the knowledge that more worthy causes of lesser men who have been long waiting in the queue have been blocked thereby and the queue has consequently lengthened.\" \n 4. I am in a worse position than their Lordships of the Supreme Court in that case, in hearing marathon arguments addressed by counsel for the respondents on technicalities to injunct me from going into the merits of the case knowing fully well that he is having a bad case on the merits, over three weeks referring to voluminous record and the case law cited before me and the number of days for which I was forced to burn the midnight oil in assimilating the arguments and rendering the judgment running into several pages. Even then I cannot say that I have referred to each and every document or pages referred to by both the parties. I feel that I have considered the documents and case law to the extent of relevancy on the issues that have cropped up for consideration.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-3", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "5. Both the appeals were filed against the order passed by the Company Law Board (for short \"the Board\") in C. P. No. 15 of 1994 filed under Sections 397 and 398 of the Companies Act, 1956 (for short \"the Act\") alleging oppression of the minority shareholders and mismanagement of the affairs of the company, to the extent the order went against their interests. Hence both the appeals can be disposed of by a common order. \n 6. For the sake of convenience the parties are referred to in this order as they are arrayed in the company petition. \n 7. Company Appeal No. 4 of 1999 is filed by the respondents in C. F. No. 15 of 1994, i.e., Sri Ramdas Motor Transport Ltd. (respondent No. 1), its managing director Mr. K.V.R. Choudary (second respondent), its joint managing director Mr. Saradhi (third respondent), son of the second respondent and the company secretary Mr. S. Rajeasekhara Rao (fourth respondent), aggrieved by the order of the Board directing the company or the party respondents to purchase the shares held by the petitioners having held that the petitioners have not been able to establish any of the allegations meriting grant of any of the prayers. \n 8. Company Appeal No. 5 of 1999 is filed by petitioners Nos. 4 to 9 in C. P. No. 15 of 1994 in dismissing their application by holding that some of the allegations have been made on mere suspicion and others have not been established.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-4", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "9. Having opined that the disposal of the company petition by the Board is not in accordance with the provisions of the Act and unknown to common parlance of law, I repeatedly suggested that it is an eminently fit case for compromise and to settle the disputes amicably keeping the proximity of the relationship between the parties. Mr. K.V.R. Choudary (hereinafter referred to as \"second respondent\"), managing director of the company, happened to be the father of Chundru Manorama (petitioner No. 7), grandfather of Chundru Padma Chaitanya (petitioner No. 8) and Nandamuri Satya Lavanya (petitioner No. 6) and father-in-law of Chundru Sri Hari Rao (hereinafter referred to as \"ninth petitioner\"). When counsel for the second respondent conveyed the anguish of his client against his son-in-law (i.e.) the ninth petitioner in dragging the affairs of the company to the streets, may be because of the precarious situation in which he is placed, his son-in-law the ninth petitioner has gone to the extent of submitting before the court that he is prepared to give a written apology if the company purchases the shares held by the petitioners as directed by the Board and pay the amounts that are due to them and if they are relieved of their agony to which they are subjected for over ten years. But the offer was rejected outright and the father-in-law invited a judgment on the merits in this case. Hence I am left with no option except to proceed with the case and deliver judgment on the merits.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-5", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "10. Before adverting to the various contentions raised by the parties, it is useful to refer to the factual background of the case. Sri Ramdas Motor Transport Ltd. was incorporated as a private limited company on December 1, 1944, under the provisions of the Act mainly to carry on business as carriers of passengers, freight and mail by using motor vehicles etc., and in the course of time it not only acquired name and fame as a reputed parcel lorry service in the State of Andhra Pradesh but also diversified its activities to other fields. As on today it is having six subsidiary companies under its management and its annual turnover exceeds rupees 100 crores. It became a deemed public company in terms of the provisions of Section 43A(1A) of the Act. While 51 per cent. of the shares were held by the second respondent, his family members and his supporters, 11 per cent. of the shares were held by the ninth petitioner, and his family members. The ninth petitioner held the shares jointly with Annapurna Devi who died in the year 1984. The non-aligned members held the remaining 40 per cent. shares. It is also in the evidence of the ninth petitioner that the second respondent having joined as an employee on Rs. 250 per month rose to the level of managing director of the company very soon and as on today himself and his family members are holding majority shares in the company. From the above it is seen that majority of shares are held by the second respondent and his associates including the ninth petitioner till the disputes have arisen between them. As per Article 11 of the articles of association that were in force as on the date of dispute, the number of directors of the company shall not be less than three and shall not exceed nine. At the time of dispute, the company was having seven directors out of whom four directors are from the second respondent's family. From this it is seen that the", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-6", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "out of whom four directors are from the second respondent's family. From this it is seen that the second respondents family is in full control of the affairs of the company. While the second respondent continued to be the managing director of the main company, the ninth petitioner was heading some of the subsidiary companies or firms (1) chairman of Bhavani Castings, (2) managing partner of Padmamalaya Finance, (3) director of K.V.R. Forgings having resigned the post of managing director on his election as Member of Parliament in 1984, (4) managing director of Vijaya Engineering Works and (5) director in the main company. From the above it is seen that the ninth petitioner was looking after the affairs of most of the subsidiary companies and enjoying the powers on par with his father-in-law, i.e., the second respondent in the first respondent-company. In and around 1993, some disputes seemed to have arisen between these two individuals. While it is the case of the ninth petitioner that disputes have arisen when he raised the issue of sale of lorries and closure of parcel offices in the board meeting held on March 3, 1993, the case of the respondents is that disputes have arisen between them as he refused to finance his political activity, I feel that both the versions may be far from the truth. The efforts made by the well wishers of the family did not yield fruitful results. On the other hand, misunderstanding developed between the father-in-law and the son-in-law, i.e., the second respondent and the ninth petitioner, reached a stage of no return. While the majority of the shareholders aligned with the second respondent, a few shareholders who figured as petitioners Nos. 1 to 5 in C. P. No. 15 of 1994 aligned with the ninth petitioner and his family members (petitioners Nos. 6 to 9). As and when some information with regard to the management of the affairs", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-7", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "6 to 9). As and when some information with regard to the management of the affairs of the company was sought by the minority shareholders, the company secretary refused to furnish the same on the ground that he is not under an obligation to furnish any information. Ultimately the ninth petitioner was not only removed from the positions held by him in the subsidiary companies but also as director of the main company in its general body meeting held on January 21, 1994. In those circumstances the minority shareholders filed C.P. No. 7 of 1994 on February 24, 1994, on the file of the Board under Sections 397, 398, 403 and 406 read with Schedule 11 and Sections 539 to 544 and other applicable provisions of the Act for relief against oppression and mismanagement of the affairs of the first respondent-company and the ninth petitioner did not join as petitioner in this petition. The respondents seemed to have raised an objection to the maintainability of the petition on the ground that the petition was filed without obtaining the consent of the petitioners in writing. In those circumstances, the Board gave liberty to withdraw that petition and file a fresh petition and accordingly nine shareholders of the company filed C. P. No. 15 of 1994 on April 11, 1994. The main allegation of oppression and mismanagement of the affairs of the company relates to closure of parcel offices, sale of lorries and vehicles, removal of the ninth petitioner as director of the company, diversion of funds of the company to the other companies managed by the former employees, for personal gains and fabrication of the board's minutes by respondents Nos. 2 and 3. The petitioners in the said company petition have sought the relief of supersession of the board and a declaration that respondents Nos. 2 and 3 are not fit to hold the post of directors of the company. Some other company appeals were also filed by the petitioners during the pendency of", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-8", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "of the company. Some other company appeals were also filed by the petitioners during the pendency of the company petition and they will be referred to later in the judgment.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-9", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "11. During the pendency of the petition, the petitioners filed C. A. No. 134 of 1995 seeking permission of the Board to lead evidence by way of affidavit as per Order 19 of the Code of Civil Procedure. This application was contested by counsel for the respondent stating that Order 19 is applicable only when a specific fact has to be established but cannot be relied on for all purposes and examination-in-chief is a must followed by cross-examination in view of the allegations of misconduct and fraud. Accepting the contention of the respondents counsel the petition was dismissed by observing that if counsel for the petitioner desires to lead any evidence by the petitioners it may be done through personal appearance of such petitioners. \n 12. After some time, the petitioners filed C. A. No. 65 of 1996 on January 12, 1996, seeking appointment of an administrator for a period of five years and for production of minutes books, account books along with the vouchers for the period 1992-1995. In the said application, the petitioners have given some more instances relating to oppression of minority shareholders and mismanagement of the affairs of the company. Subsequently with the permission of the Board the petitioners filed another application, i.e., C. A. No. 115 of 1997 on March 13, 1997, seeking permission to amend C. A. No. 65 of 1996 by adding paragraphs 18A, 18B and 18C. The respondents contested these applications by contending that the petitioners cannot travel beyond the allegations made in the main petition and the subsequent events cannot be taken into consideration for considering the relief sought for in the main petition. \n 13. Having heard the arguments on both sides, the Board passed the following order on December 18, 1997 :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-10", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"A Section 397/398 petition has to stand on its own on the basis of allegations contained in the petition. Subsequent events brought on record alone in case the main petition fails on the merits cannot entitle a person to any relief. In case the allegations in the main petition are proved then the subsequent events may be taken into consideration by the Board in moulding suitable relief.\" \n 14. When the matter came up for hearing on September 5, 1997, the Board suggested to the parties to settle the disputes amicably and the respondents should inform the Board by September 21, 1997, whether they are agreeable for the appointment of an independent valuer to value the shares in respect of not only the two companies that are before the Board but also the other four companies in which the ninth petitioner is a shareholder. On September 29, 1997, learned counsel appearing for the second respondent sought for more time on the ground that other members of the board have to be consulted and the case was adjourned to November 27, 1997. But the respondents did not agree for the proposal of the Board. Arguments on both the sides in C. A. No. 65 of 1996 were completed before the Board at its meeting held on November 28, 1997, and the Board passed the following docket order : \n \"Arguments on the application concluded. The petition will be heard on March 30 and 31, and April 15, 1998, and also August 27, 28 and 29, 1998 at 10.30 a.m. each day.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-11", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "15. By an order dated December 18, 1997, in C. A. No. 65 of 1996, the Board rejected the prayer for appointment of an administrator for the reasons stated therein. In the said order having recorded a finding that the discrepancies in the stock as pointed out by learned counsel for the petitioner could not be taken as an act of such grave misconduct that would warrant appointment of an administrator at the interim stage, when the petition is still to be heard and the Board directed the company to furnish a statement of reconciliation on the discrepancies in stocks pointed out by the petitioners during the next hearing, as undertaken by learned counsel for the company, to enable them to take a view on this allegation. The ninth petitioner carried the matter in appeal to this court by filing C. A. No. 4 of 1998 and the same was dismissed by a Division Bench of this court in its order dated August 26, 1998, in, C. Sri Hart Rao v. Sri Ramdas Motor Transport ltd. [1999] 97 Comp Cas 685. The court held as follows (page 687) : \n \"(1) None of the issues raised in the appeal can be said to be a question of law arising out of the order of the Company Law Board and as such the question of entertaining the appeal under Section 10F of the Act does not arise ; (2) the order under challenge is an interlocutory on for purpose of appointment of administrator at the interim stage and the Company Law Board in the contextual facts has exercised discretion and the user of discretion cannot by any stretch be termed to be so perverse in any event so as to warrant interference or intervention of the appellate court and (3) directed the Board to dispose of the matter with utmost expedition.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-12", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "16. S. L. P. No. 16705 of 1998 filed against the said order was also dismissed on November 3, 1998. \n 17. Since the proceedings of the Board were not stayed during the pendency of the appeal, the following docket order was passed by the Board on April 1, 1998: \n \"Witnesses will be examined on April 18, 1998, at 9.30 a. m. at Chennai. Petition will be heard on the merits as already fixed on August 27, 28 and 29, 1998, at New Delhi, at 10.30 a. m. each day.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-13", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "18. At this stage petitioner No. 9 filed an affidavit dated May 13, 1998, before the Board stating that though the Board handed over the summons to him on March 31, 1998, to be served on the list witnesses submitted by him for giving evidence on April 18, 1998, in the summons the date was shown as March 18, 1998, and the witnesses refused to take the summons apprehending that they may be taken to task for not appearing before the Board on the date mentioned in the summons for their appearance, i.e., March 18, 1998. In the meantime respondents Nos. 2 and 3 started creating a fear psychosis among the witnesses by implicating them in false criminal cases and also tried to assault him when he attended the annual general body meeting of the first respondent-company held on September 25, 1996. He brought to the notice of the Board not only various violent acts that were committed by the respondents on him but also filed documentary evidence to show that himself and the list witnesses were implicated in criminal cases. He also filed the orders passed by the High Court in W. P. No. 27324 of 1997 filed by him complaining on the inaction on the part of the police in not taking action on his complaint and the bail orders granted by this court to one of the list witness. In the last paragraph he stated as follows : \n \"In this background our witnesses have been terrorized and persuaded in all possible ways by the managing director and the joint director of the first respondent and their followers. The said witnesses are totally refusing to attend and give evidence before this Honourable Bench on June 9, 1998, at Chennai for fear of retaliation on the part of respondents Nos. 1 and 2. I am placing all these facts before this Honourable Bench so that it can appreciate the conduct of the respondents.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-14", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "19. It is also seen from record that the first petitioner the late Karedla Suryanarayana filed an affidavit dated October 13, 1995, during his lifetime how respondent No. 2 and his men tried to silence him at the annual general body meeting held on September 27, 1995. \n 20. Learned counsel for the respondent did not bring to my notice that the allegations made in this affidavit were denied by the respondents by filing rebuttal evidence.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-15", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "21. Thereafter when the matter was taken up for hearing on September 8, 1998, it was reported that the first petitioner died and his legal representatives were to be brought oft record. But they have not chosen to come on record. On the next date of hearing, i.e., December 2, 1998, the Board straightaway started hearing the arguments on the petition without completing the evidence of the ninth petitioner and without recording any evidence on the respondents side and without verifying the xerox copies of the documents filed by the respondents with the original records more so in the light of the allegations made by the petitioners that the second and third respondents fabricated the minutes of the board meetings etc., and completed the arguments by March 22, 1999. The Board by an order dated June 15, 1999, while dismissing the petition by holding that the petitioners have not been able to establish any of the allegations meriting the grant of any of the prayers in the petition, gave a direction under Section 402 of the Act to the first respondent-company to purchase the shares held by the petitioners by itself or the private individuals as may be decided by the respondents. Though I could not see from the attendance sheets that any one was examined in this case at any point of time both the parties agreed that the ninth petitioner (Chundru Srihari Rao) was examined before the Board and relied upon the oral evidence given by the ninth petitioner before this court. The date on which the evidence of the ninth petitioner commenced is not seen anywhere but his cross-examination was completed on October 18, 1995. It gives me an impression that the Board started recording evidence after C. A. No. 134 of 1995 was dismissed and before C. A. No. 65 of 1996 was filed. From the evidence it is seen that his cross-examination was completed on the allegations in the main petition on October 18,", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-16", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "seen that his cross-examination was completed on the allegations in the main petition on October 18, 1995.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-17", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "22. From the above factual narration, the first issue that falls for consideration of this court would be : \n \"Whether the procedure followed by the Board in disposing of C. P. No. 15 of 1994 is in accordance with law ?\" \n 23. The power to deal with the allegations of oppression of minority shareholders and mismanagement of the affairs of the company under Chapter VI of the Act were originally vested in the High Court till the Companies (Amendment) Act, 1988, came into force with effect from May 31, 1991, whereunder the said power was conferred on the Board. \n 24. Learned counsel for the petitioners contends that the functions of the Board are akin to the functions of a court having stepped into the shoes of the High Court while discharging judicial functions, at worst a quasi-judicial authority and it is expected to follow the rules of procedure while adjudicating the lis. On the other hand, learned counsel for the respondent-company strenuously contends that the Board being an administrative body not vested with the judicial powers it need not follow the procedure prescribed in the Code of Civil Procedure and it is at liberty to follow its own procedure as per Section 10E(6) of the Act. \n Aims and objects of the Act : \n 25. To appreciate the rival contentions, we have to look into the aims and objects underlying the amending Act and the provisions introduced by the Amendment Act, 1988.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-18", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "26. Prior to the Amendment Act, 1988, the judicial and quasi-judicial functions vested in the Central Government under Sections 17, 18, 79 and 144 were being exercised by the Board as its delegate apart from discharging statutory functions and the composition of the Board was from among the officers of the Central Government and the High Court was exercising powers under Chapter VI in granting relief against the acts of oppression and mismanagement of the affairs of the company apart from other powers conferred on it. \n 27. In the light of the overwhelming representations received from all the organizations and individuals for constitution of an independent Board without interference of the Central Government, the Central Government constituted the Sachar Committee to consider those representations and suggest suitable amendments to the Act. Having considered the representations of several organizations, the Committee made the following recommendations : \n \"We therefore, feel that appropriate solution would lie in statutorily constituting an independent quasi-judicial Company law Board broadly on the lines of the Income-tax Appellate Tribunal as provided in Section 252 of the Income-tax Act.\" \n 28. The Committee also recommended modifications to the existing provisions relating to the constitution and functions of the Board. Under Clause (c) it recommended that the Company Law Board including its Regional Benches shall have powers of the court tinder the Code of Civil Procedure not only in respect of matters specified in the present Sub-sections (4C) and (4D) of Section 10E, but also in respect of the powers conferred upon it or the Regional Benches by the Act.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-19", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "29. Accepting the recommendations of the Committee, the Central Government amended the Act in 1988 and established an independent Company Law Board to exercise judicial and quasi-judicial functions hitherto exercised by the court or the Central Government till then besides the statutory powers vested in the Board by the Amendment Act, 1974. But the second recommendation of the Committee did not find a place in the amending Act. From the above, it can be safely concluded that the Board at the worst has to be declared as quasi-judicial functions while discharging functions under Chapter VI of the Act. \n 30. But learned counsel for the respondent-company in support of his case cited a judgment in Prakash Timbers Pvt. Ltd, v. Smt. Sushma Shingla, , while considering the status of the Company Law Board, their Lordships of the Allahabad High Court held as follows (page 781 of Comp Cas) : \n \"The Board has to perform the functions under the various provisions of the Act. Some of them are judicial in nature and some of them are quasi-judicial and some of the functions are more in administrative nature . . . \n Broadly speaking, the Company Law Board has the trappings of a court in the sense that it has to determine a matter placed before it judicially, give fair opportunity of hearing to the parties who may be affected by the order, to accept the evidence and also to order for inspection and discovery of documents, compel the attendance of the witnesses and in the last, to pass a reasoned order which gives finality to its decision subject to right of appeal to a party under Section 10F of the Act or such other legal remedy which is available under law to a party.\"  \n 31. The court then considering the scope, functions and jurisdiction conferred on the Company Law Board concluded that the Company Law Board can only be regarded as a Tribunal and not a court.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-20", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "32. Even as per this judgment, the Tribunal is exercising judicial functions. Hence even if the Board is not court in the strict sense, it is definitely a quasi-judicial Tribunal and it has to follow the procedural laws to the extent possible and it cannot act at its whims and fancies while discharging judicial functions. \n 33. Though the apex court interpreted the words \"observance of principles of natural justice to be followed by quasi-judicial/administrative bodies\" to mean that even if the procedure laws prescribed in the Code of Civil Procedure need not be strictly followed, yet they have to be guided by those provisions in discharge of their functions. But as learned counsel addressed marathon arguments justifying the procedure followed by the Board, I am forced to refer to his contentions to avoid criticism that the court did not consider various contentions raised on behalf of the respondents. \n Now the question to be considered is : \n Whether the Company Law Board is having inherent powers ?", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-21", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Whether the Company Law Board is having inherent powers ? \n 34. It is seen that an independent Company Law Board is established to exercise judicial and quasi-judicial functions exercised by the courts or the Central Government till then and is not subjected to control of the Central Government. Under Sub-section (4C) of Section 10E of the Act, the powers of the civil court under the Code of Civil Procedure while trying a suit were conferred on the Board to the extent indicated therein. Under Sub-section (5) without prejudice to the provisions of Sub-sections (4C) and (4D), the Board in discharge of its functions under the Act or any other law is \"to be guided by principles of natural justice\" and shall act in its discretion and under Sub-section (6) \"subject to the foregoing provisions of this section, the Board shall have the power to regulate its own procedure\". In exercise of this power the Board framed the Company Law Board Regulations, 1991. Under Regulation 44, the Board is empowered to exercise the inherent powers which are akin to Section 151 of the Civil Procedure Code, 1908 and which were till then exercised by the courts under rule 9 of the Companies (Court) Rules, 1959, while dealing with company matters. As the language used in Regulation 44 and rule 9 of the Courts Rules being one and the same, it is useful to extract the above provisions to know the scope, ambit and powers of the Tribunal. Regulation 44 of the Company Law Board Regulations, 1991, reads as under : \n \"Nothing in these rules shall be deemed to limit or otherwise affect the inherent power of the Bench to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Bench.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-22", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "35. Further these Regulations deal with regard to the procedure to be adopted for regulating the business of the Board. The Regulations postulate that a fair opportunity should be given to the party who may be affected by the order and also to the person who files a petition before it.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-23", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "36. Nextly, it is seen that under Section 402 of the Act, on an application filed under Section 397 or 398 of the Act, the Board is competent to pass any of the orders specified in that section without prejudice to the generality of the powers of the Board to pass any order under either Section 397 or 398 of the Act. Section 402(b) deals with the purchase of shares or interest of any member of the company by any other members thereof or by the company. In other words, the Board is competent to pass orders directing the majority shareholders or the company to purchase the shares of minority shareholders. But Mr. Raghavan strenuously contended that the Board having dismissed the case on the merits is not expected to give the above directions. He placed reliance on a judgment reported in Suresh Kumar Sanghi v. Supreme Motors Ltd. [1983] 54 Comp Cas 235 (Delhi), wherein it was held that jurisdiction under Section 402 of the Act to make an order would arise only when the Board records a finding that the requirements of the section are fulfilled, but not otherwise. To my mind even if the minority shareholders failed to establish the acts of mismanagement complained of by them, a reading of Section 398 of the Act makes it clear that even an apprehension in the minds of minority shareholders is sufficient to clothe the Board to give directions under Section 402 of the Act as the provisions of Sections 397, 398 and 402 of the Act are inter-related and they should not be read in isolation. A combined reading of the aforesaid three sections clearly brings out two aspects ; first, the very wide nature of the power conferred on the court and, secondly, the object sought to be achieved by the exercise of such power. The only limitation that could be impliedly read on the exercise of the power would be that nexus must exist between the order that may be passed thereunder", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-24", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "the exercise of the power would be that nexus must exist between the order that may be passed thereunder and the object sought to be achieved by these sections and beyond this limitation which arises by necessary implication, it is difficult to read any other restriction or limitation on the exercise of the court's power. While Sections 397 and 398 of the Act are intended to protect the minority shareholders from acts of oppression and mismanagement or preventing its affairs from being conducted in a manner prejudicial to public interest or the interests of the company while avoiding winding up of the company if possible and keep it going the powers of the Board under Section 402 of the Act are wide enough to enable the court to put an end to the acts complained of. Likewise while exercising the powers under Sections 397 and 402 of the Companies Act, the court is considering not only the relief that is sought for but also considering as to what is the nature of the complaint and how the same has to be rectified. It is the interest of the company that is being considered and not the individual dispute between the minority shareholders and majority shareholders. In other words, the interest of the company requires that the majority shareholders must have their say in the management.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-25", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "37. The purpose and object of Sections 397 and 398 is to put an end to acts of oppression and mismanagement promptly and speedily rather than allow the parties to be involved in a costly and protracted litigation. If the facts justify interference by the court in the exercise of its powers under the two sections and if the conditions prescribed by the sections are fulfilled, the court ought not to relegate the parties to a series of protracted and costly litigation. \n 38. Though the party approaching the Board seeking relief against acts of oppression is bound to prove the allegations levelled against the majority shareholders, as far as the relief in the case of mismanagement under Section 398 of the Act is concerned, the Board is competent to make any order as it thinks fit with a view to bringing to an end or preventing the matters complained of or apprehended. From this it is seen that as far as acts of mismanagement are concerned, mere apprehension in the mind of any prudent person is sufficient for the Board to pass any of the orders specified in Section 402 of the Act. \n 39. He also conceded that if the court comes to the conclusion that the Board is having powers to give such a direction, he has no case in his appeal. In the light of the foregoing discussion, I hold that it is open to the Board to make just and equitable provision if situation demands apart from the orders that can be passed under Section 402 of the Act itself. \n 40. Even assuming for a moment that the Board cannot exercise its powers under Section 402 of the Act without proving the acts of oppression and mismanagement, under Regulation 9 the Board is fully empowered to exercise the inherent powers vested in it to do substantial justice and to put an end to the acts complained of. I am fortified in my view by the dicta laid down in the following cases.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-26", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "41. In Shoe Specialities P. Ltd. v. Standard Distilleries and Breweries (P.) Ltd. [1997] 90 Comp Cas 1; [1997] 1 Comp LJ 243 (Mad), a Division Bench of the Madras High Court held as follows (pp. 35 and 36) : \n \"Regulation 44 of the Company Law Board Regulations, 1991, saves the inherent power of the Board and it corresponds to Section 151 of the Civil Procedure Code. It is settled law that under the inherent powers, the court can pass any order to prevent the abuse of process and also to meet the ends of justice. . . . \n When a case of oppression is made out..., it is only within the power of the Company Law Board to end the matter complained of and to make such orders as it thinks fit. While considering to end matters complained of and when it is given the power to make any such order as it thinks fit to rectify the same, the Company Law Board is empowered to remove the board of directors so that the affairs of the company can be set right.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-27", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "42. In Standard Industries Ltd. v. Mafatlal Services Ltd. [1994] 80 Comp Cas 764, the Principal Bench of the Company Law Board at New Delhi held that the modus operandi adopted by the majority shareholders fully subscribing to the rights issue is intended to reduce the voting of the petitioners by reducing their shareholding from 48 per cent. to 12 per cent. and suffers from lack of probity and fair play as evidenced by their resolution and in exercise of its powers under Section 402 of the Act the Board observed that the most equitable proposition is that the respondents should buy the shares of the petitioners so that their grievance of oppression was redressed and at the same time that the company's paid-up capital was also maintained. In this judgment, the Board observed that it was not the legality of the rights issue but the modus operandi adopted by the respondents that was the real issue. \n 43. In Daulat Makanmal Luthria v. Keshav S. Naik [1992] 3 Comp LJ 119, again the Principal Bench of the Board having noticed that a stage had come where the petitioners and the respondents had lost mutual trust necessary for working together in managing the affairs of the company under the circumstances it has become impossible for the petitioners and the respondents to work together even if an independent chairman was appointed. In those circumstances, the Board passed order under Section 402 of the Act directing the respondents to purchase the shares of the petitioners or sell their shares to the petitioners so that the company came under the exclusive control and management of either the respondents or the petitioners.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-28", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "44. Again the Principal Bench of the Board in Yashovardhan Saboo v. Groz-Beckert Saboo Ltd. [1993] 1 Comp LJ 20 ; [1995] 83 Comp Cas 371 observed that \"on the facts of the case though the petitioners had failed to establish a case of oppression, yet reconciliation between the parties being difficult, with a view to do substantial justice between them and also to put an end to the dispute, the majority group was asked to pay the price for the shares of the minority group on fair terms in view of settled law that the majority should never be forced to sell their shares to the minority in exercise of its powers under Section 402 of the Act.\" \n 45. A learned single judge of this court in R. Khemka v. Deccan Enterprises (P.) Ltd. [1998] 16 SCL 1 held that though the case of oppression and mismanagement was not made out but on the facts, the petitioner could be directed to sell share's to the respondent and on failure of the respondent to purchase he could be directed to sell his shares to the petitioners in the interest of company. The said judgment was confirmed by a Division Bench of this court reported in Khemka v. Deccan Enterprises Pvt. Ltd. [2000] 100 Comp Cas 211.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-29", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "46. In H.R. Harmer Ltd., In re [1958] 3 All ER 689 ; [1959] 29 Comp Cas 305 (CA) Lord Denning in his separate judgment having observed that the object of the remedy under Section 210 of the English Act, 1948, similar to that of Section 397 of our Act is to bring to an end the matters complained of, i.e., oppression and one of the most useful orders mentioned in the section which will enable the court to do justice to the injured shareholders is to order the oppressor to buy their shares at fair price. \n 47. In Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holdings Ltd. , their Lordships of the Supreme Court at paragraph No. 172 held as follows (page 845) : \n \"Even though the company petition fails and the appeals succeed on the finding that the holding company has failed to make out a case of oppression, the court is not powerless to do substantial justice between the parties and place them, as nearly as it may, in the same position in which they would have been, if the meeting of May 2, were held in accordance with law.\" \n 48. In fact, the Board, relying on this judgment gave a direction to the respondent-company to purchase the shares of the minority shareholders. \n 49. The complaint of learned counsel for the respondent is that the Supreme Court while exercising the inherent powers/plenary powers vested in it, has given such direction and the Board not being a regular civil court is not empowered to exercise the inherent powers. In the light of the foregoing discussion, the contention of the respondents falls to the ground ; more so in the light of the judgment of the Madras High Court, which is directly on the issue apart from the other judgments referred above.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-30", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "50. Nextly, Mr. Raghavan contended that having dismissed the case on the merits, the Board is not expected to give directions and he further contended that the Board misread the judgment of the Supreme Court in Needle's case, . \n 51. In support of his case, he relied on a judgment of the Delhi High Court in Suresh Kumar Sanghi's case [1983] 54 Comp Cas 235, wherein Justice Kirpal, as he then was, held that (p. 244): \"the petitioner has not proved or shown that there have been any continuous acts of oppression by the majority on the minority shareholders and as such no relief can be granted under Section 397 of the Act. In that petition, the petitioner claimed oppression on the basis of a solitary incident of removing him from the management of the company.\" \n 52. Firstly, the facts of the case on hand are different from the facts of that case. A series of acts of oppression as well as mismanagement were alleged against respondent No. 2 and his group in this application. Further in this case nowhere it was held that the Board is not having inherent powers to do substantial justice between the parties. The relief sought for was simply refused on the ground that a solitary instance cannot form the basis for invoking the jurisdiction of the court under Section 397 of the Act. Hence, this judgment would not come to the rescue of the respondents.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-31", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "53. To sum up the discussion on this aspect, 1 hold that the Board is having inherent powers under Regulation 44 of the Regulations, which are akin to the inherent powers of the civil court under Section 151 of the Civil Procedure Code to do substantial justice to the parties. Even assuming for a moment that the Board is not having inherent powers, the Board is fully competent to pass orders under Section 402 of the Act if the acts of mismanagement alleged against the majority shareholders creates an apprehension in the minds of the minority shareholders even if they fail to establish the allegations levelled against them. \n Whether the procedure followed by the Board can be sustained in law : \n 54. Now let me examine the legal position to see whether the procedure followed by the Board can be sustained in law. In the main petition as well as in C. A. No. 69 of 1994 the petitioner prayed for summoning the records but the board did not pass orders. In fact in C. A. No. 65 of 1996 also similar prayer was made. But counsel might have felt that he will be in a position to convince the Board without summoning the originals, he did not press for summoning the originals at that stage. That does not mean that the Board can act arbitrarily at its whims and fancies. \n Whether provisions of the Civil Procedure Code are applicable to proceedings before the Board ?", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-32", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Whether provisions of the Civil Procedure Code are applicable to proceedings before the Board ? \n 55. To my mind when the Board exercises judicial functions the elementary principle of adjudicatory process is observance of rules of procedure, i.e., pleadings supported by oral, and documentary evidence and respective parties have to get into the witness box to prove their case and also subject themselves to cross-examination to test the correctness or the veracity of his case apart from proving the authenticity of the documents. Keeping the above principles in mind if one looks into the facts of the case it is seen that serious allegations as extracted supra are made in the management of the affairs of the company as well as oppression of minority shareholders by respondents Nos. 2 and 3. But the Board simply extracted the arguments on the basis of xerox copies of the documents and recorded its findings without even discussing the oral evidence of the ninth petitioner by holding that the evidence is incomplete though it is not the case of the respondents and even without looking into the annual reports filed by -the petitioners to prove that huge amounts were swindled by not bringing all the spare parts manufactured by the company into the account books. The Board has neither summoned the original documents and audited accounts of the company nor given opportunity to the petitioners to peruse the records to prove the allegations of mismanagement and pronounced the impugned order.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-33", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "56. The attendance sheets maintained in the case and the order of the Board dated July 21, 1995, in C. A. No. 134 of 1995 clinchingly establish that till December 4, 1998, the Board as well as the respondents took the stand that the provisions of the Civil Procedure Code are applicable and recording of evidence is a must in the case. The petitioner might have expressed his inability in securing the presence of list witnesses, but he never stated that he is not available for examination on the subsequent acts of mismanagement as the evidence of the ninth petitioner is complete in all respects on the allegations made in the main petition. Even assuming without admitting that the evidence on behalf of the petitioners is incomplete, no evidence on behalf of the respondents was recorded and pronounced the impugned order. Learned counsel for the respondent-company having taken an irrevocable stand that the provisions of the Civil Procedure Code are applicable and chief examination followed by cross-examination is a must, cannot take a round about turn to justify the illegal order by contending that the Board being an administrative body the provisions of the Code of Civil Procedure are not applicable to the Board. \n 57. I am fortified in my view by a judgment of the Honourable Supreme Court reported in Dwarka Nath v. ITO , Justice K. Subba Rao speaking for the Constitution Bench having held that the jurisdiction conferred under Section 33A(2) of the Indian Income-tax Act, 1922, prima facie is a judicial one and having reviewed the case law held that if an administrative body is empowered to determine questions affecting the rights of subjects and if it is having a duty to act judicially it is a clear case of judicial act and held as follows (page 356 of ITR) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-34", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"In all these cases the Government, the Examination Committee and the Board of Revenue were administrative bodies, but the acts impugned were quasi-judicial ones, for they had a duty to act judicially in regard thereto. The law on the subject may be briefly stated thus : The provisions of a statute may enjoin on an administrative authority to act administratively or judicially. If the statute expressly imposes a duty on the administrative body to act judicially, it is a clear case of a judicial act. But the duty to act judicially may not be expressly conferred but may be inferred from the provisions of the statute. It may be gathered from the cumulative effect of the nature of the rights affected, the manner of the disposal provided, the objective criterion to be adopted, the phraseology used, the nature of the power conferred, or the duty imposed on the authority and other indicia afforded by the statute. In short, a duty to act judicially may arise in widely different circumstances and it is not possible or advisable to lay down a hard and fast rule or an inflexible rule of guidance.\" \n 58. Under Section 141 of the Civil Procedure Code the procedure provided in the Code in regard to suits shall be followed, as far as it can be made applicable, in all proceedings in any court of civil jurisdiction and in the light of the above judgment of the Supreme Court, the procedure prescribed in the Civil Procedure Code in regard to suits shall be followed, as far as it can be made applicable at least to the extent of pleadings, receiving documentary evidence and recording oral evidence in support of the case of the respective parties.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-35", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "59. In Jhabarmull Agarwalla v. Kashiram Agarwalla [1969] 71 ITR 269, a Division Bench of the Calcutta High Court while considering the effect of Section 131 of the Income-tax Act, 1961, which is in pari materia to Section 10E(4C) of the Act dealing with the powers of the officers of the Income-tax Department, held as follows (page 271) : \n \"The powers conferred on the Income-tax Officer under Section 131(1) of the Act have not been specified with reference to particular provisions of the Code of Civil Procedure but all the powers which the civil court has under the Code have been conferred on the Income-tax Officer on some specified matters. One such matter is 'compelling the production of books of account and other documents'. Section 131(1) must, therefore, be construed to confer on the Income-tax Officer all the relevant powers, which the civil courts have under the Code of Civil Procedure regarding the production of books of account and other documents. Since Order XIII, Rule 10, confers such power on the civil court to call for documents from other courts, the Income-tax Officer too has such powers under Section 131(1) of the Act.\" \n 60. From Section 131 of the Income-tax Act, it is seen that the officers of the Income-tax Department while exercising the powers of an Administrative tribunal were conferred with the powers of a civil court for certain purposes which are in pari materia the same as in Section 10E(4C) of this Act. But in this case, admittedly the Board is exercising judicial functions at worst, quasi-judicial functions. \n 61. Even in Prakash Timbers Pvt. Ltd's case, their Lordships of the Allahabad High Court did not observe that the Board need not follow rules of procedure while discharging judicial functions.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-36", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "62. Hence it cannot be said that the provisions of the Code of Civil Procedure are not altogether applicable to proceedings of the Board. On the other hand, to the extent possible these Tribunals are guided by those principles when they are involved in the adjudicatory process. \n The Board can regulate its own procedure subject to observance of rules of natural justice under Section 10E(5) and (6)--What does it mean ? \n 63. The contention of learned counsel for the respondent, that the Board is entitled to regulate its own procedure and it is not under an obligation to follow strict rules of evidence is answered by their Lordships of the Supreme Court in Industrial Credit and Investment Corporation of India Ltd. v. Grapco industries ltd. . Their Lordships of the Supreme Court while considering the procedural powers of a Debt Recovery Tribunal under Section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, held as follows (page 123) : \n \"When Section 22 of the Act says that the Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, it does not mean that it will not have jurisdiction to exercise powers of a court as contained in the Code of Civil Procedure, Rather, the Tribunal can travel beyond the Code of Civil Procedure and the only fetter that is put on its powers is to observe the principles of natural justice.\" \n 64. Further, their Lordships of the Supreme Court while considering the powers of the adjudicating officer and the Appellate Board to summon witnesses, under Section 53 of the Foreign Exchange Regulation Act, 1973, held as follows (page 124) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-37", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"... there are no limitations on the powers of the Tribunal under the Act, the Legislature has thought it fit to restrict the powers of the authorities under various enactments while exercising certain powers under those enactments. We have to give meaning to Section 22 of the Act as here the Tribunal is exercising powers of a civil court while trying a money suit.\" \n Observation of principles of natural justice--Meaning : \n 65. Their Lordships of the Supreme Court in A.K. Kraipak v. Union of India, , held in para. 20, as follows (page 156) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-38", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law of the land but supplement it. The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules, namely (1) no one shall be a judge in his own cause (nemo debet esse judex propria causa), and (2) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to the rules of natural justice. Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act judicially there was no room for the application of the rules of natural justice. The validity of that limitation is not questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries. Oftentimes it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial enquiries. Enquiries which were considered administrative at one time are now being considered as quasi-judicial in character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far-reaching effect than a decision in a quasi-judicial enquiry.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-39", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "66. In Fort William Jute Mills Co. ltd. v. First Labour Court [1963] 1 LLJ 734 (Cal), the Calcutta High Court ruled that \"though the strict rules of law of evidence are not to be applied this does not mean that the proceedings can be held in an arbitrary manner. The rules of natural justice must be applied. Ordinarily, there must be a personal hearing. If a person is entitled to show cause he is entitled to a hearing and if he is entitled to hearing, he must be given an opportunity of being personally heard of calling his own evidence and cross-examining any witness called by the prosecution.\" \n 67. In Delhi Transport Corporation v. D.T.C. Mazdoor Congress , their Lordships while considering the validity of Regulation 9-b of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952 which provides for removal of employee from service without assigning any reasons, observed that (page 148 of 79 FJR): \"in a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within the defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any principle or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-40", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "68. From the above decisions, it can be safely held that even if the Board is exercising quasi-judicial powers it has to follow not only the rules of procedure prescribed in the Code of Civil Procedure but it can also travel beyond it, in furtherance of cause of justice subject to observance of principles of justice and ordinarily there must be personal hearing and a party must be given an opportunity of putting forth his own case and cross-examining any witness called by the other side. Observance of principles of natural justice operates in areas not covered by any law validly made and they do not supplant the law of land but supplement it. Even assuming that the Board is only an administrative tribunal and need not follow the rules of procedure, in a system governed by rule of law discretion when conferred on the authorities must be confined within defined limits and if a decision is taken without any principle or without any rule, it is unpredictable and such a decision is antithesis to a decision to be taken in accordance with rule of law. \n 69. Even assuming for a moment that the Board is competent to regulate its own procedure and it has to be guided by the principles of natural justice as conceded by learned counsel, it does not clothe the Board to act illegally, irregularly or irrationally without observing the rudiment of law more so while discharging quasi-judicial functions and it cannot function as it wishes. Any procedure prescribed or followed should be in consonance with the law of the land. It is beyond anybody's comprehension that the Board will deliver orders even without looking into the original records when the petitioners complained that the respondents have fabricated the records, which resulted in miscarriage of justice. Observance of the principles of natural justice does not mean that the Board can pass orders on the basis of xerox copies or typed copies, which were filed before the Board even without attestation.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-41", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "70. Keeping the above principles in mind if one looks at the order of the Tribunal it is evident that the order suffers from serious infirmities and the order is ab initio void. \n Board is following the same procedure : \n 71. Nextly, learned counsel for the second respondent having conceded that the procedure followed by the Board is not within the parameters of the procedural laws of the land, he tried to justify the conduct of the Board by contending that the Board is following this procedure for a long time. At the same time, the Supreme Court deprecated such a practice followed even by the courts way back in 1981 counsel placed reliance on the observations of the Supreme Court. \n 72. In Needle Industries (India) Ltd.'s case , the Supreme Court held as follows (page 786) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-42", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"We appreciate that it is generally unsatisfactory to record a finding involving grave consequences to a person on the basis of affidavits and documents without asking that person to submit to cross-examination. It is true that men may lie but documents will not and often, documents speak louder than words. But a total reliance on the written word, when probity and fairness of conduct are in issue, involves the risk that the person accused of wrongful conduct is denied an opportunity to controvert the inferences said to arise from the documents. But then, Sri Nariman's objection seem to us a belated attempt to avoid an inquiry into the conduct and motives of Devagnanam. The company petition was argued both in the trial court and in the appellate court on the basis of affidavits filed by the parties, the correspondence and the documents. The learned appellate judges of the High Court have observed in their judgment that it was admitted, that before the learned trial judge, both sides had agreed to proceed with the matter on the basis of affidavits and correspondence only and neither party asked for a trial in the sense of examination of witnesses. In these circumstances, the High Court was right in holding that, having taken up the particular attitude, it was not open to Devagnanam and his group to contend that the allegation of mala fides could not be examined, on the basis of affidavits and the correspondence only. There is ample material on the record of this case in the form of affidavits, correspondence and other documents, on the basis of which proper and necessary inferences can safely and legitimately be drawn.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-43", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "73. In that case their Lordships of the Supreme Court upheld the procedure followed by the trial court as well as the High Court in deciding the case on the basis of affidavits and documentary evidence as both the parties agreed to proceed with the matter on the basis of affidavits and correspondence and neither of the parties asked for a trial in the sense of examination of witnesses. Their Lordships further held that there is ample material on record, i.e., affidavits, correspondence and other documentary evidence on the basis of which proper and necessary inferences can safely and legitimately be drawn. \n 74. But in this case, the Board itself by an order dated July 21, 1995, rejected the request of the petitioners to lead affidavit evidence by observing that if learned counsel for the petitioner desires to lead any evidence by the petitioners it may be done through personal appearance of such petitioners. It is interesting to see from the order of the Board that learned counsel for the respondents strenuously contended that Order 19 is applicable only when a specific fact has to be established but cannot be used for all purposes. Examination-in-chief is a must followed by cross-examination in view of the allegations of misconduct and fraud. The Board upheld the objection raised by the respondent's counsel. But before this court learned counsel for the respondent-company has taken a round about turn and started pleading that the Board is justified in passing the orders without there being any oral evidence by the respondents in support of their plea and without proof of untested xerox copies of the documents.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-44", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "75. In A.K.K. Nambiar v. Union of India, , their Lordships of the Supreme Court while considering clause (f) of Section 10E whereunder the Bench is empowered to receive evidence on affidavits held that the affidavits without verification are not admissible in evidence. Their Lordships of the Supreme Court emphasised the need for verification of the affidavits as here-under (page 653) : \n \"The reasons for verification of affidavits are to enable the court to find out which facts can be said to be proved on the affidavit evidence of rival parties. Allegations may be true to knowledge or allegations may be true to information received from persons or allegations may be based on records. The importance of verification is to test the genuineness and authenticity of allegations and also to make the deponent responsible for allegations. In essence verification is required to enable the court to find out as to whether it will be safe to act on such affidavit evidence.\" \n 76. Admittedly in this case the affidavits of the third parties filed by the respondents are not verified. But the Board acted on these affidavits. At the same time, the Board did not refer to the affidavits filed by the petitioners, which are very much available on its file. \n 77. From the above whatever documents were relied on by the respondents they being only the xerox copies, they are not admissible in evidence. With the result, the respondents did not produce any evidence whatsoever either oral or documentary in support of their pleadings, and at the same time the Board did not consider the oral/affidavits/documentary evidence filed by the petitioners.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-45", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "78. In the adjudicatory process if the authorities do not follow the procedural laws of the land and the basic principles of adjudication of disputes as stipulated under Section 10E(4C) of the Act, the common man will lose faith in the very system of administration of justice. I understand that a retired High Court judge is heading the Board. I am sure that had the Board observed minimum procedural laws and considered the case of the parties on the merits dispassionately the result would have been otherwise. \n 79. In M. J. Builders Pvt. Ltd. v. Radhey Shyam Sahu, , their Lordships of the Supreme Court held that (p. 2505) : \"such discretion cannot be exercised which encourages illegality or perpetuates an illegality . . . Judicial discretion cannot be guided by expediency. Courts are not free from statutory fetters. Justice is to be rendered in accordance with law. Judges are not entitled to exercise discretion wearing robes of judicial discretion and pass orders based solely on their personal predilections and peculiar dispositions. Judicial discretion wherever it is required to be exercised has to be in accordance with law and set legal principles.\" \n 79. While considering the duty of the Mahapalika, a body corporate constituted under the U.P. Municipal Corporation Adhiniyam, 1959, to construct and maintain public places, parks and plant trees, their Lordships held that a Mahapalika a body corporate constituted under the Act being a trustee is under an obligation and duty to maintain public places, parks and plant trees. When the nature of the park, as it existed, is destroyed, it would be violative of the doctrine of public trust as expounded by this court in Span Resort's case . The public trust doctrine is part of Indian law.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-46", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "80. Viewed from the above angle, the Company Law Board is bound to exercise its powers in a manner known to law. But it cannot act whimsically, fancifully and arbitrarily and adopt a procedure of its own unknown to law. It is the public trust reposed in the institution. If the Board acts in violation of the doctrine of public trust, it amounts to destroying the public confidence in the institution. \n 81. Further the Board as well as the respondents having proceeded on the assumption that the provisions of the Civil Procedure Code are applicable as seen from the order of the Board dated July 21, 1995, in C. A. No. 134 of 1995 till December 2, 1998, the day on which the Board started hearing the matter cannot dispense with the procedure, they thought of at the initial stage, more so without assigning any reasons. As stated supra the Board is expected to be guided by the provisions of the Civil Procedure Code in discharge of its judicial functions, though it need not follow all the provisions of the Civil Procedure Code in its strict sense. If it is not following the law of the land it is committing the gravest illegality in discharge of its judicial functions. Even if it is following an illegal procedure for a long time the same cannot turn to be legal, and at the earliest it needs rectification. Otherwise, the interest of the litigant public will be completely jeopardized as seen in this case. Accordingly this contention is also rejected. \n Documentary evidence :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-47", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Documentary evidence : \n 82. Under Section 61 of the Evidence Act the contents of documents may be proved either by primary or secondary evidence ; under Section 62 primary evidence means the document itself produced for the inspection of the court; Section 63 deals with secondary evidence and under Section 64 all the documents must be proved by primary evidence except in cases mentioned in Section 65 of the Evidence Act for which necessary foundation has to be laid in the pleadings itself for leading secondary evidence. \n 83. In this case only xerox copies of the documents were filed and it is not the case of the respondents that they are not having the original documents or the records with them. \n 84. On the other hand the petitioners have not only filed the original documents in their possession but also filed applications for summoning of the original records from the respondent-company. On behalf of the petitioners, petitioner No. 9 has gone to the witness box and spoken on all the allegations made in the main application. But at the same time the respondents neither filed the original records nor entered into the witness box to give evidence in support of their case. \n 85. Under Section 114 of the Evidence Act, the court has to draw a presumption with regard to the existence of any fact which it thinks likely to have happened regard being had to the common cause of natural events, human conduct and public and private business, in their relation to the facts of the particular case. As per illustration (g) of Section 114, the evidence, which could be, and is not produced, would, if produced, be unfavourable to the person who withholds it the court is expected to draw an adverse inference against the person who is in possession of the information and failed to produce the evidence.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-48", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "86. Coming to the provisions of the Code of Civil Procedure, under Order 13, Rule 1, all parties shall produce all the documentary evidence of every description in their possession or power, on which they intend to rely, and which has not already been filed in court, and all the documents, which the court has ordered to be produced. Under Order 39, Rule 4, the court should endorse on every document, which has been admitted in evidence in the suit with the particulars contained therein. Under Order 13, Rule 5(3), where a copy of an entry is furnished, the court shall, after causing the copy to be examined, compared and certified in the manner mentioned in Order 13, Rule 17, mark the entry and cause the book, account or record in which it occurs to be returned to the person producing it. \n 87. A Division Bench of this court in Badrunnisa Begum v. Mohamooda Begum held that a copy of the agreement without there being comparison of it with the original document, is not admissible in evidence as secondary evidence. Having considered the scope of Section 63 of the Evidence Act dealing with secondary evidence, their Lordships observed as follows (page 397) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-49", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"Learned counsel for the appellant submits that under illustration [c] a copy transcribed from a copy but compared with the original is secondary evidence but the copy not so compared is not secondary evidence of the original although the copy from which it was transcribed was compared with the original. Now, if one goes by this illustration in the light of the evidence that is on record, one finds that there is no evidence whatsoever showing thereby that the copy taken from the copy was compared with the original. What the plaintiff has tried to do is that, she has tried to prove comparison of the copy of the copy by exhibiting exhibit A-32 which is a photo copy along with the negatives. The requirement of illustration (c) was that the copy taken from the copy should have been compared with the original. That could have not been done in view of the pleadings of the plaintiff herself as the original was not with her.\" \n 88. Even assuming that counsel did not object to the procedure, the respondents having filed xerox copies are bound to prove the authenticity of the documents filed by them in a manner known to law. If such a course is not adopted by the respondents, the Board is expected to eschew the documents filed by the respondents. But the Board acting on such inadmissible evidence dismissed the application. \n 89. In Roman Catholic Mission v. State of Madras, , the District Judge took into consideration the certified copies of certain leases from the record of an old case, i.e., O. S. No. 124 of 1944 on the file of the Sub-Court, Madurai. The Supreme Court while interpreting Section 65 of the Evidence Act held that those copies of the documents are not admissible in evidence, held that both Mailavaram and Kudivaram rights were included in Inam. Commenting on the act of the District Judge, their Lordships observed thus (page 1461) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-50", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"These documents undoubtedly would have thrown light upon the matter but they were not admissible because they were only copies. The originals were not produced at any time nor was any foundation laid for the establishment of the rights to give secondary evidence. The High Court rejected them and it was plainly right in so deciding.\" \n 90. In Pradip Kumar Sarkar v. Luxmi Tea Company Ltd. [1990] 67 Comp Cas 491, the learned judge of the Calcutta High Court held as follows : \n Since the audited accounts for the relevant period were not placed before the court for its perusal and for refusing the allegations of depressing the working results of the company, prima facie the allegation of the mismanagement of working results stood unrebutted and in such an event the court is empowered to supersede the board of directors if found to have acted illegally and appoint a receiver for a limited period and purpose. \n 91. In Abdul Rasheed v. Abdul Hakeem , a learned single judge of this court held that the entries in the account books in favour of a party producing them have to be strictly proved. In a suit for specific performance filed on the basis of an oral agreement, the plaintiff therein produced a note book (exhibit A-44) maintained by him to show that he paid an amount of Rs. 10,000 to the defendant as advance and the version of the plaintiff was disbelieved by the learned judge by giving the following reasons ; \n \"(1) in the first place the entries are unsound; (2) the entries as such are not marked; (3) the accountant who made the entries was not examined. Thus observing the learned judge held that the entries in the note book relied upon by the plaintiff to prove the alleged payment of Rs. 10,000 as advance were not proved.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-51", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "92. In arriving at the conclusion, his Lordship relied upon a judgment in Mathilda Sice v. Fritz Gaebele, AIR 1926 Mad 955. In the said case their Lordships of the Madras High Court held that (headnote) : \n \"mere laying down the account books without more does not prove anything and that it is for the party who prepared the accounts to explain them and support them in such a way as to convince the judge that there is a probability of their occuracy as to make it reasonable for a prudent man to accept them. The law requires the proof of not only account books generally but of each item that is in the interest of the person producing the books but with regard to admissions, i.e., entries against the producer's own pecuniary interest, the law dispenses with all proof save that the book has been kept by or under the authority of the producers.\" \n 93. From this it is seen that except in a case where the entries are against the interest of the producers of the account book, the law requires proof of not only account books generally but of each item. Admittedly that was not done in this case.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-52", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "94. In Ishwar Dass Jain v. Sohan Lal, , their Lordships of the Supreme Court while considering the admissibility of the extracts from the account books, held that (headnote) : \"the extracts from accounts are not 'account books' falling within Section 34 of the Evidence Act and are inadmissible. Sanctity is attached in the law of evidence to books of account if the books are indeed 'account books' i.e., in original and if they show, on their face, that they are kept in the 'regular course of business'. Such sanctity, cannot attach to private extracts of alleged account books where the original accounts are not filed into court. This is because, from the extracts, it cannot be discovered whether the accounts are kept in the regular course of business or if there are any interpolations or whether the interpolations are in different ink or whether the accounts are in the form of a book with continuous page numbering. Hence, if the original books have not been produced, it is not possible to know whether the entries relating to payment of rent are entries made in the regular course of business. It is only in the case of the Bankers' Books Evidence Act, 1891, that certified copies are allowed or the case must come under Section 65(f) or (g) of the Evidence Act. Private extracts of accounts in other cases can only be secondary evidence and unless a proper foundation is laid for adducing such secondary evidence under Section 65 or other provisions of the Evidence Act, the privately handwritten copies of alleged account books cannot themselves be treated as secondary evidence.\" \n 95. In United India Assurance Company Ltd. v. Satyanarayana Ghee Trading Company , this court held thus :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-53", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"merely because the accounts are kept in regular course of business and entries have been made therein they cannot have any binding nature vis-a-vis the insurer against whom the plaintiff is making now the claim. In other words the respondent-firm has to prove the entries separately by independent evidence apart from the proof required under Section 34 of the Indian Evidence Act to the effect that the accounts have been kept in regular course of business inasmuch as the element of interestedness cannot be ruled out. The distinction between the relevancy and proof of entries and probative value thereof cannot be lost sight of.\" \n 96. In National Insurance Co. Ltd. v. Jugal Kishore , their Lordships of the Supreme Court while commenting on the conduct of the insurance company in not filing the copy of the policy before the Tribunal or before the High Court held as follows (page 853 of Comp Cas) : \n \"This court has consistently emphasised that it is the duty of the party which is in the possession of a document which would be helpful in doing justice in the cause to produce the said document and such party should not be permitted to take shelter behind the abstract doctrine of burden of proof.\" \n 97. On the facts of the case, their Lordships held that \"we accordingly wish to emphasise that in all such cases where the insurance company concerned wishes to take a defence in claim petition that its liability is not in excess of the statutory liability it should file a copy of the insurance policy along with its defence.\" (page 853)", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-54", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "98. From the above it is seen that a party to a judicial proceeding in whose possession the document is, has to produce the same and having failed to do so, it cannot be permitted to take shelter behind the abstract doctrine of burden of proof. \n 99. In the case on hand, the Board under the guise of following its own procedure in adjudicating the dispute, passed the order under challenge without following any of the well known rules of procedure and the order is the result of non-application of mind to the issues in controversy with reference to the original records. Had the Board seen the original records, it is evident to the naked eye that the resolutions of the board were tampered with by the respondents. \n 100. A reading of the order shows that whatever is stated by the respondent is treated as gospel truth and the Board even went to the extent of placing reliance on the affidavits of the third parties without verification filed by the respondents retracting from the earlier affidavits given to the petitioners having held that the Board is not going to rely on the affidavit evidence in its order dated November 28, 1997. At the same time the Board did not consider the affidavits filed by the petitioners, for reasons best known to it though the respondents did not choose to rebut the same either by filing affidavits or by oral evidence. This action of the Board proves beyond doubt that it treated the parties differently and it has not acted dispassionately and in good faith. In one word the scales of justice heavily swung in favour of the respondents.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-55", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "101. It is not the case of the respondents that the Board has at least followed the rudiments of law by summoning the original records and verifying with the documentary evidence filed by the respondents to test the veracity of the statements of the petitioners that the records were tampered with by the respondents or not. As stated supra, having summoned the original records and seen them I have no hesitation to hold that the records were tampered with by the respondents. \n Petitioners themselves gave up the prayer for summoning the records in C. A. No. 65 of 1996. \n 102. Nextly, learned counsel for the second respondent contended that though the ninth petitioner filed C. A. No. 65 of 1996 for appointment of interim administrator and sought for production of the minutes books, account books along with the vouchers for the period 1992-1995 from the respondent-company, before the Board for verification, he did not press for the same as is evident from the order of the Board. He has drawn my attention to a passage in the order of the Board dated December 8, 1997, passed in the above C. A. wherein it was observed that : \n \"Dr. Prasad Paul, senior advocate appearing for the petitioners, even though the application contains various allegations, restricted his arguments on the following two allegations only for the appointment of an administrator\" and contends that the ninth petitioner gave up his plea for summoning the records in the case.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-56", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "103. Countering the above argument, counsel for the petitioners brought to my notice the observations of this court in C. Sri Hari Rao's case [1999] 97 Comp Cas 685. In this case itself on appeal filed by petitioner No. 9 against the order of the Board in C. A. No. 65 of 1996, this court observed that the order under challenge is only an interlocutory order for the purpose of appointment of an administrator at the interim stage. Exercise of discretion by the Board cannot by any stretch be termed as so perverse. \n 104. Admittedly, the prayer for appointment of an administrator is only as an interim measure till the disposal of the main case but not in the main case, i.e., C. P. No. 15 of 1994. The passing of an interim order being a discretionary one, learned counsel might have felt that summoning of the records is a time-consuming process more so when the respondents are not co-operating with the Board for the disposal of the case. It is seen from the record that though the C. P. was filed in the year 1994 there was not much progress in the case. \n 105. The intention and purport of an interim order to be passed during the pendency of a case is to protect the interests of both the parties pending final adjudication of the dispute. Hence, on that ground the Board cannot give up the procedure to be followed by a court in adjudicating a lis more so without passing any orders on the prayer in the main petition as well as C. A. No. 69 of 1994 to call for the records. \n 106. In Kanshi Ram v. Bansi Lal, , his Lordship Chief Justice Pathak, speaking for the Bench held as follows (page 63) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-57", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"In every application for an interim injunction in a pending suit, it is necessary for the court to enter, to some degree, into the merits of the case in order to determine whether a prima facie case exists. To what degree the court will enter will vary, with the facts of each case. When the court declares that a prima facie case exists, it intends to say that the case of the plaintiff is not without merit. It is an opinion rendered on the state of the evidence then existing on the record, and it is open to the trial court to take a different view when all the evidence has been let in and the suit itself has to be decided. In some cases, a pure question of law alone may arise in the suit. In such a case when the court expresses an opinion on the question in order to determine in an injunction application whether a prima facie case exists, an impression can conceivably be gathered that the suit itself has been disposed of. But when the matter is considered in deeper perspective, it will be evident that the impression is a false one. The finding is limited to the context in which it has been given. It is a finding on an application for interim relief only. Any opinion expressed by the court, whether it be of the trial court or an appellate court or revisional court, cannot in law preclude the trial court from considering the issue afresh when deciding the suit, and for that purpose it must have regard to all the material then before it. In deciding that issue, it will properly have no regard to the finding rendered on the point while disposing of the application for interim injunction. No matter how superior the court rendering that finding--and we would include this court--the trial court is bound in the proper discharge of its duties to ignore the finding when it proceeds to dispose of the suit and to apply its mind independently to the decision of the issue. The trial court will bear in mind that the opinion expressed on the merits of", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-58", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "decision of the issue. The trial court will bear in mind that the opinion expressed on the merits of the suit when deciding an application for interim injunction does not operate as res judicata. Even in a case where the suit calls for the decision of a pure question of law alone, the trial court would be entitled to, and indeed is bound to, express its independent opinion on the issue of law and dispose of the suit accordingly.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-59", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "107. In a recent case in Amresh Tiwari v. Lalta Prasad Dubey , the Supreme Court at para. 10 held as follows (page 444) : \n \"We have heard the parties at length. In our view the High Court has committed an error in setting aside the order of the Magistrate on the basis that the earlier order was final and binding. The earlier orders were interim orders. They were passed before any evidence or statements had been recorded. Those orders were passed only on the basis of the contentions of the parties. At that stage the first respondent had contended that the civil proceedings did not relate to the same properties in respect of which the proceedings under Section 145 of the Criminal Procedure Code were adopted. Thereafter statements were recorded in Section 145 proceedings. In her statement the first respondent admitted that proceedings under Section 145 of the Criminal Procedure Code were in respect of property which formed the subject matter of the civil suit and in respect of which an order for maintenance of status quo had been passed by the civil court. The SDM was bound to take a decision afresh based on the statements before him. It is settled law that interim orders, even though they may have been confirmed by the higher courts, never bind and do not prevent passing of the contrary order at the stage of final hearing. The learned single judge of the High Court appears to have lost sight of this.\" \n 108. In PDR. B.L. Anand v. Jaffar Hussain , a Division Bench of this court while considering the plea whether an interlocutory order operates as res judicata held in para. 7 as follows :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-60", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"No doubt, the appellate court while considering an appeal has power to alter or modify an interlocutory order which does not decide the merits of the controversy in issue in the suit, but is only a step in reaching the decision in the dispute. In other words, all interlocutory orders will not operate as res judicata within the meaning of Section 11 of the Civil Procedure Code. For example, orders relating adjournment of the case, appointment of receiver or commissioner, stay of proceedings, casting of issues, summoning witnesses, calling for documents, remanding the case and many more such orders cannot operate as res judicata since they do not decide any matter in dispute arising in the suit. Even the same court in respect of such orders has power to alter or vary them by subsequent applications on proof of new facts and subsequent events.\" \n 109. In Palika Sathi Raju v. Pydah Soma Malleswara Rao , a learned single judge of this court while considering the effect of an interim order, held \"that the finding given by the courts in interlocutory applications are ephemeral and are coterminous with the result of the main proceedings and as such no importance can be attached to those findings since those findings have been arrived at in a summary proceeding.\" \n 110. Accordingly this contention is rejected as devoid of merit. \n Oral evidence :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-61", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "110. Accordingly this contention is rejected as devoid of merit. \n Oral evidence : \n 111. Under Section 59 of the Evidence Act all facts except the contents may be proved by oral evidence; under Section 60 any oral evidence must be direct in all cases. Under Section 101 of the Evidence Act whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts, which he asserts, must prove that those facts exist. When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person. Under Section 102 of the Evidence Act the burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side. \n 112. Under Order 18, Rule 2(1) on the day fixed for the hearing of the suit or on any other day to which the hearing is adjourned the party having the right to begin shall state his case and produce his evidence in support of the issues which he is bound to prove. Sub-rule (2) of Rule 2 says that the other part) shall then state his case and produce his evidence (if any) and may then address the court, generally on the whole case. Sub-rule (3) says that the party beginning the case may then reply generally on the whole issue. Under Sub-rule (4) notwithstanding anything contained in this rule, the court may, for reasons to be recorded, direct or permit any party to examine any witness at any stage. \n 113. To the surprise of the court, learned counsel for the respondent-company having vehemently contended before the Board, that examination-in-chief is a must followed by cross-examination in view of the allegations of misconduct and fraud did not choose to examine the witnesses on his side before the Board.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-62", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "114. In Palika Sathi Raju v. Pydah Soma Malleswara Rao , this court held \"that under Section 102 of the Evidence Act even if there is no evidence on the side of the plaintiff, if the defendant fails to prove the specific plea taken by him he would fail.\" \n 115. In Ishwar Bhai C. Patel v. Hari Har Behera [1999] 2 ALD (SCSN) 19, their Lordships of the Supreme Court while considering the effect of Section 114(g) of the Evidence Act observed that \"if the defendant fails to appear as witness to substantiate his evidence, it can be presumed that his pleas in the written statement are not established and suit can be decreed on the basis of the evidence adduced by the plaintiff.\" \n 116. In that case, respondent No. 2, father of the first respondent, issued a cheque for a sum of Rs. 7,000 from the account of his son as a loan to the appellant. When the amount was not repaid, the son filed a suit. The trial court dismissed the suit against the borrower, but decreed against the father. On an appeal, the High Court decreed the suit against the borrower also. Aggrieved by the said decree and judgment, the appellant (borrower) approached the Supreme Court. Their Lordships of the Supreme Court held \"that since the appellant did not enter into the witness box nor made any statement on oath in support of his pleading, an adverse presumption has to be drawn against him.\" \n 117. Even after passing the order in C. A. No. 65 of 1996, the Board in its meeting held on April 1, 1998, passed the following order :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-63", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"Witnesses will be examined on April 18, 1998, at 9.30 a.m. at Chennai. The petition will be heard on the merits as already fixed on April 27, 28 and 29, 1998, at New Delhi.\" \n 118. On April 27, 1998, also the Board observed that oral evidence will be taken on June 9, 1998, at 10.30 a.m. at Chennai. I do not know how the Board can hear the petition on the merits even without completion of trial. \n 119. Thereafter the Board started hearing the matter on January 4, 1998, without recording any evidence, perhaps on the basis of an affidavit filed by petitioner No. 9 dated May 13, 1998, wherein he expressed his inability to produce list witnesses as they are being terrorized and pressurized in all possible ways by respondents Nos. 2 and 3 by the money power at their command and taking advantage of their position as managing director and joint managing director of the first respondent-company. It has not considered even the oral evidence that was adduced on behalf of the petitioners by observing that it is incomplete. The Board recorded the evidence of the ninth petitioner prior to filing of Application No. 65 of 1996 he did not depose on the subsequent events. But at the same time as he is very much conducting the case personally, and it is not known why he was not examined on subsequent events and the attendance sheets of the Board do not throw on this aspect any light having posted the case for adducing evidence after disposing of C. A. No. 65 of 1996. Be that as it may it is not known why the respondents were not examined to prove their case ; more so to prove the authenticity of the xerox documents on which they placed reliance.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-64", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "120. As the examination of the ninth petitioner was prior to the filing of C. A. No. 65 of 1996, wherein fresh acts of oppression and mismanagement were brought to the notice of the Board, his evidence is complete on the main allegations in the company petition. It is not known why he was not examined on those aspects though he is conducting the case. But the Board brushed aside his evidence by observing that it is incomplete. At the same time, Mr. Raghavan tried to defend his client's case by relying on that evidence. The law of the land is that when no rebuttal evidence is produced by the opposite party and the version spoken by the witness remained undisturbed, the natural presumption that arises is that whatever the witness spoke should be regarded as true and an adverse inference has to be drawn against the opposite party who did not choose to go into the witness box and subject himself to the cross examination on the documents and material relied on by him before the court as held by the Supreme Court in Iswar Bhai C. Patel v. Hari Har Behera [1999] 2 ALD (SCSN) 19.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-65", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "121. While confirming the judgment of the High Court, that the findings of the first appellate court were not based on proper appreciation of evidence, their Lordships of the Supreme Court in Rajappa Hanamantha Ranoji v. Mahadev Channabasappa , observed that (headnote): \"though the High Court has observed that findings arrived at by the first appellate court are not based on proper appreciation of the evidence on record and the same are set aside but for all intents and purposes and in substance the conclusion of the High Court is that the decision of the first appellate court is based on no evidence and is perverse. The High Court has rightly drawn an adverse inference on account of non-examination of respondent No. 4, the tenant, as a witness by the appellant. On the facts and circumstances of the case that was vital and was rather the heart of the entire matter going to the root of the whole case. There was no explanation for non-examination of respondent No. 4. Clearly, the decree of the first appellate court is based on no evidence and is perverse.\" \n 122. In Habeeb Khan v. Valasula Devi , this court drew an adverse inference against the defendant/appellant for with-holding important and material witnesses viz., the fourth defendant Shahbaz Khan and their employee, Abdul Ahmed. In recording the above finding, the learned single judge relied upon a judgment of the Supreme Court in Gopal Krishnaji Ketkar v. Mohd Haji Latif, and Patel Naranbhai Marghabhai v. Dhulabhai . In this case, neither the respondents have gone into the witness box nor their employees who maintained the records were made to depose to prove the documents filed by the respondents.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-66", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "123. In the light of the foregoing discussion, I find that there is no substance in the contention of learned counsel for the respondent that the petitioner has given up his plea for summoning the original documents in this case forgetting the prayer in the company petition and C. A. No. 68 of 1994 for the purpose on which the Board did not pass any orders. \n 124. To my mind to the extent of allegations in the main petition the evidence of the ninth petitioner stood unrebutted and in the normal course the petition would have been allowed. \n Any amount of proof cannot substitute the pleadings : \n 125. Nextly, counsel for the respondents contended that any amount of proof on a plea not raised in the pleadings can substitute pleadings, which are the foundation of the claim of a litigating party and he placed reliance on Abu-bakar Abdul Inamdar v. Harun Abdul Inamdar, and a judgment of the Privy Council reported in Siddik Mahomed Shah v. Masammat Saran [1930] 58 MLJ 7 ; AIR 1930 PC 57(1). \n 126. I have gone through these judgments and I have no hesitation to reject the contention of counsel, as these two decisions referred to a situation, where evidence was let in without there being a basic foundation in the pleadings. But, the facts of this case are converse to the facts of those cases. Here pleadings on both the sides are complete, while some evidence was let in by the petitioners apart from filing original documents in their possession, and requested the Board to call for the original record from the company the respondents simply filed xerox copies of the documents on which they are placing reliance and no one was examined on their behalf to prove their case. Hence the above judgments cannot come to the aid of the respondents.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-67", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Non-examination of respondents is not fatal as no documents were marked on behalf of the petitioners : \n 127. Counsel for the respondents contended that the ninth petitioner though was examined on behalf of the petitioners did not speak to a single document filed on behalf of the petitioner and as such the non-examination of the witnesses on behalf of the respondents is not fatal. It is true that the documents were not marked and it is definitely a lapse on the part of the Board as well as counsel who are expected to know the procedural laws. I have no manner of doubt, had counsel for the petitioners conducted the case properly, the hands of the Board would have been tied in this case. It is not known whether counsel for the petitioners is a party to the grave illegalities committed by the Board wantonly or otherwise. But at the same time, the ninth petitioner spoke in crystal clear terms in his evidence on the acts complained of by the petitioners and in fact learned counsel appearing for the respondents could not and did not elicit anything contrary to what the ninth petitioner has spoken in his chief examination and he stuck to his version except for some minor discrepancies which did not matter much. Even the respondents counsel did not cross-examine the witness with reference to the documents. He being sufficiently a senior counsel, at least he would have cross-examined the witness with reference to the documents filed by him or examined his witnesses in the manner in which counsel for the petitioners examined his witness. That was also not done. Having pleaded before the Board that recording oral evidence is a must he cannot now turn round and contend at this belated stage that as the petitioner failed to mark the documents, non-examination of witnesses by the respondents is not fatal to the case.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-68", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "128. In counter to these arguments of the petitioners, learned counsel for the respondent-company contended that the order of the Board cannot be held as bad on the ground that the procedural law is not followed and relied upon a judgment of the Supreme Court in Union of India v. T.R. Varma, , wherein their Lordships observed as follows (page 885) : \n \"Now, it is no doubt true that the evidence of the respondent and his witnesses was not taken in the mode prescribed in the Evidence Act; but that Act has no application to enquiries conducted by Tribunals, even though they may be judicial in character. The law requires that such Tribunals should observe rules of natural justice in the conduct of the enquiry and if they do so, their decision is not liable to be impeached on the ground that the procedure followed was not in accordance with that, which obtains in a court of law . . . \n If these rules are satisfied, the enquiry is not open to attack on the ground that the procedure laid down in the Evidence Act for taking evidence was not strictly followed.\"  \n 129. But this contention of learned counsel runs counter to his argument addressed before the Board in C. A. No. 134 of 1995 to the effect that the provisions of the Code of Civil Procedure are applicable before the Board, which were already referred to supra. In this appeal having contended that the Board need not follow the rules of procedure, now contends that non-examination of respondents is not fatal as no documents were marked on behalf of the petitioners. This conduct of the respondents is nothing but blowing hot and cold ; more so in a judicial forum and it is nothing but an abuse of the process and a vexatious litigation.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-69", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "130. In Lohia Properties (P.) Ltd. v. Atmaram Kumar , their Lordships of the Supreme Court considered the effect of Order 8, Rule 5(1), where-under the defendant is duty-bound to deny the plaint allegations specifically or by necessary implication and held as follows : \n \"Order 8, Rule 5(1) reads as follows : \n 'Every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability : \n Provided that the court may in its discretion require any fact so admitted to be provided otherwise than by such admission.' What is stated in the above is, what amounts to admitting a fact on a pleading while Rule 3 of Order 8 requires that the defendant must deal specifically with each allegation of fact of which he does not admit the truth ... Non-traverse would constitute an implied admission. In the facts of this case the findings of the trial court and that of the first appellate court could be upheld on this admission. Thus, we find the High Court was wrong in interfering with this finding. Accordingly, the appeal will stand allowed. No costs.\"  \n 131. In Naseem Bano (Smt.) v. State of U.P. , their Lordships of the Supreme Court held that since the respondents did not dispute that 40 per cent. of the total number of posts had not been filled up by promotion, as pleaded by the appellants, in as much as the said averments had not been controverted, the High Court should have proceeded on the basis that the said averments had been admitted by the respondents.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-70", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "132. In this case, except filing the written statement and some xerox copies of the records, no semblance of fair trial has taken place. Even assuming what learned counsel for the respondents submits is true, the Board is expected to observe the rules of natural justice. What is meant by observance of rules of natural justice was considered by the Supreme Court in A.K. Kraipak v. Union of India, and Industrial Credit and Investment Corporation of India Ltd. v. Grapco Industries Ltd. . \n Summary of the lapses : \n 133. Now I sum up the procedural illegalities or lapses committed by the Board and the manifest errors evident on the face of the record are : \n (1) The Board having taken the stand that the averments made by the parties in the petition and the counter have to be proved by letting oral evidence on both sides and the provisions of the Code of Civil Procedure are applicable to the proceedings, without giving any reasons, the Board heard the arguments on December 4, 1998, and February 16, 1999, and pronounced orders on March 22, 1999. I have carefully examined the order passed by the Board as well as the attendance sheets to know the mind of the Board why it has changed its attitude and pronounced the orders by hearing learned counsel on both sides. Neither could I cull out anything from the record nor the respondent's/counsel who appeared before the Board was able to offer any explanation for the sudden change in the mind of the members of the Board. To my mind, the procedure followed by the Board, completely vitiated the proceedings.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-71", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(2) Nextly, it is seen that in the main petition itself the petitioners prayed for summoning the original records. In fact in the notice served on the respondents, it is clearly stated that they shall appear with original records to answer the allegations but the respondents filed only xerox copies of the records. When the records have not been produced by the respondents after receiving the summons, the petitioners filed another application, i.e., C.A. No. 69 of 1994 on April 11, 1994, to summon these records. Without calling for original records, the Board passed the orders even after the petitioners brought to the notice of the Board, by filing documentary evidence, that the respondents are refusing to furnish information by stating under what law they are entitled for the information. It is yet another illegality. \n (3) Petitioner No. 9 went into the witness box and his cross examination was completed on October 18, 1995. This evidence is complete on all aspects on the allegations made in the main petition. The Board started hearing the case without completing his evidence. \n (4) Be that as it may only to the extent of subsequent allegations, though he did not depose, he proved the allegations by filing necessary documents. But his evidence was discarded stating that it is incomplete. \n (5) On the other hand, the respondents completely failed to prove their case in a manner known to law. \n (6) The Board relied on xerox copies of documents, which are not admissible in evidence in dismissing the case of the petitioners without summoning the original records though serious allegations of fabrication of documents and accounts etc., are made against the respondents.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-72", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(7) Assuming for a moment that the petitioner failed to examine the witnesses, under Section 59 of the Evidence Act, the respondents are expected to lead oral evidence in support of their contentions. Further, under Section 102 of the Evidence Act, the burden of proof lies on the respondents to prove that there is neither mismanagement in running the affairs of the company prejudicial to the public interest nor is there oppression of the minority shareholders as alleged in the petition with documentary as well as oral evidence. That was also not done in this case. \n (8) Under Section 114(g) of the Evidence Act, the Board is expected to draw adverse inference against the respondents for not leading any evidence and also for not producing original records, which are in their possession before the Board. \n (9) The Board having rejected the plea of the petitioners to lead evidence by affidavits, relied on the retracted affidavits of those persons who initially gave affidavits in favour of the petitioners, filed by the respondents, more so without verification in dismissing the case of the petitioners without reference to the affidavits filed by the petitioners in support of their plea. \n (10) Petitioner No. 9 filed an affidavit expressing his inability to secure the presence of the list witnesses by stating that respondents Nos. 2 and 3 started influencing the witnesses with the money power at their end and also falsely implicated him as well as others in criminal cases with documentary evidence. The Board failed to consider whether the acts of the respondents constitute acts of oppression of minority shareholders or not. \n (11) The other illegalities committed by the Board will be considered while dealing with the merits of the case.  \n Question of law :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-73", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Question of law : \n 134. Nextly, learned counsel for the respondents strenuously contended that under Section 10F of the Act, the High Court can entertain an appeal only on a question of law arising out of the order and this provision is more stringent than that of Section 100 of the Code of Civil Procedure whereunder the High Court can entertain the second appeals only on questions of law. It is further contended that even if the Board failed to follow the procedure known to law, it cannot be said that any question of law will arise for consideration in the appeals before the court and they are liable to be dismissed. In support of his contention, he cited a plethora of decisions on this aspect. \n (1) In CIT v. Scindia Steam Navigation Co. ltd, their Lordships of the Supreme Court while considering Section 66(1) of the Income-tax Act, which is in pari materia the same as Section 10F of the Act to find out whether a question of law has arisen out of the order or not summarized the discussion in the judgment at page 611 as hereunder :  \n \"the result of the facts and circumstances of the case, (1) When a question is raised before the Tribunal and is dealt with by it, it is clearly one arising out of its order. \n (2) When a question of law is raised before the Tribunal, but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it and is, therefore, one arising out of its order. \n (3) When a question is not raised before the Tribunal, but the Tribunal deals with it, that will also be a question arising out of its order. \n (4) When a question of law is neither raised before the Tribunal nor considered by it, it will not be a question arising out of its order not withstanding that it may arise .....\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-74", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "This case cannot be an authority for the proposition that whether the procedural illegalities committed by the Tribunal constitute a question of law arising out of the order of the Board or not. \n (2) In Union of India v. T. R. Varma, , their Lordships of the Supreme Court having held the Evidence Act is not applicable to the enquiries conducted by Tribunals even though they may be judicial in character observed (p. 885) : \"The law requires that such Tribunals should observe the rules of natural justice in the conduct of the enquiry and if they do so their decision is not liable to be impeached on the ground that the procedure followed was not in accordance with that which obtains in a court of law.\" \n (3) Malleswara Finance and Investments Company (P.) Ltd. v. Company Law Board [1995] 82 Comp Cas 836 ; [1995] 1 CLJ 1 (Mad) wherein the Madras High Court in para. 124 of the judgment held that (p. 890): \"an appeal under Section 10F of the Companies Act before this court can be entertained only on a question of law which arises from that order.\" \n (4) C. Sri Hari Rao's case [1999] 97 Comp Cas 685, this court in the same case, on an appeal filed by the petitioners against the order of the Board in C. A. No. 65 of 1996 held when the matter is pending before the Company Law Board for final adjudication of the disputes, we do not see any reasons to entertain an appeal in view of the provisions of Section 10F of the Act.  \n 135. None of the above cases can be considered as an authoritative pronounce-", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-75", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "135. None of the above cases can be considered as an authoritative pronounce-\nment on the issue before this court, i.e., whether the procedure adopted by the Board and the perverse finding recorded by it can be sustained in law. If not, whether a question of law will arise for consideration by the court from out of the order of the Board. \n 136. On the other hand a Constitution Bench of the Supreme Court in Printers (Mysore) Pvt. Ltd. v. Pothan Joseph, , while holding that the discretion vested in the court to grant stay is judicial, made the following observations (p. 1159) : \n \"If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. As is often said, it is ordinarily not open to the appellate court to substitute its own exercise of discretion for that of the trial judge ; but if it appears to the appellate court that in exercising its discretion the trial court has acted unreasonably or capriciously or has ignored relevant facts and has adopted an unjudicial approach then it would certainly be open to the appellate court--and in many cases it may be its duty--to interfere with the trial court's exercise of discretion. In cases falling under this class the exercise of discretion by the trial court is in law wrongful and improper and that would certainly justify and call for interference from the appellate court. These principles are well established.\" \n 137. The Supreme Court has taken a similar view with regard to the observance of principles of natural justice by Tribunals exercising quasi-judicial powers in a decision reported in A. K. Kraipak v. Union of India, .", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-76", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "138. In Shri Bhagwan Sharma v. Smt. Bani Ghosh, , a Constitution Bench of the Supreme Court held that : \"the High Court was certainly entitled to go into the question as to whether the findings of fact recorded by the first appellate court which was the final court of fact were vitiated in the eye of law on account of non-consideration of admissible evidence of vital nature\". \n 139. To the same effect is the judgment of the Supreme Court in Ishwar Dass Jain's case, , where their Lordships of the Supreme Court held that (p. 429) : \n \"the court (the first appellate court) is under a duty to examine the entire relevant evidence on record and if it refuses to consider important evidence having direct bearing on the disputed issue and the error which arises is of a magnitude that it gives birth to a substantial question of law, the High Court is fully authorised to set aside the finding. This is the situation in the present case.\" Their Lordships further held that : \"where the findings by the court of facts are vitiated by non-consideration of relevant evidence or by an essentially erroneous approach to the matter, the High Court is not precluded from recording proper findings\". \n 140. Nextly in Dilbagrai Punjabi v. Sharad Chandra, , their Lordships of the Supreme Court held that \"the court is under a duty to examine the entire relevant evidence on record and if it refuses to consider important evidence having direct bearing on the disputed issue and the error which arises is of a magnitude that it gives birth to a substantial question of law, the High Court is fully authorized to set aside the finding.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-77", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "141. Similar is the view taken by the Supreme Court in Sundra Naicka Vadiyar (dead) v. Ramaswami Ayyar (dead), , wherein it held that \"ignoring some of the documents which were vital for deciding the question of possession also vitiated the finding on the question of possession recorded by the trial court as well as the first appellate court.\" \n 142. In Sree Meenakshi Mills ltd, v. CIT , their Lordships of the Supreme Court while interpreting Section 66(1) and (2) of the Indian Income-tax Act, 1922, under which a reference has to be made to the High Court only on a question of law, observed that (pp. 36 and 37) : \"(1) finding on a question of fact is open to attack as erroneous in law only if it is not supported by any evidence or if it is unreasonable and perverse ; (2) when a conclusion has been reached on an appreciation of a number of facts established by the evidence, whether that is sound or not must be determined not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting in the picture as a whole.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-78", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "143. Lastly their Lordships observed (pp. 42 and 36) : \"inference from the facts would be a question of fact or of law according as the point for determination is one of pure fact or mixed question of law and fact..... Under Section 66(1) of the Act it is only a question of law that can be referred for decision of the court and it is impossible to argue that the conclusion of the Tribunal is anything but one of fact, it has been held on the corresponding provisions in the English Income Tax statutes that a finding on a question of fact is open to attack as erroneous in law only if it is not supported by any evidence or if it is unreasonable and perverse\". \n 144. In Kondiba Dagadu Kadam v. Savitribai Sopan Gujar , their Lordships of the Supreme Court while interpreting Section 100 of the Code of Civil Procedure held that the High Court cannot substitute its opinion for the opinion of the first appellate court unless it is found that the conclusions drawn by the lower appellate court were erroneous being contrary to the mandatory provisions of law applicable or its settled position on the basis of pronouncements made by the apex court, or was based upon inadmissible evidence or arrived at without evidence. \n 145. In Ashwinkumar K. Patel v. Upendra J. Patel, , their Lordships of the Supreme Court posed a question and answered as follows (pages 164 and 165) : \n \"The point for consideration is whether the order of the High Court in remitting the matter to the trial court was necessary. Question also is whether this court should remand the case to the High Court in the event of this court holding that the remand by the High Court was not called for. If not, whether the order of the trial court is to be sustained.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-79", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "In our view, the High Court should not ordinarily remand a case under Order 41, Rule 23 of the Civil Procedure Code to the lower court merely because it considered that the reasoning of the lower court in some respects was wrong. Such remand orders lead to unnecessary delays and cause prejudice to the parties to the case. When the material was available before the High Court, it should have itself decided the appeal one way or the other. It could have considered the various aspects of the case mentioned in the order of the trial court and considered whether the order of the trial court ought to be confirmed or reversed or modified. It could have easily considered the documents and affidavits and decided about the prima facie case on the material available. In matters involving agreements of 1980 (and 1996) on the one hand and an agreement of 1991 on the other, as in this case, such remand orders would lead to further delay and uncertainty. We are, therefore, of the view that the remand by the High Court was not necessary. \n We have also considered whether, on that account, we should send back the matter to the High Court for consideration of the appeal. We are of the view that on the facts of this case, this court can decide whether the temporary injunction granted by the trial court should be confirmed or not. We are, therefore, not remitting the matter to the High Court because a further remand would lead to delay and perhaps one more special leave petition to this court.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-80", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "146. In the light of the preponderant view of the Supreme Court, I have no hesitation to hold that the order passed by the Board is neither in accordance with the rules of procedure prescribed under the provisions of the Civil Procedure Code nor based on the principles of natural justice. The Board passed the impugned order in a manner unknown to law and in an arbitrary manner apart from the fact that the findings recorded by it on the merits of the case are not only perverse but unknown to adjudicatory process of the land as discussed below. There being an error apparent on the face of the orders of the Board, as pointed out supra, definitely a question of law has arisen from out of the order of the Board to be decided by this court under Section 10F of the Act. \n Whether matter to be remitted back for fresh disposal in accordance with law : \n 147. In the normal course, the matter has to go back to the Board for fresh disposal in accordance with law. If I adopt such a course, a dispute pending for over a decade will be in the courts for another decade or two as there is every possibility of carrying the matter in appeal till all the forums that are involved in the adjudicatory process are exhausted by one or the other party.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-81", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "148. Secondly, the ninth petitioner in the open court expressed that he is not even being paid dividends all these years and he will be satisfied if the value of the shares held by his family members and his friends is paid to them and they are not interested in continuing as shareholders in the first respondent-company and it is for respondent No. 2 to administer the affairs of the company in a manner he likes as long as the majority shareholders approve his actions. In opposition to the claim of petitioners, counsel for respondent No. 2 strenuously contended that the direction given by the Company Law Board is not supported by any reasons and as such the company cannot be compelled to purchase the shares. In the light of this contention, I directed counsel to argue the case on the merits to find out whether cogent reasons can be given for the direction given by the Board on the basis of the material available on record including the documents, which were not looked into by the Board. I am fortified in my view by several judgments of the superior courts. \n 149. In Bechan Pandey v. Dulhin Janki Devi, , their Lordships of the Supreme Court while considering the plea of the plaintiff/appellant for remand of the case, in a suit for declaration of title and possession, partly decreed by the trial court, but dismissed in its entirety by the High Court, held as follows (page 869) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-82", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"To remand the suit to the trial court would necessarily have the effect of keeping alive the strife between the parties and prolonging this long-drawn litigation by another round of legal battle in the trial court and thereafter in appeal. It is time, in our opinion, that we draw the final curtain and put an end to this long meandering course of litigation between the parties. If the passage of time and the laws of nature bring to an end the lives of men and women, it would perhaps be the demand of reason and dictate of prudence not to keep alive after so many years the strife and conflict started by the dead. To do so would in effect be defying the laws of nature and offering a futile resistance to the revages of time. If human life has a short span, it would be irrational to entertain a taller claim for disputes and conflicts which are a manifestation of human frailty. The courts should be loath to entertain a plea in a case like the present which would have the effect of condemning succeeding generations of families to spend major part of their lives in protracted litigation\". \n 150. In Ashwinkumar K. Patel v. Upendra ). Patel, , their Lordships of the Supreme Court held as follows (page 165) ;", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-83", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"that the High Court should not ordinarily remand a case under Order 41, Rule 23 of the Civil Procedure Code to the lower court merely because it considered that the reasoning of the lower court in some respects was wrong. Such remand orders lead to unnecessary delays and cause prejudice to the parties to the case. When the material was available before the High Court, it should have itself decided the appeal one way or other. It could have considered the various aspects of the case mentioned in the order of the trial court and considered whether the order of trial court ought to be confirmed or reversed or modified. It could have easily considered the documents and affidavits and decided about the prima facie case on the material available.\" \n 151. In Shri Bhagwan Sharma's case, , their Lordships of the Supreme Court held as follows (headnote) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-84", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"The High Court is certainly entitled to go into the question as to whether the findings of fact recorded by the first appellate court which was the final court of fact were vitiated in the eye of law on account of non-consideration of admissible evidence of vital nature. But, after setting aside the findings of fact on that ground the court had either to remand the matter to the first appellate court for a rehearing of the first appeal and decision in accordance with law after taking into consideration the entire relevant evidence on the records, or in the alternative to decide the case finally in accordance with the provisions of Section 103(b). If in an appropriate case the High Court decides to follow the second course, it must hear the parties fully with reference to the entire evidence on the records relevant to the issue in question and this is possible if only a proper paper book is prepared for hearing of facts and notice is given to the parties. The grounds which may be available in support of a plea that the rinding of fact by the court below is vitiated in law does not by itself lead to the further conclusion that a contrary finding has to be finally arrived at on the disputed issue. On a reappraisal of the entire evidence the ultimate conclusion may go in favour of either party and it cannot be prejudged.\" \n 152. In Sundra Naicka Vadiyar's case, , their Lordships of the Supreme Court held that (headnote) : \"concurrent findings of fact--Reappre-ciation--Findings on possession by ignoring documents evidencing the compromise documents containing recitals of surrender of possession and other material evidence, such as dismissal of eviction proceedings between same parties in terms of compromise before the Revenue Court--Interference in second appeal justified\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-85", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "153. In Dilbagrai Punjabi's case, , their Lordships of the Supreme Court observed that (headnote) : \"the court is under a duty to examine the entire relevant evidence on record and if it refuses to consider important evidence having direct bearing on the disputed issue and the error which arises is of a magnitude that it gives birth to a substantial question of law, the High Court is fully authorised to set aside the finding\". \n 154. In Bhairab Chandra Nandan v. Ranadhir Chandra Datta , their Lordships of the Supreme Court held that even though formally an issue not framed but if parties went to trial and adduced evidence keeping that issue in mind and drew attention of the court in that regard, appeal need not be remanded for a finding on that question. \n 155. In Thamma Ramachandra Rao v. Madras State [1956] ALT 24 (NRC), it is held that an appellate court is not bound to remand the case for trial of an issue on which no finding was recorded but is entitled to give its own decision, if the evidence on record is sufficient. \n 156. I am satisfied that even with the scant evidence that is available on record in this case, whether admissible or inadmissible, the dispute can be adjudicated without remanding the matter for fresh disposal by the Board by verifying the xerox copies of the records by summoning the originals, more so in the light of the submission of the ninth petitioner that their group is satisfied with the direction given by the Board.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-86", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "157. But, counsel for the respondents contended that if the court feels that the order of the Board is cryptic, it has to remand the matter. In support of his plea, he placed reliance on Shree Consultants and Services Pvt. Ltd. v. K. N. Sankaranarayanan [1995] 84 Comp Cas 473, wherein their Lordships of the Madras High Court held as follows (page 485) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-87", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"We have carefully considered the submissions of learned counsel appearing on either side. A perusal of the memorandum of grounds of appeal filed in this court against the order of the Company Law Board also shows that the appellants before the learned single judge (respondents Nos. 1 and 2 before us) were equally aggrieved against the manner of disposal of the preliminary objection and contended that the Company Law Board ought not to have decided the issue in such a summary fashion and the laconic order passed without objective consideration or assigning any reasons therefor cannot be sustained. That apart, several factual issues such an discrepancies in the signatures found in the consenting letter, the varying numbers of such persons who subscribed their signature to the letter of consent are very serious as also vital questions of fact which deserve a proper and effective enquiry or trial at the hands of the Company Law Board. That apart, the locus standi or authority of Mr. C. P. Sodhani, to present the application in the absence of a resolution of the board of directors authorizing him to do so was also raised. We also find from the order of the Company Law Board challenged on appeal before the learned single judge that the Company Law Board has passed a cryptic order holding that after carefully considering the views of both counsel and the facts of the case they came to the conclusion that the consent given in annexure 2 meets the requirement of Section 399 and, therefore, the petition was maintainable. No reasons or judicious discussion or consideration of any of the contentions or the facts and circumstances of the case have been assigned or made in the order which involve serious consequences. In the background of such contentions and serious lapse arid omission on the part of the Company Law Board the learned single judge ought to have in our opinion, set aside the order of the Company Law Board and remitted the matter for fresh consideration of the Company Law Board instead of undertaking an adjudication of some of the legal issues which depend", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-88", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "consideration of the Company Law Board instead of undertaking an adjudication of some of the legal issues which depend very much on vital issue of facts.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-89", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "158. I have already recorded the reasons for reappreciating the evidence on record. Hence, this contention is also rejected. \n Subsequent events : \n 159. Counsel for the respondents nextly contended that the court must confine itself to the case as made out in the petition and the subsequent events, if any, brought to the notice of the court cannot be looked into. In support of his plea, he relied on a judgment of the Supreme Court in Sri Venkataramana Devaru v. State of Mysore, . In that case counsel for the appellants raised a new plea stating that the subject temple was originally founded for the benefit of five families of Gowd Saraswath Brahmins and it cannot be treated as a public institution by contending that it is purely a question of law. Rejecting the contention of counsel their Lordships of the Supreme Court held that we are unable to agree with the submission. (Page 263) : \"The object of requiring a party to put forward his pleas in the pleadings is to enable the opposite party to controvert them and to adduce evidence in support of his case. And it would be neither legal nor just to refer to evidence adduced with reference to a matter, which was actually in issue and on the basis of that evidence, come to a finding on a matter which was not in issue and decide the rights of parties on the basis of that finding\". \n 160. I have no manner of doubt that the above judgment cannot be pressed into service by counsel for the simple reason that the issue was sought to be raised at the level of the apex court without there being any foundation in the pleadings and without adducing any evidence on that aspect. The facts of this case are altogether different. The subsequent events were brought to the notice of' the Board, before it has taken up the company petition for hearing.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-90", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "161. He also relied on a judgment of the Calcutta High Court in Mohta Bros (P.) Ltd. v. Calcutta Landing and Shipping Company Ltd. [1970] 40 Comp Cas 119, wherein the Division Bench of the Calcutta High Court held that (headnote) : \"when dealing with a petition for relief from oppression or mismanagement made under Sections 397 and 398 of the Companies Act, 1956, the court must confine itself to the case as made out in the petition and to the allegations made therein and the supporting affidavits and not to look at the other evidence with regard to events that might have happened subsequent to the petition\". \n 162. I am not inclined to agree with the reasoning given by the Calcutta High Court for the reason that the apex court in many a case held that the court is bound to take subsequent events into consideration even at the appellate stage as the proceedings being a continuous one and should mould the relief. \n 163. In Pasupuleti Venkateswarlu v. Motor and General Traders, , Justice V. R. Krishna lyer speaking for the Full Bench, while rejecting the argument of counsel for the appellant that the High Court committed illegality in taking cognizance of subsequent events, disastrous as they proved to be, summarized the legal position as hereunder (p. 1410) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-91", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"We feel the submissions devoid of substance. First about the jurisdiction and propriety vis-a-vis circumstances which come into being subsequent to the commencement of the proceedings. It is basic to our processual jurisprudence that the right to relief must be judged to exist as on the date a suitor institutes the legal proceedings. Equally clear is the principle that procedure is the handmaid and not the mistress of the judicial process. If a fact, arising after the lis has come to court and has a fundamental impact oh the right to relief or the manner of moulding it, is brought diligently to the notice of the Tribunal, it cannot blink at it or be blind to events which stultify or render inept the decretal remedy. Equity justifies bending the rules of procedure, where no specific provision or fairplay is violated, with a view to promote substantial justice--subject, of course, to the absence of other disentitling factors or just circumstances. Nor can we contemplate any limitation on this power to take note of updated facts to confine it to the trial court. If the litigation pends, the power exists, absent other special circumstances repelling resort to that course in law or justice. Rulings on this point are legion, even as situations or applications of this equitable rule are myriad. We affirm the proposition that for making the right or remedy claimed by the party just and meaningful as also legally and factually in accord with the current realities, the court can, and in many cases must, take cautious cognisance of events and developments subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously obeyed. On both occasions the High Court, in revision, correctly took this view. The later recovery of another accommodation by the landlord, during the pendency of the case, has as the High Court twice pointed out a material bearing on the right to evict, in view of the inhibition written into Section", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-92", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "pointed out a material bearing on the right to evict, in view of the inhibition written into Section 10(3)(iii) itself. We are not disposed to disturb this approach in law or finding of fact.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-93", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "164. In fact, the Board itself in its order dated December 18, 1997, held that since now the matters relating to Section 397 or 398 of the Act are solely within the jurisdiction of the Company Law Board, we would like to settle this issue once for all in the following terms : \n \"(a) Section 397 or 398 of the Act has to stand on its own on the basis of the allegations contained in the petition. Subsequent events brought on record alone, in case the main petition fails on merits, cannot entail a person to any relief. In case the allegations in the main petition are placed, then subsequent events may be taken into consideration by the board in moulding the suitable relief.\" \n 165. From this it is seen that the Board did not close the doors for the ninth petitioner to raise subsequent events also during the course of the arguments in the main case. In fact the Board considered these two new issues that were brought to the notice of the Board in C. A. No, 65 of 1996 in the impugned orders. Hence, it is too late in the day to contend that subsequent events that have taken place after the filing of the petition cannot be taken into consideration, more so, when the subsequent events were brought to the notice of the Board even before the case was taken up for hearing i.e., when the petitioner is still at the preliminary stage of completing the formalities before taking up the petition for trial. Hence, the contention of counsel that subsequent events brought to the notice of the Board in C. A. No. 65 of 1997 cannot be looked into for moulding the relief has no legs to stand. \n Vague allegations :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-94", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Vague allegations : \n 166. Learned counsel for the respondents strenuously contended that the allegations of oppression and mismanagement are very vague and the petitioners have not given full particulars of the acts alleged by them. Hence the company appeal is liable to be dismissed. In support of his contention, he placed reliance on a judgment of the Calcutta High Court in Mohta Bros. (P.) Ltd. 's case [1970] 40 Comp Cas 119, wherein it was held that (p. 128) : \"vague and uncertain allegations of oppression and mismanagement although they may constitute grounds for suspicion, do not entitle a petitioner to ask the court to embark upon an investigation into the affairs of the company in the hope that, in consequence of such investigation, something will turn up which will enable the court to grant relief to the petitioner ..... and the petitioner must prove prima facie, at any rate, that on those facts, an investigation is called for\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-95", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "167. In R. Khemka v. Deccan Enterprises (P.) Ltd.'s case [1998] 16 SCL 1 (AP) at para. 93 after considering the case law, a learned judge of this court observed that \"it is now beyond controversy that in a petition under Sections 397 and 398, it is to be specifically pleaded and established by the party not only the existence of circumstances, warranting winding up of the company under the 'just and equitable' clause, but also it should be further established that winding up order if passed would act adverse to the interest of the shareholders. Further, when this clause is invoked, there must be material to show that it is just and equitable not only for the persons applying for winding up but also to the company and all its shareholders. Even in certain cases, violation of statutory provisions was held to be not oppressive act warranting interference under Section 402 of the Companies Act\". \n 168. In Sri Venkataramana Devaru's case, , the Supreme Court held that \"the object of requiring a party to put forward his pleas in the pleading is to enable the opposite party to controvert them and to adduce evidence in support of his case and it would be neither legal nor just to refer to evidence adduced with reference to a matter which was actually in issue and on the basis of that evidence .....\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-96", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "169. In S. Seetharaman v. Stick Fast Chemicals (P.) Ltd. [1998] 93 Comp Cas 507, the Madras High Court held that in a petition filed under Section 397 of the Companies Act, 1956, the petition should contain all material facts. In the case of fraud, mismanagement, oppression, etc., full and complete particulars must be alleged in the petition. Subsequent affidavits are not enough. The petitioner must plead all material facts necessary for granting the relief as prayed for. \n 170. Countering the arguments of counsel for the respondents, counsel for the petitioners placed reliance on M. Harichandra Prasad v. Chitturi Krishna-murthy , wherein this court held as follows : \n \"Pleading should receive a liberal construction. There may be many instances wherein the pleadings are incomplete, but during trial the parties place many materials before the court either directly touching the actual controversies between them or incidentally touching upon such questions, where the court could draw inferences and render justice. If a plea is not specifically made and yet it is covered by an issue by implication and the parties knew that the said plea was involved in the trial then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence. That is how even by invoking its powers under Order VI, Rule 2 of the Civil Procedure Code the court will mould the relief taking the subsequent events as judicial notice.\" \n 171. In Hari Singh v. Kanhaiya Lal, , the Supreme Court reversed the concurrent findings of the courts below on the ground of lack of details in pleadings. Their Lordships of the Supreme Court observed (p. 3330) : \"it is not in dispute that there is pleading that the disputed premises was sublet.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-97", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Details if any can be supplemented through evidence. Mere lack of details.in the pleadings cannot be reason to set aside concurrent finding of facts\". \n 172. In Mir Niyamath All Khan v. Commercial and Industrial Bank Ltd., , a Division Bench of this court held that \"normally the court will not grant the relief to the plaintiff on a case for which there was no foundation laid in the pleadings and which the defendant was not called upon to meet. But when the alternative case which the plaintiff could have made was admitted by the defendant either in his written statement or in his evidence and the parties adduced evidence relating to such an alternative claim, there would be nothing improper in giving the plaintiff a decree upon such alternative claim.\" \n 173. In Kalka Prasad Ram Charan v. Harish Chandra, , the Allahabad High Court held that (headnote) : \"even though no issue was framed on certain point by the court below when both parties adduced evidence relating to it, each party knows what its case is and avails of the opportunity of producing evidence on the point, the High Court can, in an appeal from the decision, record a finding on the point under Order 41, Rule 24 of the Civil Procedure Code\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-98", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "174. I have seen the order of the Board, the evidence and the written arguments submitted by both the parties. I have no hesitation to hold that sufficient details of the allegations of oppression and mismanagement were given in the petition. The ninth petitioner not only deposed on those allegations but he was also subjected to cross-examination by counsel for the respondents. From the written arguments submitted by counsel for the respondents and the order of the Board it is seen that both counsel addressed arguments very elaborately and the Board recorded findings on some of the issues and reference was made to some other issues without giving a finding and certain other issues were not at all considered for reasons best known to it. Hence I hold that there is no vagueness in the allegations in the petition, at any rate, parties addressed arguments on all the issues knowing fully well the issues in controversy and in fact the Board recorded findings adverting to their arguments. To my mind the respondents are blowing hot and cold in the judicial proceedings. With regard to the findings of the Board that are in their favour they are trying to take advantage of it knowing fully well that the Board conducted the proceedings in a very shabby manner unknown to law and on the findings that are inconvenient to them they are raising all sorts of pleas. In the result, I do not find any substance in this contention. \n If the action of the board is illegal the same has to be questioned in a court of law and petition under Sections 397 and 398 of the Act is not an appropriate remedy :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-99", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "175. Nextly, counsel for the respondents contended that if any of the actions of the board of directors is illegal or invalid, the appropriate remedy for the shareholders would be to question the validity of such action in a court of law, but a petition under Sections 397 and 398 of the Act is not an appropriate action for the purpose. In support of his contention learned counsel relied on a decision of the Delhi High Court reported in Suresh Kumar Sanghi's case [1983] 54 Comp Cas 235. His Lordship Justice Kripal as he then was, observed that (headnote) : \"the powers of the court while deciding a petition under Section 397 or 398 of the Act, are very wide and in exercise of the powers under these sections, the court has further been given powers to pass orders in terms of Section 402 of the Act. However, no orders under Section 402 of the Act can be issued or relief granted under Section 397 or 398 of the Act unless the case can be brought by the petitioner within the ambit of Section 397 or 398 of the Act. His Lordships further held that relief under Section 398 of the Act can be obtained only if (1) the affairs of the company are being conducted in a manner prejudicial to public interest or the interests of the company, or (2) if there is a material change which has taken place in the management or control of the company in the manner set out in the said section, and that by reason of such change it is likely that the affairs of the company will be conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company. Section 397 of the Act would be applicable only in the case of oppression by the majority shareholders on the minority shareholders. Section 397 of the Act does not come into play in the case of wrongful acts being done by the management. That may be a", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-100", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "not come into play in the case of wrongful acts being done by the management. That may be a ground for winding up. One of the prerequisites of the applicability of Section 397 of the Act is that the complaint of oppression has to be by the minority shareholders. If an action of the directors is illegal or invalid then the company or the shareholders may take appropriate action in a court of law by challenging the validity of such an action, but a petition under Section 397 or Section 398 of the Act is not an appropriate remedy for the purpose. In order to constitute oppression within the meaning of Section 397 of the Act there must be continuous acts on the part of the majority shareholders, continuing up to the date of the petition showing that the affairs of the company were being conducted in a manner oppressive to some part of the members.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-101", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "176. The conducting of affairs prejudicial to the interests of the company by the persons who are in the control or the management gives the court jurisdiction to pass appropriate orders to bring to an end the matter complained of. Neither Section 398 of the Act nor Section 402 of the Act provides that only such orders can be passed which will result in handing over the management of the company to the aggrieved persons. In granting relief under Section 398 and Section 402 of the Act not only is the interest of the company to be kept in view, but also other equitable considerations have to be taken into account\". From the above, it is seen that while certain actions of the directors are illegal or invalid, the shareholders can question the validity of such an action in a court of law. But Section 397 of the Act comes into play when minority share-holders allege oppression by the majority shareholders and Section 398 of the Act comes into play when the affairs of the company are being conducted in a manner prejudicial to public interest and not in the interest of the company. To constitute oppression within the meaning of Section 397 of the Act, the acts must be continuous on the part of the majority shareholders and continuing up to the date of the petition. From the pleadings, it is seen that a series of instances, not only continuous acts of oppression, but also the acts of mismanagement were alleged. I have absolutely no quarrel with the proposition laid down in this case. But, I would like to see whether my investigation into the facts of the case satisfy the tests laid down in various cases referred to supra on acts of suppression.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-102", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "177. To the same effect counsel cited another judgment of the Gujarat High Court in Sheth Mohanlal Ganpatram v. Shri Sayaji Jubilee Cotton and Jute Mills Co. Ltd. [1964] 34 Comp Cas 777. In that case a textile mill run by the company having entered into an adat agreement with a firm for supply of working capital for running the mill and to purchase yarn for the company on commission basis. The mill run by the company started incurring losses and the majority of the shareholders sold the mill both on the ground of losses incurred by the company and also on the ground that machinery of the mill became old and obsolete. After the sale was concluded, a minority of shareholders of the company applied to the court under Sections 397 and 398 of the Act alleging that the termination of the adat agreement and sale of the mill were oppressive acts, prejudicial to the interests of the company and claimed that the sale should be set aside. His Lordship Justice Bhagawati, as he then was, ruled \"neither the termination of adat agreement nor sale of assets of the mill are prejudicial to the interests of the company and it could not be said to be a continuing wrong. Hence, a petition to set aside the sale under Sections 397 and 398 of the Act is not maintainable\". \n 178. In this case the minority shareholders complained against a solitary act of mismanagement, that too selling the mill as it is continuously incurring losses.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-103", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "179. But in this case not only a series of acts of mismanagement but also acts of oppression were alleged and if the petitioners are able to prove them, this case will definitely attract the provisions of Sections 397, 398 and 402 of the Act. Hence any of the cases cited by him will not come in aid of his contention. Accordingly, this contention also has no legs to stand and is accordingly rejected. \n All the directors were not made party respondents : \n 180. The next contention of counsel was that out of nine board of directors, only the managing director and joint managing director were impleaded and as the board has to be treated as an independent one and as all the decisions were taken by the board, apart from respondents Nos. 2 and 3 a petition under Sections 397 and 398 of the Act is not maintainable without impleading them as party respondents to the proceedings. \n 181. This contention is answered by their Lordships of the Madras High Court in Shoe Specialities Ltd.'s case [1997] 90 Comp Cas 1 ; [1997] 1 Comp LJ 243, wherein they held as follows (page 22) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-104", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"We are not hampered by such rigid technicalities of procedure and if the minority in a company complains of an oppression and discloses certain grounds of complaint in the petition which are made the basis for the relief, we would hold that the court should ordinarily investigate the charges. Such investigations may in certain cases, be necessary even to regulate the future conduct of the company for providing against recurrence of such abuses of power by the majority. We are, therefore, of opinion that notwithstanding the omission in the petition to pray for relief against the delinquent directors, an enquiry into the charges against them was proper within the scope of the petition. Sections 402 and 406 of the (Indian) Companies Act give ample jurisdiction to the court to dispose of the matter in the larger interests of the company.\" \n 182. In Nalam Satya Prasada Rao v. Vinupamula Lakshmi Narasimha Sastry [1991] 70 Comp Cas 303, this court adverting to the preliminary objection of respondents Nos. 1 to 4 as to the maintainability of the company petition in view of the death of the first respondent during the pendency of the company petition having held that respondents Nos. 2 to 4 who are already on record represented the first respondent, observed as follows (page 310) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-105", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"At any rate, the relief prayed for under Sections 397 and 398 of the Act is against the company as such and there can be no variation in the number of shares. Even assuming that the unmarried daughter in the first respondent is entitled to any shares, the estate of the deceased first respondent is amply represented by respondents Nos. 2 to 4 who are already on record, and hence I hold that the interests of the first respondent are amply safeguarded. As such, the decision of the Allahabad High Court in J. K. Investment Trust Ltd. v. Muir Mills Company Ltd. [1962] 32 Comp Cas 893, has no application because, the alleged acts of oppression and mismanagement are directed not merely against the first respondent but against respondents Nos. 2 to 4 also. Inasmuch as respondents Nos. 2 to 4 were already on record in the company petition, I hold that there can be no objection in continuing the proceedings against them. I, therefore, hold that this objection cannot be sustained.\" \n 183. In Malleswara Finance and Investments Company (P.) Ltd.'s case [1995] 82 Comp Cas 836 ; [1995] 1 CLJ 1 (Mad), the question that fell for consideration before the Madras High Court was whether the order of the Company Law Board passed on an application filed by respondents Nos. 4 to 7, under Sections 397 and 398 of the Companies Act was violative of the principles of natural justice as the petitioner was not given an opportunity to present its case. Answering the said contention, a Division Bench of the Madras High Court held as follows (page 855) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-106", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"In a proceeding under Sections 397 and 398 of the Companies Act, the only question to be decided is, whether the affairs of the company are being conducted in a manner prejudicial to the interest of the company, or in any manner prejudicial to its member, or whether there is any material change that has taken place in the management and control of the company, and whether such constitution has affected or (is) likely to affect the affairs of the company. When we read these two sections, it is clear that the Company Law Board has taken into consideration how the company has been managed. It is not the individual's right or the right of the individual/shareholder or creditor that is the subject matter of the litigation. The proceedings under Sections 397 and 398 are like a declaratory suit. It is for that reason, the Companies Act provides that any person who is not a party can get himself impleaded in the proceedings. Section 405 of the Companies Act says : \n 'If the managing director or any other director, the managing agents, secretaries and treasurers or the manager, of a company, or any other person, who has not been impleaded as a respondent to any application, under Section 397 or 398 applies to be added as a respondent thereto, the Company Law Board shall, if it is satisfied that there is sufficient cause for doing so, direct that he may be added as a respondent accordingly.' A reading of the said section will make it clear that if sufficient cause is shown, any person who has not been impleaded as a respondent to any application under Section 397 or 398 can get himself impleaded, if he desires.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-107", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "184. Further under Order 29, Rule 1 of the Civil Procedure Code, a company being a juristic entity it can sue and be sued in its own name. In United Bank of India v. Naresh Kumar [1997] 90 Comp Cas 329 ; AIR 1997 SC 3, the Supreme Court held as follows (page 333) : \n \"It cannot be disputed that a company like the bank can sue and be sued in its own name. Under Order 6, Rule 14 of the Civil Procedure Code, a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company, Order 29, Rule 1 of the Civil Procedure Code, therefore, provides that in a suit by or against a corporation the secretary or any director or other principal officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6, Rule 14, together with Order 29, Rule 1 of the Code of Civil Procedure would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and de hors Order 29, Rule 1 as a company is a juristic entity, it can duly authorize any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6, Rule 14.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-108", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "185. From the above it is seen that the first respondent-company having been incorporated under the provisions of the Companies Act and being the cor-porate body it can sue and be sued in its name and it can duly authorize any person to sign the plaint or written statement on its behalf and it should be regarded as sufficient compliance with the provisions of Order 6, Rule 14 of the Civil Procedure Code. Secondly, in any application filed under Sections 397 and 398 of the Act, the only question that falls for consideration is whether the affairs of the company are being conducted in a manner prejudicial to the public or the interests of the company itself or in a manner oppressive to the minority shareholders. \n 186. Admittedly, in this case, the company, the juristic person having been incorporated under the provisions of the Act, is a juristic person and the same is represented by its secretary. In fact the managing director and the joint managing director who are responsible in conducting the affairs of the company, according to the petitioners, in bad faith were also impleaded as an abundant precaution. Hence the contention of learned counsel for the respondents that the company petition is not maintainable on the ground that all the board directors were not made parties to the proceedings has no legs to stand. Accordingly, this contention was also rejected. \n The procedure followed by the Board was not questioned in the appeal :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-109", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "The procedure followed by the Board was not questioned in the appeal : \n 187. Nextly, Mr. Raghavan contended that the petitioners did not raise any objection for the procedure followed by the Board even in the grounds of appeal and, therefore, this court is not justified in interfering with the order of the Board on the ground of procedural lapses ; at any rate the same cannot be a ground for interference by the appellate court. It is true that the petitioners did not question the procedure followed by the Board specifically. But at the same time, when it has come to the notice of the court that the orders suffer from serious infirmities, and the Board committed a manifest error which vitiated the entire proceedings before the Board and that being a pure question of law, the court is expected to take judicial notice and rectify the same to prevent miscarriage of justice. Even on the merits, I have no hesitation to hold that the findings recorded by the Board are perverse and contrary to the record. Hence, the order suffers from serious infirmities in not following the well established procedure in adjudicating the disputes apart from the fact that the findings recorded by the Board cannot be sustained in law. In fact, the respondents did not raise the objection with regard to maintainability of C. C. on the ground that all the directors were not made party respondents either before the Board or in the appeal filed by them in this court. Even then I permitted counsel to raise the issue and answered the same. \n 188. I am fortified in my view by a judgment of the honourable Supreme Court in Kondiba Dagadu Kadam v. Savitribai Sopan Gujar , wherein their Lordships of the Supreme Court in para. 3 held as follows (p. 724) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-110", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"3. After the amendment a second appeal can be filed only if a substantial question of law is involved in the case. The memorandum of appeal must precisely state the substantial question of law involved and the High Court is obliged to satisfy itself regarding the existence of such a question. If satisfied, the High Court has to formulate the substantial question of law involved in the case. The appeal is required to be heard on the question so formulated. However, the respondent at the time of the hearing of the appeal has a right to argue that the case in the court did not involve any substantial question of law. The proviso to the section acknowledges the powers of the High Court to hear the appeal on a substantial point of law, though not formulated by it with the object of ensuring that no injustice is done to the litigant where such a question was not formulated at the time of admission either by mistake or by inadvertence.\" \n 189. Hence, this contention is also rejected. \n Whether one tenth of the shareholders should be there to continue the proceedings : \n 190. Nextly, counsel tried to make a feeble attempt by contending that unless one tenth of the shareholders join the appeal, the same is not maintainable by pointing out that some of the petitioners withdrew from the petition. While counsel admits the fact that on the day when the application was filed, the petitioners in the petition were holding more than 11 per cent. shares, he contends that after withdrawal of the legal representatives of the first petitioner and the other two petitioners, the shares held by the petitioners fell short of 10 per cent. of the shares. But counsel himself conceded that there would not be any impediment for continuing the proceedings even if the shareholding of the petitioners is less than 10 per cent. of the shareholding of the company.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-111", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "191. Be that as it may, this issue is covered by a judgment of the Supreme Court in Rajahmundry Electric Supply Corporation Ltd. v. A. Nageswara Rao . In the above case, while considering the objections of the chairman of the company that, though the petitioner stated that he obtained consent of 80 shareholders for filing an application under Section 162(vi) of the old Act for winding up of the company, only 52 persons consented for filing of the applications and therefore the condition laid down in Section 153C(3)(a)(i) of the old Act is not complied with. Repelling the said contention their Lordships of the Supreme Court held (p. 95) : \"that the validity of a petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when presented cannot, in the absence of a provision to that effect in the statute, cease to be maintainable by reason of events subsequent to its presentation. Thus, where the applicant under Section 153C of the Act has obtained the consent of not less than one tenth of the members of the company and has presented the application, the withdrawal of consent by some of those members subsequent to the presentation of the application cannot affect either the right of the applicant to proceed with the application or the jurisdiction of the court to dispose of it on its . own merits.\" \n 192. This contention was not pressed by counsel, though he raised the same initially. Accordingly this contention is also rejected. \n Issues in controversy :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-112", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Issues in controversy : \n 193. Now coming to the controversy apart from seeking the relief of winding up of the company for its mismanagement, under Chapter VI, the minority shareholders are given the right to complain to the Board that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members provided they hold not less than one tenth of the total number of the shares and if the board is of the opinion that the affairs of the company are being conducted, as aforesaid. Under Section 402 without prejudice to the generality of the powers of the Board, the order to be passed under Section 397 or 398 of the Act may grant one or more reliefs mentioned in this section including the purchase of the shares or interests of any members of the company by other members thereof or by the company itself with a view to bringing to an end or prevent the matters complained of or apprehended. The other reliefs that can be granted under Section 402 of the Act are not being referred to, as the ninth petitioner is satisfied with the relief given by the Board, which is being opposed by the respondents. \n 194. In the light of serious contest put forth by the respondents, it has to be seen whether the directions given by the Board can be sustained in law or not. \n 195. Now I would proceed to examine whether the findings recorded by the Board on the alleged acts of oppression and mismanagement can be sustained in law. Even if the findings of the Board cannot be sustained whether the acts alleged by the minority shareholders against the majority shareholders can constitute an apprehension in the mind of a prudent person so as to enable the Board to exercise the powers vested in it. The issues in controversy are referred to seriatim. \n Merits of the case : \n Mismanagement : \n 1. Closure of parcel offices :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-113", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Mismanagement : \n 1. Closure of parcel offices : \n (a) Fabrication of the minutes of the board meeting dated August 7, 1992 :  \n The case of the petitioners is that during the year 1992, respondents Nos. 2 and 3 closed as many as sixty parcel offices without the knowledge or sanction of the board of directors. The motive behind such closure is to release the lorries connected to these parcel offices and to dispose of them and pocket the sale proceeds by showing nominal price i.e., around the book value in the books of account. When the issue was raised by petitioner No. 9 at the board meeting held on March 3, 1993, the respondents not only fabricated the resolutions of the meeting of the board of directors dated August 7, 1992, to show that the closure of parcel offices was effected as per the resolution under item 12.2 i.e., under any other item with the permission of the chair and also replaced the minutes of the board of directors held on March 3, 1993, as if the board meeting was held on February 27, 1993.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-114", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "196. The case of the company is that it is having about 300 parcel offices all over the country and that the board at its meeting held on August 7, 1992, under Item 12.2 i.e., under any other subject with the permission of the chairman the board has taken a decision to close down the uneconomic parcel offices as per the details furnished by the chairman with immediate effect for efficient running of the company and to reduce further losses from the branches in future. The board further resolved to authorise the chairman to effect the closure of uneconomic branches. Unfortunately though the issue was very much raised in the pleadings and the ninth petitioner spoke about the fabrication of the minutes of the meeting dated August 7, 1992, for reasons best known to the Board, it has given a clean chit by stating that \"we are not in a position to doubt the genuineness of the resolution inasmuch as in the next board meeting held on September 29, 1992, which the petitioner attended, the minutes of the meeting held on August 7, 1992, were reportedly confirmed\" without taking into consideration the explanation offered by the petitioner that generally such a resolution will be adopted without reading out the details of the resolutions adopted in the previous meeting, in his oral evidence. The fallacy of the reasoning is exploded from the replies given by the company to the letters of the petitioners stating that it was a managerial act, during day-to-day business. If the parcel offices were closed under a resolution of the board nothing prevented them from stating so while giving reply to the first petitioner, for the first time the respondents came up with this plea in the counter filed before the board.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-115", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "197. Firstly from the agenda for the board meeting it is seen that closure of parcel offices was not included in the agenda for discussion. The minutes of this meeting were recorded from page 248 onwards to 262 in the minutes book from June 24, 1986, to August 7, 1992, and pages 263 to 272 were left blank. For the next board meeting a new book was opened. While the first page of the minutes i.e., 248 to 250 were written with one pen, the minutes from page 251 from where the new form of 16 pages started in the book, the minutes were written with a separate pen and the same is visible to the naked eye. Further this form is restitched with the support of a piece of a cloth. While it is the case of the ninth petitioner that this form was introduced by removing the original form, the company says that as the binding has become loose in the ordinary course of business this form was restitched by using the cloth for strength. In the normal course this version of the respondents was to be proved by adducing oral evidence. As the record is speaking for itself, I am proceeding to test the veracity of the statement. From the resolution of the board dated August 7, 1992, it is seen not only a decision was taken to close down the unremunerative parcel offices with immediate effect as per the. statement given by the chairman, but also authorized him to take decision with regard to closure of uneconomic branches. But it is not known for what purpose this subject was again included in the agenda for discussion in the notices for the meetings dated December 19, 1992, and March 3, 1993/February 27, 1993, nearly seven months after the board passed the resolution. Nextly, it is the case of the respondents that at the meeting of the board dated February 27, 1993, eighteen", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-116", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "of the respondents that at the meeting of the board dated February 27, 1993, eighteen parcel offices including the offices at Mandya and Gobi-chettipalayam in the State of Karnataka were closed. While going through the original minutes book I found that these two parcel offices were closed under item No. 5(e) in the board meeting held on December 19, 1992. When these offices were closed under an earlier resolution, how these two offices again figured in the meeting dated February 27, 1993, and they were closed again. Nextly, it is seen that in the minutes of the board held on December 29,-1992, and February 27, 1993, the names of the offices that were closed were specified. But in the resolution dated August 7, 1992, the list of offices closed was not mentioned. Further it is seen such an important issue was taken up for discussion under any other subject with the permission of the chair. Nextly the note said to have been submitted by the chairman to the board has not seen the light either before the Board or this court. Likewise, no information was placed before the Board when each of the parcel office was opened, the extent of losses the company suffered, more so, when 20 per cent. of the parcel offices relating to one of the main activities of the company are sought to be closed.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-117", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "198. As per the version of the ninth petitioner in the annual general body meeting held on November 25, 1993, himself and the late K. Suryanarayana raised the issue and sought for the list of parcel offices that were closed. Further, it is not in dispute that the late K. Suryanarayana as well as the ninth petitioner in their letters dated November 2, 1993, and November 10, 1993, specifically addressed letters to the company as well as the other board of directors to furnish the list of places where the offices were closed with full reasons for closing the parcel offices and from which date they were closed. The reply of the company secretary dated December 3, 1993, sent to K. Suryanarayana is interesting and it will be useful to extract the same. \n 199. \"Dear Sir, we have received your letter dated November 2, 1993, and the contents have been noted. The matters referred to by you are matters to be dealt with by the management during the day-to-day business. Hence, we are unable to accede to your request.\" If closure of offices relates to day-to-day business of the company, why was the same placed in the board meeting dated August 7, 1992, more so under any other item and in other meetings as discussed above having taken blanket authority to close down the offices.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-118", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Nextly, when the board passed a resolution way back on August 7, 1992, how the company failed to inform the shareholder that under a resolution of the board, the parcel offices were closed. Yet at the same time no reply was sent to the ninth petitioner to his letter. As he happened to be the director of the company on that day, and they cannot refuse to give information to him, before the Board a photostat copy of the acknowledgment which is said to have been signed by the ninth petitioner on December 27, 1993, is filed as annexure 6-B by stating that a reply was sent to him on December 3, 1993, asking him to come to the office and inspect the same during 2.00 p.m. to 4.30 p.m. on any working day with prior intimation to them. The ninth petitioner in the above letter not only asked for the information, but also requested respondent No. 2 to convene the board meeting or put those issues on the agenda at the ensuing board meeting for discussions and proper considerations thereon and the reply of respondent No. 1 does not throw any light on this aspect. It is his specific case that he has not received any reply from the respondent-company to his letter (ans. to Q. 131 in cross). The falsity of the case of respondent No. 2 is exposed from the fact that the registered letter sent on December 4, 1993, remained undelivered till December 27, 1993, in the same town. As per postal rules, if a registered letter remained undelivered for seven days, it has to be redirected to the sender. It is not known how this letter remained undelivered in the same town for about 23 days. Further, the respondent-company did not file the original acknowledgment before the Board to prove that this acknowledgment relates to the registered letter emanating from the company on", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-119", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "acknowledgment before the Board to prove that this acknowledgment relates to the registered letter emanating from the company on December 4, 1993, and addressed to the ninth petitioner. A photostat copy of one side of the acknowledgment containing the signature of the ninth petitioner was filed but not the reverse side of the acknowledgment, wherein the addressee's name is shown but not the sender's name.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-120", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "200. From the above discussion, I have no manner of doubt in holding that the minutes of the board meeting dated August 7, 1992, are fabricated with a view to take shelter under the board resolution and to see that the Board may not hold against the respondents by rejecting their contention that closure of parcel offices cannot be termed as managerial function in the day-to-day business of the company as contended by the respondents. \n (B) Whether the board meeting was held on March 3, 1993 or February 27, 1993 ? \n 201. While the case of the petitioners is that the meeting of the board of directors was held on March 3, 1993, and the minutes of the board meeting held on March 3, 1993, were replaced with new minutes and the case of respondents is that the meeting slated for March 3, 1993, was advanced and it was held on February 27, 1993, and no meeting took place on March 3, 1993, as contemplated by the petitioners. The Board held that the meeting was held on February 27, 1993, and the ninth petitioner applied for leave. \n 202. Under Section 286 of the Act notice of every meeting of the board shall be given in writing to every director at his usual address.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-121", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "203. The company seemed to be not in the practice of sending notices by registered post or maintaining notice register to prove that the notices were served on the board of directors in a manner known to law. The specific case of the ninth petitioner is that he received the notice on February 20, 1993, saying that the board meeting will be held on March 3, 1993, and he attended the meeting and signed in the minutes book. It is his case that he raised the issue of closure of parcel offices and sale of lorries, which lead to misunderstanding between him and respondent No. 2. On the other hand, the case of respondent No. 2 is that on the same day, i.e., February 20, 1993, another meeting notice was sent advancing the board meeting to February 27, 1993, and the ninth petitioner applied leave from attending the meeting. At the same time, the ninth petitioner denied the receipt of the notice advancing the meeting to February 27, 1993, and the leave letter pressed into service by the respondents is a fabricated one. It is his specific case that while he was functioning as Member of Parliament he left blank signed papers with the manager at Hyderabad for railway reservation purpose and on one such paper the leave letter was brought into existence. A xerox copy of the letter seemed to have been produced before the Board and the Board without summoning the original came to the conclusion that the ninth petitioner applied for leave. \n 204. To know the truth or otherwise of the rival contentions, I directed the respondents to produce the original leave letter. It is not original but only a carbon copy. The respondents did not offer any explanation for not producing the original leave letter. \n 205. Be that as it may, for better appreciation of the contentions of the parties, the letter in dispute was scanned below.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-122", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "From  \n  \n\n Ch. Srihari Rao, \n  \nKakinada.        BM 27-2-93  \n \n\n To  \n  \n\nThe Board of Directors, \n\n Ms. S. R. M. T. Ltd., \n\n P. B. No. 42, Subhash Road, \n\n Kakinada 533 001. \n \n\n Dear Sirs, \n \n\n Due to preoccupation I will not be able to attend the board meeting of the company to be held on 27.2.93 at 10 a.m. \n\n \n\n I, therefore, request you to kindly grant me leave of absence for the said board meeting. \n \n\n Thanking you, \n \n\nYours faithfully, \n \n\n (Sd.).............. \n  \nStation : Kakinada.      Leave of absence granted.\nDate : 23-2-1993.      (Sd.)....................", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-123", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "206. From the above it is seen while the body was typed on one typewriter, \"Mr. Sri Hari Rao\" and \"station\" was typed on a different typewriter. Further, it is seen that the name, station and signature are found in original and the body of the letter is copied by carbon. Nextly, it is seen that the size of the leave letter and letterhead after tearing away the printed portion are of the same size. The ninth petitioner in his evidence categorically stated that the leave letter was fabricated. In the absence of any rebuttal, the Board ought to have held that the leave letter is a fabricated one. \n 207. Having entertained a doubt whether the minutes of the meeting dated March 3, 1993, were replaced with the minutes of the meeting said to have been held on February 27, 1993, wherein the ninth petitioner has not participated in the meeting, I have verified the minutes book maintained by the company from September 29, 1992, to February 23, 1994, and it does not infuse much confidence and the authenticity of the proceedings could have been tested with oral evidence. The notices for both the meetings, i.e., March 3, 1993, and February 27, 1993, emanated from respondent No. 1 office on the same day and there seems to be not much difference in the agenda. Further the notice for February 27, 1993, meeting did not say that in supersession of earlier notice convening the board meeting on March 3, 1993, that notice was issued. At the same time the notice dated December 22, 1993, for the board meeting held on December 27, 1993, to consider the requisition resolution for removal of the ninth petitioner as director, a note is seen as hereunder :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-124", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"Note : The meeting to consider these items was originally fixed on November 18, 1993, but due to the order of the Principal Sub-court, Kakinada in I. A. Nos. 5351 of 1993 and 5352 on November 17, 1993, the same could not be considered and have been deferred till the disposal of the said petitions. These petitions are disposed of on December 21, 1993, and the order dated November 17, 1993, has been vacated. Hence these items are being considered now.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-125", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "208. But such a note is not there in the notice for the advanced meeting. The only suggestion made by counsel for the respondents for convening the meeting on February 27, 1993, in cross-examination of the ninth petitioner in questions Nos. 28 and 29 is that the company has to furnish board resolution to the banks for deferred payment guarantee before the end of February, 1993. But the same was denied by the ninth petitioner and stated that all the documents and agenda were forged. The next suggestion made to the ninth petitioner is that the minutes of this meeting were confirmed in the meeting held on June 9, 1993. The answer given by the ninth petitioner to question No. 31 is that the practice is that the agenda used to be discussed and the minutes were never discussed. The minutes used to be noted on a small paper and subsequently they used to be carried out in the minutes book and he acted in good faith. In the cross-examination counsel suggested to the ninth petitioner that since no meeting took place on March 3, no sitting fee was paid to him. The ninth petitioner said that now and then he used to be paid the sitting fees and he did not remember for which meeting he received the sitting fee. While going through the minutes book, I noticed that the board at its meeting held on July 29, 1993, in resolution No. 6 resolved to amend Article 13 of the articles of association enabling the company to pay sitting fee after the Amending Act 1988 came into force. The said resolution is extracted hereunder :\n\"Resolved that the existing Article 13 of the articles of association of the company be and is hereby substituted by the following article :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-126", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "13. The directors of the company may be paid a sitting fee not exceeding Rs. 500 per sitting with a daily allowance and travelling allowance at such rates as the board may decide in that behalf. If any director shall be appointed to advise the board as an expert or be called upon to perform extra service or make special exertions for any of the purposes of the company, the board may reimburse all his expenses and may, subject to the provisions of Section 314 of the Act, pay to such director such special remuneration as they may think fit, which remuneration may be in the form of either salary, commission or profits and may be either in addition to or in substitution of the remuneration specified in the articles.\" \n209. In the light of the above resolution the question of payment of sitting fee to the directors prior to that date does not arise.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-127", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "210. Further, it is the case of the ninth petitioner throughout that he attended the meeting on March 3, 1993, along with some other directors. In the answer to Q. No. 38 in the cross-examination he stated that five directors including himself, respondents Nos. 2 and 3, Ananda Rao and another director whose name he could not remember attended the meeting. Neither the managing director nor any of the directors came to the witness box to disprove the statement of the ninth petitioner. In the absence of any proof to show that the notice for the board meeting dated February 27, 1993, was served on the ninth petitioner and the notice is not in cancellation of the earlier notice convening the board meeting on March 3, 1993, and the fabricated letter of leave of absence alleged to have been given by the ninth petitioner throws any amount of suspicion on the version spoken by the respondents that the board meeting has taken place on February 27, 1993. Likewise in the absence of any evidence that the minutes of the board meeting dated February 27, 1993, were specifically read over and then only the minutes were confirmed, the explanation offered by the ninth petitioner in his evidence stands unrebutted and it has to be accepted. \n\n211. In Mrs. Rashmi Seth v. Chemon (India) (P.) Ltd. [1992] 3 Comp LJ 89 ; [1995] 82 Comp Cas 563 (CLB), the Principal Bench of CLB held \"that the action of the company in passing a resolution that the petitioner consented for transfer of her holding of 50 per cent. shares by fabricating minutes showing her presence, though she did not attend the meeting and other resolutions passed in such a meeting are null and void and non-operative.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-128", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "212. In the case on hand also I hold that the alleged leave letter and meeting notice were brought into existence to cover up the illegal action of respondent No. 2 in closing the parcel offices unilaterally without the approval of the board and they are fabricated. Likewise, I have no hesitation in holding that the resolutions of the board meeting dated March 3, 1993, were replaced with new minutes as if the board meeting was held on February 27, 1993. As the resolutions said to have been adopted at the meeting of the board held on February 27, 1993, are proved to be fabricated they have to be declared as null and void.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-129", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "213. Sale of lorries :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-130", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "It is an admitted fact that the company sold 22 and 15 vehicles during the financial years 1992-93 and 1993-94 respectively. The case of the ninth petitioner is that the company from its inception never sold so many lorries in a span of one or two years and respondents Nos. 2 and 3 pitched upon the plan to swindle the monies of the company. Further no auction of lorries even took place to his knowledge and the auction slips were brought into existence by the respondents to justify their illegal action in selling the lorries for a throw away price to meet the case of the petitioners. It is also his case that these vehicles were sold even before the lifetime of the vehicles as fixed in the Motor Vehicles Act is over and these vehicles were sold for a song i.e., from Rs, 18,000 to Rs. 30,000 practically at the book value of the vehicles and as per the auction slips filed before the Board, mostly ten people participated in the auctions held on different dates. In support of his case he filed affidavits of some of the purchasers of the vehicles and also hire-purchase agreements entered into by them with Lakshmi Devi Finance Company to show that the vehicles fetched much higher amounts than the price shown in the auction slips. It is also his case that if the auction slips are carefully analysed, the same party signed differently at different points of time apart from the fact that only one person had written all the auction slips. The auction slips do not contain any serial number, though the word \"Sri. No.\" is shown therein. All these facts will prove that no auctions of lorries have taken place. The respondents admit that the lorries sold were of ten to eleven years old and the company was in the habit of selling old and unserviceable vehicles in order to maintain a good fleet. The company is to make additions and deletions to its fleet and the same is in the normal", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-131", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "The company is to make additions and deletions to its fleet and the same is in the normal course of business. Hence it is not correct to contend that large scale misappropriation in sale of lorries has taken place. The Board accepted the plea of the respondents by placing reliance on the retracted affidavits of the purchasers of the vehicles filed by the respondents and rejected the contention of the petitioners. At the same time the Board in its order observed as follows (p. 530 of 98 Comp Cas) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-132", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"The average price of lorries sold in the later years was found to be higher by 15 to 20 per cent. Perhaps the higher price was taken on account of the direction that we gave that there should be more transparency in sale of lorries. Any way we do not find the gap to be such a huge amount of Rs. 1 lakh as alleged by the petitioner ... Since we ourselves felt that the present system was not a fool proof system we advised the company that a more transparent system should be evolved in disposal of lorries by fixing a reserve price and getting approval of the board and giving wide publicity before conducting the auction. We feel that as far as this allegation is concerned it is sufficient that we reiterate the above advice for future adherence and accordingly to do so.\"  \n214. The order neither referred to the directions given nor verified whether the procedure followed by the company in disposing of the vehicles is in accordance with the directions given by the Board. Even before this court, the respondents did not choose to place the directions as well as the procedure followed by them to show that the disposal of lorries is in accordance with the directions given by the Board. The Board expressed satisfaction by observing that the vehicles fetched 15 to 20 per cent. higher price in the subsequent years.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-133", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "215. Nextly, the Board did not advert to any of the contentions of the petitioners, more so the contention that the company never sold so many vehicles in a year, that the company never auctioned the vehicles and the auction slips were brought into existence for the purpose of this case. The Board did not even look into the auction slips. \n\n216. I have gone through the xerox copies of the auction slips available on record and the facts emerging on analysis, are given in a tabular form for better understanding of the case. \n\n A Grade Officers B Grade Asst. Managers (Junior Mgmt.) C Grade Dy. Managers D Grade Managers E Grade Senior Manager (Middle Mgmt.) F Grade Chief Managers G Grade Dy. General Managers H Grade General Manager (Senior Mgmt.) I Grade Executive Directors J Grade Directors. \n\n SHAIK AHAMMED Sl. No. Vehicle Number Model Rank How he signed Value in Rs. \n\n Comments\n  \n \n   \n  \n   \n\n 1. ATP 1212 7th Rank 26,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 2. MEK 8343 6th Rank English (S.K.Ahamed) 29,000 Second Highest Bidder Rs. 28,500\n  \n \n  \n   \n 3. ABP 1202 4th Rank 30,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 4. AEP 6746 3rd Rank Telugu 25,000 First Highest Bidder ANNEXURE III M. D. gouse Sl. No. Vehicle Number Model Rank How he signed Value in Rs. \n\n Comments", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-134", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Comments\n  \n \n   \n  \n   \n\n 1. ATP 1455 3rd Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 2. ATP 1554 1st Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 3. ATP 1445 7th Rank 27,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 4. ATP 6979 5th Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 5. AP 5T 6th Rank 60,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 6. ATP 1221 4th Rank 22,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 7. ATP 7566 6th Rank 27,500\n  \n   \n  \u00a0\n  \n \n  \n   \n 8. ADI 9969 3rd Rank 22,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 9. AP 5T 1st Rank English (Md. Gouse) 28,000 First Highest Bidder\n  \n \n  \n   \n 10. ABP 6286 8th Rank English 25,000 Second Highest Bidder Rs.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-135", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "24,900\n  \n \n  \n   \n 11. ABP 1220 4th Rank 26,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 12. ATB 5234 5th Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 13. AP5T 2612' 4th Rank 22,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 14. Ap5T2620 6th Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 15. APST 2230 5th Rank 30,000 Last year Year before last year 2 years before last year Total Outstanding Very good Satisfactory ANNEXURE V MD. AYUB KHAN Sl. No. Vehicle Number Model Rank How he signed Value in Rs. \n\n Comments\n  \n \n   \n\n  \n   \n\n 1. ATP 969 3rd Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 2. MEK8343 3rd Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 3. ABP 1202 7th Rank 30,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 4. ABP 1194 3rd Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 5. ADI 9969 6th Rank Telugu 22,000 First Highest Bidder\n  \n \n  \n   \n 6. ABP 6286 5th Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 7. AP5T2802 4th Rank 24,000 ANNEXURE VI D. SEETHARAMAIAH Sl. No. Vehicle Number Model Rank How he signed Value in Rs. \n\n Comments", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-136", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Comments\n  \n \n   \n  \n   \n\n 1. ATP 1554 2nd Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 2. ATP1445 8th Rank 27,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 3. A8P 5424 3rd Rank 30,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 4. ATP1122 1st Rank 26,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 5. ADP 6693 5th Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 6. ATP 6979 4th Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 7. AP5T 2226 1st Rank Telugu 25,500 Second Highest Bidder Rs. \n\n 25,450\n  \n \n  \n   \n 8. AEP6746 9th Rank Telugu 25,000 Second Highest Bidder Rs. \n\n 24,899\n  \n \n  \n   \n 9. ABP 6286 3rd Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 10. ABP 1256 5th Rank 30,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 17. AP5T 2612 7th Rank Telugu 22,000 Second Highest Bidder Rs. \n\n 21,900\n  \n \n  \n   \n 12. Ap5T 2220 3rd Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 13. AIQ 5524 1st Rank Telugu 18,000 Second Highest Bidder Rs. \n\n 17,900\n  \n \n  \n   \n 14. AP5T 2801 7th Rank 29,500 ANNEXURE VII K. ANANDA PRASAD Sl. No. Vehicle Number Model Rank How he signed value in Rs. \n\n Comments", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-137", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Comments\n  \n \n   \n\n  \n   \n\n 1. ATP 1455 7th Rank English (K. Anand Prasad) 25,000 Second Highest Bidder Rs. \n\n 24,950\n  \n \n  \n   \n 2. ATP 1554 4th Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 3. ATP 1445 9th Rank English 27,000 Second Highest Bidder Rs. \n\n 26,900\n  \n \n  \n   \n 4. ATP 3245 7th Rank English 39,000 Second Highest Bidder Rs. \n\n 38,950\n  \n \n  \n   \n 5. ABP 1202 3rd Rank 30,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 6. ABP 6286 7th Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 7. ABP 1220 6th Rank 26,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 8. AP5T 2220 5th Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 9. AP5T 2360 1st Rank English 25,000 Second Highest Bidder Rs.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-138", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "24,900\n  \n \n  \n   \n 10. AP 5T 2620 7th Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 11. AP5T 2230 6th Rank English 30,000 Second Highest Bidder Rs.29,500 ANNEXURE VIII B.RAMA RAO Sl No Vehicle Model Model Rank How he signed Value in Rs Comments ATP 1445 5th Rank 27,000 ABP 5424 5th Rank 30,000 ATP 6979 1st Rank 29,000 AP5T 2226 2nd Rank 25,000 ATP 7566 1st Rank 27,500 ADI 9969 5th Rank 22,000 AP5T 2928 3rd Rank 28,000 ATB 5234 2nd Rank 29,000 AP5T 2612 1st Rank 22,000 AP5T 2802 6th Rank 24,000 AP5H 2552 2nd Rank 2,70,000 ANNEXURE IX S. K. ANWAR Sl.No. \n\n Vehicle No. \n\n Model Rank How he signed Value in Rs. \n\n Comments", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-139", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "1. ATP 3245 6th Rank 39,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 2. AP5T 2683 2nd Rank 30,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 3. ADP 6693 6th Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 4. AP5T 3354 3rd Rank 60,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 5. AP5T 2226 4th Rank 25,500\n  \n   \n  \u00a0\n  \n \n  \n   \n 6. AEP 6746 5th Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 7. ATP 7566 2nd Rank 27,500\n  \n   \n  \u00a0\n  \n \n  \n   \n 8. AP 5T 2928 2nd Rank 28,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 9. ATE 5234 4th Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 10. AP5T 26I2 6th Rank 22,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 11. AP5T 2802 5th Rank 24,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 12. AP5T 2620 4th Rank 29,000", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-140", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "13. AIQ 5524 5th Rank 18,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 14. AP5T 2230 4th Rank 30,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 15. AP5T 2801 4th Rank 29,500\n  \n   \n  \u00a0\n  \n \n  \n   \n 16. AP 5H 2552 3rd Rank 2,70,000 ANNEXURE X K. SATYANARAYANA RAJU Sl. No. Vehicle Number Model Rank How he signed Value in Rs.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-141", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Comments\n  \n \n   \n  \n   \n\n 1. ATP 1554 5th Rank English (K. Satya-narayana Raju) 25,000 Second Highest Bidder Rs.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-142", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "24,950\n  \n \n  \n   \n 2. ABP 2318 2nd Rank 30,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 3. ATP 1122 6th Rank 26,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 4. ATP 3245 1st Rank 39,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 5. MEK 8343 2nd Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 6. ABP 1202 8th Rank 30,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 7. AP5T 3354 4th Rank 60,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 8. AEP 6746 4th Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 9. AP5T 2360 7th Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 10. ADI 9969 2nd Rank 22,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 11. AP5T 2928 6th Rank 28,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 12. ABP 6286 2nd Rank 25,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 13. ABP 1256 3rd Rank 30,000", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-143", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "14. AP 5T 2802 2nd Rank 24,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 15. AP5T2620 2nd Rank 29,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 16. AIQ 5524 3rd Rank 18,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 17. AP5T2230 1st Rank 30,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 18. AP5T2801 5th Rank 29,500\n  \n   \n  \u00a0\n  \n \n  \n   \n 19. AP5H2552 4th Rank 2,70,000\n  \n   \n  \u00a0\n  \n \n  \n   \n 20. ATP 969 4th Rank English 25,000 Second Highest Bidder Rs.24,975\n  \n \n  \n   \n 21. ATP 1212 6th Rank English 26,000 First Highest Bidder", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-144", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "217. From the above tables it is seen that (1) several individuals not only participated in the auction alleged to have been held on different dates as per the information furnished by the respondents but also signed differently. (2) From the auction slips it is seen that only the first two highest bids were given but neither the upset price nor the offers given by the others were shown in the auction slips--apart from not showing the progress in the bids in the process of auction and the difference between the first and the second bidder is marginal and they do not exceed Rs. 100 generally. (3) From the information furnished by the first respondent-company the date of auction of three lorries bearing Nos. ATP 1455, ATP 1212 and ABP 1220 are not tallying with the dates on which auction slips were prepared. (4) In the case of certain lorries originally they were shown as condemned lorries but later on corrected as old lorries. (5) In the auction slips for lorry No. ATP 6979 the highest bid amount was corrected. (6) No serial numbers are found on the auction slips though a column is there. \n\n218. It is not known how all these people could know of the auction dates though the company never notified the auctions in any manner. Secondly from the dates of auction, it is seen that the company was auctioning one lorry at a time in selling about forty lorries in a span of two years as per the version of the respondents, a procedure unknown to corporate sales.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-145", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "219. From the above it is seen that there is some truth in the contention of the petitioners that the auction slips were brought into existence to meet the case of the petitioners. After differences arose, both the late Suryanarayana and the ninth petitioner in their letters dated November 2, 1993, and November 10, 1993, in respect of sale of lorries sought full particulars of the vehicles sold like make of the vehicle, model and year of purchase, to whom they were sold and at what price they were sold, the nature of sale whether it is by public auction or private sale. While a reply was sent to Suryanarayana stating that the matters referred to by him are the matters to be dealt with, by the management during day-to-day business, the company produced xerox copy of an acknowledgment dated December 27, 1993, for the alleged registered letter sent on December 4, 1993. This aspect d already adverted to while considering the closure of parcel offices. The specific case of the petitioner is that the issue of sale of lorries came up for discussion in the meeting held on March 3, 1993, under any other item and when he asked for the information, the same was not furnished, and he requested that his objection should be noted in the minutes of the meeting. On that the chairman informed that the details would be sent later. It is also his case that in the board's meeting held on March 23, 1993, also, this issue was raised. It is his further case that this issue was raised in the annual general body meeting held on November 25, 1993. The case of the respondents is that the sale of lorries is a managerial function while carrying on day-to-day affairs of the company. The further case of the company is that on September 23, 1993, the ninth petitioner participated in the board meeting and", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-146", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "is that on September 23, 1993, the ninth petitioner participated in the board meeting and approved the profit and loss account as on March 31, 1993, to be placed before the annual general body meeting. The petitioner categorically stated that no issues were discussed in the board meeting held on September 23, 1993, (answer to question No. 29 in chief). With regard to the approval of profit and loss account by the general body, the case of the petitioners is that when the chairman refused to give information he walked out of the meeting (answer to questions 25 to 27 in chief). Be that as it may it is not known why the company refused to furnish the required information sought for by petitioner No. 9 as well as the late Suryanarayana in their letters. When a suggestion (question No. 136 in cross-examination) was made to him that he is having every right to inspect the books and records of the company, the answer given was that since the information asked for was not given, it is not possible to go through the records of the company and find out the misappropriation. But at the same time the court should not miss the fact that the ill feelings have reached to a point of no return by that time and petitioner No. 9 was also manhandled by the employees of the company (answer to question No. 86 in chief). The respondents elicited from the witness that after July 29, 1993, he was given further powers to operate the bank accounts and the answer given by him is that such a thing was done by the second respondent to see that he should not oppose him in any manner. From the record it is seen that some of the shareholders gave notice to convene annual general body meeting to remove the ninth petitioner as director of the company. In fact he was not only removed as director at the annual general body meeting dated January 21,", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-147", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "In fact he was not only removed as director at the annual general body meeting dated January 21, 1994, but also from all the positions held by him in subsidiary companies. It is also elicited that he signed one transfer form relating to one of the vehicles that were sold.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-148", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "220. Coming to the affidavits, initially the petitioners filed the affidavit of Adi-garla Raghava, Desetti Narayana Rao and J. V. Raghavulu, to prove that they purchased the vehicles at much higher price and also the hire-purchase agreements entered into by them with the third parties. But later they gave affidavits stating that they purchased the vehicles for the value shown in the auction slips and they have raised these loans for effecting massive repairs to the vehicles. Firstly, the Board having rejected the prayer of the petitioners to lead evidence by affidavits, it is not known how it can rely on these retracted affidavits filed by the respondents. Secondly the Board committed grave illegality in giving credence to the affidavits filed by the respondents when there are two affidavits of one and the same individual contradicting each other without examining him. Thirdly, the affidavits are not verified which is a must as held by the Supreme Court in A. K. K. Nambiar's case, . Fourthly, as the amount spent for repairs on the vehicles is too high they neither stated what type of repairs they got done to the vehicles in their affidavits nor at least filed semblance of evidence in support of their claim. Fifthly, they have neither stated in their affidavits in which work shop they got their vehicles repaired nor filed letters given by the workshops to that effect where they got the vehicles repaired. The specific case of the petitioners is that by threatening the purchasers and by involving them in criminal cases the company obtained these affidavits and they filed documents to that effect. Without going into these aspects when a person gives two affidavits contradicting each other, in the normal course the respondents having filed the later affidavits would have produced them before the Board to test which of their statements are true and would have provided an opportunity to the petitioner to cross-examine", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-149", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "test which of their statements are true and would have provided an opportunity to the petitioner to cross-examine them on the retracted affidavits. If the Board wanted to rely on these affidavits the Board should have directed the respondents to produce these individuals for examination. That was also not done.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-150", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "221. Though no material was placed before the Board that the parties have taken loans for attending to major repairs, the Board simply jumped at the retracted affidavit and held that they have borrowed the amounts for attending to major repairs of the vehicles more so in the absence of any evidence that these vehicles have become so unserviceable.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-151", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "222. Nextly, it is seen that though these parties went back on their earlier statement in the affidavits filed by the respondent-company, the fact remains that they have borrowed the amounts from the financial company, i.e., Laxmi Devi Finance Corporation. In the hire-purchase agreement they entered with that corporation they never stated that they are borrowing these monies for effecting repairs. The ninth petitioner in his evidence categorically stated that he obtained hire-purchase documents from Laxmi Devi Finance Corporation apart from the affidavits given by the purchasers and the Board in its order did not refer to the hire-purchase agreements at all. Further, it is to be seen that generally companies will be certifying about the roadworthiness of the vehicles and then a paper advertisement will be given to secure a higher price.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-152", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Both the things were not done in this case. Nextly, it is to be seen that the company is having automobile workshop and involved in manufacturing spare parts for over a number of years apart from being a dealer in spares for Tata vehicles. In this background have we to presume that the vehicles became so unroadworthy even before their life span as fixed under the M. V. Act expired though no iota of evidence on the condition of the vehicles is produced by the respondent-company ? Further if the Board takes judicial note of market trends, even second-hand two-wheelers are fetching a much higher price than the lorries sold by the company. I am sure that even if the lorries were sold as scrap, they would have fetched a much higher price. Can it be said that the company maintained the vehicles in such a worse condition and they are not able to fetch reasonable price when they were sold in an auction ? If we keep the market trend in mind though the book value of the vehicles comes down year after year on account of depreciation, in reality their value in the market will be much higher. In fact, the Board also felt that the procedure followed by the company is not transparent. Further the case of the petitioners is that all the auction slips were written by one P. Krishna Murthy, the sales manager in Tata show room, and those slips were not even numbered though a column is provided to that effect. This Krishna Murthy is none other than the father-in-law of the managing director of Hastina Auto Dealers Pvt. Ltd., Delhi, which was appointed as sole selling agents for North India for marketing the spare parts of the company. But neither Narayana Murthy who seemed to have conducted the auction nor Krishna Murthy who prepared the auction slips were examined to prove that auctions in fact did take place. Nextly, if there is any truth in the contention of the respondents that to maintain a good fleet the vehicles were sold, why have they not added even a", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-153", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "the respondents that to maintain a good fleet the vehicles were sold, why have they not added even a single lorry during those years though the company was paying hire charges for private lorries to a tune of rupees three crores.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-154", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "223. From this the inevitable conclusion to be drawn is that the sale proceeds of the vehicles shown in the books of account by the company are in and around the book value of those vehicles, but not the real price fetched by these vehicles and the inevitable presumption to be drawn is, the excess amount realized by the company over and above the amounts shown in the books of account were embezzled by respondents Nos. 2 and 3.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-155", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "224. Payment of hire charges to private lorries :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-156", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "The case of the petitioner is that, while he was the managing partner of the Padmalaya Finance Corporation, it used to give its lorries on hire to SRMT and the average hire charges used to be Rs. 6,000 to Rs. 7,000 per month. But during 1993-94 and 1994-95 an amount of Rs. 2,90,83,525 and Rs. 3,19,37,496 were paid to private lorry owners towards hire charges as seen from Schedule 'S' to the 50th annual report for the year 1994-95. The case of the petitioners is that all the payments to the lorry owners were paid in cash, but not by way of cheques. In that process, respondents Nos. 2 and 3 obtained receipts from the owners for much higher amounts and the same were misappropriated and in the year 1994-95 there was a shortfall of Rs. 1.55 crores in the cash flow. The contention of the respondents is that it is a common trade practice to engage outside vehicles as and when the situation demands. The Board adverted to these contentions of both the parties on this issue under \"other acts of mismanagement\". But without giving a finding on the issue expressed its satisfaction over the payment of increased dividends and recorded the following finding : \"An analysis of the allegations would show, as rightly pointed out by Sri Raghavan, that other than the allegation relating to issue of rights shares, no other acts of oppression qua shareholders has been agitated in this petition.\" This finding runs counter to the record and the oral evidence of the ninth petitioner who spoke on this issue. More so, when the respondent contended that it is a common trade practice in transport business to engage outside vehicles as and when required in addition to own vehicles without producing the original records and also without reference to the letter of the company secretary dated March", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-157", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "own vehicles without producing the original records and also without reference to the letter of the company secretary dated March 5, 1999, that the contracts register to be maintained statutorily under Section 301 of the Act for the years 1989 to 1992-93 are not traceable. Here we should keep in mind that the company is engaged in parcel lorry service for transportation of goods in and closed lorries. Closed lorries will not be owned by private persons, unless they enter into a contract on permanent or semi-permanent basis with parcel lorry service companies. The company did not place any material with regard to engagement of a number of closed lorries and open lorries. We should also keep in mind that the vehicles sold are less than ten years, i.e., before the expiry of the life of the vehicles as fixed under the M. V. Act and no evidence whatsoever was placed before the Board to show that they have become so unroadworthy and they were damaged to such an extent, that they cannot be made roadworthy by a company having dealership for spare parts of Tata vehicles apart from having an automobile workshop and involved in the manufacturing of automobile spare parts. From the retracted affidavits of the purchasers of the vehicles, filed by the respondents they stated that they have taken loans for repairs of the vehicles. According to them, they spent about a lakh of rupees for repairs on each of the vehicles. If the respondent-company repaired the vehicles on their own, they would have saved a lot of money not only in effecting the repairs to the vehicles but also in payment of hire charges to others. Further, the case of the respondents that the contracts register, containing the particulars of the vehicles hired, to be maintained statutorily is not traceable. To my mind the self-same vehicles sold might have been hired and the contract register was purposely withheld by the company. Instead of drawing an adverse inference against the respondents, the Board observed that this", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-158", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "withheld by the company. Instead of drawing an adverse inference against the respondents, the Board observed that this issue was not raised. Further the Board did not consider the aspect, whether the respondent-company was subjected to audit and payment of income-tax, can pay hire charges in crores of rupees in cash though the evidence of the ninth petitioner on this aspect stood unrebutted (see answers to questions Nos. 55, 62, 82, 83 in chief and questions Nos. 160 to 165 in cross).", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-159", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "225. The issue can be looked at from another angle also. One of the main activities of the company being a parcel lorry service and in the absence of denial, of the evidence of the ninth petitioner that previously one or two vehicles used to be sold, the company did not offer any explanation for not purchasing new vehicles having sold a considerable number of alleged old vehicles in those two years, when the case of the respondents is that addition and deletion of the vehicles is intended to a maintain good fleet. The reason is obvious. Engaging private vehicles and paying hire charges in cash, serves the interests of the second respondent. Hence the finding recorded by the Board that no other issue except rights issues was raised by the petitioners having extracted the contentions of both the parties is nothing but arbitrary exercise of powers.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-160", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "226. In the light of the foregoing discussion, I find sufficient justification in the complaint of the petitioners that the respondents were obtaining receipts for higher amounts from the owners of the vehicles and the income derived therefrom is being misappropriated by respondents Nos. 2 and 3.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-161", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "227. Diversion of funds :\n The specific case of the petitioners is that the second respondent is in the habit of diverting the funds by way payment of exorbitant commissions with kickback arrangements and in a raid conducted in the year 1988 by the Income-tax Department it was noticed that certain firms in the benami names of these respondents have been paid substantial commission and as such all this expenditure was disallowed. Subsequently those firms were dissolved and the company appointed Hastina Auto Dealers Pvt. Ltd., New Delhi, for the northern region in the year 1989 and V. K. Automotive Pvt. Ltd., Madras, for the southern region as sole selling agents for the sale of about 400 automobile products manufactured by the company by a make believe process of selection by a private consultancy agencies and huge commissions are being paid to these companies whose share capital is in the thousands. He has also questioned the genuineness of the reports filed by the consultant companies.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-162", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "228. In answer to these allegations, learned counsel for the respondents contends that the Income-tax Tribunal and the High Court upheld the payment of the commission to those firms. The fact remains that in the written arguments the company admitted dissolution of those three partnership firms against whom the income-tax authorities made adverse comments and that necessitated the company to appoint new agents. The respondents contend that the above two agents were appointed validly as per the recommendations of the consultants and the ninth petitioner was on the board of directors at the time of appointment and he never raised any objection. Finally the company contended that it can appoint only those in whom it has confidence. Except making vague allegations, the petitioners have not furnished any evidence to show that respondents Nos. 2 and 3 have received kickbacks from the commission paid to those companies. The Board held against the petitioners on the ground that \"he was a director of the company for nearly three years after appointment of these firms as their sole selling agents for North and South India and the fact that he has not raised this issue in any of the board meetings during this period, giving us an impression that he has no grievance in this regard till the same was raised in this petition\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-163", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "229. To my mind, the Board cannot reject the plea of the petitioners solely on the ground that the ninth petitioner was on the board when the agents were appointed without examining whether there is any truth or not in the allegations. Even assuming that the ninth petitioner is a party to the decision of the board, if the decision is ultimately found to be illegal and the alleged silence on the part of the ninth petitioner is of no avail and as held by the Supreme Court in B.R. Kapoor v. State of Tamil Nadu, AIR 2001 SCW 3720. Further he might not have visualized at that point of time that huge amounts will be paid as commission to the companies whose share capital is only in a few lakhs of rupees. The real issue before the Board is whether the two agencies are benami agencies of respondents Nos. 2 and 3 and whether there is transparency required in selecting the agencies and whether such an action would be prejudicial to public interest. From that angle I would like to examine the issue in controversy.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-164", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "230. Agency for South India :\n V. K. Automotive Pvt. Ltd., was appointed as the sole selling agent of the company for southern region on March 28, 1989. The case of the respondents is that an advertisement was given in The Hindu on December 21, 1998, inviting applications for dealership and Ram Associates was appointed as a consultant to select the agent. \n231. It is not in dispute that the managing director of V. K. Automotive Pvt. Ltd., Madras, Vijaya Kumar was earlier an employee of the company. From the record it is seen that while the authorised share capital of V. K. Automotive is Rs. 1,30,200 it was paid a commission of Rs. 38,23,000 for the financial year 1992-93. I have gone through the report of Ram Associates filed in the court. In their report they did not say how many applications they have received and with how many people they held discussions. The report of the consultant dealing with Vijay Kumar was only filed in the court. The reasons given for selecting him were that : (1) he is having inherent strengths, (2) he is having exposure to automobile spares for over a decade ; (3) he is going to form a private limited company with an authorised capital of Rs. 5,00,000 to give the business adequate capital base ; (4) the serious and methodical way he seems to be going about establishing a marketing organization lends fur ther credibility. It is useful to extract preliminary evaluation of this firm. \n\n Client : S R M T Limited Assignment/Dealership : Evaluation of applications for stockists Name and address of applicant :\nMr. C. Vijaykumar, C-39 LIG Flats, 7th Avenue, Ashok Nagar, Madras 600 083.  \nPresent business and other relevant data.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-165", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "232. Appears to be serious about the business. Has stated that he is augmenting his resources and streamlining the organisation. May be able to devolve full time for a major product line like SRMT and market its products. To meet for further discussion A B C D\n  \n \n     \n  \n   \n 1. Location\n  \n   \n  \u00a0\n  \n   \n  \u00a0\n  \n   \n  \u00a0\n  \n   \n  \u00a0\n  \n \n  \n   \n 2. Present business\n  \n   \n  \u00a0\n  \n   \n  \u00a0\n  \n   \n  \u00a0\n  \n   \n  \u00a0\n  \n \n  \n   \n 3. Intensity of interest\n  \n   \n  \u00a0\n  \n   \n  \u00a0\n  \n   \n  \u00a0\n  \n   \n  \u00a0\n  \n \n  \n   \n 4. Overall (including presentation) Preliminary decision Shortlist for further discussions. \n\nCertified true copy.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-166", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "233. The columns relating to corporation, present business, intensity of interest, overall presentation are shown as 'nil'. As per the balance-sheet of that company that its capital is Rs. 1,30,000 but he was able to earn Rs. 38,23,000 as commission. It is not known how the consultant felt that the amount which he is going to invest, i.e., Rs. 5,00,000 would be sufficient to market about 400 spare parts of the company in the whole of South India. Be that as it may 3 years after its establishment, the share capital of the company is only Rs. 1,30,200. It is not known whether he established any shops of his own or appointed dealers all over the South for marketing the spare parts. To my mind the capital invested by him is not sufficient even to establish one wholesale shop at Madras leave about other places. In the light of the above factual position, the question that falls for consideration of the court would be, whether the company with the meagre money at its disposal can earn such a huge commission to a tune of Rs. 38,23,000, i.e., practically 36 times the capital invested by it. He did not even mobilize Rs. 5 lakhs as undertaken by him before the consultant. In response to the letter of the fourth petitioner dated September 19, 1996, the second respondent in his letter dated September 24, 1996, informed him that the sales commission includes target commission to the dealers who directly deal with the company. Target commission varies between 2 and 10 per cent. depending upon the turnover achieved by each dealer. During the year of account the realization out of the business done through various dealers has gone up and similarly the dealers who directly deal with the company achieved the targets in the higher rate of commission group. Hence the target commission paid to them was more than that of the last", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-167", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "higher rate of commission group. Hence the target commission paid to them was more than that of the last year. The company did not place any material with regard to sale of spare parts to this company and the details of the commission paid to it. The Board completely missed these aspects. Further it is not known when he resigned his job in the company. The fact remains that he registered the company after he was selected and the company was incorporated on the same day under the provisions of the Act and entered into an agreement with the respondent-company on the same day, i.e., March 28, 1989.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-168", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "234. Agency for North India :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-169", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Likewise the company appointed Hastina Automobile Dealer for North India. The managing director of Hastina Automobile Dealers, New Delhi, Mr. P. Venkata Siva Anjaneya Prasad, is none other than the son-in-law of P. Krishna Murthy, sales manager in the company and who prepared the auction slips for the sale of lorries. A notification seemed to have been issued in The Hindustan Times dated July 16, 1990, and as per the report of Techma Engineers dated October 16, 1990, they have received thirty-one applications and three applicants could meet the evaluation criteria and rankwise details are given. While Hastina Automobile Pvt. Ltd., stands at Serial No. 1 the other experienced companies like Manik Motor Works established in 1932 at Calcutta having branch at Kasmiri Gate, New Delhi and C. S. Arban Singh Sabar-wal and sons with its head office at Bombay and having a branch officer at Kasmiri Gate, New Delhi, partnership concerns having vast experience in the field with abundant money flow and with show room facility at Delhi were shown at serials Nos. 2 and 3 respectively. The list of the other applicants was not filed before the court. The consultant recommended the name of this company with a paid up share capital of Rs. 4,55,000 though newly incorporated on the ground that the promoters are well experienced in auto parts technically as well as marketingwise ignoring the well experienced firms and this company earned a commission of Rs. 45,56,000 in the financial year 1992-93 as seen from its balance-sheet. While the petitioners filed some letters from the dealers, who according to the respondents, have responded to the notifications inviting applications both for South India and North India stating that they never applied for the agency, the respondents got letters from those dealers saying that they have not given such letters to the petitioners. I need not", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-170", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "letters from those dealers saying that they have not given such letters to the petitioners. I need not go into that controversy.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-171", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "235. Now it is evident that this company appointed as the sole selling agent for North India with a paid-up capital of Rs. 4,55,000 received a commission of Rs. 45,56,000 i.e., ten times its share capital while the V. K. Automative (Pvt) Ltd., sole selling agent for South India earned commission 36 times its share capital investment, i.e., Rs. 38,23,000. In all the commission paid to these two companies is Rs. 85,00,000 during 1992-93. To my mind unless the turnover of these companies is in crores of rupees, such a huge commission cannot be earned by these companies. Nextly it is seen that appointment of consultants and selection of candidates is intended to select a person having knowledge and experience in dealing with automobile spare parts with sufficient financial resources to meet the magnitude of the agency for substantial areas of the country and should have a wide network for supply of spare parts throughout the area for which they are appointed as agents and their marketing skills. While the managing director of V. K. Automotive Pvt. Ltd., was at least an employee of the respondent-company for some time, the managing director of Hastina Automobiles Pvt. Ltd., is only the son-in-law of one Krishna Murthy, sales manager in the first respondent-company, without any knowledge in marketing automobile spare parts. Although the report of the consultant with regard to Hastina Automobiles Pvt. Ltd., says that they are experienced entrepreneurs nowhere it is stated what type of experience the entrepreneurs had. On the other hand the company was initially incorporated with two directors, namely P. A. A. Prasad and another Smt. Y. Rajeswari, w/o Y. V. Subba Rao on September 25, 1990.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-172", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "236. Admittedly though no evidence was produced to show that these directors had any experience in the marketing field or manufacturing automobile spare parts, for reasons best known to the consultants they recommended to the company for their appointment as sole agents. Without discussing all these aspects the Board brushed aside the complaint of petitioner No. 9 on the ground that he was on the board for nearly three years after they were appointed as dealers. The court should not miss the point that petitioner No. 9 is none other than the son-in-law of the managing director of the company and he himself was heading several subsidiary companies and more or less the whole family including petitioner No. 9 was holding about 60 per cent of the shares and other shareholders being individual shareholders they cannot raise their voice in the company as it may be difficult for them to muster necessary strength to oppose the second respondent and perhaps they might be satisfied with the dividends that are being paid to them for the investment they made. Now because of the differences between the family members, these underhand dealings came to light. If they are together things would not have gone in this manner to the detriment of the interest of the other shareholders apart from causing loss to the exchequer by avoiding payment of sales tax, excise duty, income-tax, etc. When the acts of mismanagement brought to the notice of the court are ignored, it amounts to giving a seal of approval for the mismanagement of the affairs that are being conducted by the company which are prejudicial to public interest.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-173", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "237. Persons of confidence :\n Coming to the other contention of the respondents that they can appoint only those in whom they have confidence, I can only observe that if the respondents want to appoint people of their confidence without undertaking any such process they would have straightaway appointed these companies as their sole agents. I have no manner of doubt in holding that the respondents introduced this make believe process of selection by inviting applications and appointing consulting agencies to justify their action in paying huge amounts, before the income-tax authorities by taking a stand that they are independent agencies and they have nothing to do with the company and to save themselves from any criticism from the Income-tax Department as happened in the case of three firms which were closed after income-tax raids which necessitated the company in opening these companies as their sole selling agents. The ninth petitioner brought to the notice of the public that the managing directors of these two companies are none other than the blue-eyed people that are close and dear to the second respondent in his underhand dealings. \n238. Donation to a non-existing trust :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-174", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "In C. A. No. 65 of 1996 the petitioner brought to the notice of the Board that during the financial year 1995-96 the company gave a donation of Rs. 10 lakhs to Srinivasa Charity Trust in which the second respondent and his family members were trustees which was wound up on May 30, 1992, and in the guise of giving this amount as a donation the second and third respondents used this amount for their personal benefits. This contention was refuted by the respondent company stating that it is a subsequent event and the Board haying dealt with it in C. A. No. 65 of 1996 rejected the said contention, which has become final. Therefore, according to the respondent-company, the matter cannot be opened now. The said contention of the respondent found favour with the Board. The law is well settled on this aspect that any orders passed by a judicial forum at the intelocutory stage is only intended to make interim arrangements during the pendency of the main case and any such order is subject to the orders to be passed in the main case. I have already taken a view that though it is an event that has taken place after the filing of the application the issue can be canvassed as the main petition is still pending. I have seen the interim order passed by the Board on November 28, 1997. The Board refused to grant interim relief by holding that it is an existing trust on the ground/ basis of (1) the resolution produced by the respondents wherein the second respondent was authorised to take steps and transfer the assets to Srinivasa Educational Society ; (2) the exemption certificate issued by the income-tax authorities and (3) the assessment order for the financial year ending with March 31, 1996, on the basis of a nil return without giving a finding on the contention of the petitioners, that the later para, of the resolution dated May 30,", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-175", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "the contention of the petitioners, that the later para, of the resolution dated May 30, 1992, (annexure A) filed along with the counter of the respondents is a fabricated one. Be that as it may after considering the events the Board recorded a finding that the application filed under Sections 397 and 398 of the Act has to stand on the allegations contained in the petition and subsequent events brought on record alone cannot entitle any person to a relief in case the main petition fails. In other words in case the allegations in the main petition are held proved then the subsequent events may be taken into consideration by the Board in moulding relief suitably. In the normal course as the second respondent being the managing trustee of the trust, the Board would have directed him to produce the original records of the trust to see which of the resolutions produced by the parties are true and genuine. From the material available on record and as per the version of the petitioners that the trustees passed a resolution on May 30, 1992, to wind up the trust and he also filed copy of the resolution. On the other hand, the case of the respondent is that the trust resolved to transfer the assets of the trust to Srinivasa Educational Society but not to wind up the trust. It is useful to extract the resolutions filed by the parties.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-176", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "239. Copy of the resolution filed by the petitioners :\n\"true copy of the resolution passed at the meeting of the board of trustees of Sri Srinivasa Charity Trust, Kakinada, held on May 30, 1992, at 20-6-2, Sitapatirao Street, Kakinada 533 -1.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-177", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "The chairman placed before the meeting a photostat copy of the registered deed of memorandum and articles of association of Sri Srinivasa Educational Society, Kakinada. The said society was registered with the Registrar E. G. District, Kakinada, on April 24, 1992. \n\nThe chairman suggested that in view of our trust being not able to achieve the desired objects on its own in spite of best efforts and also on being satisfied that the said desired objects of our trust can be attained through Sri Srinivasa Educational Society, Kakinada, which was registered with the similar and identical objects as that of ours, it is desirable to wind up our trust and pass over the moveable and immovable properties to Sri Srinivasa Educational Society. In this regard he brought to the notice of members the resolution passed on April 20, 1992, a copy of which is also placed before the meeting.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-178", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "After thorough discussion the following resolution is unanimously passed :\n 'Resolved that our trust Sri Srinivasa Charity Trust be and is hereby wound up today i.e. May 30, 1992, and all the assets and liabilities as on today (list enclosed) be and are hereby transferred/handed over to Sri Srinivasa Educational Society--Regd. Kakinada. Further Sri K. V. R. Choudary, Managing Trustee be and is hereby authorised to complete the necessary formalities in this regard'.\"  \n240. Copy of the resolution filed by the respondents :\n\"Meeting of the board of trustees of Sri Srinivasa Charity Trust, Kakinada, held on May 30, 1992, at Ram Nivas, Sitapatirao Street, Kakinada, at 10 a.m. The chairman placed before the meeting a photostat copy of the registered deed of memorandum and articles of association of Sri Srinivasa Educational Society, Kakinada. The said society was registered with the Registrar E, G. District, Kakinada, on April 24, 1992. \n\nThe chairman suggested that in view of our trust being not able to achieve the desired objects on its own in spite of best efforts and also on being satisfied that the said desired objects of our trust can be attained through Sri Srinivasa Educational Society, Kakinada, which was registered with the similar and identical objects as that of ours, it is desirable to wind up our trust and pass over the moveable and immoveable properties to Sri Srinivasa Educational Society. In this regard he brought to the notice of members the resolution passed on April 20, 1992, a copy of which is also placed before the meeting.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-179", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "After discussion the following resolution is unanimously passed :\n 'Resolved that Sri K. V. R. Choudary, managing trustee be and is hereby authorised to take all steps to become a sponsor patron in Sri Srinivasa Educational Society and for which purpose, do all such things that\" are necessary such as advancing/transferring moveable and immovable properties to Sri Srinivasa Educational Society. \n\nResolved that Sri K. V. R. Choudary, managing trustee be and is hereby authorised to take necessary permission from the income-tax authorities and do all acts that.are necessary for finally transferring the properties of our trust to Sri Srinivasa Educational Society.' The meeting terminated with a vote of thanks to chairman.\"  \n241. From these resolutions, it is seen that while the preamble to both the resolutions is one and the same the resolutions said to have been adopted are different as per the version of the parties. The Board did not feel the necessity of summoning the minutes book of the trust to find out which of the resolutions is true. Even as per the version of the respondents themselves, the managing trustee opined that the trust was not able to achieve the desired objects on its own in spite of best efforts ... and it is desirable to wind up the trust and pass over the movable and immovable property to Srinivasa Educational Society. While acceding to the request of the managing trustee, the trustees resolved to take necessary permission from the income-tax authority and do all acts that are necessary for finally transferring the property of the trust to Srinivasa Educational Society. It is not known why the trustees, who are none other than the family members of respondent No. 2 passed such a resolution, when the managing trustee himself suggested winding up of the trust.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-180", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "242. Be that as it may, on April 27, 1992, the secretary of Srinivasa Educational Society applied for permission for establishment of Sri K. V. R. College of Engineering in Kakinada in an extent of Ac. 31.96 cents of land situated in the backward area of Ponnamanda village of Kothapally Mandal, East Godavari District. This land was shown in the name of the trust in the list of properties of the trust as on May 30, 1992, with the signature of the second respondent. The Board without examining the need and purpose in donating Rs. 10 lakhs to this trust owned by the second respondents family out of a total donation of Rs. 11,01,382 given by the company during that year, simply upheld the donation on the basis of exemption certificate granted by the Commissioner of Income-tax on March 6, 1995, for a period of five years and on the basis of the assessment order for the assessment year 1995-96 passed on the basis of nil return. When once a decision was taken to transfer the assets of the trust to the society way back in 1992 on the ground that the trust failed to achieve the desired results and the society to which the trust thought of transferring its assets, started functioning, it is not known why the second respondent got income-tax exemption in 1994 for a period of five years for a defunct trust in contravention of the alleged resolution passed by the board, whereunder he was authorized to take necessary permission from the income-tax authorities for effecting transfer of properties of the trust to the society. Be that as it may it is not the case of the respondent that this amount was in any way required for carrying on the activities of the trust. In fact they have not shown utilization of this amount in the income-tax return. Nextly, it is to be seen that normally the donee will", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-181", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "in the income-tax return. Nextly, it is to be seen that normally the donee will be approaching the donor for donation by specifying the purpose. There is absolute silence on the part of the respondents, as to - who approached the company for donation or at least how this donation was utilised by the trust belonging to the family of the second respondent. By diverting the funds in this manner to a non-functioning trust if not non-existent trust belonging to the second respondent family, the company avoided payment of income-tax and claimed exemption. The Board has not applied its mind to the crux of the matter and simply washed its hands by saying that the contribution is to an existing trust. Hence it cannot be said that the affairs of the company are being run not in a manner prejudicial to public interest.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-182", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "243. Discrepancies in the stock of finished products :\n This issue was not raised in the company petition. But it was raised by filing C. A. No. 65 of 1996 and C. A. No. 115 of 1997 seeking amendment to the main petition. The allegation of the petitioners is that respondents Nos. 2 and 3 are misappropriating huge funds of the company by not bringing major quantities of automobile parts manufactured by the company to the books of account by filing annual reports of the company for the years 1989-90, to 1995-96. He also filed a statement pointing out the discrepancies in respect of automobile parts at an estimated value of Rs. 86.49 crores in a span of seven years. \n244. Unfortunately the Board not only rejected the plea but also gave a certificate to the company for the increase in the turnover during the subsequent years and the Board says that the petitioners themselves agreed that in the subsequent years the closing stocks and opening stocks are shown properly. Likewise, the Board simply believed the version of the respondent-company that this procedure is being followed for a number of years as gospel truth having observed as follows :\n \"The company has unhesitantly admitted that the discrepancy in closing stock which was being followed for over a number of years would have been made more comprehensive than what was shown in the balance-sheet.\" \n245. The Board further held :\n \"The discrepancies have occurred due to incomplete narration of closing stock in the balance-sheet and it is due to non-supply of full description of closing stock and it cannot be assumed that there is diversion of spare parts by the company.\" \n246. In other words the petitioners have not been able to establish that the respondent-company is diverting the products of the company without accounting for the same.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-183", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "247. In arriving at this conclusion, the Board relied upon the compilation of entries in the RJI register said to have been maintained under the provisions of the Central Excise Act which contains the day-to-day particulars of opening stock production, sales and closing stock together with statement of reconciliation for the year 1994-95 and it is also the case of the respondent-company that the entries in the RJI register are being periodically verified and signed by the authorities. \n\n248. Now it is to be seen whether the procedure followed by the Board can be sustained in law. \n\n249. Mr. Raghavan tries to impress upon the court that the Board comprises a member well acquainted with the accounts and other experts have approved the explanation given by the respondent-company. I can only observe that as this country is having such type of accounts officers the black money that is being generated in the industrial circles of this country is 3 to 4 fold than the real currency, which is expected to be in circulation as per the version of the Reserve Bank of India. If the members of the Board properly analysed this issue in a manner known to law and not carried away by extraneous reasons, the result of the company petition would have been otherwise.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-184", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "250. The book that was produced before the Board was produced before this court also. To my surprise it is nothing but a compilation prepared by the company. But the original RJI register was not produced before the Board to prove that the Central excise authorities have verified and signed in the register. Further the Board did not summon the original RJI register to find out whether the entries in the compilation book tally with the original register or not. In fact no Central excise officer was examined to prove that the entries in the RJI register are being periodically checked and signed by the Department officials. As stated supra none of the entries in the compilation was proved by the respondent in a manner known to law by examining themselves or their representatives or the excise officials. Further the members of the Board were carried away with the increased turnover of the company year after year by completely brushing aside the allegations made by the petitioners. \n\n251. Now the next question is whether the finding recorded by the Board is sus-tainable, even if the perfunctory enquiry conducted by the Board is given any credence in the light of the documentary evidence.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-185", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "252. From the annual reports, it is seen that the company divided the automobile spare parts that are being manufactured by it into four groups, namely (1) king pins, king pin units, shackle pins, shackle pin bolts, C & BP tubes, (2) tie-rod ends, kits and draglinks, (3) UJ crosses and (4) piston pins and the production as well as sales were shown groupwise in the annual reports. From the information culled out from the balance-sheet, the discrepancies in the stock were shown yearwise as follows :\n Statement showing the difference of manufacturing items and its costs as per the price of SRMT (1) King pins (2) Tierod ends (3) U. J. Cross (4) Piston Total value 1989-90 Opening stock 1,90,707 11,946 Production 16,93,546 1,19,502 94,629 2,60,254 Sales 3,43,485 ... \n\n 1,26,660 Closing stock 2,33,978 22,020 Discrepancy 13,06,790 1,19,502 94,629 1,23,520 (Amount Rs.) 13,06,79,000 2,39,00,400 2,83,88,700 61,76,000 1,891 1990-91 Opening stock 2,33,978 22,020 Production 18,19,083 1,58,315 1,00,666 3,77,958 Sales 4,02,824 1,71,588 Closing stock 3,76,565 ...", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-186", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "36,336 Discrepancy 12,73,672 1,58,315 1,00,666 1,92,054 (Amount Rs.) 12,73,67,200 3,16,63,000 3,01,99,800 96,02,700 1,988 1991-92 Opening stock 3,76,565 36,336 Production 19,17,917 1,76,116 1,28,738 2,03,529 Sales 4,19,260 1,44,354 Closing stock 3,27,631 24,462 Discrepancy 15,47,591 1,76,116 1,28,738 71,049 (Amount Rs.) 15,47,59,100 3,52,23,200 3,86,21,400 36,52,450 2,321 1992-93 Opening stock 3,27,631 24,462 Production 21,93,374 1,36,833 1,19,927 2,01,883 Sales 4,56,203 1,26,948 Closing stock 1,90,404 5,472 Discrepancy 18,74,394 1,36,833 1,19,927 93,925 (Amount Rs.) 1,87,43,400 2,73,66,600 3,59,78,100 46,96,250 2,554 1993-94 Opening stock 1,90,404 5,472 Production 24,89,080 1,44,537 1,55,651 2,75,534 Sales 5,43,636 1,45,434 Closing stock 72,048 3,942", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-187", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "1,45,434 Closing stock 72,048 3,942 Discrepancy 20,63,800 1,44337 1,55,651 1,31,650 (Amount Rs.) 20,63,80,000 2,89,07,400 4,66,95,300 65,82,500 2,885 1994-95 Opening stock 72,048 3,942 Production 24,90,943 1,83,966 1,44,055 2,42,725 Sales 4,88,413 1,49,166 Closing stock 1,24,385 5,394 Discrepancy 19,50,193 1,83,996 1,44,055 92,107 (Amount Rs.) 19,50,19,300 3,67,99,200 4,32,16,500 46,05,350 2,796 1995-96 Opening stock 1,24,385 5,394 Production 39,22,383 1,67,955 1,72,197 1,76,316 Sales 5,72,499 1,69,062 Closing stock 1,10,969 15,672 Discrepancy 33,63,576 1,67,955 1,72,197 + 3,024 (Amount Rs.) 33,63,57,600 3,35,91,000 5,16,59,100 1,51,200 4,212 Total value of discrepancy since 1989-90 to 1995-96 = Rs. 186.49 crores.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-188", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "253. The estimated value of the unaccounted spare parts as per the price list of the company was arrived at. The total value of the discrepancies of the stocks from 1989-90 to 1995-96 worked out to Rs. 186.49 crores :\n Though this is a very serious allegation, the Board neither looked into original annual reports filed by the petitioners to find any discrepancies in the stocks nor assessed the value of the missing stocks and expressed their satisfaction on the explanation given by the respondents without verifying the truth or otherwise of their plea.  \n254. The ninth petitioner to prove his case pointedly has taken one item, i.e., piston pins for the year 1994-95. These pins are sold in sets consisting of 6 pieces. The opening stock of piston pins for the year 1994-95 is 657 sets (3,942 pins) and the production during the year is 40,454 sets (Nos. 2, 42, 725 pins). The total number of sets available for sale are 41,111 and the sets sold are 24,861. The closing stock of the sets should be 16,250. But the closing balance was shown as 899 and the missing sets are 15,357 whose value works out to Rs. 70,76,811 at the rate of Rs. 461 per set as per the price list of the respondent-company. To prove the falsity of the case of the respondents, the petitioners furnished the account of piston pins for the years 1980, 1994-95 and 1996-97. The table is extracted hereunder :\n Stock position of piston pins in the balance-sheets of S. R. M. T.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-189", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Piston Pins 1994-95 1996-97 Sets Production in Nos. \n\n Sets Production in Nos. \n\n Sets Production in Nos. \n\n Opening stock 1,20,204 2,42,725 2,612 1,43,424 Production 20,034 40,454 23,904 Sales 20,327 41,111 26,516 Closing stock 18,363 24,861 24,223 1,964 16,250 2,293 1,964 2,293 15,351 Stock Difference value Nil 15351 X 461 Rs. per set -Rs. 70,76,811 Nil Before filing the petition in the Law Board At the time of filing the petition in the Law Board After filing the petition in the Law Board", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-190", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "255. When these discrepancies were shown at the time of considering the plea of . the petitioner for appointment of interim administrator in C. A. No. 65 of 1996 the members of the Board observed that \"we made a pointed question to Sri Raghavan whether the company will be in a position to produce a statement reconciling the figures of production, sales and dosing stock to compare the same with the monetary value of shares shown in the annual accounts, he readily agreed to do so\". Thereafter at the time of final hearing, learned counsel for the respondents filed a statement said to be a reconciliation statement and the same is extracted herein :\n Reconciliation statement of opening stock, production, sales and dosing stock for the year 1994-95 Group Opening Stock As per balance-sheet Production Sale Closing Stock As per balance-sheet Piston pins 25,103 24,861 King pins 32,052 4,11,862 3,77,374 66,540 King pin units 2,392 1,10,751 1,11,039 2,105 Other 32,555 72,048 19,68,329 21,71,780 46,726 1,24,385 M.V. Parts and Engine parts 2,17,622 21,85,951 U. J. Crosses 2,876 1,44,055 1,46,390 Tie rod ends. \n\n 2,173 1,83,996 1,77,696 8.473 kits, Drag Links Grand total 72,705 72,705 30,61,719 30,09,140 1,25,284 1,25,284 Note : 1. The narration in respect of \"piston pins\" under the head \"Production\" in balance-sheet is incomplete.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-191", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "2. Balance-sheet production figure shown against narration \"piston pins\" Nos. 2,42,725 includes other engine parts Nos. 2,17,622. \n\n3. In this statement they have been included under \"Other M. V. parts and engine parts\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-192", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "256. On the basis of the above statement, counsel for the respondents contended that the petitioners arrived at the conclusion on the basis of incomplete narration in the annual reports and the production of piston pins includes other engine parts whose number is 2,17,622 and they are shown in this reconciliation statement. This contention found favour with the members of the Board. To my mind the explanation is utterly false and far from the truth. For the first time I came across with a contention that the figures shown in the balance-sheet are incomplete and they include some other engine parts whose identity was not established. If there is any truth in this reconciliation statement, the respondents would have stated what are the other engine parts that they are manufacturing, how their production and sales were shown in the balance-sheets of all those years, and how for the first time in the reconciliation statement they came up with this story that piston pins include other engine parts. The case of the petitioners is that the automobile spare parts that are being manufactured by the company are reflected in the balance-sheet and to their knowledge there are no other engine parts that are being manufactured by the company. Under the caption \"sales\" after sale of Tata vehicles for which the company is dealer, sales of SRMT parts were shown and the sale of other engine parts was not shown in any of the annual reports. The respondents have not given any explanation how the sale proceeds on other engine parts are being shown in the balance-sheets. Nextly the production of piston pins for the year 1994-95 was shown as 2,42,225 (40,454 sets) in the annual report. But in the reconciliation statement the production was shown as 25,103 sets. It is not known from where he got this figure. From the figures given in the balance-sheet the difference is 15,351 sets as explained in the Table. This difference is sought to be explained by stating that the production includes other engine parts Nos.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-193", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Table. This difference is sought to be explained by stating that the production includes other engine parts Nos. 2,17,622, this figure is shown separately along with other parts whose production, sale and closing stocks were shown groupwise and though the so called other engine parts have nothing to do with either the piston pins account or other parts shown groupwise in the annual reports.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-194", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "257. Assuming for a moment that the reconciliation is true, the respondents have shown other M. V. parts and engine parts under different head and how they can add these parts to piston pins accounts. The fallacy of this argument can be exposed from another angle also. The mischief played by the respondents which missed the eye of the Board, is as follows. The piston pins produced in that year was 2,42,725, As they are being sold in sets of 6 Nos. the number of sets will be 40,454. But the respondents mischievously deducted the so-called other engine parts from the total number of pins, i.e., 2,42,725--2,17,622 and shown that 25,103 Nos. pistons pins were produced. If this figure is divided by six, the number of sets will be only 4,184. For this, if the opening stock of 657 sets are added total number of sets available for sale would be 4,841 sets. But the piston pins sold during that years are 24,861 sets while the other figures relating to piston pins were shown in sets--production was shown in numbers as explained above. The Board did not apply its mind to these grave discrepancies that are evident on the face of the reconciliation statement. The falsity in the plea of the respondent-company can be exposed in another manner also. From the annual reports for the years 1980 and 1996-97 (after Board order in C. A. No. 65 of 1996) it is seen that there are no discrepancies in the stocks of the piston pins. If other engine parts are included in the piston pins, why were the discrepancies that occurred in the financial year 1994-95 not there in those years and where have the other engine parts gone ? I understand in 1980 the company was following the calendar year but the company seemed to have opted financial year for accounts", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-195", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "the company was following the calendar year but the company seemed to have opted financial year for accounts purpose subsequently.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-196", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "258. If the statement of the respondent counsel that the production of piston pins includes other engine parts is true, how they disappeared in the years 1980 and 1996-97 when the respondent-company is following the same pattern of accounts consistently for the last 25 to 30 years as per their version before the Board and their own letter dated September 24, 1996, addressed to petitioner No. 4 wherein he stated \"that the itemwise tally of each and every part manufactured in the formula given by you is impracticable because of the large number of items manufactured and also on account of combination sale and the company has been consistently following the same pattern of disclosing the quantitative particulars of production, sales and stock for the last 25 to 30 years.\" \n\n259. From the above it can be safely presumed that either the details of the spare parts shown for the years 1980 and 1996-97 should be false or the figures shown in the year 1994-95 should be false. \n\n260. The above discussion exposes the falsity of the plea of the respondents that the production figure of piston pins includes other engine parts. The Board did not even advert to the discrepancies in the stock position from 1989-90 to 1995-96 with regard to (1) king pins, (2) tie-rod ends, (3) U. J. crosses and (4) piston pins whose value seems to be Rs. 186.49 crores as per the price list of the respondent-company.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-197", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "261. Learned counsel for the petitioners strenuously contended that as the company is involved in manufacture of spare parts, the accounts of the company have to be audited under the Cost Audit (Report) Rules, 1968. On the other hand, counsel for the respondents contended that these rules are not applicable to this company. I am not going into that controversy. From the statement of discrepancies extracted supra, it is seen that a large number of spare parts that were produced by the company were not brought to the books of account. In fact the respondents did not dispute seriously the discrepancies. They simply tried to get over by saying \"incomplete information\". At least there is a prima facie evidence to show that there is large scale embezzlement of funds of the company and there is large scale evasion of excise duty, sales tax, income-tax etc., and required thorough investigation. \n\n262. In the light of the foregoing discussion, I have no hesitation to hold that the Board in its anxiety to give a clean chit to the respondent-company has not even looked into the annual report of the company as approved in the annual general body meeting of the company to find out whether there is any truth in the allegation about the large scale misappropriation of the company funds by not bringing the automobile spare parts that are being manufactured by the company to the books of account as is evident from the statement extracted supra and satisfied itself with the statement of the petitioners that in the subsequent years opening stocks and closing stocks are being shown properly without reference to large scale evasion of both direct and indirect taxes apart from excise duty payable to the State as well as Central Governments. \n\nOther acts of mismanagement", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-198", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Other acts of mismanagement\n \n\n263. I am not adverting to the plea of the petitioner with regard to the diversion of material for construction of a community hall in the name of the mother of the second respondent, Hotel Jaya International, sale of scrap, used oil etc. as no serious arguments were addressed on these matters before me, though the petitioners filed some material and deposed on these issues in his evidence before the Board. I would not like to express any opinion on these aspects. \n\n264. From the findings recorded by me on the acts complained of by the petitioners with regard to mismanagement, I have no hesitation to hold that the affairs of the company are being conducted by respondents Nos. 2 and 3 (father and son) as joint managing directors of the company in a manner not only prejudicial to public interest but also prejudicial to the interest of the shareholders of the company as well. \n\nActs of oppression :\n The word \"oppression\" used in Section 397 of the Act was not defined in the Act. \n265. In Universal Dictionary the word \"oppression\" is defined as (1) harsh ; tyrannical (2) causing a state of physical or mental discomfort or weariness. \n\n266. As Section 397 of the Act being a corresponding Section to Section 210 of the old English Act, counsel for the petitioner placed reliance both on English decisions as well as Indian decisions.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-199", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "267. In Elder v. Elder and Watson ltd. [1952] Scottish Cases 49, Lord Keith while considering the word \"oppression\" observed that \"it is not lack of confidence between shareholders per se that brings Section 210 into play, but lack of confidence springing from oppression of a minority by a majority in the management of the company's affairs, and oppression involves, I think, at least an element of lack of probity or fair dealing to a member in the matter of his proprietary rights as a shareholder.\" In Scottish Co-operative Wholesale Society Ltd. v. Meyer [1958] 3 All ER 66; [1959] 29 Comp Cas 1 (HL) Lord Viscount Simonds speaking for the majority of the House of Lords observed, (page 28): \"Oppression under Section 210 may take various forms. It suggests, to my mind, as I said in Elder's case, a lack of probity and fair dealing in the affairs of a company to the prejudice of some portion of its members. The Section introduces a wide power to the court to deal with such a situation in an equitable manner which it did not have in the case of a company prior to the passing of the Act of 1948.\" Lord Denning in a separate judgment held that the object of the remedy is to bring \"... to an end the matters complained of, that is, the oppression, and this can be done even though the business of the company has been brought to a standstill.\" (page 33)\n \n\n268.In Five Minute Car Wash Service Ltd., In re [1966] 36 Comp Cas 566; [1966] 1 All ER 242 (Ch D), it was held that an act or omission may also amount to oppressive conduct if it is designed to achieve an unfair advantage.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-200", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "269. In Shanti Prasad Jain v. Kalinga Tubes Ltd. , their Lordships of the Supreme Court observed that (p. 364) :\n \"the law, however, has not defined what is oppression for purposes of this section, and it is left to courts to decide on the facts of each case whether there is such oppression as calls for action under this section. \n\n(Page 366) : . . . the question in each case is whether the conduct of the affairs of a company by the majority shareholders was oppressive to the minority shareholders and that depends upon the facts proved in a particular case . . . It must further be shown that the conduct of the majority shareholders was oppressive to the minority as members and this requires that events have to be considered not in isolation but as a part of a consecutive story. There must be continuous acts on the part of the majority shareholders, continuing up to the date of petition, showing that the affairs of the company were being conducted in a manner oppressive to some part of the members. The conduct must be burdensome, harsh and wrongful and mere lack of confidence between the majority shareholders and the minority shareholders would not be enough unless the lack of confidence springs from oppression of a minority by a majority in the management of the company's affairs, and such oppression must involve at least an element of lack of probity or fair dealing to a member in the matter of his proprietary rights as a shareholder. . . . Section 397 unless it be shown that this lack of confidence sprang from a desire to oppress the minority in the management of the company's affairs and that there was at least an element of lack of probity and fair dealing to a member in the matter of his proprietary right as a shareholder.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-201", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "270. In Gajarabai Patny v. Patny Transport (Pvt.) Ltd. [1966] 36 Comp Cas 745 (AP), this court considered the effect of Sections 397 and 398 of the Act of 1956. Justice Jaganmohan Reddy, as he then was, observed that (headnote): \"where there is discrimination by the majority of shareholders or by the majority of the directors to the detriment of the minority amounting to oppression, and the affairs of the company are managed in a manner derogatory to the company's interest, Sections 397 and 398 of the Companies Act can be invoked and the court has unfettered discretion in such a case to impose upon the parties whatever settlement it considers just and equitable to remove the oppression.\" \n\n271. On facts of the case, his Lordship held (headnote) : \"that the action of the directors in withholding transfer of shares in favour of the petitioners, in accordance with the terms of the will, while at the same time transferring some other shares in the managing agency firm, under the same will, was vindictive and harsh and unreasonable and amounted to oppression. \n\n272. In Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holdings Ltd. , their Lordships of the Supreme Court in para. 52 of the judgment held that (page 782) \"the person complaining of oppression must show that he has been constrained to submit to a conduct which lacks in probity, conduct which is unfair to him and which causes prejudice to him in the exercise of his legal and proprietary rights as shareholder\". If this act is proved, the power of the Company Law Board to invoke Section 397 of the Companies Act will be justified.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-202", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "273. While going through the minutes book I found two/three important resolutions adopted by the board which throw sufficient light on the acts complained of by the petitioners against respondents Nos. 2 and 3 and which were not placed before the Board. While dealing with the merits of the case, I have taken note of the resolutions. \n\n274. In Malleswara Finance and Investments Co. v. Company Law Board [1995] 82 Comp Cas 836; [1995] 1 Comp LJ 1 (Mad), the main matter in dispute was the decision to increase the share capital of the company so as to reduce the majority shareholders into minority shareholders. Learned counsel for the appellant in that case contended that the allotment of the shares is a matter of internal management of the company and the same is outside the scope of Section 397 or 398 of the Act. After reviewing the case law on the subject, the Madras High Court held that (page 886): \"it is well established that directors of a company are in a fiduciary position vis-a-vis the company and must exercise their power for the benefit of the company. If the power to issue further shares is exercised by the directors not for the benefit of the company but simply and solely for their personal aggrandisement and to the detriment of the company, the court will interfere and prevent the directors from doing so. The very basis of the court's interference in such a case is the existence of the relationship of a trustee and cestui que trust as between the directors and the company.\" On the facts of the case, the court having observed that there was no necessity to increase the capital since there was no plant or machinery, why the share capital was increased is not explained. Accordingly, the court held that the directors of the fifth respondent-company did not act in good faith and amounted to act of oppression.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-203", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "275. In Mrs. Rashmi Seth's case [1992] 3 Comp LJ 89 ; [1995] 82 Comp Cas 563 (CLB), the Principal Bench of CLB held that the action of the company in passing a resolution that the petitioner consented for transfer of her holding of 50 per cent. shares by fabricating minutes showing her presence, though she did not attend the meeting and other resolutions passed in such a meeting are null and void and non-operative. As the petitioner continued to hold 50 per cent. shares in the company and as such she was held to have fulfilled the criteria prescribed under Section 399 of the Companies Act, 1956, for filing a petition under Sections 397 and 398 of that Act. \n\n276. In the aboye judgment it was further held that the action of the directors in not offering shares to all the shareholders, but to one shareholder, such allotment had the effect of converting the majority shareholding of the petitioner into a minority shareholding and the same amounts to acts of oppression and mismanagement. The Company Law Board further held that the directors cannot utilise the fiduciary powers over the shares purely for the purpose of destroying an existing majority or creating a new majority and exercise of power to issue further shares for the purpose of consolidating and improving voting power to the exclusion of the existing majority shareholder cannot be allowed. \n\n277. In R. Khemka's case [1998] 16 SCL 1 (AP) this court observed that the word \"oppression\" is a chameleonic word and it changes its colour and content from time to time, place to place, and event to event, depending on circumstances of the case. His Lordship also observed while Section 397 of the Act is intended to protect the interest of minority shareholders, Section 398 of the Act is intended for maintaining public interest and interest of the company.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-204", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "278. From the above it is seen that if the company with the support of the majority shareholders creates a state of physical or mental discomfort to the minority members and tries to alter shareholdings of the members by fabricating the resolutions as held supra it has to be construed as an act of \"oppression\" of the minority by majority. Further, in a case of mismanagement, the minority shareholders need not prove the allegations to be true. Mere apprehension is sufficient for making an order by the Company Law Board with a view to bringing to an end the disputes, as seen from Section 398(2) of the Act. \n\n279. But Sri Raghavan appearing for the respondents strenuously contended that the Company Law Board, not being a court and being creature of a statute, whose powers are enumerated cannot exercise powers in equity as is being done by the High Courts as well as the Supreme Court. \n\n280. While this court considered the series of objections raised by counsel, this contention was rejected by holding that the Company Law Board is empowered to exercise inherent powers under Rule 44 of the Company Law Board Regulations, 1991, akin to the inherent powers that are being exercised by the civil courts under Section 151 of the Civil Procedure Code. \n\n281. Nextly, from the language of Section 398, mere apprehension in the minds of minority shareholders is sufficient and the allegations levelled against the majority shareholders need not be proved in the strict sense for exercise of the powers vested in it under Section 402 of the Act by the Board. \n\n282. Keeping the dicta laid down in the cases referred supra, I proceed to examine whether the acts complained of by the petitioners constitute acts of oppression.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-205", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Rights issue :\n The case of the petitioner is that in January, 1994, the company made rights issue all of a sudden without any discussion in any board meeting or the general body meeting, on September 25, 1993, with a view to bringing the shareholding of the petitioners below 10 per cent. in order to see that the petitioners would not approach the Board for reliefs against oppression and mismanagement and the issue was not for any bona fide business purpose. The petitioner in his chief examination categorically stated that in the board meeting held on July 29, 1993, the issue regarding expansion or modernization of the company was not in the agenda. It is also his case that in the annual general body meeting held on September 25, 1993, no discussion about expansion or modernisation of the company took place. Be that as it may, the petitioners having received the offer of rights on April 31, 1994, applied for shares on March 8, 1994, but the shares were not allotted to the petitioner for a long time on the ground that the form was not signed by one Aruna Devi who was holding shares jointly along with the petitioner and who died in the year 1980, though the death certificate of Aruna Devi was sent to the company on May 25, 1994. The case of the respondents is that the additional share capital was sought to be raised for purposes of expansion and modernisation and replacement through the rights issue as per the resolution of the board in its meeting held on July 29, 1993. The company has not allotted the shares to the petitioner, as the petitioner did not attach the death certificate of the joint shareholder along with the application. It is only in 1997 the shares were allotted to the ninth petitioner.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-206", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "283. Rejecting the contention of the petitioners, the Board held that it is beyond their comprehension as to how the rights issue as long as the offer is accepted would reduce one's shareholding forgetting the fact that the shares were not allotted to the ninth petitioner till 1997, i.e., three years after the company petition was filed. On the second contention that the company is not in need of funds, the Board observed that it was not the first time that the company made such an issue. Earlier in 1991 also such an issue was made even without verifying the minutes of the board dated July 29, 1993. Ultimately the Board held as follows (page 538 of 98 Comp Cas) :\n \"Therefore, we cannot subscribe to the view of the petitioners that the rights issue was made with an oblique motive especially when it will have effect on nearly 90 per cent. of the shareholders other than the petitioners who hold only around 10.6 per cent. shares.\" \n284. Having taken such a view the Board surprisingly held (page 539) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-207", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "284. Having taken such a view the Board surprisingly held (page 539) :\n \"However, we find that the grievance of the petitioner relating to delayed allotment of the shares has substance. We are not in a position to appreciate the stand of the company that the death of a family member was not known to the persons in management, viz., second respondent for over three years to allot shares applied for in 1994, in 1997. Personal differences should not come in the way of discharging statutory responsibilities. The delayed allotment has denied the petitioner the benefit of dividend declared. Therefore, we are of the view that the petitioner should be compensated at least to the extent of the dividend that he would have been otherwise entitled to if the shares had been allotted in time. Accordingly, we direct the company to compensate him by payment of interest at the same rate at which dividends were declared and paid in respect of the delayed period within a period of one month from the date of receipt of this order.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-208", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "285. Now let me see to what extent the findings recorded by the Board can be sustained. The case of the respondent is that the Board has taken a decision at its meeting held on July 29, 1993, admittedly after the disputes started. The agenda notice for that meeting was filed before the Board as annexure R-15 by the respondents themselves. None of the agenda items relate to expansion or modernisation or replacement of the old machinery. Perhaps they want to take advantage under the last item \"any other matter with the permission of the chair\". But at the same time the resolution adopted at the meeting was not filed before the Board. I summoned the original minutes book to have a look at the resolutions adopted by the board. The subject replacement/modernisation of machinery was taken up under Item No. 8 (D) in the board meeting held on July 29, 1993, and the resolution adopted under this item is extracted hereunder :\n\"Resolved that approval of the company be and is hereby given in prin-' ciple to take up replacement-cum-modernisation of machinery and expansion of the plant.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-209", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Resolved further that the scheme of funding and other details be considered at the next board meeting which shall be made available by the managing director.\" \n286. From the above resolution it is seen that the board did not decide to raise additional amounts through rights issue-Secondly, if the rights issue was made for the purpose of expansion, etc., the respondents did not state how the additional share capital raised was utilised even at the time when the case was heard at the fag end of 1998. Further the case of the respondent is that about Rs. 1.5 crores was raised through rights issue and it is not known whether the company is not in a position to raise that amount if it is really needed from other sources. On the other hand, the specific case of the petitioner is that the company made rights issue only to see that his shareholding is reduced to less than 10 per cent. thereby preempting him from approaching the Board under Section 397 of the Act. The ninth petitioner spoke about this issue in detail while giving evidence. From the resolution of the board it is seen that the company is having surplus funds and with regard to raising of additional share capital, the board having agreed in principle to the suggestion of the second respondent that about Rs. 7.5 crores may be raised for the purpose, resolved to consider the scheme of the funding and other details at the next board meeting which shall be made available by the managing director. From the above it is seen that the board did not resolve to raise additional share capital by rights issues. Further while the estimated amount for the purpose is Rs. 7.5 crores the amount raised through rights issue is only Rs. 1.5 crores. How the remaining amount was raised, the company did not explain. On the other hand, the respondents did not file the copy of these resolutions before the Board purposely as they will be caught on the wrong side.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-210", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "287. In the light of the foregoing discussion the conclusion arrived at by the Board that the company decided to raise Rs. 1.50 crores by making rights issue is not based on any material and it is the result of non-application of mind.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-211", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "288. Nextly, the Board brushed aside the contention of the petitioner that the company made a rights issue only to see that his shareholding is reduced to less than 10 per cent. to prevent him from approaching the Board under Section 397 of the Act, by holding that it is beyond their comprehension as to how the rights issue as long as the offer is accepted would reduce one's shareholding. The case of the petitioner is that both in the petition as well as in his evidence that having accepted the rights issue, he submitted an application dated March 8, 1994, to the Assistant Secretary, when the company did not allot the shares to the petitioner on the ground that the ioint shareholder, i.e. Aruna Devi has not signed the application, he submitted the death certificate of Aruna Devi on May 25, 1994. The copy of the letter along with death certificate were filed before the court. Though counsel for the respondent-company contended that the company did not receive the death certificate till 1997, he neither produced any evidence to show that the death certificate was not received by the company in 1997 nor he elicited anything contra in the cross-examination of the petitioner that he has not furnished the death certificate on May 25, 1994. If there is no mala fide intention on the part of respondents Nos. 2 and 3 it is not known how the shares remained unallotted to the petitioner for three long years, more so in the light of the observation of the Board that \"we are not in a position to appreciate the stand of the company that the death of the family member was not known to the persons in management\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-212", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "289. Mr. Raghavan in his marathon arguments did not attack this finding of the Board. Be that as it may, the very finding of the Board that \"personal differences should not come in the way of discharging the statutory responsibilities and awarding of payment of interest at the rate at which the dividends were declared to compensate the petitioner\", is sufficient to hold that respondents Nos. 2 and 3 pitched upon the rights issue and withheld the allotment of shares to the ninth petitioner with a view to see that the shareholding of the petitioner will be less than 10 per cent. Had the other shareholders not joined him, he would not have on his own approached the Board under Section 397 of the Act. \n\n290. In Malleswara Finance and Investments Company (P.) Ltd.'s case [1995] 82 Comp Cas 836; [1995] 1 CLJ 1 the Madras High Court held that in the absence of any evidence that the increase in the share capital was necessary, the issue and allotment of shares is not in good faith and is intended to defeat the rights of shareholders. \n\n291. In Gajarabai Patny's case [1966] 36 Comp Cas 745 (AP), his Lordship Justice Jaganmohan Reddy as he then was in this court held that the action of the directors in withholding transfer of shares in favour of the petitioners, in accordance with the terms of the will, while at the same time transferring some other shares in the managing firm, under the same will, was vindictive, harsh, unreasonable and amounted to oppression.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-213", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "292. In Standard Industries Ltd.'s case [1994] 80 Comp Cas 764 again the Principal Bench of the Company Law Board held that the action, as evidenced by resolute endeavour, to go with the rights issue in spite of opposition from 48 per cent. shareholders in effect, intended to reduce the petitioners and others to insignificant minority and suffers from lack of probity and fair play. \n\n293. Following the dicta laid down in the above judgments, I hold that withholding of allotment of shares of the ninth petitioner even after producing the death certificate of the joint shareholders, the late Aruna Devi, along with her letter dated May 25, 1994, for more than four years is only with a view to preempt the ninth petitioner and his group from approaching the Company Law Board complaining of acts of oppression and mismanagement in the affairs of the company and such an action is vindictive, harsh and unreasonable and amounts to oppression. \n\nRemoval of petitioner No. 9 as director :\n The case of petitioner No. 9 is that he was removed as director in the extraordinary general body meeting of the company held on January 21, 1994, without following the procedure prescribed in the Act. It is also his case that the petitioners and other shareholders supporting him were not allowed to participate in the said meeting and he was not accorded any opportunity to explain his position as envisaged under Section 284 of the Act. His further case is that once the board decided to convene the meeting as per the requisition, a special notice under Section 190 of the Act must have been issued by the requisitionist. Likewise, the provisions of Section 168 of the Act were not followed and the notice for the meeting did not contain any explanatory statement as envisaged under Section 173 of the Act and as such the proceedings of the meeting have to be declared as null and void.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-214", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "294. The case of the respondents is that the company received a requisition notice for removal of the petitioner as director of the company. After the court litigation initiated by the petitioner on the requisition notice came to an end, in the extraordinary general body meeting held on January 21, 1994, it was unanimously decided to remove the petitioner as director. Their case is that the telegraphic representation sent by the petitioner for the board meeting held on December 27, 1993, was circulated to the members, as the petitioner did not choose to attend the meeting to make oral representation. The general body decided to remove him after considering the telegraphic representation and as such the provisions of Section 284 of the Act were complied with. \n\n295. With regard to issuance of special notice under Section 190 of the Act, the case of the respondent is that the requisition notice received by the company was a composite one both under Section 169 of the Act as well as under Section 190 of the Act. Hence, the removal of the petitioner was in consonance with the above provisions of law and had the support of all the shareholders who attended the meeting and as such it cannot be impugned.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-215", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "296. The Board, having observed that in a petition under Section 397 of the Act directorial complaints cannot be generally agitated, examined the same and held:\n \"As per record, nine shareholders requisitioned for convening an extraordinary general body meeting for passing a resolution to remove the petitioner as a director. Having taken recourse to the legal forum, the petitioner is complaining that the provisions of Sections 284 and 190 of the Act were not followed in this process\". The Board accepted the plea of the respondents that \"the circulation of telegraphic representation is sufficient compliance with the provisions of Section 284 of the Act\". The other contention of the petitioner that the requisitionist has not issued special notice of fourteen days before the date of meeting did not find favour with the Board and they observed that Section 169 of the Act has to be read independently from Section 284 of the Act. Since a notice under Section 169 of the Act is received by the company and the notice indicates the business to be transacted in the meeting which is to be held within a stipulated time framed as provided under that section, the question of issuing separate special notice under Section 190 of the Act does not arise and the notice of the requisitionist was treated as special notice under Section 190 of the Act. The Board also held that \"the provisions of Section 190 of the Act are applicable only in connection with the annual general body meeting and not in respect of a requisitioned extraordinary general body meeting\". The Board also held that \"in case of meetings convened on requisition under Section 169 of the Act, no explanatory statement need be enclosed. In that view of the matter, the Board held that the removal of the petitioner as director does not suffer from any legal infirmity\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-216", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "297. Before considering the correctness or otherwise of the order of the Board, it should be kept in mind that petitioner No. 9 was given in marriage to respondent No. 2's daughter in 1969 and he became a director of the company in 1970. He was not only a director of this company, but also actively involved in the management of the affairs of the various subsidiary companies. He was the (1) managing partner of Padmalaya Finance Company, (2) managing director of Vijaya Engine Valves Limited, (3) managing director of K. V. R. Forgings and (4) chairman of Bhavani Castings. From this it is clear that the petitioner was holding important positions at least in four subsidiary companies apart from the post of director in the respondent-company. After the disputes have arisen between the father-in-law and son-in-law, i.e., respondent No. 2 and the ninth petitioner, he was stripped of the positions held by him one after the other except the post of managing director for K. V. R. Forgings which he seemed to have resigned after he became Member of Parliament in 1984. No explanation whatsoever is forthcoming as to why he was removed from various positions held by him for nearly 2 1/2 decades. From the events that have taken place, it is obvious that he was stripped of all his positions as he has fallen from the grace of his father-in-law and he started raising his voice against the mismanagement of the affairs of the company by respondent No. 2. Nextly, as a director of the company he will be having access to all the records and account books of the company and as director he is entitled to have the information as a matter of right unlike a shareholder who has no right to have the information with regard to the day-to-day affairs of the company. This is evident from the alleged letter of the company dated December 3,", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-217", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "affairs of the company. This is evident from the alleged letter of the company dated December 3, 1993, addressed to the ninth petitioner, which did not reach him as per the answer given by the ninth petitioner to Q. No. 131 in cross-examination. The question (Q. No. 136) put to the ninth petitioner and the answer given by him in his cross-examination are extracted below :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-218", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"Q. 136. You have every right to inspect the books and records of the company ?", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-219", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "A. Since the information asked for was not given and it is not possible to go through the records of the company and find out the mis-appropriation.\" \n298. From questions Nos. 6 to 10 in the cross-examination, it is seen that counsel suggested to the ninth petitioner that as a director he is having access to all the books, records and accounts. \n\n299. From this it is evident that petitioner No. 9 is stripped of his directorship, so that he will not have access to the records and to pre-empt him from approaching the Board seeking relief against acts of oppression. This answer of the ninth petitioner is further fortified from the reply given by the company to the letters addressed by him seeking information before and after losing the directorship as well as the replies of the company to the other petitioners as shareholders. \n\n300. From this angle, if we look at the notice, nine shareholders belonging to respondent No, 2's family gave notice after the disputes have arisen between respondent No, 2 and the ninth petitioner, the irresistible conclusion that can be arrived at is that respondent No. 2 with the power at his command wants to oppress the voice of the petitioners by not allowing him to have access to the records, accounts, etc., more so, when he tried to find pitfalls in the administration and tried to expose the misdeeds of respondent No. 2 prejudicial to public interest as well as the interest of the company.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-220", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "301. Coming to the resolution removing petitioner No. 9 as director, the specific case is that in the annul general body meeting held in September, 1993, he raised the issue of misappropriation of Rs. 1.25 crores and as a retaliation respondent No. 2 got requisition notice issued by his family members on November 4, 1993. The requisition notice is said to have been given under Section 169 of the Act requesting the managing director to convene an extraordinary general body meeting to consider and pass a resolution, \"resolved that Mr. Chundru Srihari Rao be and is hereby removed as director of the company\". They also stated that \"it may be treated as special notice under Section 190 of the Act\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-221", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "302. Section 284 of the Act deals with removal of directors. Under Sub-section (1), a company may, by ordinary resolution, remove a director before the expiry of his period of office. Under Sub-section (2), a special notice has to be given for passing a resolution for removal of a director or appoint some one in his place. Under Sub-section (3), on receipt of such a notice, the company shall forthwith send a copy thereof to the director concerned, and the director shall be entitled to be heard on the resolution at the meeting. Under Sub-section (4), the director concerned after receipt of the meeting notice may make a representation in writing to the company and request its notification to members of the company. While giving notice for a general body meeting, the company has to send a copy of the representation to every member of the company, and if a copy of the representation is not sent for the reasons stated therein, the director may without prejudice to his right to be heard orally, require that the representation shall be read out at the meeting. From the language employed in Sub-sections (3) and (4), I feel that there is some ambiguity with regard to the time at which notice to be given to the director, i.e., prior to giving notice for the general body meeting or after the notice for general body is given. I need not go into the controversy, as both counsel did not address arguments on this aspect. \n\n303. Under Section 190 of the Act, notice of intention to move the resolution shall be given to the company not less than fourteen days before the date of meeting at which the resolution to be moved, excluding the day on which the notice is served or deemed to be served on the member concerned.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-222", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "304. Under Section 169 of the Act, on receipt of requisition meeting notice received from the members of the company, the board of directors shall proceed to call for an extraordinary general body meeting of the company. Though the board at its meeting held on December 27, 1993, decided to call for the extraordinary meeting, on January 21, 1994, neither the notice calling for the meeting nor the explanation of the ninth petitioner appended to the notice, or the resolution passed in the general body meeting were produced either before the Board or this court to find out whether the statutory requirement is satisfied in convening the meeting or the contents of the telegram, to know whether it can be treated as an explanation and whether the resolution adopted by the general body reflects the application of mind by the members to the telegram in removing petitioner No. 9 as director.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-223", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "305. Be that as it may, even assuming that the company complied with statutory requirements in convening the meeting, under Section 294(3) of the Act, the director is entitled to be heard on the resolution at the meeting. In the evidence, the petitioner categorically stated that having received the notice for extraordinary general body meeting slated on April 21, 1994, he along with his wife went to attend the meeting at 3.30 p.m., which is scheduled to be held at 4.00 p.m., to explain to the shareholders of the company the reasons why a resolution is being moved to remove him as a director and to explain to them the stand taken by him for exposing corruption and misappropriation of funds by respondent No. 2, but he was not allowed to enter the meeting hall as the gates were closed at 3.30 p.m. and the security told him that they were doing so under instructions. Immediately, he gave a press release, but the same was published on January 27, 1994, vide answer to question No. 65 in chief-examination. This statement of the petitioner stood unrebutted. But the Board accepted the version of the company and held that the removal of the petitioner as director does not suffer from any legal infirmity.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-224", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "306.Firstly, I have gone through the order as well as the material papers filed by the respondents in this regard. From Sub-section (4) of Section 284 it is seen that even if the representation is not circulated to the members of the company, the director may, without prejudice to his right to be heard, orally require that the representation shall be read out at the meeting. From this, it is evident that even if the representation is circulated with the notice, the right of the director sought to be removed, of being heard is preserved. As the deposition of the petitioner that he was not allowed to enter the meeting hall to explain his stand and he gave a press statement to that effect which was published on December 27, 1993, stood unrebutted, I have no option except to hold that the resolution adopted by the general body at its meeting held on April 21, 1994, is in contravention of Section 284 of the Act.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-225", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "307. Counsel for the respondent strenuously contended that the shareholders cannot be restrained from calling a meeting and they are not bound to disclose the reasons while calling for an extraordinary general body meeting to move a resolution for removal of some directors and appoint others in their place, nor the reasons for the resolutions are subject to judicial review by placing reliance on Life Insurance Corporation of India's case . Their Lordships of the Supreme Court in para. 100 held as follows (page 636) :\n \"100. Thus, we see that every shareholder of a company has the right, subject to statutorily prescribed procedural and numerical requirements, to call an extraordinary general meeting in accordance with the provisions of the Companies Act. He cannot be restrained from calling a meeting and he is not bound to disclose the reasons for the resolutions proposed to be moved at the meeting. Nor are the reasons for the resolutions subject to judicial review .. . .. It does not require the shareholders calling a meeting to disclose the reasons for the resolutions which they propose to move at the meeting.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-226", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "308. It is true that the Honourable Judges of the Supreme Court have taken such a view in upholding the action of the Life Insurance Corporation in seeking removal of non-executive directors in Escorts Limited who resisted transfer of shares held by the financial institutions in favour of non-resident Indians with a view to avoid confrontation with the Government and the Reserve Bank and to adopt more conciliatory approach as per the policy of the Government, to earn foreign exchange by attracting non-resident individuals of Indian nationality or origin to invest in the shares of Indian companies, by providing incentives to facilitate investment by non-residents of Indian nationality or origin in shares of Indian companies and by liberalising the existing facilities and procedural formalities, and who dragged the issue to the court. In arriving at this conclusion, they placed reliance on Company Law by Gower who compared the shareholders and board of directors as legislative and executive organs. Their Lordships opined that the only effective way the members in general meeting can exercise their control over the directorate in a democratic manner is to alter the Articles so as to restrict the powers of the directors for the future or to dismiss the directorate and appoint others in their place. I have no quarrel with the general proposition laid down by the Honourable Supreme Court.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-227", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "309. But the facts and circumstances of that case are altogether different from the facts and circumstances of this case. Here, the Board is considering whether the action of the shareholders in calling for an extraordinary general body meeting to move a resolution for removal of petitioner No. 9 is bona fide one or tainted with bad faith at the instance of respondent No. 2. Though the resolutions are not subject to judicial review, the court should not close its eyes to the time and the manner in which the resolution is sought to be moved by the shareholders, more so, when the shareholders who have given the notice for convening of the extraordinary general body meeting are no other than the kith and kin of respondent No. 2, apart from the fact that the ninth petitioner was stripped of all his positions in the subsidiary companies which he was holding for more than 2 1/2 decades at the same time. In fact, in Standard Industries Ltd.'s case [1994] 80 Comp Cas 764, 771 (CLB) while considering the action of the majority shareholders fully subscribing to the rights issue to the detriment of the petitioners observed that \"it was not the legality of the rights issue but the modus pperandi adopted by the respondents that was the real issue\". From the above it is seen that it is not the legality of the resolution passed by the general body removing the ninth petitioner as director, but the time, the intention, modus operandi adopted by respondents Nos. 2 and 3 in getting the resolution passed, so that he will not have access to the original records and account books, etc., to see that the ninth petitioner is placed in a disadvantageous position to expose their misdeeds and also to gain time to fabricate the documents, which are in their possession, in the event of his approaching the Company Law Board under Chapter VI of the Companies Act.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-228", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "310. In Life Insurance Corporation of India's case their Lordships of the Supreme Court held that (page 628) : \"Generally and broadly speaking, we may say that the corporate veil may be lifted where a statute itself contemplates lifting the veil, or fraud or improper conduct is intended to be prevented, or a taxing statute or a beneficent statute is sought to be evaded or where associated companies are inextricably connected as to be, in reality, part of one concern. It is neither necessary nor desirable to enumerate the classes of cases where lifting the veil is permissible, since that must necessarily depend on the relevant statutory or other provisions, the object sought to be achieved, the impugned conduct, the involvement of the element of public interest, the effect on parties who may be affected, etc\". \n\n311. From this judgment it is crystal clear when fraud or improper conduct is alleged against the majority shareholders, the Board is expected to lift the corporate veil to see whether the majority shareholders acted in violation of the statutory provisions, whether any element of public interest is involved and whether any of the parties are affected by their actions and whether the resolution is moved in good faith. But the Board without seeing whether the removal of the petitioner by the general body is in good faith or at the dictates of respondents Nos. 2 and 3, who are controlling the majority shareholders and even without looking into statutory provisions whether the resolution passed by the general body satisfied the test laid down in Section 284 of the Act, simply held that the removal of the ninth petitioner as director does not suffer from any legal infirmity.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-229", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "312. Hence, it is rather difficult to hold that the procedure prescribed for removal of petitioner No. 9 as a director under Section 284 of the Act is followed. As such the finding of the Board that Section 169 of the Act has to be read independently from Section 284 of the Act and no explanatory statement need be enclosed in the case of meetings convened on requisition and that the provisions of Section 190 of the Act are applicable only in connection with the annual general body meeting and not in respect of a requisition for the extraordinary general body meeting, runs counter to the provisions of the Act and I have no manner of doubt to hold that the findings of the Board are not in consonance with the provisions of the Act.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-230", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "313. Other acts of oppression not adverted to by the Board, by not considering the voluminous record :\n1. Assault by Krishna Mohan :\n While giving answer to questions Nos. 77 and 78 in chief, categorically stated that respondent No. 2 sent one Krishna Mohan working as manager in S. R. M. T. to his cabin to assault him and in the assault he received bleeding injuries. With the result he was treated in the Government Hospital at Kakinada and he also filed a criminal case against the said Krishna Mohan. It seems the case is still pending. On the other hand, the case of the respondent-company is that on a complaint given by Krishna Mohan, petitioner No. 9 was convicted and a fine was imposed on him. Rebutting this argument, petitioner No. 9 brought to the notice of this court that on appeal the order of the learned magistrate was reversed. It is not known how the magistrate kept the criminal case filed by the ninth petitioner pending and disposed of the criminal case filed by Krishna Mohan though both the complaints arose out of the same incident and they being case and counter case. \n2. Assault by Mr. M. V. V. Satyanarayana Rao :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-231", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "2. Assault by Mr. M. V. V. Satyanarayana Rao :\n Mr. M. V. V. Stayanarayana Rao, joint managing director of Padmalaya Finance Corporation and co-son-in-law of petitioner No. 9 seemed to have caused bodily injuries to petitioner No. 9 and he lodged a complaint before the III Town Police Station, Kakinada, on April 9, 1997. Though a case was registered in Cr. No. 82 of 1997 under Section 324 read with Section 34 of the Indian Penal Code no action seemed to have been taken by the police. In those circumstances, petitioner No. 9 filed Writ Petition No. 27324 of 1997 questioning the inaction on the part of the police. In the counter, the Sub-Inspector of Police while admitting that the investigation has not been completed went to the extent of saying that the incident has nothing to do with the disputes between the co-sons-in-law. The learned judge in his judgment dated November 7, 1997, recorded a finding as follows :\n \"It is rather difficult to appreciate as to how the Investigating Officer could have expressed any opinion whatsoever about the non-involvement of certain persons whose names are mentioned by the petitioner.\" \nIn fact this court directed the Superintendent of Police to entrust the investigation of the case to another Inspector of Police by divesting the Sub-Inspector of Police, III Town Police Station, Kakinada. Even after the judgment, the result of the investigation has not seen the light of the day till this date.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-232", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(3) Criminal cases filed by Satyanarayana Rao, son-in-law of respondent No. 2 :\n It is also his case that the said Satyanarayana Rao filed as many as eight criminal cases against him, i.e., C. C. Nos. 434 of 1998, 453 of 1998, 82 of 1999, 93 of 1999, 607 of 1999, 46 of 1999, 56 of 1999 and 94 of 1999. Though these cases were filed after the company petition, the fact remains that the persecution of the ninth petitioner is continuing and the court has to take judicial notice of these cases, as counsel for the respondents did not deny the fact of filing so many criminal cases against the ninth petitioner. \n(4) Criminal cases filed by K. V. V. Prasada Rao another son-in-law of respondent No. 2 :\n Another co-son-in-law Mr. K. V. V. Prasada Rao filed three criminal cases against him, viz., C. C. Nos. 705 of 1999, 706 of 1999 and 707 of 1999. \nAgain though these cases are subsequent to the filing of company petitions, I have taken judicial notice for the reasons given below. \n\nThese cases filed by both the co-brothers of the ninth petitioner against him are all pending in the criminal courts, Kakinada.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-233", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(5) Criminal case against E. Satyanarayana Murthy--List witness under Section 3(1)(e) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989 :\nIt is his further case that (a) at the instance of respondent No. 2 a criminal complaint was given by one Peter Bala against one E. Satyanarayana Murthy, who worked in various capacities in the respondent-company, on a suspicion that he is giving information to petitioner No. 9, stating that he scolded him by his caste name on August 8, 1995, and the same was registered as Crime No. 55 of 1995 under Section 3(1)(e) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989. He was detained in the prison for more than ten days. Ultimately, he was granted bail by this court in Crl. Petition No. 3912 of 1995, dated August 17, 1995.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-234", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(b) Mr. E. S. N. Murthy in his representation dated September 7, 1995, to the Collector and S. P. stating that the management was harassing him for the reason that the ninth petitioner cited him as a witness in the company case and not able to withstand the harassment, he resigned the job. Not being satisfied with this, the second respondent got him implicated in this false case though he did not even know the de facto complainant and he requested them to get the case investigated by a superior Police Officer and to do justice to him. It is also his case that when the district authorities did not move in the matter, to save himself, he left Kakinada and settled in Visakhapatnam. Though the complaint and representation are of the year 1995 neither the police prosecuted him nor closed the case till this date. \n(6) False case against Y. D. Rama Rao :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-235", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(6) False case against Y. D. Rama Rao :\n It is also his case that the second respondent got a false criminal case registered against Y. D. Rama Rao, who worked as manager in S. R. M T. for more than 20 years and now Chairman of Super Bazar, Kakinada, on the ground that he abused and beat one Harijan under Section 3(l)(e) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989. In proof of the allegation the pamphlet published by Y. D. Rama Rao explaining the circumstances under which he was forced to go on hunger strike at taxi stand near Balajicheruvu on September 23, 2000, and also the bail order granted by the First Additional Sessions Judge, East Godavari on September 20, 2000, wherein Mr. Rama Rao categorically pleaded that de facto complainant has been pressed into service by the S. R. M. T. group in order to foist a false case against him. As this incident is after the judgment of the Board, I am not taking into consideration, as the same was not brought to my notice in a manner known to law. It is suffice to state that Y. D. Rama Rao is supporting the ninth petitioner as seen from the statement of George Babu before police on February 17, 1994.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-236", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(7) Inaction of police against D. George Babu, Security Guard in S. R. M. T. : The specific case of the ninth petitioner is that when the petitioner and his group of shareholders are taking steps to file a company petition one Mr. D. George Babu, who is working as a security person in S. R. M. T. followed him to Samalkota Railway Station on February 17, 1994, and on a complaint given by his men, as he is leaving for Hyderabad, the Railway Police arrested and handed him over to regular police and the said George Babu gave a statement before the police. As per his version, while he was in \"A\" shift from 6.00 a.m. on the fateful day the security officer by name Ch. S. V. S. N. Murthy sent for him at about 2 p.m. in the noon and he was asked to go in plain dress on the Kinetic Honda bearing No. AP-5-8656 belonging to the security officer and asked him to trace the whereabouts of petitioner No. 9 and also to see who are the others accompanying him including Y. D. Rama Rao and he admitted that Sri Hari Rao having seen him asked Mr. E. Satyanarayana Murthy and Tallapudi Subba Rao who are with him to hand him over to the Railway Police who in turn handed him over to the local police before whom he gave the above statement. No information is forthcoming whether the police registered a crime or not against George Babu and at what stage the investigation is. But the receipt given by the police in proof of receipt of the complaint given by E. Stayanarayana Murthy and the statement given by the said George Babu before the police were filed before the Company Law Board.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-237", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(8) Threat to ninth petitioner by respondent No. 2 after board meeting dated October 3, 1993 :\n The case of the petitioners is that immediately after the board meeting dated October 3, 1993, wherein the issue of misappropriation was again raised by him, is over, respondent No. 2 threatened him to vacate the premises of SRMT wherein the office of Padmalaya Finance Corporation was also located within 24 hours and thereafter having agreed before the police not to press for vacation of the premises, removed his table and placed it outside the company premises on October 14, 1993. \n314. The ninth petitioner in his affidavit dated May 13, 1998, filed before the Board not only brought all these incidents to the notice of the Board with documentary evidence, but also deposed in his evidence on the incidents that have taken place till the time of giving evidence (see answers to questions Nos. 78, 84 and 86 in chief). \n\n315. The company did not produce any rebuttal evidence on any of the above aspects. Though such a voluminous material was placed before the Board, it did not discuss whether the above actions on the part of respondents Nos. 2 and 3 amount to oppression of the minority shareholders or not.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-238", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "316. From the above documentary and oral evidence available on record, I have no hesitation to hold that the petitioner placed sufficient material explaining not only his inability in not getting the list witnesses to give evidence but also proved that respondents Nos. 2 and 3 are creating fear psychosis among the list witnesses, that if any one helped the ninth petitioner or raised his voice against the activities of respondent No. 2, the first and foremost thing would be, that he will be arrested by the police under the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989. Secondly, the series of incidents referred to supra both before and after filing of the company petition are clearly intended to prove to the outside world that a man who incurred the wrath of respondent No. 2 even if he is his own son-in-law will not be spared so easily and the persecution will continue till he is crushed. \n\n317. At this stage the court is expected to take judicial notice of the fact that in the entire district, the respondent-company is the biggest industrial house with assets worth more than Rs. 100 crores and we can imagine how much political clout the managing director of such a company will wield not only in the town, but also in the entire district leave apart the State. \n\n318. We should also keep in mind that petitioner No. 9 was a Member of Parliament when he was in the good books of his father-in-law and when petitioner No. 9 fell from the grace of his father-in-law, another son-in-law by name Mr. Ravinder is now Member of Parliament.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-239", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "319. Hence, all the above incidents clinchingly establish that as the majority of directors and majority of the shareholders in the respondent-company hail from the family of respondent No. 2 and they will go to any extent to silence the minority shareholders by using their brute majority in the company and also by using the political clout and physical force at their command to suppress any dissent voice against his illegal activities.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-240", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Compromise proposals :\n After the petitioners filed C. A. No. 65 of 1997 seeking appointment of interim administrator, as the petitioners offered to sell their shares to the respondent-company at a value determined by an independent chartered accountant, the Board suggested that the matter should be settled amicably in its meeting held on September 5, 1997, not only relating to the respondent-company--Gopal Automatic Limited, but also other four group companies, in which the petitioner had some interest and counsel for the respondent has taken time to find out the reaction of his clients. Again when the matter came up for hearing on September 29, 1997, he sought for further extension of time by stating that the shareholding of the respondent-company and its subsidiaries being divergent, the shareholders have to be consulted before any commitment could be given to the Company Law Board. Though the attendance sheet does not reflect the reaction of the respondents from the order of the Board it is seen that the respondents did not agree to the proposals. Having taken time to consult the shareholders in the company as well as its subsidiaries no material whatsoever is placed to show that the views of the shareholders were ascertained either by convening general body meetings of these companies or by circulation and they did not agree to the proposals.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-241", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "320. In the appeal, arguments were addressed by counsel for about three weeks. I understand respondent No. 3 was physically present in the court most of the time apart from the employees of the respondent-company and every day having pointed out the glaring illegalities committed by the Board, this court went on suggesting that this matter has to be settled amicably and the shares held by the petitioners can be purchased by the company instead of inviting a judgment on the merits. But the respondents flatly refused to purchase the shares by contending that the financial position of the company would not permit such a measure. From the record, it is seen that the annual turnover of the company is more than Rs. 100 crores and it is having sufficient reserves.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-242", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "321. This is evident from resolution 8-B at the meeting of the board of directors held on July 29, 1993, in the following terms :\n\"8-B : Subject: Authority to invest surplus funds in Government securities and shares of company :\n Resolution : Resolved that pursuant to the provisions of Section 292(1)(d) and (2) and other applicable provisions of the Companies Act, 1956, Sri K.V.R. Choudary, managing director and Sri K. Sarathi, joint managing director be and are hereby severally authorised to invest funds of the company in fixed/term deposits with banks, body corporate and in shares and/or debentures (convertible and non-convertible) of companies and other Government securities (Central or State or semi-Government) provided, however, that the total amount up to which the funds to be invested as aforesaid shall not exceed the sum of Rs. 2 crores (rupees two crores only) at any one time until otherwise decided in this regard).\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-243", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "322. Further, even according to the respondents an amount of Rs. 1.5 crores were raised through the rights issue in 1993 and how this amount was invested was not explained by the company. Further, in the extraordinary general body meeting held on December 6, 2000, the shareholders with a view to diversify the activities of the company and to carry on the business of generating, selling, transmitting, distributing, supplying electric power and host of other activities including floriculture, horticulture, not only amended the objects clause, but also authorised the board of directors to borrow any sum or sums of money exceeding the aggregate of the paid-up capital of the company and its free reserves, provided, however the total amount so borrowed shall not exceed Rs. 100 crores at any time. Can it be said that a company of this magnitude is not having financial resources at its command and is not in a position to purchase the shareholding of the minority shareholders whose shareholding is less than 10 per cent. as on today ? To my mind, such an action on the part of the respondent-company is nothing but victimisation and persecution of petitioner No. 9 and other shareholders supporting him. It may be the intention of respondents Nos. 2 and 3 to show to others that if they raised their voice against their mismanagement they will meet the same fate as petitioner No. 9 who is none other than the son-in-law of respondent No. 2. This conduct of respondents Nos. 2 and 3 is yet another act of oppression of minority shareholders.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-244", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "Non-furnishing of the information :\nOn November 2, 1993, the first petitioner addressed a letter to all the directors seeking information on the closure of parcel offices and selling of about forty lorries. \n\n(1) The secretary in his letter dated December 3, 1993, stated that \"the matters referred to by you are the matters to be dealt with by the management during the day-to-day business. Hence it is not possible to accede to your request\". If information sought for, relates to day-to-day business, it is not known why respondent No. 2 has taken a resolution in the meeting of board of directors alleged to have been held on August 7, 1992, as well as February 27, 1993. When the ninth petitioner, as director, sought for the information in his letter dated November 27, 1993, the company claimed that a reply was sent on December 3, 1993, stating that \"the books of account and other records are available at the registered office of the company and he may come and inspect the same during 2.00 p.m. to 4.30 p.m. on any working day with due prior intimation to them\". In proof of service of notice, they filed acknowledgment dated December 27, 1993, and petitioner No. 9 categorically denied about the receipt of the said letter. In the witness box also counsel for the respondents cross-examined the petitioner that he being a director he is having access to statutory books. The petitioner in his deposition categorically stated to question No. 86 in chief that respondent No. 2 threatened him to vacate the premises of Padmalaya Finance on October 3, 1993. This issue was dealt with separately apart from the attempted attacks on his body by that time.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-245", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(2) Petitioner No. 9 by his letter dated July 17, 1995, i.e., after the filing of the petition before the Board requested for certified copies of the registers duly enclosing banker's cheque for the purpose and the company secretary by his letter dated July 20, 1995, asked him \"under what provision of law he is seeking certified copies of the said registers as he is no more director by that date\". \n\n(3) Again in the month of September, 1997, when petitioner No. 9 sought for several details with regard to the financial transactions of the company through registered letter as well as telegram dated September 24, 1997, respondent No. 3-joint managing director raised the same query \"please let us know under what provisions of the Companies Act a member is entitled to several details which you sought for\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-246", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(4) Again on February 27, 1999, petitioner No. 9 addressed a letter to furnish photostat copies of the (1) balance-sheets of the company for the years 1983-84 to 1986-87, (2) copies of contract registers for the years 1989-90 to 1992-93 (3) list of bad debts with all particulars for the years 1991-92 to 1996-97 and (4) particulars of the passenger cars possessed by SRMT Limited as on the date with full particulars relating to company make, model and its registered numbers as they are required for arguments before the Company Law Board. The company secretary in his letter dated March 6, 1999, has taken the stand in the first para, \"that the submissions on both the parties have completed before the Company Law Board and the matter is posted to March 22, 1999, for reply of counsel for the petitioner and further stated that no fresh documents or facts can be introduced in the reply\" as if he is the authority to decide the admissibility of the documents in a case pending before the Board.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-247", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "In the second para., it is stated that \"the company is not required to give the information sought for\" and again questioned the petitioner \"under what provisions of the Act the company is bound to furnish the above\". In the third para, of the letter, the secretary stated that in September, 1994, itself the company informed that the register of contracts of which the petitioner required copies were not traceable. Hence, furnishing the copies of register of contracts for the period 1989-90 to 1992-93 is not possible. From the above it is seen, while admitting that the matter is posted for reply arguments to March 22, 1999, the company secretary states that no fresh documents or facts can be introduced in the reply. It is not known how the petitioners are precluded from substantiating their plea, in reply to the arguments of the respondents by securing fresh material relevant to the issues that have cropped up for adjudication, more so, when the Tribunal did not follow any known procedure like marking of documents as exhibits recording oral evidence, etc. Further, if more evidence is collected on the plea already raised, through the documents sought for it is always open to the petitioner to file an application to reopen the hearing for receiving the documents as additional evidence at any time before the Board pronounced the orders and even at the appellate stage in support of his plea. Be that as it may, in the second para, the secretary flatly refused to furnish the information sought for and questioned the petitioner under what provision he is asking the information.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-248", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "As far as register of contracts is concerned, under Section 301 of the Act, every company is bound to keep one or more registers in which the particulars of all the contracts and arrangements covered by Sections 297 and 299 of the Act have to be mentioned. Under Section 297 of the Act, no director of the company or his relative can enter into a contract without the express consent of the board of directors and under Section 299 of the Act if a director of the company is directly or indirectly concerned with the contract or arrangement, etc., to be entered into on behalf of the company, he shall disclose the nature of his concern or interest in the meeting of the board of directors and obtain prior approval of the board and the same should find a place in the register. This being a vital register containing the information whether any director or his relative has entered into contract or arrangement with the company with or without disclosing the same to the board of directors, the company secretary simply stated that the register of contracts for the period 1989-90 to 1992-93 is not traceable.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-249", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(5) Petitioner No. 9 again addressed a letter on September 12, 2000, having seen that huge amounts were written off as bad debts in the annual reports of the company, seeking full and accurate information regarding bad debts that were written off during those five years, and the reply given by respondent No. 2 on September 19, 2000, is that \"please let us know under what provisions of the Act a shareholder is entitled for such elaborate information and any clarification/explanation will certainly be given at the annual general meeting, if sought for, by the shreholders\". When petitioner No. 9 is not being allowed to enter the premises and there is every threat of attacking his person or implicating him in criminal cases as seen from the record, the possibility of attending annual general meeting and raising any question with regard to these bad debts is completely ruled out.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-250", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "(6) After the company petition was filed, as per the letter of P.1 dated September 27, 1995, he attended the annual general body meeting of the company held on September 27, 1995, and when he sought clarification on certain items listed in the general business as well as special business on the annual report of the company for 1994-95, as he happened to be one of the petitioners in the company petition the followers of respondent No. 2 created disturbance and created fear in him as well as the other shareholders who are also of his view and when he requested that the proceedings to be noted reflecting the true state of affairs, respondent No. 2 refused to do so. Having come out of the meeting he addressed registered letter to respondent No. 2 on the happenings at the general body meeting on the same day. No reply was given by the respondents to this letter. On the same day the late Karedla Suryanarayana, petitioner No. 1 in the company petition, addressed a letter to all the board of directors to furnish the true reasons for closing parcel offices and the reasons for selling away the lorries for low prices causing loss to the company. The directors of the company observed silence. \n\n(7) For the letter of P. 4 dated September 19, 1996, respondent No. 2 in his letter dated September 24, 1996, gave reply on similar lines.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-251", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "It is to be seen to what extent the action of the respondents in not furnishing information sought for by the shareholder, more so when they filed an application under Section 397 of the Act and when the Company Law Board failed to call for the documents can be justified. Under Section 163 of the Act, the registers that are required to be maintained by the company shall be kept at the registered office of the company and they shall be open during the business hours for inspection of the members at least for two hours subject to reasonable restrictions. Under Sub-section (3), a member, debenture holder or other person is at liberty to make extracts of the registers that are maintained under Section 163 of the Act without paying any fee and under Sub-section (3)(b) he may require the company to furnish certified copies of them on payment of the prescribed fee required for copying. On requisition given by the member, the company is bound to furnish them within ten days and under Sub-section (5) refusal to permit the member to inspect the records or furnishing of the copies, the company is liable to be punished with a fine, which may extend up to Rs. 50 for every day. Under Sub-section (5)(b) the Company Law Board may also, by order, compel an immediate inspection of the document, or direct that the extract required shall forthwith be allowed to be taken by the person requiring it and did not move its little finger in the matter. \n323. Under Section 209 of the Act every company shall keep at its registered office proper books of account with respect to the aspects enumerated therein and under Section 209(a) of the Act, the books of account, other books and papers of every company shall be open for inspection during business hours.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-252", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "324. Under Section 219 the members of the company are entitled to have a copy of the balance-sheet including profit and loss account, auditors' report and every other document required by law to be annexed or attached as the case may be to the balance-sheet, which is to be laid before the company in the general meeting at least 21 days before the date of the meeting. Under Sub-section (2) any member of the company on demand is entitled to have a copy of the last balance-sheet of the company free of cost with other documents annexed or attached to the balance-sheet. Again if the company refuses to furnish copy of the documents, the Board by order directs the company to furnish a copy of the document demanded by person concerned.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-253", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "325. In Life Insurance Corporation of India's case , the rights of shareholders are summarised in para. 84 of the judgment as hereunder (page 617) :\n \"On an overall view of the several statutory provisions and judicial precedents to which we have referred, we find that a shareholder has an undoubted interest in a company, an interest which is represented by his shareholding. Share is movable property, with all the attributes of such property. The rights of a shareholder are (i) to elect directors and thus to participate in the management through them; (ii) to vote on resolutions at meetings of the company ; (iii) to enjoy the profits of the company in the shape of dividends; (iv) to apply to the court for relief in the case of oppression ; (v) to apply to the court for relief in the case of mismanagement; (vi) to apply to the court for winding up of the company; (vii) to share in the surplus on winding up.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-254", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "326. From the provisions of Sections 163, 209 and 219 of the Act coupled with the law enunciated by the Supreme Court, the shareholders in a company are having every right to seek information in order to safeguard their rights and interests in the company and to know whether the management of the affairs of the company are in the larger interest of the shareholders or not. As the annual reports deal with the assets and liabilities of the company broadly and as they do not contain the details, generally the shareholders cannot raise the issue in the annual general body meeting. Be that as it may, in this case when the majority shareholders supporting respondent No. 2 are not allowing the minority shareholders to raise any issue by creating a hostile atmosphere and the minority shareholders are afraid to attend the meeting of the office, the only way left for them is to get details, for the information furnished in the report by applying for certified copies of the extracts. They cannot make a grievance without getting required information. In a case of this nature where a right is conferred on the minority shareholders to approach the Company Law Board seeking relief against acts of oppression and mismanagement they are entitled to have copies of the documents sought for, to prove their case. Otherwise, the right to seek relief against acts of oppression and mismanagement given to the minority shareholders under the statute will be a futile exercise, if the required information sought for is neither provided by the company nor called for by the Board.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-255", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "327. The whole misfortune in this case is that the Board has not chosen to summon the original record and provide an opportunity to the petitioners to go through the records of the company. The Board did not choose to pass any orders to that effect in spite of their specific prayer in the main petition as well as in C. A. No. 69 of 1994. When they approached the company, it was refusing to furnish information required to prove their allegations by questioning them under what provision a shareholder is entitled to that information having removed respondent No. 2 as director of the company. \n\n328. To my mind while the action of the Board is wholly unsustainable in law, the action of the respondent-company is intended not only to oppress the minority shareholders, but also intended to withhold the information to prove their case and the Board ought to have drawn an adverse inference against the respondents for withholding the information available with them. But unfortunately the Board did not advert to this aspect and did not record a finding whether these acts on the part of the respondents amount to acts of oppression or not.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-256", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "329. Withdrawal of some of the petitioners from company petition :\n Coming to the company petition, originally nine shareholders have filed this application including the third petitioner-S. Jayaram Reddy, a resident of Visakhapatnam. He executed general power of attorney along with his subsidiary shareholders on April 4, 1994, in favour of petitioner No. 9. He also filed an affidavit on September 10, 1994, confirming the contents of the rejoinder filed by the petitioners in the case. But on November 29, 1995, he informed petitioner No. 9 that he executed a revocation deed on November 8, 1995, duly enclosing a copy of the revocation deed. This letter was sent by registered post from Rajahmundry, though he is a resident of Visakhapatnam. After the death of the first petitioner-Suryanarayana, his legal representatives did not choose to come on record. Petitioner No. 2 Dwarapudi Seetharam did not file appeal along with others. The case of the petitioner is that respondents Nos. 2 and 3 pressurised them either from not continuing the proceedings or for withdrawing from the proceedings only to see that petitioner No. 9 is singled out in his fight against the misdeeds of respondents Nos. 2 and 3. The respondents did not rebut these allegations by any evidence oral or documentary. From the conduct of respondents Nos. 2 and 3 on various acts of oppression discussed in this judgment a presumption has to be drawn in favour of the contention of the petitioners. \n330. Non-recording of minutes of the general body truly and correctly :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-257", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "330. Non-recording of minutes of the general body truly and correctly :\n Likewise petitioner No. 9 in his letter dated September 27, 1993, alleged that the minutes of the previous general body meeting are not recorded properly and truly and the issue referred therein were raised by him in the general body meeting held on September 27, 1993, were wantonly omitted. For this no reply was given by any of the respondents. \n331. The will of the majority shall prevail :\n The judgment would not be complete without the answering the sheet anchor of the arguments of learned counsel for the respondents that majority directors on the board as well as the shareholders and at times the petitioners also approved the actions of mismanagement as well as the acts of oppression, the question of granting any relief to the petitioners in this case does not arise. This issue was answered by the Supreme Court in B. R. Kapur v. State of Tamil Nadu, AIR 2001 SCW 3720 ; [2001] 3 MLJ 165, their Lordships while repelling the arguments of counsel for the respondents that the members of the political party commanding majority in the Legislative Assembly are having an unfettered right to elect a person who does not possess the qualifications enumerated under Article 173 or who incurs the disqualifications enumerated in Article 191 held as follows (pages 183 and 186) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-258", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "\"... a person convicted for a criminal offence and sentenced to imprisonment for a period of not less than two years cannot be appointed as a Chief Minister under Article 164(1) read with (4) and continue to function as such. Their Lordships further observed 'that such an action on the part of the legislative members would be subversive of the Constitution and would be repugnant to the theory of good governance and would be contrary to the Constitution itself, which Constitution has been adopted, enacted and given to the people of India by the people of India.\"  \n332. Their Lordships further held thus (page 191) :", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-259", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "332. Their Lordships further held thus (page 191) :\n \"Given the present political parties and the electoral system, it is accepted that following a general election, the party with a majority of seats in the State Legislature or Parliament will form the Government. This is what the Constitution postulates and permits. But in the matter of formation of Government if the said majority political party elects a person as their leader, whom the Constitution and the laws of the country disqualifies for being chosen as a member of the Legislative Assembly, then such an action of the majority elected member would be a betrayal of the electorate and of the Constitution to which they owe their existence. In such a case, the so-called will of the people must be held to be unconstitutional and, as such, could not be and would not be tolerated .... In other words, the people of the country, the organs of the Government, Legislature, Executive and Judiciary are all bound by the Constitution ... to be suprema lex or the paramount law of the land and nobody is above or beyond the Constitution .... This being the position, the action of the majority of the elected members of a political party in choosing their leader to head the Government, if found to be contrary to the Constitution and the laws of the land then the Constitution and the laws must prevail over such unconstitutional decision, and the argument of Mr. Rao, that the will of the people would prevail must give way ... it would be a blatant violation of constitutional laws to allow her to continue as the Chief Minister of a State, howsoever short the period may be, on the theory that the majority of the elected members of the Legislative Assembly have elected her as the leader and that is the expression of the will of the people.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-260", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "333. At some other place their Lordships held that \"the Constitution prevails over the will of the people as expressed through the majority party. The will of the people as expressed through the majority party prevails only if it is in accord with the Constitution\".", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-261", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "334. From this it is seen that if the decisions taken by the board or general body is in contravention of the laws of the country and prejudicial to public interest, it cannot be said that the will of the majority will prevail, but not the law of the land. \n\n335. Further, for various reasons, the majority of the shareholders in the company might have not dared to open their mouth against the illegal actions of respondent No. 2 having burnt their fingers once in 1978 and having seen the plight of the petitioner, who is none other than the son-in-law of the second respondent and brother-in-law of the third respondent, on that ground the respondents cannot contend that if their actions are clearly in violation of the laws of the land like the Companies Act, Income-tax Act, so on and so forth, their decisions will prevail over the law of the land. \n\n336. Further under Chapter VI of the Act, a right is conferred on the minority shareholders seeking relief against not only acts of oppression but also on the actions of majority shareholders that are prejudicial to public interest apart from acts of mismanagement of the affairs of the company. Hence, the respondents cannot take shelter, if the actions of the company are not in accordance with law, by contending that such an action is having the approval of majority shareholders. \n\n337. In the light of the foregoing discussion on various issues in controversy I have no manner of doubt in holding that the petitioners were able to prove the acts of mismanagement as well as the acts of oppression and they are being continued unendingly, even after company petition if filed, even though the procedure followed by the Board is unknown to law and the findings recorded by the Board are not supported by any evidence and they are per verse. As stated supra the scales of justice before the Board heavily swung in favour of the respondents.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-262", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "338. Hence, I have no hesitation in setting aside the findings recorded by the Board on the issues in controversy and in holding that the allegations levelled by the petitioners are proved, at any rate, a prima facie case was made out by the petitioners for grant of relief under Chapter VI of the Act.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-263", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "339. As stated supra, the petitioners are satisfied with the directions given by the Board and from that point of view only, I examined the case of the petitioners to see whether any reasons can be given by this court in support of the directions given by the Board, as counsel for the respondents vehemently argued that the Board having dismissed the case of the petitioners as devoid of merit, gravely erred in giving such a direction. Now as I have taken the view that the series of acts of mismanagement as well as acts of oppression are proved by the petitioners, the question would be what should be the relief that can be granted in the circumstances of the case. The facts of the case speak for themselves that the differences between the groups have reached an irrevocable point of no return and any direction or directions for keeping the company with present holding intact will not serve the purpose as it is impossible for the parties to continue together in the company and at the same time or ordering winding up of a company, which is otherwise solvent is not proper. Hence the only equitable and just relief that can be granted is to direct either of the parties to purchase the shareholding of other group. But in this case, as the majority shareholders are on the side of the second respondent, it would not be proper for this court to direct the majority shareholders to sell their shares to the minority shareholders. Hence the only order that can be passed in this case is to direct the respondent-company itself or any one of the shareholders of the company including respondents Nos. 2 and 3 to purchase the shares of the minority shareholders. In fact, the petitioners expressed their willingness for the said course both before the Board as well as this court, but respondents Nos. 2 and 3 contended that the financial position of the company does not permit the purchase of the shares held by the minority shareholders. As far as the financial position of the company is concerned, I have clearly taken a view", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-264", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "shareholders. As far as the financial position of the company is concerned, I have clearly taken a view that the financial position of the company is very sound and it is in a position to purchase the shares of the minority shareholders. At that stage, I brought to the notice of counsel for the respondents Article 6 of the Articles of association whereunder any member of the company can transfer his shares to an outside person, only with prior approval of the board of directors and suggested that in the light of bad blood flowing between the parties as no one will come forward to purchase the shareholding of the minority shareholders who incurred the wrath of the second respondent, that the company itself may select the purchaser of their choice for transfer of shares of the minority shareholders. Even for this suggestion also the respondents are not willing.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-265", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "340. I am fortified in my view by the following decisions :\n341. In Shanti Prasad Jain's case , their Lordships of the Supreme Court held that the provisions of Section 397 of the Companies Act are more or less akin to Section 210 of the English Companies Act of 1948. It was held that the purpose of introducing Section 210 in the English Companies Act was to give an alternative remedy to winding up in the case of mismanagement or oppression. The law always provided for winding up, in case it was just and equitable to wind up a company. However, it was being felt for some time that though it might be just and equitable in view of the manner in which the affairs of a company were conducted to wind it up, it was not fair that the company should always be wound up for that reason, particularly when it was otherwise solvent. That is why Section 210 was introduced in the English Act to provide an alternative remedy where it was felt that though a case had been made out on the ground of just and equitable cause to wind up a company, it was not in the interest of the shareholders that the company should be wound up and that it would be better if the company was allowed to continue under such directions as the court may consider proper to give. This is the genesis of the introduction of Section 153C in the 1913 Act, and at present Section 397 of the Indian Companies Act, Their Lordships further held that \"the circumstances must be such as to warrant the interference that 'there has been, at least, an unfair abuse of powers and an impairment of confidence in the probity with which the company's affairs are being conducted, as distinguished from mere resentment on the part of a minority at being outvoted on some issue of domestic policy'.\"", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-266", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "342. In Daulat Makanmai Luthria's case [1992] 3 Comp LJ 119, the Principal Bench of the Board held that in case of deadlock or loss of mutual trust necessary for working together in managing the affairs of the company and if it becomes impossible for the petitioner and the respondent to work together even if an independent chairman was appointed, the only course open to the Board is to direct either of the parties to purchase the shares of the other party, so that the company comes under the exclusive control and management of either of the warring groups. \n\n343. From the beginning both before the Board as well as this court, the respondents consistently exhibited a defiant attitude perhaps they are under an impression that they can resort to acts of oppression of minority shareholders and crush them ruthlessly by dragging the proceedings to the apex court level by availing of the services of corporate lawyers with the riches at their command ; so that no one can dare to raise his voice, in future on administration of the affairs of the company by respondents Nos. 2 and 3, as they have already tasted success once in 1978. Of course, at that time the ninth petitioner was with his father-in-law.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-267", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "344. Even assuming that the findings recorded by this court are not sound in law on the facts of the case will, as I have taken the view that the Board is empowered to exercise the inherent powers under regulation 9 of the Board's regulations to give directions in equity for doing substantial justice between the parties and pull down the curtain on the acts complained of by the minority shareholders. I hold that the directions given by the Board are proper and just in the circumstances of the case. Hence, though I did not agree with the findings of the Board on the merits of the case, I am in full agreement with the end result in the case, vide Yashovardhan Saboo's case [1993] 1 Comp LJ 20 ; [1995] 83 Comp Cas 371 (CLB). \n\n345. Accordingly, C. A. No. 4 of 1999 is dismissed as devoid of merits and C A. No. 5 of 1999 is allowed to the extent indicated above. \n\n346. Naturally the petitioners in C. A. No. 5 of 1999 should not only have the costs but exemplary costs, according to me, against the respondents. Accordingly, the respondents are directed to pay Rs. 25,000 to the petitioners towards costs. \n\n347. Having pronounced the judgment on the merits, I am adjourning the matter to October 29, 2001, to have the views of the parties on the appointment of valuers to value the shares held by the minority shareholders. Provisionally, I am thinking that both the parties will nominate one chartered accountant each and the court will be nominating one chartered accountant and the fee for the chartered accountant nominated by the court has to be paid by the company subject to modification after hearing the parties.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-268", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "348. After pronouncing judgment on the merits on October 18, 2001, I adjourned the matter to October 29, 2001, so as to enable both the parties to nominate one chartered accountant from their respective side to be associated with the chartered accountant to be nominated by this court for valuation of the shares held by the minority shareholders. The matter underwent some adjournments due to the untimely death of the managing director. Today both the parties nominated the chartered accountants. Accordingly, the following order is passed constituting the committee of chartered accountants. \n\n349. Mr. Ch. G. Krishna Murthy, M.A., LL.B., F.C.A., former Member of Law Commission of India, Ministry of Law and Justice, Government of India (now residing at H. No. 512/A/2, Road No. 31, Jubilee Hills, Hyderabad, Phones : 3543622 and 4745165 (Res.)) is nominated, on behalf of this court and he will be the Chairman of the Committee. M/s. V. Sankarayya and Co., Chartered Accountant (202-301, Satyam Cinema Complex, Ranjit Nagar Community Complex, New Delhi-8) is nominated as chartered accountant by the minority shareholders and M/s. S. Daga and Co., Chartered Accountants, (403, Paigah Plaza, Basheer Bagh, Hyderbad-500063) is nominated as chartered accountant by the respondent company M/s. Sri Ramadas Motor Transport Limited and its board of directors. Their postal addresses are given below the order.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-269", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "350. The remuneration payable to the chartered accountant nominated by this court is fixed at Rs. 1,50,000 in lump sum. He is entitled to claim actual expenses to be incurred by him towards travelling apart from the above remuneration if he has to leave Hyderabad. He is given liberty to move this court if the above remuneration is not adequate for the work done by him. As far as the chartered accountants nominated by the parties are concerned, both the parties shall bear the remuneration and travelling expenses payable to their respective chartered accountants. \n\n351. Both the parties are given liberty to make their representation before the committee of chartered accountants ; and the committee of chartered accountants shall submit its report to this court within three months from the date of receipt of this communication.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "ed3b2bcc1e02-270", "Titles": "Sri Ramdas Motor Transport Ltd. ... vs Karedla Suryanarayana And Ors. on 18 October, 2001", "text": "352. Before parting with the case, I feel that it is my bounden duty to bring to the notice of the authorities concerned, that grave miscarriage of justice has taken place in this case as the Company Law Board failed to observe fundamental principles of procedural laws. But counsel appearing for the respondents submitted that the Company Law Board is following the same procedure from its inception. I am afraid, that if the Company Law Board is allowed to function in this manner, grave injustice will be done to the litigant public. Since the Company Law Board is vested with discharge of judicial functions and being an institution of public trust, it is expected to act fairly, objectively and dispassionately, but not whimsically, fancifully or arbitrarily. If the individual members/Benches of the Board are allowed to follow their own procedure giving a go-by to the laws of procedure, the very faith and belief of the litigant public will be eroded. Hence, it is high time that either the Board should frame regulations on the procedure to be followed without amibiguity or the Government in exercise of its rule making power shall frame rules with regard to the procedure to be followed by the Board instead of leaving the issue to the individuals occupying position in the Company Law Board which will go a long way in gaining credibility by the institution.", "source": "https://indiankanoon.org/doc/720379/"}
+{"id": "61ce4e329840-0", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "JUDGMENT Ramanujulu Naidu, J. \n\n 1. Against the preliminary decree dt. 22-11-1978 passed in O.S. No. 20 of 1975 on the file of the Court of the subordinate Judge Guntur, instituted by the 1st respondent against defendants 1 to 7 thereto for recovery of a sum of Rupees 84,736 on the foot of a deed of mortgage, dt. 15-10-1970 executed by late chilamkuri venkata Kotirathnam. Both on behalf of himself and as guardian of his son impleaded as the 1st defendant in the suit who was then a minor. For a sum of Rs. 49,000 by enforcing the mortgage against the hypothecated property a terraced building situate at Guntur town as also against the other properties of the 1st defendant and of late venkata kotirthnam in the hands of all the defendants defendants 1 and 4 pereferred the above appeal. \n\n2. Defendants 2 and 3 are the divided sons while defendants 5 to 7 are the daughters of late chilamkuri venkata Kotirathnam the 4th defendant is his widow.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-1", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "3. The case of the plaintiff is that defendants 1 to 3 and their father. Late venkata kotirathnam originally constituted a Hindu joint family that defendants 2 and 3 became divided from the Joint family that late venkata Kotirathnam and the 1st defendant. However continued as members of a Joint family with venkata kotirathnam as manager of the joint family that venkata Kotirathnam borrowed a sum of Rs. 49,000 from him for discharge of the antecedent debts cntracted by the family and for meeting other expenses of the family that late venkata kotirathnam executed a registered deed of mortgage on 15-10-1970 both on his behalf and as father and guardian of the 1st defendant who was then a minor mortgaging the teraced building that compound interest at 12% per annum with monthly rests was stipulated under the deed of mortgage. That venkata Kotirathnam died on 10-8-1974 survived by the defendants. That his share of the property devolved on all the defendants that as the mortgage debt was not discharged he got registered notices issued to all the defendants calling upon them to discharge the mortgage that the 1st defendant caused a reply to be sent to him denying the truth and validity of the mortgage and disowing and liability under Ex. A-1 that defendants 4 to 7 refused to receive the notices and that the 3rd defendant did not choose to send any reply to the notice received by him.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-2", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "4. The suit was resisted by all the defendnats . In the written statement filled by the 1st defendant it was averred that defendants 2 and 3 went out of hte joint family in the years 1964 and 1967 respectively relinquishing theri interests in the property of the joint family, that in the year 1967 he too got himself divided from the 1st defendant that late venkata Kotirathnam had no right to Act as manger of the alleged joint family that Ex. A-1 executed by him on his behalf without obtaining prior permission of the District Court Guntur as required under the provisions of the Hindu Minority and Guardianship Act was unenforceable and not binding on him that the alleged borrowing under Ex. A-1 was not true and that in any event. The consideration received under Ex. A-1 was not applied in discharge of any binding antecedent debts. Incurred and not spent to meet the necessary expenses of the family. \n\n5. In the written statement filed by defendants 2 and 3. It was averred that they were divided from the joint family int eh years 1964 and 1967 relinquishing their rights in the properties of the joint family that they had nothing to do with the 1st defendant that they were not aware of execution of Ex. A-1 and that in any event the rate of interest stipulated under Ex. A-1 was highly excessive penal and usurious.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-3", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "6. After framing appropriate issues the learned subordinate Judge found that no evidence whatsoever was let in on behalf fo the 1st defendant in support of his plea of division in status with his father in the year 1967 that the 1st defendant did not even choose to examine himself in support of his plea that Ex. A-1 was true valid and binding on the 1st defendant and that the rate of interest stipulated under Ex. A-1 was neither penal nor usurious In the result a preliminary decree in a sum of Rs. 49,000 was passed on 22-11-1978 directing the defendants to pay the mortgage money together with compound interest thereon at 12 per cent per annum with monthly rests from the date of the mortgage till the date of redemption three months time was granted or redemption of hte mortgage and subsequent interest at the rate of 6 per cent per annum on the principal sum of Rs. 49,000 from the date of realisation was also awarded In case of default in payment of the decretal amount. The mortgaged property was directed to be brought to sale and in case the sale proceeds were not sufficient to satisfy the decree. The plaintiff was declared entitled of the 1st defendant and those of late venkata Kotirathnam in the hands of defendants 1 to 7 In the decree actually drawn up. Interest from the date of hte suit till the date of redemption was calculated at the rate of 6% per annum. Interest upon the date of the suit was calculated at the stipulated rate. The plaintiff filed I.A. No. 655 of 1979 before the learned subordinate Judge for amendment of the decree contending that on account of a mistake interest from the date of suit till date of redemption was calculated at a lesser rate and that the same should be calculated at the rate stipulated in Ex. A-1. The application was allowed by the learned subordinate Judge on", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-4", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "rate stipulated in Ex. A-1. The application was allowed by the learned subordinate Judge on 19-4-1979 without notice to the defendants. The amended decree was for a sum of Rs. 1,39.064-06 representing the principal sum of Rupees 49,000 interest in a sum of Rupees 83,842-06 accrued thereon at the stipulated rate from the date of the mortgage up to the date of redemption and costs in a sum of Rs. 6.222. Clause 2 of the amended decree runs as follows:", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-5", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "\"2. And it is hereby declared and decreed as follows That the defendants do pay into the Court on or before the day of 22nd February 1979 or any other date up to which time for payment may be extended by the Court the said sum of Rs. 1.39, 064.06 ps. Wtih further interest at 6% from the date of redemption i.e. 22-2-1979 till the date of realisation'. \nThe defendants thereupon filed I.A. No. 1892 of 1979 before the learned subordinate Judge for setting aside the order dated 19-4-1979 on the ground that they had no notice of the application. The learned subordinate Judge dismissed the application holding that no notice was necessary to be given to the defendants as correction of a clearical error was sought by the plaintiff and ordered in exercise of the powers conferred upon the Court under S. 152 of the civil P.c. \"", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-6", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "7. Assailing the judgment and the amended decree passed by the learned subordinate Judge defendants 1 and 4 preferred the above appeal as already stated. \n\n8. Aggrieved by the order dated 19-4-1979 passed by the learned subordinate Judge directing amendmetn of the preliminary decree defendants 1 and 4 preferred C.R.P. No. 199 of 1980. The revision petition came up before Jeevan Reddy J and the learned Judge by his order dated 9-3-1980 upheld the plea of the plaintiff. That only a clerical error that crept in the preliminary decree. Was corrected by the learned subordinate judge. The learned Judge however modified the amended decree by awarding subsequent interest at the rate of 6 per cent per annum from the date of redemption till the date of realisation only on the principal sum of Rs. 49,000. In pursuance of the amended preliminary decree as modified by Jeevan Reddy J., the appellants were permitted to amend the memorandum of grounds of appeal relating to valuation of the subject matter of the appeal suit the deficit court-fee as a consequence there of was also paid by the appellants. \n\n9. It was urged by sri T. Veerabhadraiah learned counsel for the appellants that there was division in status between the 1st defendant and his father in the year 1967 itself and that his father had no right to mortgage his share of the hypothecated property.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-7", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "10. As already stated. The learned subordinate Judge found that noevidence, oral or documentary was let in on behalf of the 1st defendant and that even the 1st defendant did not choose to examine himself in support of the plea. Realising the difficulty. The 1st defendant filed C.M.P. No. 536 of 1982 under O. XLI R. 27 of the civil P.c. on 20-1-1982 for reception of three documents tendered therein as additional evidence and for marking the same as Exs. B-1 to B-3 one of the three documents is a letter dated 16-10-1967 purporting to have been addressed by Ch v. Kotirathnam to the 1st defendant represented by his maternal uncle as his guardian he then being a minor It is recited in the said document that defendats 1 to 3. Defendants 5 to 7 and another son by name chandrasekhara Rao were born to venkata Kotirthnam that chandrasekhara Rao was taken in adoption by chilamkuri seetharathnamma. Widow of the elder brother of venkata Kotirathnam that defendants 1 to 3 and venkata Kotirathnam constituted members of a Hindu undivided family. That defendants 1, 6 and 7 were to be married by them that the 2nd defendant became divided from the joint family after receiving some properties of the joint family and executing a registered deed dated 27-3-1964 relinquishing his rights in the properties of the joint family that likewise the 3rd defendant relinquished his rights inteh properties of the joint family by executing a registered deed dated 29-8-1967 that venkata Kotirathnam and the 1st defendant however continued to be members of the joint family that venkata kotirathnam", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-8", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "defendant however continued to be members of the joint family that venkata kotirathnam was carrying on business in a manner detrimental to the interest of the 1st defendant that the mother and the maternal uncle of the 1st defendant as also some well-wisehers of Venkata kotirathnam and the 1st defendant demanded venkata Kotirathnam to partition the properties of the joint family by metes and bounds that as it was not convenient to do so, severance in status between venkata kotirathnam and the 1st defendant was effected that Venkata kotirathnam undertook not to alienate the 1st defendant's half share inthe properties of the Joint family that the 1st defendant would not be concerned with any profit and would not be liable for any losses incurred or debts contracted by venkata kotirathnam in the business he was carrying on and theat the 1st defendant was relieved of all obligations of maintenance and marriages of the two unmarried sisters. The document purports to have been attested by the mother of the 1st defendant and two others.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-9", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "11. In para 4 of the affidavit filed in support of the application for reception of the additional evidence it is claimed by the 1st defendant that the document was in the custody of the maternal uncle of the ist defendant that he had no Knowledge of the document until the disposal of the suit that it was only after the disposal of the suit he was apprised of the contents of the document by his maternal uncle and that it was only after the disposal of the suit he was apprised of the contents of the document by his maternal uncle and that at his request the document was given to him by his maternal uncle. \n\n12. It may be noted that the suit was instituted in tehyear 1975 that the ist defendant was the real contestant in the suit that trial of the suit was taken up on 24-11-1976 and that significantly neither the maternal ujcle of the Ist defendant nor his mother apprised him of and supplied him with the most valuable defence available to him to defeat the suit no explanation was offered by the ist defendant for not tendering the document for reception of the additional evidence till 20-1-1982 In the circumstances we have absolutely no hesitation in holding that the document dt. 16-10-1967 was brought into existence by the ist defendant with a view to defeat the rights of the plaintiff.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-10", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "13. That Ex. A-1 the deed of mortgage was truly executed and also supported by consideration as detailed therein is amply established by evidence of unimpeachable character let in by the plaintiff P.W. 2 the sole proprietory of the plaintiff's concern deposed to the execution of Ex. A-1 by late chilamkuri venkata kotirathnam signing in Ex. A-2 to A-24 were market on his behalf in proof of the various items making up the total consideration of Rs. 49.000 recited in Ex. A-1 P.W. 1 the scribe of Ex. A-1 substantially corroborated the testimony of P.W. 2 and added that some amounts were paid by P.W. 2 towards discharge of the mortgage amount that the plaintiff paid some cash to venkata Kothiratnam for purchase of stamps for execution of Ex. A-1 and that the balance of consideration was paid by the plaintiff to venkata kotirathnam at the time of registration of the document No evidence whatsoever was le tin on behalf of the defendants in rebuttal. The testimony of P.Ws. 1 and 2 thus remains uncontradicted and unchallenged.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-11", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "14. The consideration of Rs. 49,000 recited in Ex. A-1 consists of (I) Rupees 6,110 towards discharge of the debt due under Ex. A-2 a registered deed of mortgage dt. 31-1-1964 executed by Venkata kotirathnam both on his behalf and on behalf of the 1st defendant he then being a minor as also defendants 2 and 3 in favour of Garee venkata subbarao for Rs. 5.000 borrowed for the purpose of meeting the expenses of erstwhile joint family of venkata kotirathnam and defendants 1 to 3; (ii) Rs. 8, 325 towards discharge of the Khata debt contracted by the ist defendant from Garee venkata subbarao and co.. for the purpose of the business carried on by the joint family consisting of venkata kotirathnam and defendants 1 to 3 and acknowledged by the 3rd defendant on 31-12-1966 in the accounts of Garee venkata subbarao & co., (iii) Rs. 13,000 towards discharge of the debt due to the concern of the plaintiff on a promissory note executed by defendants 2 and 3 the amount covered by the promissory note having been borrowed by them for the purpose of the business carried on jointly by venkata kotirathnam and defendants 1 to 3 in the name of sri Balaji Dal mill after defendants 2 and 3 divided from venkata Kotirathnam and the 1st defendant : (iv) Rupees 3,100 towards discharge of the Khata debt contracted by the 2nd defendant from the concern of the plaintiff for the purpose of the business carried on by the 2nd defendant: (v) Rupees 1,200 received in cash by", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-12", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "by the 2nd defendant: (v) Rupees 1,200 received in cash by venkata kotirathnam on 14-10-1970 from the plaintiff towards expenses for purchase of stamps for execution of Ex. A-1; and (vi) Rs. 17,265 received in cash by the 1st defendant before the joint sub Register Guntur at the time of registration of Ex. A-1 as already stated the truth of the details of consideration recited in Ex. A-1 is amply established not only by the unchallenged testimony of P.Ws. 1 and 2 but also by Exs. A-2 to A-24.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-13", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "15. The question for consideration is to what extent the various items making up the total amount of consideration of Rs. 49,000 recited in Ex. A-1 are binding on the 1st defendant who was a minor at the time of execution of Ex. A-1 and on whose behalf also Ex. A-1 was executed by venkata Kotirathnam. \n\n16. It is unnecessary to advert to the various decided cases as the legal position is neatly summed up in the latest decision of the Supreme Court in prasad v. V. Govindaswamy Mudaliar . Their lordships of the Supreme Court held (at pp. 96 to 97);-\n \"A natural guardian of Hindu minor has power in the management of his estate to mortgage or sell any part thereof in case of necessity or for the benefit of the estate. If the alienee does not prove any legal necessity or that he does not make reasonable enquiries the sale is invalid. \nBut the father in a joint Hindu family may sell or mortgage the joint family property including the son's interest therein teo discharge a debt contracted by him for his own personal benefit and such alienation binds the sons provided (a) the debt was antecedent to the alienation and (b) it was not incurred for an immoral purpose. The validdity of an alienation made to discharge an antecedent debt rests upon the pious duty of the son to discharge his father debt not tainted with immorality.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-14", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "\"Antecedent Debt' means antecedent in fact as well as in time that is to say, that the debt must be truly independent of and not part of the transaction impeached. The debt may be a debt incurred in connection with a trade started by the father the father alone can alienate the son's share in the case of a joint family. The privilege of alienating the whole of the joint family property for payment of an antecedent debt is the privilege only of the father, grandfather and great-grandfather qua the son or grandson only. No other person has any such privilege.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-15", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "There is however another condition which must be satisfied before the son could be held liable i.e. that the father or the manager acted like a prudent man and did not sacrifice the property for an inadequate consideration'. \nTheir Lordships of the Supreme Court quoted with approval the following propositions laid down in Briji Narain v. Mangla prasad. AIR 1924 PC 50:-\n \"(1) The managing coparcener of a joint undivided estate cannot alienate or burden the estate qua manager except for purposes of necessity but (2) if he is the father and the other members are his sons he may by incurring debt so long as it is not for an immoral purpose lay the estate open to be taken in execution proceedings upon a decree for payment of that debt. (3) if he purports to burden the estate by a mortgage. Then unless that mortgage is to discharge an antecedent debt it would not bind the estat (4) Antecedent debt means antecedent in fact as well as in time that is to say that the debt must be truly independent and not part of the transaction impeached. (5) There is no rule that this result is affected by the question whether the father . who contracted the debt or burdens the estate. Is alive or dead\". \n17. The doctrine of pious obligation of a son to pay his father's debts elucidated by a Division Bench of the Madras High Court in shanmukam v. Nachu Ammal AIR 1937 Mad 140 as under was also quoted with approval by their Lordships of hte Supreme Court :", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-16", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "\"The doctrine of pious obligation of a son to pay his father's debts cannot be restricted to cases where father also happens to be the manager. If this limitation was well founded it would also follow that the father's power of disposing of the son's share for the satisfaction of his own debts must be likewise limited. There cannot be any justificationof such limitation when it is remebered that the son's obligation to pay his father's debts was under the orginal smritis independent of possesion of assets of joint family property. It depends purely upon the relationship of father and son. It is only by case law developed furing the early part of nineteenth century and by statute law in the Bombay presidency that the liability of the son for father's debt was limited to assets and to joint family property. The true basis of the obligation therefore is the relationship of father and son and not the accident of the father being the manager of the Joint Hindu family\".", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-17", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "18. It is not denied that the mortgage debt evidenced by Ex. A-2 dated 31-1-1964 is an antecedent debt contracted by venkata kotirathnam as the manager of the joint family consisting of himself and defendants 1 to 3 for the purpose of meeting the expenses of the said joint family and is therefore binding upon the 1st defendant Likewise the Khata debt of Rs. 8.325 incurred by the joint family of venkata kotirathnam and defendants 1 to 3 as the manager of the joint family consisting of himnself and defendants 1 to 3 for the purpose of the business carried on by the said joint family is also binding onthe 1st defendant Equally the debt of Rs. 13,000 due on a promissory note executed by defendants 2 and 3 in favour of the oncern of the plaintiff even after defendants 2 and3 got divided from venkata Kotirathnam and the 1st defendant is binding on the 1st defendant the amount covered by the promissory note having been borrowed for the purpose of the business carried on jointly by venkata Kotirathnam and defendants 1 and 3 in the name and style of sri Balaji Dal Mill as recited in Ex. A-1. Two other documents tendered for reception of additional evidence in C.M.P. No 536 of 1982 for the purposes of establishing that the debt of Rs. 13,000 is not binding on the 1st defendnat as the business in connection with which the debt was incurred was carried on by the 1st defendant and the 3rd defendant only are of no assistance as late venkata Kotirathnam must be deemed to have carried ont he business Jointly with the 3rd defendant for the benefit of the 1st defendant also only the debt of Rs.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-18", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "3rd defendant for the benefit of the 1st defendant also only the debt of Rs. 3,100 contracted by the 2nd defendant from the concern of the plaintiff and discharged by the 1st defendant from out of the principal amount borrowed under Ex. A-1 is not binding on the 1st defendant as the debt contracted by the 2nd defendant was for the purpose of the business solely carried on by the 2nd defendant In discharging the said debt venkata Kotirathnam did not Act like a prudent man. The amount of Rs. 1,200 in cash received by the 1st defendant towards purchase of stamps for the purpose of execution of Ex. A-1 and the amount of Rs. 17,265 also paid to the 1st defendant before the joint sub-registrar Guntur at the time of registration of Ex. A-1 for the purpose of improving the business carried on by the joint family consisting of Venkata Kotirathnam and the 1st defendant the latter is bound to discharge. The amount of Rs. 17,265 received by venkata kotirathnam was for the benefit of the estate of the joint family consisting of venkata Kotirathnam and the 1st defendant admittedly even after defendants 2 and 3 got themselves divided from venkata kotirathnam and the 1st defendants 2 and 3 got themselves divided from venkata Kotirathnam and the 1st defendant. The latter were carrying on the very same business conducted by the erstwhile joint family consisting of venkata Kotirathnam and the 1st defendant Admittedly even after defendants 2 and 3 got themselves divided from venkata Kotirathnam and the 1st defendant the latter were carrying on the very same business ocnducted by the erstwhile joint family consisting of Venkata Kotirathnam", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-19", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "business ocnducted by the erstwhile joint family consisting of Venkata Kotirathnam and defendants 1 to 3. No evidence was let in on behalf o f the defendants that the amount of Rs. 17,265 paid to the 1st defendant at the time of registration of Ex. A-1 was neither utilised for the business carried on by the joint family consisting of venkata Kotirathnam and the 1st defendant nor applied for any immoral purposes. If therefore follows that the 1st defendants is bound to discharge half of the principal sum of money borrowed under Ex. A-1 minus Rs. 3,100 together with interest. It should however be borne inmind that the other half share of venkata Kotirathnam in the mortgaged property is liable to satisfy the balance of the mortgage debt.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-20", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "19. In jagannath prasad singh chowdhury v. Surajmul Jalal. AIR 1927 PC 1. Their Lordships of Privy council held:-\n \"In the case of mortgages order 34 of the code of civil procedure and not S. 34 of the code of civil procedure would determine the question of the rate of interest\". \n20. In   K. Venkata  satyanarayana v.  State  Bank  of India  .  It was   reiterated  that the  provisions  of S. 34  of  the C.P.C.  were  not applicable  to cases of  mortgages   and  that  the    award  of  interest was  governed  by  the  provisions  of O. 34   R. 11  of  the  civil  P.c.\n\n \n\n21.  It was   next  contended  by  the learned  counsel  for  the appellants  that  compound   interest  at  the rate  of 12%  per annum  with  monthly  rests  stipulated under Ex. A-1  was  usurious  and that the  appellants were   entitled  to the  benefits  of  the Usurious  Loans  Act,  1918.\n\n \n\n22.  Reliance  was placed  upon  the  decision in Venkata  Rao  v. Venkatarathnam  SIR  1952  Mad  872  wherein  their Lordships  held  that  anything   above  12%  per  annum  simple  interest  was excessive  having   regard  to the   nature  of the  transactions  in the then   composite  state   of Madras  Their  Lordships  added  (at  p.  876):-", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-21", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "\"The  effect  of  Madras  Act  VIII  of 1937  by which sub-sec  (I)  of S. 3 of  the Usurious  loans   Act was   amended and  explanations  and provisos  were  added  is to make  it   obligatory   upon  the   Court  to find  out  whether   there is excessive  interest  and when   once  that is done  to presume  that  the   transaction  was  unfair  we have  already  expressed  the opinion  that  anything    above  12  per  cent  per  annum  simple  interest  is excessive  considering  the  nature  of transactions  in this  state\". \n\n \n\n23.  In  the said  case  compound  interest  was  charged  at Rs. 1-0-6  per cent  with  monthly  rests.  The same  was held  to be  excessive  within  the meaning  of  the  explanation  inserted   by madras  Act  VIII  of 1937  only  12%  simple   interest  was  awarded  to the creditors  therein.\n\n \n\n24.  In Gopala  menon  v. Sreenivasa,   adverting  to the decision  in Venkata   Rao v.  Venkataratnam.   (supra)  Rajamannar  C.J.  Speaking  on behalf    of  the   Bench  observed  (at  p.  361):-", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-22", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "\"We  do not  however  understand  the effect  of this   decision  to be to  lay  down  an inflexible  rule  that anything   above  12 per  cent  per  annum  simple  interest  is excessive  whatever  be  the  particular  circumstances  relating   to a particular  transaction  of loan.  So far  as we  are  aware   this decision  has  not  been  under  Their  Lordships  added: \n\n \n\n\"We   are   clearly   of opinion  that to lay  down  an absolute  maximum  rate  of interest  beyond   which  interest  would  be excessive  within  the  meaning   of the  Usurious  Loans   Act would  be in  direct  contravention  of  what is laid   down   in the Act  itself  S. 3  (2) (a) (b) and  (c)  of the Usurious    Loans  Act  which  continues  to be  applicable    notwithstanding  the  madras  amendment  makes  it abundantly   clear  that  in   deciding   whether  the interest  charged  is  excessive  several  factors  have  to be  taken  into   consideration.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-23", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "One   important  fact  will be  the risk  incurred  as it  appeared  Or  must  be taken to have  appeared.  Or  must be  taken  to have  appeared,  to  the   creditor   at  the  date  of the loan  In considering   the  question  of risk    S. 3 (2)  (c)  enacts   that  it  will  be material  to take  into  account  the presence  or absence  of security  and  the  value  thereof.  And   the  financial   condition    of  the  debtor  and  the result  of  any   previous  loan   transaction   known  to the  creditor    if  compound  interest   is charged  the periods  at which   it is  calculated  and the total  advantage   which   may  be reasonably   expected  to  have   accrued  from  the  transaction  are   important  factors\". \n\n \n\n25.   In  the  said  case   compound  interest at 155  with  quarterly  rests   stipulated  between  the parties  was  held  to  be  excessive   and  compound  interest  at  10%  with  yearly   rests   was  allowed.\n\n \n\n26.   Their   Lordships  of  the Supreme Court affirmed  the aforesaid  decision of  the  Division  Bench  of  the High Court  of  Madras  in varadachariar  v. Gopala   menon  .", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-24", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "27.  In General  and  Credit    Corporation  (India)  LTd  v.  Venkata  Ramarao    Chandra  Reddy, C.J.  And  jaganmohan  Reddy J.,  as  he  then  was   observed  at  page  434  as  follows:-\n\n   \n\n\"A  Court  has  to determine  whether  a particular  rate  of interest  is excessive   or not   having  regard  to  the    rates  of  interest  at  the time  when  the impugned  transaction  was  entered  into  and  the surrounding   circumstances   what  amounts  to excessive   interest  has to be determined  with   reference  to various factors  such as the security which the  creditor obtained for  the amount advanced  by him, the pecuniary position of the debtor the rate  of interest prevailing at  that time and  the advantages  which the debtor  would  derive  from  the loan.\n\n \n\nA  debtor  would get relief under the usurious Loans  Act, only if  it is  established that the  transaction  is substantially     unfair  one.  It is  true    that the explanation   introduced  by the Madras  Amendment  has laid  down that if the interest is excessive  the Court shall  presume  that the transaction was substantially   unfair; but such presumption may be rebutted  by proof  of special circumstances justifying  the rate of interest. Thus before the explanation could be invoked it  should be  established that the interest is excessive. It is  only then that  it may be presumed  that the transaction was  an unfair one\".", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-25", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "28.  In Girwar prasad v. Ganeshlal saraogi, AiR  1949  FC  57  patanjali sastri. J., as he  then was  held:-\n\n   \n\n\"In order to be entitled to the  benefits of the usurious  loans Act. 1918 the appellant must   establish.\n\n \n\n(1)  That the interest payable   on the  loan  is  excessive  and\n\n \n\n(2)  That  the transaction was as between the parties thereto substantially  unfair. It was  frnakly admitted before  us that  the appellant adduced to evidence as to the circumstances  under  which he borrowed  moneys from the respondent the  availability of credit facilities  and possibility  of borrowing on easier terms in that part of the country where  the transactions took place\". \n\n \n\n29.  On  the facts of  that case, the learne d Judges confirmed the Judgment   of the High Court  allowing  compound  interest at the rate of 12%  as it was not established that the rate of interest charged was in excess of the commercial  rate prevailing  at that time.\n\n \n\n30.    The scope  of S. 3 of the Usurious  Loans Act as  amended by the  Madras Amending  Act VIII of 1937  was also  construed in an unreported judgment of  this  Court dated 5-8-1970.  In  Godugula  Lakshmi  narasimha Murthy v. MuthuKumalli  venkata  subbarao (L.P.A. No. 69/68). After  considering  the relevant  case law on the point  the  legal  position was summarised  as under:-", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-26", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "\"(1)  The Court can  reopen the transaction and give appropriate  relief in the matter of interest when the transaction is substantially unfair.\n\n \n\n(2)  If the interest is ecessive the Court shall presume that transaction is substantially unfair, but this is a rebuttable presumption;\n\n \n\n(3) No hard  and fast rule can be  laid down as to what is  reasonable or excessive rate  without reference to the several circumstances enumerated to Cls. (A) (b) and (c) of  the sub-s. (2) of S. 3 of  the Act.\n\n \n\n(4) In determining whether the rate is  reasonable or not the Court has to take  into consideration the following  circumstances:\n\n   \n\n(a) The value of the security offered:\n\n \n\n(b) The financial condition of  the debtor including the result of any prior transaction:\n\n \n\n(c)  The know or  probable risks in getting  repayment:\n\n \n\n(d) if compound  interest was provided for  the frequency of the period of calculation of the interest and\n\n \n\n(e) The advantage which the debtor reasonably expected to derive from the transaction\".  \n\n \n\n31. Adverting to the various cases referred to above a Division Bench of  this Court in K. Venkata Satyanarayana v. State Bank of India  (supra) observed (at p. 122):-", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-27", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "\"The aforesaid rulings clearly establish that there can be no presumption that the charging of compound rate of interest is per se excessive that the burden of establishing that the interest is excessive lies on the debtor setting up a plea that the interest charged is usurious and that it is only when that is established the presumption under explanation (1) to S. 3 (1) of the usurious Loans Act, as amended by the madras Amendment Act arises\". \n32. In P. Sambamurthy & sons v. M. Krishna Rao, while adverting to the observations of their Lordships of the Supreme Court in varadachariar v. Gopal Menon (supra) Jeevan Reddy J., observed (at p. 79):-\n \"What is relevant to notice is that the Supreme Court did not say that as a rule of law any interest over and above 12% simple is per se usurious and excessive\". \n33. In anunreported judgment in A.S. No. 334 of 1970 dt. 1-8-1972 on the file of this Court, chinnappa Reddy J. While adverting to the decision in Varadachariar v. Gopala menon (supra) observed that the mortgage in question in the said case was of the year 1936 and that since then there had been change in the market conditions and the economy. He added (at p. 79):-", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-28", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "\"The learned subordinate Judge failed to notice that their Lordships of the Supreme Court were concerned with a transaction of the year 1936 whereas in the present case, we are concerned with a transaction of the year 1962. It cannot be pretended that there has been no change in the economy of our country in the meanwhile it is well known that even the bank rate has gone up during this period In those circumstances. I do not see how it can be said that 12% compound in the face of the evidence that there were several other transactions where similar rate of interest was charged can be considered to be excessive leave alone unfair I therefore think that the learned subordinate Judge ought to have allowed the interest as claimed by the plaintiff'. \n34. It therefore follows that it cannot be laid down as a rule of law that interest above a particular rate per se is penal or excessive Whether interest is penal or excessive is always a question of fact to be decided on the facts and circumstances of a given case.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-29", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "35. In S.P. Majoo v. Ganga Dhar their Lordships of the Supreme Court observed (at pp. 603-4): \n \"Prior to 1929 the legal position was that under S. 34 of the C.P.C granting a decree for payment of money the Court had full discretion to order interest at such rate as it deemed reasonable to be paid on the principal sum adjudged from the date of the suit onwards But O. 34 Rr. 2 and 4 which applied to a mortgage suit enjoined the Court to order an account to be taken of what was due to the plaintiff at the date of such decree for principal and \"interest on the mortgage\". The special provision in O. 34 had therefore to be applied in preference to the general provision in S. 34 Till the period for redemption expired therefore the matter was considered to remain in the domain of contract and interest had to be paid at the rate and with the rests specified in the contract of mortgage but after the period for redemption had expired the matter passed from the domain of contract to that of judgment. The right of the mortgagee would henceforth depend not on the contents of his bond but on the directions of the decree\". \n36. It was held by the Federal Court in Jaigobind singh v. Lachmi Narain Ram AiR 1940 FC 20 that the language of O. 34 R.11 gave a certain amount of discretion to the Court so far as interest pendente lite and subsequent interest was concerned and it was no longer absolutely obligatory on the courts to decree interest at the contractual rates up to the date of redemption in all circumstances even if there was no question of the rate being penal excessive or substantively unfair within the meaning of the usurious Loans Act. 1918.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-30", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "37. Quoting the aforesaid principle approval their Lordships of the Supreme Court in S.P. Majoo v. Ganga Dhar (supra) observed (at p. 604):-\n \"In view of the principle laid down by the Federal Court we are of opinion that in the circumstances of the present case the respondent should be granted interest on the principal sum due at the contractual rate till the date of the suit and simple interest at 6 per cent p.a. on the principal sum adjudged from the date of the suit till the date of the preliminary decree and also at the same rate till the date of realisation\". \nSri C.P. Sarathy the learned counsel for the plaintiff urged that the plaintiff would be entitled to the payment of would be entitled to the payment of subsequent interest not only on the principal sum of money borrowed under Ex. A-1 but also on the amount of interest accrued thereon up to the date of redemption Reliance was placed upon the decision in Narharilal v. Firm Bhogilal Amratlal, . Construing O. 34 R. 11 of the civil P.C. V. B. Raju J. Observed (at p. 254):-", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-31", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "\"It is provided that the Court may order payment of interest But what is provided in O. 34, R. 11 is interest up to the date on or before which payment of the amount found or declared due is under the preliminary decree to be made. The rule therefore contemplates that a certain amount is found or declared due and that amount has to be paid on or before a date under the preliminary decree. The rule therefore contemplates interest on the amount found due from the date when it is found due up to the date on or before which payment is to be made under the preliminary decree. The amount found or declared due has reference to the amount mentioned in O. 34 R. 2 and O. 34 R. 4 That includes interest from the date of the suit till the date of the preliminary decree. A preliminary decree provides that the amount found or declared due may be paid into the Court on or before such date as the Court may fix within six months from the date on which the Court confirms and countersingns the account taken under sub-cl. (A) of cl. (1) of order 34, R. 2 the Court has therefore to take an account under O. 34 R. 2 sub-cls (a) (b) and (c) of cl. (1) while taking such an account the Court has to include interest as provided in cl. (A) (I) of R. 2 (1). The Court then has to give time for payment of that amount and the time given should be less than six months In regard to the subsequent period which should not exceed six months. The Court has a discretion under O. 34 R. 11 to give interest or not as provided in O. 34 R. 11 the Court has therefore no discretion in regard to the manner of taking account under O. 34 R. 2 and O. 34. R. 4", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-32", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "account under O. 34 R. 2 and O. 34. R. 4 and is bound to include interest while arriving at the amount found due at the date of the preliminary decree. But under O. 34, R.11 the Court has a discretion whether or not to order interest for the subsequent period of six months from the date of the prliminary decree till the time of actual payment'.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-33", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "38. We are unable to subscribe to and dissent from the view of V.B. Raju. Supreme Court in K. Manick chand v. B. Saleh Mohammed. . In the said case two simple mortgages in succession were executed by three brothers. A Suit wa instituted in the Court of the District judge civil station Bangalore by one Khanmull for recovery of the amount due under the two mortgages. On the foot of the first mortgage the amount claimed was rupees 51,200 as principal and interest. While on the foot of thesecond mortgage the amount claimed as principal and interest was Rs. 60,200. The contractual rate of interest was 1 per cent per mensem. The trial Court decreed the suit on 27th March 1952 after applying the provisions of S. 17 of the Mysore Money Lenders Act No. 13 of 1939 for the purpose of giving effect to the provisions of S. 17 of the Act. The trial Court held that the principal amount of the two loans was Rs. 44,000 being the aggregate of the consideration shown in the two mortgage deeds, and consequently allowed as arrears of interest the sum of Rs. 44,000 A preliminary decree was therefore granted for a sum of Rs. 88,000 comprising of Rupees 44,000 as principal and Rs. 44,000 as interest. The excess interest claimed at the contractual rate of 1 per cent per mensem was disallowed on the ground of the maximum limit for the grant of the total amount of interest laid down under S. 17 of the Act. Thereupon both the parties filed appeals in the High Court of Mysore. The High Court held that the trial Court had wrongly treated the amounts of Rs. 20,000 and Rs. 24,000 as principal amounts of the original loans, and recorded a finding that the principal amounts in fact were Rupees", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-34", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "principal amounts of the original loans, and recorded a finding that the principal amounts in fact were Rupees 15,017-8-0 in respect of the first mortgage deed and Rs. 22,954 in respect of the second mortgage deed. The High Court thus, worked out the aggregate of Rs. 37,971-50 ps. As the principal amount of the two loans advanced under these two mortgage deeds and applying S. 17 of the Act. Granted a decree for this amount as principal together with the same amount as interest. The High Court further held that this would be the arrears of interest to which the appellants would be entitled up to the date fixed for payment of hte redemption money by the judgment of the High Court that the principal amount would carry interest at 6 per cent per annum from the date fixed for redemption till realisation. The decree modified by the High Court was assailed in the Supreme Court.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-35", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "39. Their Lordships of the Supreme Court observed (at p. 674):-", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-36", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "\"Admittedly civil P.C. was applicable to this suit and consequently, interest subsequent to the date of the decree had to be awarded in accordance with O. 34, R. 11 C.P.C. Under R. 11 (a) (I) interest would be payable on the principal amount found or declared due on the mortgage from the date of the decree up to the date fixed for payment at the rate payable on the principal or where no such rate is fixed at such rate as the Court may deem reasonable. In this case the date of the decree by the trial Court was 27th March 1952 while the date fixed for payment became 19th March 1959 as a result of the decree of the High Court . the interest for this period has to be calculated in accordance with R. 11 (a) (I) of O. 34 c.P.c. on the principal amount of Rs. 37,971-50 ps. As regards the rate it is true that under the mortgage deeds, the interest was payable at the rate of 1 per cent per mensem: but under the provisions of hte Act read with the provisions of the Act read with the provisions of the usurious Loans Act (mysore Act IX of 1923) the fair interest payable on the loan would be at the rate of 9 per cent per annum and it is at this rate that the interest must be calculated on this principal amount for this period In addition. Under Rule 11 (a) (ii) of order 34, C.P.C. interest at the rate of 6 per cent per annum has to be allowed on the amount decreed for costs, charges and expenses incurred by the appellants up to the date of the preliminary decree. A further direction that is necessary is that interest under R. 11 (b) of O. 34 C.P.C. will be payable up to the date of realisation or", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-37", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "of O. 34 C.P.C. will be payable up to the date of realisation or actual payment on the aggregate of the two principal sums just mentioned at the rate of 6 per cent per annum which must be deemed to be reasonable as interest at that rate is ordinarily awarded in all decrees in respect of future periods\".", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-38", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "40. In our considered view compound interest at the rate of 12% with monthly rests stipulated under Ex. A-1 is excessive and compound interest at the rate of 12% per annum on the principal sum of money borrowed under Ex. A-1 from the date of execution of Ex. A-1 up to the date of the suit and simple interest at the rate of 12% per annum on the principal sum of money from the date of the suit till the date of redemption as fixed by the Court with subsequent interest at the rate of 6% per annum on the principal sum of money from the date of redemption till the date of realisation would be reasonable . the total interest thus worked out up to the date of redemption amounts to Rs. 54.888-85 ps. There shall be a preliminary decree in favour of the plaintiff directing the defendants to pay Rs. 1,03,888-85 ps. With interest at 6% per annum of Rs. 49.000 from the date of redemption as fixed by the lower Court till the date of realisation. The preliminary decree of the lower Court is accordingly modified In the circumstances of the case while maintaining the decree passed by the lower Court for costs we direct the parties to bear their own costs in the appeal suit.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "61ce4e329840-39", "Titles": "Chilamkuri Gouri Sankar Rao And ... vs Bhurugumalla Venkatappayya Sons ... on 23 April, 1982", "text": "41. In default of payment of the mortgage money the plaintiff shall be entitled to execute the decree by sale of the mortgage property. As already shated, the 1st defendant is bound to discharge half of ht eprincipal sum of money Borrowed under Ex. A-1 minus Rs. 3,100 together with interest as allowed by us. In other words he is bound to discharge his share of Rs. 22.950 together with compound interest at 12% per annum from the date of the suit till the date of redemption as also the subsequent interest on the said sum of Rs. 22,950 at the rate of 6% per annum from the date of redemption till the date of realisation. He is also liable to contribute Rs. 3,111 towards his share of costs decreed by the trial Court. The 1st defendant's half share in the mortgaged property is accordingly made liable. The other half share of venkata Kotirathnam in the mortgage property is liable to satisfy the balance of the mortgage debt. If there is any short fall the plaintiff will be entitled to proceed against other properties of venkata Kotirathnam in the hands of defendants 1 to 7. There shall also be a personal decree against the ist defendant to that extent. \n\n42. In the reuult the appeal suit is allowed in part and c.M.P. No. 536 of 1982 is also allowed.  \n43. Order accordingly.", "source": "https://indiankanoon.org/doc/997047/"}
+{"id": "aa9bf72ff480-0", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "JUDGMENT P. Venkatarama Reddi, J.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-1", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "1. These appeals and revision petition arise out of an award dated 9-3-1989 made by the arbitrator as modified by the IV Additional Judge, City Civil Court, by his Judgment dated 25-6-1990. The State of Andhra Pradesh represented by the Superintending Engineer, I and CAD (Godavary Valley Circle) filed O.P. No. 395/1989 Under Sections 30 and 33 of the Arbitration Act to set aside the award to the extent the claims were allowed. The O.P. was partly allowed by the IV Additional Judge, City Civil Court. Against that, C.M.A.No. 357/1991 was filed by the respondent in the O.P. (hereinafter referred to as the 'contractor' or 'claimant'). The claimant filed O.P. No. 175/1989 Under Sections 30 and 33 to set aside the award in so far as it went against him. That O.P. was dismissed. Against the Judgment in O.P.No. 175/1989, the contractor filed C.M.A. No. 640/1991 and the State of A.P. has filed C.M.A.N0. 236/1991. The contractor also filed O.S. No. 546/1989 Under Section 14 to 17 of the Arbitrator Act for filing of the Award passed by the arbitrator (D-3 in the suit) and to make it a rule of the Court and to pass a decree in terms thereof. The suit was partly decreed modifying the award. The learned Additional Judge directed D-l and D-2 (State of A.P.) a sum of Rs. 3,84,196/- to be paid to the plaintiff in respect of the claims made by him as against a sum of Rs. 3,96,196/- awarded by the arbitrator. The Court also reduced the rate", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-2", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "3,96,196/- awarded by the arbitrator. The Court also reduced the rate of interest from 18% to 9%. Both sides have questioned this decree. The contractor filed C.M.A.294/1991 and the State of A.P. filed C.R.P. No. 547/1991. O.S.No. 546/1989, O.P. No. 175/1989 and O.P.No. 395/1989 were disposed of by .a common Judgment.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-3", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "2. The relevant facts are these. A contract was awarded to the appellant in CM. A. No. 357/1991 for doing 'Cement Concrete Lining Work' of Saraswathi Canal, Sriramsagar Project from 8.00 K.M. to 9.00 K.M. The agreement was entered into on 28-2-1983. The value of the contract is Rs. 4,61,663/-. It was to be completed within a period of six months from the date of handing over of the site. The site was handed over on 2-4-1983. The actual work started on 16-6-1983 and it could be completed only on 20-7-1985. The contractor invoked the arbitration clause in the agreement and filed a claim petition before the designated panel of arbitrators. The panel of arbitrators did not make the award within the time stipulated and therefore they become functus ojficio. The claimant, therefore, filed O.P.No. 76/1988 in the Court of the IV Addl. Judge, City Civil Court for the appointment of sole arbitrator for settlement of disputes arose in connection with the aforementioned contract. The Court allowed the petition by an order dated 17-8-1988 and appointed Sri K. Govinda Rao, retired District Judge as sole arbitrator in the place of panel of arbitrators for the adjudication of the disputes. The arbitrator entered on reference on 25-9-1988 on which date claim statement was filed by the contractor. The award was made on 9-3-1989. The arbitrator inter alia held that on account of release of water into the canal on 4 occasions i.e., 13-7-1983,26-2-1984,1-7-1984 and 25-3-1985, the contractor could not execute the work", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-4", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "and 25-3-1985, the contractor could not execute the work within the time schedule. The prolongation of the work was held to be on account of breach of contract and defaults on the part of the employer.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-5", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "3. We shall now proceed to discuss the claims dealt with in the Award in seriatim and record our conclusions as to whether the impugned Judgment of the Civil Court confirming or modifying the award is sustainable. \n\n4. The relevant details relating to Claim No.1 are as follows:- ________________________________________________________________________________________\n  Nature of the claim.  Amount            Amount allowed Civil Court's\n                                claimed.           by Arbitrator.   Decision\n________________________________________________________________________________________\n\n                                 Rs.                Rs.\n (a) Return of EMD;        12,000/-            12,000/-         Award confirmed.\n (b) Return of Bank\n     Guarantee.                 9,000/-             9,000/-           -do-\n (c) Return of FSD        33,064/-            33,064/-               -do-\n (d) Work done but\n     not paid                  25,000/-             6,528/-               -do-\n (e) Bills payable on\n     the basis of S.S.R.\n     Rates in force\n     for the work done\n     during 1983-84\n     and 1984-85.            1,83,293/-          1,70,945/-           -do-\n________________________________________________________________________________________\n\n \n\nRegarding items (a) to (d), there is no dispute. As observed by the learned Arbitrator, the Earnest Money Deposit etc., was not forfeited on the ground of the contractor committing breach of contract. On the other hand, the finding is that the breach was on the part of the Department. Hence, on the completion of the work, the Department was liable to refund these amounts.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-6", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "5. The dispute centres around item (e) of Claim No. 1, in respect of which, the arbitrator awarded a sum of Rs. 1,70,945/-. The award on this item has been challenged by the Government on the ground that the Agreement does not provide for extra rates and Clause 59 of A.P. Detailed Standard Specifications (APDSS) is a specific bar against payment of any extra amount for the work done during the prolonged period of contract. It is the finding of the arbitrator that the prolongation of the work much beyond the contractual period was for reasons beyond the control of the claimant and it was solely attributable to the periodical release of water into the canal, which amounted to a breach of fundamental contractual obligation. Admittedly, the water was released in four spells, i.e., on 13-7-1983 to 18-1-84; 26-2-1984 to 11-4-1984; 1-7-1984 to 15-1-1985; and 25-3-1985 to 16-4-1985. The work was ultimately completed on 20-7-1985. It is not the case of the Department that the contractor despite this uncontemplated contingency, could have completed the work earlier. The Department only contended that between 2-4-1983 when the site was handed over and 16-6-1983 when the actual work was started, the contractor could have made more progress. But, here again, the finding of the arbitrator while discussing claims 3 and 4, is that the commencement of the work by the claimant was delayed by reason of defaults on the part of the Department, viz., non-installation of pipeline for curing and non-completion of earth work by another contractor. As far as the prolongation of the work beyond the originally stipulated period of contract,", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-7", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "contractor. As far as the prolongation of the work beyond the originally stipulated period of contract, the arbitrator categorically found that the Department committed breach of contract by frequently releasing water into the canal. This finding has not been assailed nor can it be assailed on any valid ground. On this finding, the learned arbitrator proceeded to hold that \"the agreement rates are workable during the agreement period only, due to escalation of prices, for the work done after the agreement period, the claimant had to spend more on labour, machinery and material. The claimant had to spend this extra expenditure due to the default of the Department.\" The learned arbitrator also observed that the documents marked for the claimant showed that the Departmental authorities gave an assurance to the claimant that he would be paid for the work done beyond the contract period at the current Standard Schedule of Rates (S.S.Rs.) + the tender percentage. The arbitrator referred to Exs. A-14, A-22, A-23 and A-25 in this connection. He also observed that the demand for payment was not in the nature of a claim for compensation which is prohibited by Clause 59 of APDSS. The learned arbitrator relied upon the decision of this Court in State of A.P. v. Shivraj Reddy, (1988)2 APLJ 465 in support of his conclusion that the claim for payment at the prevailing Standard Schedule of Rates for the work done during the extended period of contract does not fall within the mischief of Clause 59 which bars a claim for compensation on account of delays or hindrances to the work from any cause whatsoever.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-8", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "6. The contention of the learned Government Pleader is that the claim for payment at the prevailing S.S.Rs. + tender percentage is nothing but a claim to award compensation for the loss suffered by the contractor on account of escalation in costs and, therefore, Clause 59 squarely applies. He relies upon the Division Bench decision of this Court in State of A.P. v. Associated Engineering Enterprises, ; and Prasad and Co., Hyderabad v. Superintending Engineer, Irrigation Circle, Chittoor, to which one of us (Venkatarama Reddi, J.) was a party. He has also referred to the recent decision of the Supreme Court in Ch. Ramalinga Reddy v. Superintending Engineer, 1994 (5) SCALE 67 wherein a claim for escalation in rates was negatived, basing on Clause 59. It is also contended that there was no assurance to pay extra rates as observed by the learned arbitrator. \n\n7. On the other hand, it is contended by the learned counsel for the contractor Mr. Prabhakar Sripada that the legitimate claim of the contractor cannot be denied from the stand point of Clause 59 and there are circumstances in the instant case to indicate that the Department itself waived its right to invoke Clause 59 or a clause of like nature. He also invited our attention to the observation of the arbitrator that the contractor did not at any time give an undertaking not to prefer any claim for extra rates during the extended period of the contract nor did the Department prescribe any such condition and therefore the cases cited by the Government Pleader have no application.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-9", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "8. Clause 59 was considered and applied by this Court in more than one case. In State of A.P. v. Associated Engineering Enterprises, Hyderabad, it was observed at paragraph 26:\n \"Applying the principle of the above decision to the fact of the case before us, it must be held that Clause 59 bars a claim for compensation on account of any delays or hindrances caused by the department. In such a case, the contractor is entitled only to extension of the period of contract. Indeed, such an extension was asked for, and granted on more than one occasion. (The penalty levied for completing the work beyond the extended period of contract has been waived in this case.) The contract was not avoided by the contractor, but he chose to complete the work within the extended . time. In such a case, the claim for compensation is clearly barred by Clause 59 of the APDSS which is admittedly, a term of the agreement between the parties.\" \n\nIt may be noticed that in the above case, claim No. 1 which was turned down on the basis of Clause 59 was for compensation pertaining to the Original period of contract as noted at paragraph 31 of the Judgment. Referring to the earlier Division Bench Judgment rendered by Jeevan Reddy, J., (as he than was) and Bhaskar Rao, J, the learned Judges posed the question and answered as follows:-\n \"The question is whether any claim for compensation is permissible for the original period of contract ? It was held by a Bench of this Court of which one of us (Jeevan Reddy, J.) was a member - in A.A.O. No. 786 of 1986 dated 1-12-1988, that such a claim is not permissible by virtue of Clause 59 of the APDSS.\"", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-10", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "In Prasad and Company's case (3 supra), the Division Bench, of which one of us (Venkatarama Reddi, J.) was a member, held that escalation over and above the agreed rates during the currency of the agreement period was clearly barred by P.S.59 of APDSS. In Ramalinga Reddy's case (4 supra), the Supreme Court had gone a step further and held that the claim for the payment of extra rate even for the work done beyond the agreement period was unsustainable in the light of the specific prohibition contained in Clause 59. However, it is not discernible from the Judgment whether the prolongation of the contract was for reasons attributable to the contractor or on account of breach of contractual obligations by the employer as in the instant case. Be that as it may, even assuming that Clause 59 would have in the normal course come in the way of the petitioner claiming escalation in rates for the work done beyond the contractual period, the special facts and circumstances of this case stand apart and do not attract the bar of Clause 59. We agree with the learned counsel for the contractor that the immunity conferred by the exclusionary Clause 59 must be deemed to have been waived and the Department is estopped from taking shelter under it.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-11", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "9. In Ex. A-14 dated 21-10-1984, the Superintending Engineer in continuation of his letter dated 1-8-1984, directed the Executive Engineer to submit the balance work estimates with current S.S.Rs. of 1983-84 and 1984-85 + tender percentage together with the details of financial implications. A copy of it was marked to the contractor. In his letter dated 25-1-1985. (Ex. A-17), the Superintending Engineer while mentioning the fact that the canal was closed from 15-1-1985, requested the contractor to resume the balance work before 31-1-1985 and to complete the same by middle of April, 1985. The letter further states, \"you are requested to come up with a revised month wise programme to complete the work by middle of 4/1985 and apply for extension of time. Your request for the payment of balance work at the rates of 1983-84 is under consideration and will be recommended after scrutiny in this office.\" In reply to the letters from the Superintending Engineer, the Executive Engineer sent up detailed factual reports and an estimate of financial implications, vide his letter dated 30-7-1985 (Ex. A-22), and reported that the claim of the contractor for extra rates was genuine and for 27% of the work executed by him, the SSRs., of 1983-84 have to be allowed and for 60% of work, the SSRs of 1984-85 + tender percentage should be allowed. He arrived at the total amount as Rs. 1,70,945/- which is the same that was awarded by the arbitrator. He mentioned in the above letter dated 30-7-1985 that \"with great difficulty and enthusiasm, the contractor has completed the entire work of lining by", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-12", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "that \"with great difficulty and enthusiasm, the contractor has completed the entire work of lining by 30-7-1985 as per the programme.\" In Ex. A-25 dated 19-12-1986, the Executive Engineer in his letter addressed to the Superintending Engineer stated, \"on the assurance given by the departmental officers upto Superintending Engineer's level that his claim will be considered on merits, he has completed the work without entering into litigations and we could create irrigation potential as programmed.\" The Superintending Engineer who is the officer that signed the agreement with the contractor, in his letters dated 8-7-1987 and 4-6-1987 (Exs. A-26 and A-27) reiterated what was reported by the Executive Engineer and sought the approval of the Chief Engineer for payment of revised rates. Specific reference was made in the award to Exs. A-14, A-20 and A-23. Apart from that, it was observed by the learned arbitrator that the \"documents marked for the claimant show that the departmental Engineers gave an assurance to the climate that he would be paid for the work done beyond the contract period at the current SSR Rates +tender percentage prevailing for the years 1983-84 and 1984-85.\" Hence, we are referring to these letters which were marked before the Arbitrator. The assurances/recommendations made by the departmental officers came in the wake of persistent requests made by the contractor to pay escalated rates, vide Ex. A-9 dated 21-12-1983; Ex.A-10 dated 9-4-1984; Ex. A-12 dated 1-7-1984 and Ex. A-19 dated 15-4-1985 while asking for extension of time. Whenever he sought for extension of time, he was consistently making a request for allowing payment at current S.S.Rs.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-13", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "extension of time, he was consistently making a request for allowing payment at current S.S.Rs. plus or minus tender premium. This fact is not disputed. As seen from Ex. A-17 etc., the Department itself persuaded the contractor to seek extension of time all the while assuring him that his request for payment of balance work at the extra rates was under active consideration and will be recommended after due scrutiny. Follow up action was taken by calling for reports from the Executive Engineer who in turn submitted proposals for payment on the basis of S.S.Rs. prevailing in 1983-84 and 1984-85. In this state of affairs, the contractor proceeded to do the work whenever it was possible to do. At no point of time, the Superintend ing Engineer or any other departmental official tried to shut out the claim of the contractor on the basis of Clause 59. On the other hand, the correspondence makes it crystal clear that the concerned officials including the Superintending Engineer who signed the agreement being fully conscious of the inability of the Department to keep up to the contractual obligations, lulled the contractor into the belief that his case for extra rates would be favourably considered and made him proceed with the work in larger public interest.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-14", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "10. It is well settled that a waiver of right may be oral or written or inferred from conduct. Waiver can also arise from a promise of forbearance to enforce a term of the contract. The proposition is succinctly stated in Chitty on Contracts (Volume-1,......25th Edition) at para 1495 as follows:\n \"Waiver may also be held to have occurred if, without any request, one party represents to the other that he will forbear to enforce or rely on a term of the contract to be performed or observed by the other party, and the other party acts in reliance on that representation.\" \n\nAgain at para 1497, it is stated that:\n \"The party who forbears will be bound by the waiver and cannot set up the original terms of the agreement. If, by words or conduct, he has agreed to led the other party to believe that he will accept performance at a later date than or in a different manner from that provided in the contract, he will not be able to refuse that performance when tendered.\" \nWhat is said at para 1498 is also apposite:\n \"Where one party has induced the other party to accede to his request, the party seeking the forbearance will not be permitted to repudiated the waiver and to rely on the letter of the agreement.\" \n\nThis is exactly the situation here as apparent from the documents referred to or forming part of the award. Though there must be a promise or representation to attract the principle of waiver as pointed out in the Law of Contract by Treitel (8th Edition at page 102), the promise need not be express and direct.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-15", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "\"There must be a promise (or an assurance or representation in the nature of a promise) which is intended to affect the legal relationship between the parties and which indicates that the promisor will not insist on his strict legal rights, arising out of that relationship, against the promisee. Here, as elsewhere, the law applies an objective test. It is enough if the promise induces the promisee reasonably to believe that the other party will not insist on his strict legal rights.\" However, \"to bring the equitable doctrine into operation, the promise or representation must be 'clear' or 'unequivocal', or precise and unambiguous.\"", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-16", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "On the facts of the case, it can be reasonably said that there was waiver of the right to enforce Clause 59. Alternatively, we hold that the arbitrator's finding that there was an assurance to pay the extra rates cannot be said to be perverse or vitiated by an error of law apparent on the face of the award. The assurance may not be direct or express but it is possible to take the view that there was an implied promise to pay the extra rates for the work done beyond the agreement period notwithstanding Clause 59. The promise had emanated from a competent officer who signed the agreement itself. If the view taken by the arbitrator is reasonably possible or plausible, we cannot interfere with the award on the ground of error apparent on the face of the award. We, therefore, uphold the award in regard to Claim No. 1 (e) and the learned Additional Judge, City Civil Court was justified in confirming the award to this item. Claim No. 2 (Loss of Advances to Labour):-\n11. A sum of Rs. 5.16 lakhs was claimed by the contractor to compensate the loss alleged to have been incurred by him on account of advances to labour. The arbitrator rejected the claim and the award was confirmed by the Civil Court in this regard. The arbitrator has given cogent reasons for rejecting this claim. The learned counsel for the contractor could not assail the finding of the arbitrator on any ground germane to Section 30 of the Arbitration Act. Hence, no interference is called for.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-17", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "12. Claim Nos. 3 and 4 (Charges incurred on idle Labour and Machinery):-The contractor claimed Rs. 2.94 lakhs. The learned arbitrator divided the claim into 4 parts period-wise. In respect of the 3rd claim, he awarded Rs. 12,000/- for the 1st period i.e., between 2-4-1983 and 16-6-1983; Rs. 19,800/- for the 3rd period between 10-2-1984 to 11-4-1984 and Rs. 37,500/- for the 4th period i.e., between 25-3-1985 and 16-4-1985. Altogether, he awarded Rs. 69,300/- under claim No. 3. As regards the 4th claim, the arbitrator awarded Rs. 19,025 /- for the 1st period; Rs. 15,951/- for the 3rd period and Rs. 9,380/- for the 4th period. Altogether, a sum of Rs. 44,358/- was awarded under claim No. 4. In regard to the 2nd period, i.e.,from 22-6-1983 to 29-6-1983, the arbitrator rejected the claims. The award pertaining to claims 3 and 4 was upheld by the Civil Court. The learned arbitrator found, as already noticed, that the work could not be started by the contractor till 16-6-1983 on account of non-supply of pipelines for curing and non-completion of the earth work by the earth work contractor and during this period, the labour and machinery had to remain idle for nearly 40 days by reason of default on the part of the Department. We are of the view that having regard to Clause 59 of the contract, the", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-18", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "the Department. We are of the view that having regard to Clause 59 of the contract, the arbitrator exceeded his jurisdiction in awarding compensation for the 1st period which falls within the stipulated period of contract. Evidently, the Arbitrator acted in disregard of the aforementioned provision. The decision of this Court cited supra squarely apply to the fact situation obtaining in the present case insofar as it relates to the 1st and 2nd periods. As far as the 3rd and 4th periods are concerned, the position is different. The 3rd and 4th periods fall beyond the agreed period of performance of contract. As already seen the finding of the arbitrator is that the Department let in water into the canal for its own reasons and the cross-bunds which were laid to prevent leakage of water from the regulator were breached by the ryots of the locality. The claimant could not, therefore, take up any work and the result was that the labour and machinery remained idle for 30 days during the 3rd period and for 20 days during the 4th period, the learned Arbitrator relied upon the reports of the departmental authorities themselves in support of his conclusion and estimated the quantum of loss accordingly. We have already discussed while dealing with claim 1 (e) about the applicability of of Clause 59 and we reached the conclusion that the Department cannot take shelter under Clause 59 for the work done by the claimant beyond the stipulated period on the principle of 'waiver' and 'estoppel\". For the same reason, we are of the view that the award in regard to 3rd 4th periods ought not to be disturbed. Therefore, as far as claim No. 3 is concerned, the award should have been upheld to the extent of Rs. 57,300/- (by deducting Rs. 12,000/-awarded for the 1st period) and as", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-19", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "deducting Rs. 12,000/-awarded for the 1st period) and as regards claim No. 4, it should have been confirmed to the extent of Rs. 25,333/- only (by deducting Rs. 19,025/- awarded for the 1st period). We allow the appeal (C.M.A. No. 236/1991) and the revision (C.R.P. No. 547/1991) filed by the State Government to this extent.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-20", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "13. The learnea counsel tor the contractor challenged the correctness of the quantum of amounts awarded under claim No. 4. It is commented that the supposition of the arbitrator that the \"idle days for both labour and machinery will always be identical.\" is not correct. We do not think that this proposition even if it does not appeal to the Court introduces a palpable error of law which is a sine qua non for setting aside the award. We, therefore, reject the contention of the learned counsel.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-21", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "14. Claim No. 5 (Claim for payment towards de-silting and de-watering):-The contractor claimed Rs. 1,05,000/-. The arbitrator awarded Rs. 30,000/-. The learned Additional Judge reduced the amount to Rs. 18,000/-. This reduction has been challenged by the learned counsel for the contractor on the ground that on the basis of the very findings of the arbitrator which in turn were based on the record of the Department, de-silting and de- watering operations had to be done on 4 occasions but not 3 occasions as held by the Court. In modifying the award, the learned Additional Judge pointed out that the record shows that the water was released into the canal in breach of the contract only three times. The learned counsel for the contractor has invited our attention to the letters and reports of the Executive Engineer as well as the facts admitted in the rebuttal statement itself which disclose that there was unexpected release of water on 4 occasions after the work was started or resumed. We see force in this contention. The learned Additional Judge observed that the removal of silt on 22-6-1983 and also on 16-4-1985 was part of the awarded work. We are unable to understand on what basis this observation has been made. In any case, it amounts to entering into the merits of the controversy which is not permissible while dealing with the objections to the award. The fact, however, remains that there is an error apparent on the face of the award insofar as the arbitrator assumed that the work was interrupted on account of the release of water on 5 occasions instead of 4 occasions. Hence, we modify the award by reducing a sum of Rs. 6,000/- instead of Rs. 12,000/- and hold that the arbitrator ought to have awarded a sum of Rs. 24,000/- under claim No. 5.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-22", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "15. Claim No. 6:- For the additional earth work claimed to have been done by the contractor during the years 1983-84 for the trimming, sloping, levelling and maintaining pit levels, he claimed Rs. one lakh. The arbitrator rejected the claim holding that there was no evidence on record to show that the claimant had done additional earthwork worth Rs. one lakh. The arbitrator referred to the letters addressed by the contractor himself to negative the plea of the contractor. He also commented that the contractor filed to submit his accounts, vouchers or the statements furnished to the Income-tax Department to prove his case under this claim. The arbitrator drew an adverse inference for not producing the relevant records. The learned counsel for the contractor argued that the arbitrator ought to have called upon the Department to produce the records relating to the earth work done by the earth work contractor and it would have revealed the correct position. We do not think that we should test the validity of the award on the basis of an argument of this nature. The arbitrator arrived at the conclusion purely on an appreciation of the evidence and the adverse inference drawn by him cannot be said to be arbitrary or extraneous to law. So, we find no legal error in the award in rejecting this claim.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-23", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "16. Claim No. 7:- The contractor claimed Rs. 66,000/- towards overhead charges incurred by him during the extended period of the contract. The arbitrator awarded a sum of Rs. 30,000/- on acceptance of this claim. The overhead charges consist of expenses incurred towards salaries for the staff and office expenses. We are of the view that this claim should have been totally rejected when the claim for extra rates (claim No. 1 (e) was accepted by the arbitrator and a sum of Rs. 1,70,945/- was allowed under that claim. The extra rate was allowed only to recompense the contractor for the extra expenditure that would have been incurred by him on account of prolongation of the contract by reason of breach of contractual obligations by the employer. Naturally/ that would take care of establishment expenditure also. We, therefore, find that claim No. 7 is nothing but a duplication of the claim and by accepting this claim, the arbitrator has awarded damages twice over which is not permissible in law. The award is, therefore, vitiated by error of law apparent on the face of it, and is thus liable to be set aside . The lower Court erred in upholding the award on this item of claim.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-24", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "17. The next and last item of dispute is about interest - - pendente lite and for the pre-reference period. The learned arbitrator awarded interest at 18% per annum on a sum of Rs. 45,064/- representing EMD and FSD form the date of deposit till 25-9-1988 i.e.. the date on which the arbitrator entered reference. For the remaining amounts, the arbitrator awarded interest at 18% per annum from 20-7-1985 i.e., the date of completion of works till 25-9-1988 i.e., the date of entering on reference. Pendente lite interest was denied by the Arbitrator following certain decisions of this Court and of the Supreme Court. The civil Court reduced the interest to 9% per annum. The Court also allowed interest on the amount of Rs. 3,84,196/- from 9-3-1989 i.e., the date of decree till the date of actual payment.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-25", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "18. It is the case of the contractor mat pendente lite interest should have been allowed by the arbitrator and moreover the civil Court had no power to reduce the rate of interest which was within the discretion of the arbitrator. On the other hand, the learned Government Pleader found fault with the award insofar as the interest for the pre-reference period was allowed and justified the disallowance of pendente lite interest relying upon the two Division Bench decisions to which one of us (PVR, J.) was a party, (i.e., State of A.P. v. P.L. Raju and Co, ; Prasad and Company v. Superintending Engineer (I.C), Chittoor (3 supra) and also the Judgment of the Supreme Court in Durga Ram Prasad v. Govt. of A.P., followed by the Division Bench in the aforementioned cases. In those two cases, the Division Bench felt that the law laid down by the Constitution Bench in Secretary, Irrigation Dept. v. C.C. Roy, cannot be applied in view of the specific contractual provision prohibiting payment of interest.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-26", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "19. Firstly, we will consider the legal position as regards the power of the arbitrator to award interest pendente lite. In Secretary, Irrigation Department v. G.C. Roy, a Constitution Bench of the Supreme Court which was called upon to consider the correctness of the decision in Executive Engineer, Irrigation, Balimela v. Abhaduta Jena, reviewed the entire law on the subject and enunciated the following propositions:\n\" (i) A person deprived of the use of money to which he is legitimately untitied has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This basic consideration is as valid for the period the dispute is pending before the arbitrator as it is for the period prior to the arbitrator entering upon the reference. This is the principle of Section 34, Civil Procedure Code and there is no reason or principle to hold otherwise in the case of arbitrator. \n\n(ii) An arbitrator is an alternative forum for resolution of disputes arising between the parties. If so, he must have the power to decide all the disputes or differences arising between the parties. If the arbitrator has no power to award interest pendente lite, the party claiming it would have to approach the Court for that purpose, even though he may have obtained satisfaction in respect of other claims from the arbitrator. This would lead to multiplicity of proceedings. \n\n (iii) An arbitrator is the creature of an agreement. It is open to the parties to confer upon him such powers and prescribe such procedure for him to follow, as they think fit, so long as they are not opposed to law........ All the same, the agreement must be in conformity with law. The arbitrator must be in conformity with law. The arbitrator must also act and make his award in accordance with the general law of the land and the agreement.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-27", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "(iv) Over the years, the English and Indian Courts have acted on the assumption that where the agreement does not prohibit and a party to the reference makes a claim for interest, the arbitrator must have the power to award interest pendente lite...........Until Jena case, almost all the Courts in the country had upheld the power of the arbitrator to award interest pendente lite. Continuity and certainty is a highly desirable feature of law. \n\n (v) Interest pendente lite is not a matter of substantive law, like interest for the period anterior to reference (pre-reference period). For doing complete justice between the parties, such power has always been inferred.\" \n\nTheir Lordships concluded:\n \"Where the agreement between the parties does not prohibit grant of interest and where a party claims interest and that dispute (along with the claim for principal amount or independently) is referred to the arbitrator, he shall have the power to award interest pendente lite. This is for the reason that in such a case it must be presumed that interest was an implied term of the agreement between the parties.......,............This does not mean that in every case, the arbitrator should necessarily award intetest pendente lite. It is a matter within is discretion to be exercised in the light of all the facts and circumstances of the case, keeping the ends of justice in view.\" \n\n20. The legal position has thus been settled by the constitution Bench in G.C. Roy's case (7 supra). Following the path set by the Constitution Bench in G.C. Roy's case (7 supra), the award of interest pendente lite was upheld in a number of cases, vide Jugal Kishore v. Vijayendra, State of Orissa v. B.N. Agarwala, and by this Court in State of A.P. v. N. Siva Reddy, .", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-28", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "21. Even if the award was made prior to the commencement of the Interest Act, the power to award pendente lite interest cannot be doubted, as clarified by the Supreme Court in State of Orissa v. B.N. Agarwala, . No distinction was made in this regard between the reference in a pending suit or a reference made otherwise. \n\n22. The learned Arbitrator did not have the benefit of the exposition of law laid down in that decision as the award was passed much earlier to that decision. The learned Arbitrator, therefore, referred to certain other decisions of the Supreme Court including Jena's case (8 supra) which was overruled by the Constitution Bench on the point of pendente lite interest and also a decision of this Court which also stands impliedly overruled by Roy's case (7 supra).", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-29", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "23. As regards the interest for the pre-reference period, the law laid down in Jena's case (8 supra) has not been distrubed by the Constitution Bench in C.C. Roy's case (7 supra) as clarified by the Supreme Court in Jugal Kishore v. Vijayendra (9 supra) and State ofOrissa v. B.N. Agarwala (10 supra). In Jena's case (8 supra), the Supreme Court categorically held that the award of interest prior to the proceeding is not open to question, the reason being that the expression 'Court' is defined to mean an arbitrator as well. However, if the award was made prior to the coming into force of the Interest Act, interest for the pre-reference period cannot be awarded. On a conspectus of these cases. Dr. Anand, J. Speaking for the Supreme Court in Sudhir Brothers v. Delhi Development Authority, succinctly summarised the legal position as follows:\n \"Thus, the law is now well settled that the arbitrator has the power and jurisdiction to grant pre-reference interest in references made after the coming into force of the Interest Act, 1978. The Division Bench of the High Court was thus dearly in error in holding that the arbitrator had no jurisdiction to award interest from 1-4-1984 till 8-2-1985. (pre-reference period) in the post-Interest Act, 1978 era.\"", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-30", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "24. If the matter rests there, there would be no difficulty at all and we need not proceed further to consider whether interest-pendente lite or pre-reference-should be awarded. The decision of the Supreme Court in Durgaram Prasad v. Govt. of A.P. (6 supra) is another milestone implanted in the controversial arena pertaining to the arbitrator's power to award interest. Following this Judgment, a view was taken by two Division Benches of this Court (to which one of us, namely, Venkatarama Reddi, J. was a party) that the law laid down by the Constitution Bench in G.C.Roy's case (7 supra) cannot be applied in view of the specific contractual provision prohibiting payment of interest. The Division Bench understood Clause 69 as creating an embargo against the payment of interest and thus attracting one of the exceptions laid down in G.C. Roy's case (7 supra). In Prasad and Co. case (3 supra), the Division Bench after referring to G. C. Roy's case (7 supra) as well as Durgaram Prasad's case (8 supra), observed at page 555 as follows:\n \"It may be noticed that the Supreme Court in G.C.Roy's case (7 supra) made it clear that they were dealing with a situation where the agreement was silent as to the award of interest. But, in the face of the prohibition contained in Clause 69, which was referred to and relied on by the Supreme Court in Durgaram Prasad's case (6 supra), the ratio of the dicision in G.C.Roy's case (7 supra) cannot be applied and even pendente lite interest cannot be awarded, not to speak of interest for pre-reference period. This, in effect, is the ratio of the latest decision in Durgaram Prasad's case (6 supra).\"", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-31", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "The award and the decree were, therefore, modified by directing interest to be paid only from the date of the award. The same view was reiterated in P.L. Raju's case (5 supra) and it was observed that the binding effect of the decision in Durgaram Prasad's case (6 supra) cannot be whittled down merely because the point which should have been raised (but not raised)did not come up for consideration before the Supreme Court", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-32", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "25. We have closely and carefully examined the observations made and the dicta laid down by their Lordships in Durgaram Prasad's case (6 supra). The judgment of the High Court which was affirmed by the Supreme court is reported in 1975 ALT 370. The facts leading to the controversy are clearly discernible from the High Court's judgment. The 'factual scenario', to put it in the words of the Supreme Court, which led to the conclusion reached by their Lordships unfolds the true ratio of the decision and the context in which some of the observations were made could be clearly understood in the background of the facts presenting themselves for consideration in that case. On a careful analysis of the decision, we are unable to share the view of the Division Bench in the two cases mentioned above that Clause 69 was so interpreted by the Supreme Court as placing a clog on the arbitrator's power to grant interest for the pre-award period on any and every type of amount payable to the contractor under the award. This makes us necessary to refer to Clause 69, which reads as follows:-\n \"P.S. 69: Interest on money due to the, contractor: (a) No omission by the Executive Engineer or the sub-divisional officer to pay the amount due upon certificates shall vitiate or make void the contract, nor shall the contractor be entitled to interest upon any guarantee fund or payments in arrear, nor upon any balance which may, on the final settlement of his accounts, be found to be due to him.\"", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-33", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "Their Lordships of the Supreme Court analysed the above clause and pointed out mat the contractor shall not be entitled to interest upon; (a) any guarantee fund; (b) payments in arrears and (c) upon any balance which may on final settlement of his account found to be due to him. The Supreme Court particularly referred to item (c) above with which it was concerned in that case and observed:\n \"Clause 69 of the MDSS would indicate that mere should be final settlement of the account and upon its settlement, if it is found to be due and payable to the contractor, on such payment also the contractor is not entitled to the payment of interest as contracted under Clause 69.\" \n\nThe Supreme Court then posed the question in the following terms:\n \"When such is the position, whether the contractor is entitled to payment of interest on mere making a claim and reference made to the arbitrator and whether the arbitrator gets Jurisdiction to award interest on the amount due from the respective dates on which the payments were withheld by .the Engineer concerned.\"", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-34", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "The Supreme Court then commented that the construction placed on Clause 69 by the High Court in APS RTC v. P. Ramana Reddi, is not correct. \"However\", their Lordships observed, \"on the facts in that case their does not appear to be any dispute as to the amount due. Therefore, the learned Judge had proceeded that since the contract provides for withholding the payment for a suspended period of six months, if the amount is withheld beyond that period, the contractor would be entitled to the payment of interest.\" Then, the Supreme Court observed that the factual scenario in the case on hand was different. It was observed:\n \"The very dispute is whether the appellant is entitled to the payment of the amount pursuant to the contract The claim of the State appears to be that the appellant had not constructed the godown in accordance with the specifications and therefore they withheld the payment. Unless the dispute is resolved and the amount is found due, the contractor is not entitled to the payment of it. Thereon, interest in terms of Clause 69 of the MDSS is contracted out. When such be the position, then, mere reference does not the word 'not' is perhaps omitted in the report give jurisdiction to the arbitrator to award interest to the period prior to the reference.\" \n\nThe Supreme Court then referred to Jena's case (8 supra) and Roy's case(7 supra) and concluded:\n\"Accordingly, we are of the view that the contractor is not entitled to payment of interest in terms of Clause 69 for the period anterior to the reference for arbitration until the final settlement of the amount due to the contractor of his account is determined.\" \n\nIt was further held :\n \"Therefore, from the date of withholding till the date of award, the appellant is not entitled to the payment of interest. The arbitrator has no jurisdiction to arbitrate that dispute.\"", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-35", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "A perusal of the Judgment of the High Court from which the appeal arose in the Supreme Court makes it clear that the 'withheld amount' referred to by their Lordships of the Supreme Court represents the recoveries from the running bills. Clause 68 of the APDSS (forming part of the agreement) provides for certain percentage to be withheld and retained as a security for the due fulfilment of the contract. Clause 68 further provides that on the completion of the entire work and on the basis of the certificate issued by the Executive Engineer, the contractor will receive the final payment of all the monies payable to him except the E.M.D. and a sum equal to 21/2% of the total value of the work done. The amount so withheld from the final bill will be paid to the contractor together with the E.M.D. after a period of six months so that during this period, the defects shall have been made good by the contractor. It is this money that falls under item (c) of Clause 69 as indicated by the Supreme Court. We get it from the decision of the Supreme Court itself that there was a dispute as to whether the contractor constructed the godown as per the specifications and, therefore, the Government withheld the payment. Their Lordships took the view that unless that dispute is resolved, the final settlement of the account cannot take place. The Supreme Court therefore held that till the dispute is resolved by the arbitrator by passing the award, accrual of interest thereon is by the express terms of the contract, namely, by Clause 69, specifically excluded. Therefore, the arbitrator has no jurisdiction to award any interest on the withheld amount, that is to say the amount deducted from the running bills or final bill under Clause 68.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-36", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "26. The broad observation that unless the dispute is resolved and the amount is found due, the contractor is not entitled to the payment of it and the interest thereon is contractually excluded by Clause 69 should be understood in the light of the particular facts of that case and the context in which the dispute as to entitlement of interest arose. The decision in Durgaram Prasad's case (6 supra) cannot be treated as an authority for the proposition that the payment of interest is prohibited in respect of any and every type of amount claimed by the contractor when once the dispute arises as to the right to receive payment for a particular item. For instance, let us take a case where the arbitrator finds that certain payments were due for the actual work done but the Department paid for lesser quantities or, let us take a case where the arbitrator finds that the payment should have been made to the contractor at an extra rate on account of prolongation of the contract by reason of breach on the part of the Government. In such cases, it would be unjust to deny interest upto the date of the award. Principle No. 1 laid down in G. C.Roy's case (7 supra) squarely applies in such case. The prohibition contained in Clause 69 against the payment of interest does not apply to such fact situations. As pointed out by the Supreme Court in Board of Trustees, Port of Calcutta v. Engineers-De-Space-Age, a provision in the agreement excluding payment of interest shall be strictly construed and the prohibition cannot be extended to cover any and every type of situation. We are, therefore, of the view that Clause 69 is not in the nature of a blanket ban or an absolute ban on the entitlement of interest for the amounts due to be paid to the contractor. It depends on the nature and character of the amount claimed.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-37", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "27. No doubt, their lordships of the Supreme Court said in so many terms that the interpretation placed on Clause 69 by a learned single Judge of this Court in APS RTC v. Ramana Reddi is not correct but it does not mean that the Supreme Court viewed Clause 69 as placing a total prohibition against payment of interest in all cases in which disputes arise between the parties and such disputes are referred to arbitration. In saying that the interpretation placed by the learned single Judge in APRSTC v. Ramanareddi is wrong, their Lordships only disapproved of the view taken by this Court that Clause 69 operates as a bar against payment of interest for a limited period of six months from the date of completion of the work (which is known as observation period )and not beyond that. The view of the Supreme Court appears to be that the bar extends even beyond the period of six months provided, of course, the sum is of the nature referred to in the second part of Clause 69.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-38", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "28. We hope, we have sufficiently explained the true ratio and implications of the Judgment of the Supreme court in Durgaram Prasad's case (6 supra) at the cost of differing from the view expressed by one of us (PVR, J.) speaking for the Division Bench in the aforementioned cases, i.e., Prasad and Company case (3 supra) and P. L Raju's case (5 supra). Although we have differed with the view expressed in the aforementioned cases] we do not consider it necessary to refer this case to a Full Bench inasmuch as the binding decision of the Constitution Bench in G.C. Roy's case (7 supra) followed by various other subsequent decisions of the Supreme Court as well as the law laid down by three-Judge Bench in Jena's case (8 supra) as regards pre-reference interest was not followed by the Division Bench on a misunderstanding of the ratio of the decision in Durgaram Prasad's case (6 supra). The two Division Bench decisions referred to above must be taken to be decisions rendered PER INCURIAM as far as arbitrator's power to award interest is concerned. However, we are still of the view that Durgaram Prasad's case (6 supra) operates in a limited sphere and it must still be considered to be an authority for the proposition that the arbitrator has no jurisdiction to award interest in regard to matters enumerated in the second part of Clause 69 which were compendiously referred to as 2(a), (b) and (c) by the Supreme Court.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-39", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "29. We would also like to further clarify that the limited applicability of the decision in Durgaram Prasad's case (6 supra) to the situations referred to in second part of Clause 69 is further subject to another principle which has been succinctly laid down by their Lordships Ahmadi, C.J., and S.C. Sen, J., in a very recent case reported in Board of Trustees, Port of Calcutta v. Engineers De-Space-Age (13 supra). The Supreme Court was in the case concerned with a clause in the contract which prohibited the Commissioner from paying interest in the amounts due to the contractor. The Supreme Court while holding that the said clause did not fetter the power of the arbitrator to award interest pendente lite, which is within the discretion of the arbitrator, indicated another line of approach to the problem. The following crucial observations were made at paragraph 5:\n \" Looked at from another point, if there was a dispute as to whether under this term of the contract the arbitrator was prohibited from awarding interest pendente lite, that was a matter which fell within the jurisdiction of the arbitrator, as the arbitrator would have to interpret Sub-clause (g) of Clause 13 of the contract and decide whether that clause prohibits from awarding interest pendente lite. In that case it cannot be said that the arbitrator had wandered outside the contract to deny to him jurisdiction to decide the question regarding payment of interest pendente lite. Even if we were to accept the contention urged by the learned counsel for the appellant placing reliance on paragraphs 26 and 29 of the Associated Engineering Co. case (2 supra) we think that the arbitrator was well within his jurisdiction in awarding interest pendente lite. \"", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-40", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "This line of approach was indicated by the Division Bench at paragraph 34 in P.L. Raju's case (5 supra), but it was not pursued as the Bench felt that the decision in Durgaram Prasad's case (6 supra) was directly on the point and it did not permit any such approach to be adopted. But, the latest decision pavee the way for such approach. Even if the arbitrator construed a provision in the agreement which was susceptible of two interpretations and awarded interest on his own view of the true scope and effect of the relevant clause, it cannot be said that the arbitrator exceeds his jurisdiction. As pointed out by the Supreme Court in Jena's case supra, even if there was slightest possibility of the entitlement to interest on one or other of the legally permissible grounds, it may not be open to the Court to go behind the award and decide whether the award of interest was justifiable. \n\n30. In A.P.S.R.T.C. v. Ramanareddi, the learned single Judge of this Court (Kondanda Ramayya, J.) read Clauses 68 and 69 together and concluded as follows:-\n \"Thus, it is clear that this Clause 69 is intended to really prevent any claim for interest during the running period when final bill is not settled and also in respect of earnest money deposit or the sum equal to 2 1/2% of the total value of the work done till the expiry of the period of six months. This six months' period is called 'observation period', so mat the Department can see whether the work was done satisfactorily or not. Clause 69 cannot be construed as a total prohibition, but it operates for a limited period of six months from the date of completion of the work.\"", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-41", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "The learned Judge drew support from a decision of the Supreme Court in Hyderabad Municipal Corporation v. M. Krishnaswami, . The view projected by the learned Judge of this Court on the interpretation of Clause 69 is a possible view that could be taken though not the correct view. Yet another interpretation placed on a clause in the contract similar to Clause 69 is that the said clause applies only where the work was completed within the time Schedule fixed in the original contract, (vide Municipal Corporation of Hyderabad's case . \n\n31. In the present case, it must be remembered that by the time the award was passed, the pronouncement of the Supreme Court in Durgaram Prasad's case (6 supra) was not there. In such a situation, if the arbitrator had interpreted Clause 69 and took the view more or less similar to the view taken by this Court in APSRTC v. Ramanareddi or in Hyderabad Municipal Corporation case, the award would not be open to question either on the ground of error of law apparent on the face of it or on the ground of want of jurisdiction. This in effect isthe principle laid down in Calcutta Port Trust case (13 supra). In the said case the Supreme Court merely reaffirmed the well settled principle that the arbitrator had the jurisdiction to interpret the contract and if he commits an error in the process of interpretation, that does not vitiate the award. In other words, if the view taken by the arbitrator is conceivable or possible, the award ought to be upheld. This oft-repeated principle has been applied with particular reference to a clause in the agreement prohibiting the payment of interest under certain circumstances. That is why the Calcutta Port Trust case (13 supra) is of great relevance to the issue we are dealing with.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-42", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "32. In the light of the above discussion, let us examine - - (1) whether the award of the arbitrator negativing pendente lite interest is vitiated in law; and (2) whether the interest awarded for the pre-reference period is legally sustainable. Excepting the Earnest Money Deposit and Security Deposit which fall under 'guarantee fund, no other amount awarded by the arbitrator is of the nature contemplated by Clause 69 of the contract. With regard to Earnest Money and Security deposit, there is no dispute at all as to the entitlement of the contractor to receive the same. As pointed out by the arbitrator, it is not the case of the Department that the said deposits were forfeited on account of default or breach committed by the contractor or for any other good reason. On the other \"hand, the finding of the arbitrator is that the breach was committed by the Department. The only stand taken by the Superintending Engineer before the arbitrator was that the Income-tax clearance certificate was not produced. No provision has been brought to our notice under which the deposits can be withheld for that reason despite the completion of the work by the contractor to the satisfaction of the Department. Even if we go by the dicta laid down in Durgaram Prasad's case (6 supra), if there is no dispute with regard to the liability of the Government to pay the amounts of the nature specified in second part of Clause 69, the bar against payment of interest will not apply. That is how, the decision in APSRTC v. Ramana Reddi was distinguished by their Lordships of the Supreme Court. We are, therefore, of the view mat grant of interest on the amounts awarded by the arbitrator for the pre-reference period is valid and is not liable to be questioned on any relevant ground. However, whether the interest could be awarded from the date of deposit and whether the rate of interest granted by the arbitrator is liable to be", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-43", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "from the date of deposit and whether the rate of interest granted by the arbitrator is liable to be interfered with-we shall deal with later.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-44", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "33. As far aspendente /ifeinterest is concerned, the learned arbitrator rejected the same not on the ground that Clause 69 barred the claim for interest or on the ground that the facts and circumstances of the case did not warrant the award of interest during pendente lite. The arbitrator took into account the legal position obtaining prior to the decision of the Constitution Bench in G.C. Roy's case (7 supra) and disallowed such interest on the ground that he was not invested with the power to award interest. But, in the light of the development of law in this behalf starting with G. C. Roy's case (7 supra), the view taken by the arbitrator cannot be sustained. It must be held that he failed to exercise the power and jurisdiction vested in him on a misconception of the true legal position which came to light only after the decision in G. C. Roy's case (7 supra) subsequently rendered. It is not as if the arbitrator construed Clause 69 and reached the conclusion that he had no power to award interest. It is also not a case where the arbitrator thought it fit and proper not to exercise his discretion to award interest pendente lite on account of any special circumstances of the case. On the other hand, a perusal of the award would show that the arbitrator would have awarded interest but for the erroneous assumption that he had no power to award interest in view of the fluid legal position prevailing before G. C.Roy's case (7 supra). We, therefore, consider it a fit case to modify the award by allowing pendente lite interest instead of remitting the matter back to the arbitrator at this stage.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-45", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "34. The next aspect to be considered is whether the arbitrator is justified in awarding interest from the date of deposit of the E.M.D. and F.S.D. Even taking a most liberal view on the interpretation of Clause 69 in favour of the contractor, we are inclined to think that in view of the express bar contained in Clause 69, the contractor shall not be entitled to any interest atleast till the completion of the contract, i.e., during the currency of the contract. Therefore, the interest is payable only from 20-7-1985 but not from the date of deposit. The arbitrator referred to Section 4 (2) (a) of the Interest Act, 1978 but the arbitrator being bound by the contractual provision cannot exercise his discretion in such a way as to stultify the terms of the contract.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-46", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "35. The last question which remains to be considered is about the rate of interest. The learned counsel for the contractor is justified in saying mat normally it is not within the province of the Court to reduce or modify the rate of interest unless the law prohibits the grant of interest beyond a particular limit The reduction of interest from 18% to 9%, therefore, appears to be illegal. But we have to keep in the forefront of mind the peculiar situation in this case. -The arbitrator, as already noted, had declined to grant pendente lite interest on the ground that he had no jurisdiction to do so. He did not also provide for interest form the date of award for the same reason. If, on a correct view of the law, he had taken a decision to award interest pendente lite and post-award, in addition to the interest for the pre-reference period, it is not known whether he would have awarded interest at the high rate of 18%. In the normal course, we would have thought of remanding the matter to the arbitrator, but in view of the long lapse of time and the representation made by both the counsel, we are inclined to fix a reasonable rate of interest rather than leaving it to the arbitrator to do so at this distance of time. We consider it just and proper to allow interest at 12% per annum on the amounts awarded by the arbitrator both for the pre-reference period as well as for the pendente lite and post-award period, that is to say, from 20-7-1985 to 9-3-1989 and from the date of decree, at the rate fixed by the lower Court i.e., at 9% per annum.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "aa9bf72ff480-47", "Titles": "M. Gangareddy, Rep. By His G.P.A., ... vs The State Of A.P. Rep. By The ... on 14 June, 1996", "text": "36. In the result, the CM.As. and the C.R.P. are partly allowed. There shall be a decree against the State of A.P for payment of a sum of Rs. 3,60,196/- to the contractor who is the plaintiff in CS.No. 546/1989 with interest @ 12% per annum from20-7-1985 to 25-6-1990, i.e., the date of decree of the civil Court and with interest at 9% per annum from that date till the date of payment. In other words, the award shall stand modified to the extent indicated above and be made the rule of the Court subject to the above modification. \n\n37. We make no order as to costs in any of these matters.", "source": "https://indiankanoon.org/doc/17482/"}
+{"id": "085843722685-0", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "JUDGMENT B.J. Divan, C.J.  \n 1. In this reference, at the instance of the revenue, the following question has been referred by the Tribunal for our opinion : \n\"Whether, on the facts and in the circumstances of the case, the estate duty payable on the estate was deductible while computing the estate duty payable on the principal value of the estate passing on the death under the Estate Duty Act ?\"", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-1", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "2. The facts leading to this reference are as follows : The deceased, Sri Om-prakash Bajaj, expired on June 4, 1971. His estate duty assessment was completed by the Assistant Controller of Estate Duty on July 29, 1972, and he computed the net principal value of the estate at Rs. 3,68,518 as against Rs. 3,45,420 admitted by the accountable person. On this it was computed that an estate duty of Rs. 39,130 way payable. The accountable person filed an appeal before the Appellate Controller and he contended that the estate duty payable should have been allowed as a liability in computing the net principal value of the estate. The Appellate Controller in his order rejected the contention of the accountable person and held that the estate duty payable could not be regarded as a debt existing on the date of the deceased's death for which a deduction would be permissible under Section 44 of the Estate Duty Act. He, accordingly, dismissed the appeal. Against this order of the Appellate Controller, the accountable person took the matter in further appeal before the Appellate Tribunal. The Appellate Tribunal, following its earlier decision in Estate Duty Appeal No. 84 of 1968-69, decided by it on December 30, 1972, held that the estate duty payable should be deducted while computing the principal value of the estate. Thereafter, at the instance of the revenue, the question hereinabove set out has been referred to us for our opinion. The Tribunal in the earlier judgment had held that under Section 44 of the Act, allowance has to be made for debts and incumbrances. According to the Tribunal, the estate duty payable was part of the debts and incumbrances and, therefore, it should be allowed as a deduction. It held that the estate duty payable in respect of the estate is a clear deduction from the value of the estate", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-2", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "that the estate duty payable in respect of the estate is a clear deduction from the value of the estate passing. It was held in the earlier decision that the allowance made should be restricted to the final estate duty quantified and held payable after all the appellate decisions.", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-3", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "3. In order to appreciate the rival contentions, it is necessary to refer to some of the Sections of the Estate Duty Act, 1953. Under Section 5, Sub-section (1) of the Act, in the case of every person dying after the commencement of the Act, there shall, save as therein expressly provided, be levied and paid upon the principal value ascertained as provided therein of all property settled or not settled including agricultural land, situate in the territories which immediately before the 1st of November, 1956, were comprised in the States specified in the First Schedule to the Act, which passes on the death of such person, a duty called \"estate duty\" at the rates fixed in accordance with Section 35. Thus, estate duty is payable in respect of properties which pass on the death of the deceased provided it is after the commencement of the Act, and estate duty is payable in respect of all pro- perty settled or not settled including agricultural lands. Part VI of the Estate Duty Act consists of Sections 44 to 50B both inclusive and the entire Part deals with deductions. Section 44 says that in determining the value of an estate for the purpose of estate duty, allowance shall be made for funeral expenses (not exceeding rupees one thousand) and for debts and incumbrances, but allowance shall not be made for the different types of debts such as those mentioned in Clauses (a) to (d) of the section. At this stage, it is worthwhile to refer to Section 36, Sub-section (1), which provides that the principal value of any property shall be estimated to be the price which, in the opinion of the Controller, it would fetch if sold in the open market at the time of the deceased's death. Thus, the charge is on the property which passes on the death of the deceased, but the valuation of that property is of the time of the death of the deceased and in", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-4", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "deceased, but the valuation of that property is of the time of the death of the deceased and in determining the principal value of that estate, allowance for the funeral expenses including allowance for debts and incumbrances has to be made. But it must be borne in mind that under Sub-section (1) of Section 36 what has to be taken into consideration is the time of the death of the deceased and not the time of passing of the property ; the incidence of estate duty or charge of estate duty as pointed out in Section 5(1) is on the property which passes on the death of the deceased, but by virtue of Sub-section (1) of Section 36, the value must be estimated on the basis of the price it would fetch if sold in the open market at the time of the death of the deceased. Clauses (a), (b), (c) and (d) which refer to debts which are not to be allowed under Section 44 are as follows :", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-5", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "Clause (a) provides : \n\"For debts incurred by the deceased, or incumbrances created by a disposition made by the deceased, unless, subject to the provisions of Section 27, such debts or incumbrances were incurred or created bona fide for full consideration in money or money's worth wholly for the deceased's own use and benefit and take effect out of his interest.\"", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-6", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "4. Under clause (b), allowance is not to be made for any debt in respect whereof there is right to reimbursement from any other estate or person, unless such reimbursement cannot be obtained. Under Clause (c) no allowance is to be made more than once for the same debt or incumbrance charged upon different portions of the estate and under Clause (d) no allowance is to be made for debts incurred by or on behalf of the deceased by way of dower, to the extent to which such debts are in excess of rupees five thousand, and any debt or incumbrance for which an allowance is made shall be deducted from the value of the property liable thereto. We are not concerned with the Explanation of Section 44. It is true, as the learned counsel for the accountable person has urged, that Section 44, as it stands, does not contain any qualification in the main clause of Section 44 regarding debts and incumbrances. It is only by reference to the context and scheme of the sections of the Estate Duty Act that we can say as to what exactly the words \"debts\" and \"incumbrances\" occurring in the main part of Section 44 mean. At this stage, it is also necessary to refer to some other sections of Part VI, which, as stated above, relates to deductions. Section 48 provides that cost of realising or administering foreign property may be allowed for within certain limits. Under Section 49, allowance for duty paid in a non-reciprocating country is to be allowed as a deduction. Under Section 50, relief is granted from estate duty where court-fees have been paid for obtaining representation to the estate of the deceased. Now, these deductions under Sections 48, 49 and 50, it will be noticed, are in respect of payments made or costs incurred after the death of the deceased and not before the death of the deceased and to that extent the provisions of", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-7", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "the death of the deceased and not before the death of the deceased and to that extent the provisions of Sections 48 to 50 do not help us in any manner in interpreting the words \"debts\" and \"incumbrances\" occurring in the main part of Section 44. Sections 50A and 50B also provide for some deductions, but they are in respect of special cases where gift-tax had already been paid or tax had been paid on capital gains. Again, they refer to special situations other than a situation for a debt and incumbrance. Therefore, we will have to examine whether any other section of the Estate Duty Act is capable of throwing any light on the meaning of the words \"debts\" and \"incumbrances\". Under Section 53, Sub-section (1):", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-8", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "\"Where any property passes on the death of the deceased-- \n(a) every legal representative to whom such property so passes for any beneficial interest in possession or in whom any interest in the property so passing is at any time vested,", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-9", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "(b) every trustee, guardian, committee or other person in whom any interest in the property so passing or the management thereof is at any time vested, and", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-10", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "(c) every person in whom any interest in the property so passing is vested in possession by alienation or other derivative title, shall be accountable for the whole of the estate duty on the property passing on the death but shall not be liable for any duty in excess of the assets of the deceased which he actually received or which, but for his own neglect or default, he might have received.\"  \n5. We are not concerned with the proviso to Sub-section (1) nor with any of the other sub-sections of Section 53. Under sub-section (1) of Section 74, a first charge on property has been created in respect of estate duty, and it is in these terms ; \n\"74. (1) Subject to the provisions of Section 19, the estate duty payable in respect of property, movable or immovable, passing on the death of the deceased, shall be a first charge on the immovable property so passing (including agricultural land) in whomsoever it may vest on his death after the debts and incumbrances allowable under Part VI of this Act; and any private transfer or delivery of such property shall be void against any claim in respect of such estate duty.\"", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-11", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "6. The learned counsel for the accountable person has urged two contentions in the alternative and each contention is sought to be rested independently of the other. The first contention is that estate duty is a debt of the estate which passes on the death of the deceased and, hence, it is deductible under Section 44. That alternative argument is that even if it is not a debt, it is an incumbrance (a) by virtue of Section 74, Sub-section (1) of the Act, and (b) even if it is not an incumbrance under Section 74(1), independently of the provisions of Section 74, it is an incumbrance in the sense of being a burden on the estate which passes on the death of the deceased. We will deal with each of these contentions separately. But we must first appreciate the position as it prevails in the light of the provisions of Sections 5, 36 and 44. Under Section 5, the charge is on the property which passes on the death of the deceased. Under Section 36, Sub-section (1), the principal value of the property shall be estimated to be the price which, in the opinion of the Controller, it would fetch if sold in the open market at the time of the death of the deceased, and, lastly, it is while determining the value of an estate, that is, under Section 36, that debts and incumbrances have to be allowed. It was contended on behalf of the revenue before us by Mr. Rama Rao, learned advocate for the revenue, that debts and incumbrances must be debts incurred by the deceased during his lifetime and incumbrances created by him in his lifetime, otherwise, they are not debts and incumbrances contemplated by Section 44. For this purpose, he has contended that there is a subtle distinction between the time of death of the deceased and the time when", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-12", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "contended that there is a subtle distinction between the time of death of the deceased and the time when the estate passes on the death of the deceased, as pointed out by several authorities which we will notice shortly hereafter. The passing of the property may take place even a split-second after the death of the deceased, but the death of the deceased must precede even by a split-second the moment of passing of the property. Under Section 36(1) it is the moment of death which is material and not the moment when the property passes and, runs the argument of the revenue, under Section 44 it is while determining the value of the estate for the purpose of estate duty, that is, while estimating the price of the property which in the opinion of the Controller it would fetch if sold in the open market at the time of the deceased's death, which is distinct from the time of passing of the property, that debts and incumbrances have to be taken into account, and it is, therefore, contended that if debts and incumbrances have to be allowed as at the moment of death of the deceased then it must by necessary implication be debts and incumbrances incurred and created respectively by the deceased. So far as the rest of the deductions in Part VI are concerned, they throw no light on this aspect of the case and, therefore, we will have to consider the question independently without any help being derived from the rest of the provisions of Part VI or Section 44. Ever since the decision of the House of Lords in what is known as Graham's Trustee's case [1971] SLT 46 (HL), it is well settled that there is a distinction between the moment of death and the moment of passing of the property. The decision in Graham's Trustee's case [1971] SLT 46 (HL) has been followed by the High Courts of India, for example, in Bharatkumar Manilal Dalal", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-13", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "followed by the High Courts of India, for example, in Bharatkumar Manilal Dalal v. Controller of Estate Duty , at page 210, where the Gujarat High Court has pointed out the decision in Inland Revenue v. Graham's Trustees [1971] SLT 46 (HL). Lord Donovan, following the earlier decision in In re Magan [1922] 2 IR 208n, observed that \"the death in contemplation of law must precede the passing\" and In re Smith [1951] 1 Ch 360 ; 3 EDC 188 (Ch D) that \"it is only when the person in question has expired, after the last breath has left the body, that the property passes and the liability to estate duty arises\". In M.CT. Muthiah v. Controller of Estate Duty the Madras High Court followed the distinction between the moment of death of the deceased and the moment of passing of the property, again the decision being based on the decision of the House of Lords in Graham's Trustee's case [1971] SLT 46 (HL). We respectfully agree with the decisions of the Gujarat High Court and the Madras High Court when they follow the principles laid down in the Graham's Trustee's case [1971] SLT 46 (HL) by the House of Lords and when they point out the subtle distinction between the moment of man's death which must precede even by a split-second the moment when that person's property passes.", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-14", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "7. However, this distinction between the moment of death and moment of passing of the property for the practical purpose of administering the Estate Duty Act is hardly of any value particularly when considering the question of \"debts\" and \"incumbrances\". In our opinion, it is only in the light of the interpretation of the provisions of Sections 36(1), 53 and 74 which indicate the intention of the legislature that the question before us can be solved. Under Section 36(1), it is the principal value of the property which in the estimation of the Controller is the price it would fetch if sold in the open market at the time of deceased's death which is the material figure. The words \"fetch in open market\" have been construed by the Supreme Court in Pandit Lakshmi Kant Jha v. Commissioner of Wealth-tax . The Supreme Court while interpreting Section 7(1) of the Wealth-tax Act pointed out that the provisions of Section 7(1) of the Wealth-tax Act and Section 36(1) of the Estate Duty Act are in pari materia and it has been pointed out that the value of an asset, other than cash, for the purpose of Section 7(1) of the Wealth-tax Act, should be the same as its value for the purpose of Section 36(1) of the Estate Duty Act. It is also pointed out that Section 36, Sub-section (1) of the Estate Duty Act was based upon Section 7(5) of the U.K. Finance Act, 1894, and Section 60, Sub-section (2) of the U. K. Finance Act, 1910, while Section 48 of the Estate Duty Act was based upon Section 7(3) of the U.K. Finance Act, 1894. The following passage from Green's Death Duties, page 393, sixth edition, has been cited with approval by Khanna J., speaking", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-15", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "page 393, sixth edition, has been cited with approval by Khanna J., speaking for the Supreme Court, at pages 104, 105 :", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-16", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "\"The price which property 'fetches' is the gross price paid by the purchaser, without deduction for the vendor's costs and expenses. This is so, even where the property is subject to a trust for sale. But if the property to be valued is merely a share in an unadministered estate, or in the proceeds of sale of trust property which must be realised for the purpose of distribution, the expenses of the executors or trustees under the old title should be taken into account.\"  \n8. The following passage from Dymond's Death Duties, fourteenth edition, page 569, has also been cited by Khanna J. (page 105) : \n\"The price which the property fetches is the gross sale price, without deduction for the costs of sale, except that, if the property is part of an unadministered estate or a share of property subject to a trust already in operation which involves conversion, or if the property consists of certified chattels of national, etc., interest, allowance for costs may be made.\" \n 9. The Supreme Court in Pandit Lakshmi Kant Jha's case approved of the following passage from the speech of Lord Reid in Duke of Buccleuch v. Inland Revenue Commissioners [1967] AC 506 at page 525 (HL): \n\" I an confirmed in my opinion by the fact that the Act permits no deduction from the price fetched of the expenses involved in the sale (except in the case of property abroad under Sub-section (3)).\"  \n10. The Supreme Court also approved the following passage from the speech of Lord Morris in the same case of Duke of Buccleuch [1967] 1AC 506, 536 (HL) :", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-17", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "\"The value of a property is to be estimated to be the  price  which  it would 'fetch' if sold in the open market at the time of  the  death   of  the deceased.   This points to the price which a purchaser would pay.    The net amount that a vendor would receive would be less.  There would be costs of and incidental  to  a  sale.    It  would seem to be harsh or even unjust that allowances cannot  be  made  in  respect  of   them.    But the words of the statute must be followed.\"", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-18", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "11. It was pointed out that similar observations were made by  Lord  Hodson and Lord Guest.    The Supreme Court accepted these observations as laying down the correct law.", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-19", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "12. It is, therefore, clear that when Section 36(1) of  the  Estate Duty Act uses the words \"the price which in the opinion of the Controller it would fetch if sold in the open market at the time of the deceased's death\"   what has to be taken into consideration is the gross amount without any deduction which the purchaser would pay in respect of the property, and it is contended on behalf of the revenue by Mr. Rama Rao that  the  purchaser would pay the open market value for the property and deduction for estate duty would be the deduction out of the total value thus estimated, namely, what the purchaser would pay in respect of the property.    Mr. Anjaneyulu has in this connection relied upon the decision of the  Gujarat  High  Court in Commissioner of Wealth-tax v. Smt. Shirinbanoo . The question before the Gujarat High Court was regarding the value of a property which was subject to a mortgage and the question was what was the net value of the particular property which was  under consideration.    B. K. Mehta J., delivering the judgment of the Gujarat High  Court, observed at page 742 : \n  \n\"The ambit of Section 2(m) of the Wealth-tax Act had come up for consideration in Spencer & Co. Ltd.  v.   Commissioner of Wealth-tax  , where the Madras High Court was concerned with the question of deduction, under Section 2(m) of the Wealth-tax Act,  of Rs.   31,26,000, being the amount the assessee, Spencer & Company, agreed to pay by way of consideration for purchase of sundry assets of another company.....    This \ndecision of the  Madras High  Court has been confirmed by the Supreme Court in Commissioner of Wealth-tax v. Spencer & Co. Ltd. [1973] 88 ITR 429.", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-20", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "Mr. Kaji, the learned advocate on behalf oi the revenue, therefore, attempted to persuade us that the exception in Section 2(m) of the Wealth-tax Act indicates that debts even though secured would go to increase the aggregate value of the debts and not reduce the aggregate value of the assets. We are of the opinion that Mr. Kaji has while urging this contention lost sight of the pertinent point that what is to be evaluated is not the assets simpliciter but the asset which is encumbered. In our opinion where an asset which has been brought to the charge of wealth-tax is an encumbered asset, for purposes of determining the value of such asset, the amount of debt which is charged on that property has to be excluded for purposes of evaluating the said asset. It is no doubt true that net wealth, according to Section 2(m) of the Act, is the amount by which the aggregate value of assets of a person exceeds the aggregate value of his debts. However, according to Section 7, subject to any rules made in that behalf, the value of any asset, other than cash, would, for purposes of the Act, be the price which in the opinion of the Wealth-tax Officer it would fetch if sold in the open market on the valuation date. It is, therefore, clear to us that while aggregating the value of all assets it is the valuation of a particular asset which is to be estimated and in estimating such valuation what the taxing officers have to bear in mind is that price which such asset would fetch if sold in the open market on the valuation date. It is no doubt true that for purposes of determining the net wealth which is the basis of the liability of wealth-tax, the amount by which the aggregate value of an asset of a person exceeds the aggregate value of the debt is to be looked into. But none the less, while estimating the valuation of an encumbered asset, the price which such asset would fetch, if sold", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-21", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "estimating the valuation of an encumbered asset, the price which such asset would fetch, if sold in the open market, is first to be ascertained and the only method of evaluating an encumbered asset is to consider the valuation of the asset less the valuation of encumbrance thereon.\"", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-22", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "13. It is the last sentence on which considerable reliance has been placed by Mr. Anjaneyulu on behalf of the accountable person. \n14. In our opinion, the decision in Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth-tax , delivered in the context of wealth-tax for the purpose of considering whether income-tax payable wsa a debt owed within the meaning of the relevant Section of the Wealth-tax Act and the decision of the Supreme Court in H.H. Setu Parvati Bayi v. Commissioner of Wealth-tax , also delivered in the context of the Wealth-tax Act which says that the wealth-tax payable by the assessee is also a debt within the meaning of the same Section of the Wealth-tax Act, are hardly of any assistance in considering the problem before us, because what has been observed in the context of the Wealth-tax Act and what has been laid down for the purpose of that Act is hardly of any assistance for the purpose of deciding as to whether the estate duty payable in respect of an estate which passes on the death of the deceased is part of the debts and incumbrances within the meaning and plain object of Section 44 of the Estate Duty Act. It is true that in Kesoram Industries' case , which was followed in Setu Parvati Bayi's case , the Supreme Court has made observations regarding what is a debt and how the courts should approach the question of what amounts to a debt, generally speaking, in the language of the law. In Kesoram Industries' case , Subba Rao J. (as he then was), delivering the judgment of the majority of the learned judges of the Supreme Court who decided the case, summarised the position thus (page 780):", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-23", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "\"We have briefly noticed the judgments cited at the Bar. There is no conflict on the definition of the word 'debt'. All the decisions agree that the meaning of the expression 'debt' may take colour from the provisions of the concerned Act: it may have different shades of meaning. But the following definition is unanimously accepted : \n'A debt is a sum of money which is now payable or will become payable in future by reason of a present obligation : debitum in praesenti solvendum in futuro.' The said decisions also accept the legal position that a liability depending upon a contingency is not a debt in praesenti or in futuro till the contingency happened. But if there is a debt the fact that the amount is to be ascertained does not make it any the less a debt if the liability is certain and what remains is only the quantification of the amount. In short, a debt owed within the meaning of Section 2(m) of the Wealth-tax Act can be defined as a liability to pay in praesenti or in futuro an ascertainable sum of money.\"  \n15. Again, at page 784 of the report, the position has been summarised in the following words by Subba Rao J. (as he then was), delivering the majority judgment:", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-24", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "\".....A debt is a present obligation to pay an ascertainable sum of money, whether the amount is payable in praesenti or in futuro : debitum in praesenti, solvendum in futuro. But a sum payable upon a contingency does not become a debt until the said contingency has happened. A liability to pay income-tax is a present liability though it becomes payable after it is ^quantified in accordance with ascertainable data. There is a perfected debt at any rate on the last day of the accounting year and not a contingent liability. The rate is always easily ascertainable. If the Finance Act is passed, it is the rate fixed by that Act; if the Finance Act has not yet been passed, it is the rate proposed in the Finance Bill pending before Parliament or the rate in force in the preceding year, whichever is more favourable to the assessee. All the ingredients of a ' debt' are present. It is a present liability of an ascertainable amount.....\"", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-25", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "16. However, what has been pointed out at page 780 of the report as to what amounts to \"debt\" in the context of the statute, has to be borne in rnind, viz., that the meaning of the expression \"debt\" may take colour from the provisions of the concerned Act. The provisions of Sections 53 and 74 are the relevant provisions of the Estate Duty Act, in the light of which we have to determine as to what amounts are \"debts\" and what amounts are \"encumbrances\" within the meaning of Section 74. Mr. Anjaneyulu for the accountable person has rightly contended that the principal section which is before us is Section 44. It is under that section that deductions or allowances have to be made; but, we cannot overlook the fact that the meaning of the words \"debts\" and \"encumbrances\" --particularly in the context of the controversy before us--has to be judged in the light of the other provisions of the Act.", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-26", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "17. Section 53 of the Estate Duty Act, as pointed out above, provides for the liability of the accountable person. The accountable person may be either a legal representative, or a trustee, guardian, committee or other person, in whom any interest in the property so passing, or the management thereof at any time, is vested ; or every person in whom any interest in the property so passing is vested, or who is in possession by alienation or other derivative title. Such legal representative or other person is accountable for the whole of the estate duty on the property passing on the death, but such accountable person is liable only to the extent of the assets of the deceased which he actually received, or which but for his neglect or default, he might have received. The provisions of Section 53 were considered by a Division Bench of the Gujarat High Court (consisting of Bhag-wati C.J. and myself) in Commissioner of Income-tax v. Mrs. Indumati Ratan-lal [1968] 70 ITR 353 (Guj). The principal question before the Division Bench of the Gujarat High Court in that case was whether interest paid on a loan borrowed for the purpose of payment of estate duty was deductible for the purposes of income-tax. The amount had been borrowed by the assessee on her own behalf and on behalf of her minor son, for payment of the estate duty on the death of her husband. While considering the liabilities of the legal representatives, etc., the provisions of Section 53 of the Estate Duty Act came up for consideration before the Division Bench. After considering the provisions of Section 53, Bhagwati C.J., delivering the judgment of the Division Bench, observed, in so far as the provisions of Section 53 are concerned (pages 357, 358):", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-27", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "\"The liability of every accountable person is thus a personal liability, though it is limited in extent to the assets of the deceased actually or constructively received by him ; qualitatively it is a personal liability and not a liability payable only out of the assets of the deceased : the assets of the deceased actually or constructively received merely constitute the limit of the liability.\"  \n18. Thus, so far as the liability for payment of estate duty is concerned, it is a personal liability of the accountable person and we respectfully agree with the interpretation placed by the Gujarat High Court on Section 53 of the Estate Duty Act. In the light of that decision--particularly in view of the fact that the liability for payment of estate duty is a personal liability of the accountable person--it cannot be said that it is a \"debt\" contemplated by Section 44. Estate duty being a liability not of the estate itself, which passes to the accountable person or which the accountable person comes into possession of, but a personal liability of the accountable person himself, it is difficult to accept the contention urged on behalf of the accountable person before us that estate duty is \"debt\" contemplated by Section 44 of the Act.", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-28", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "19. Under Section 74(1) of the Estate Duty Act, a charge of estate duty on property, passing on the death of the deceased, is created. We have already set out Section 74(1) hereinabove. But it has to be noticed that it is a first charge on the immovable property, passing on the death of the deceased, in whomsoever the property may vest on his death. The property so passing may be movable or immovable; it may include agricultural land as well. But the words about which some controversy has been raised before us in the context of Section 44 are \"after the debts and encumbrances allowable under Part VI of this Act\" occurring in Section 74(1) of the Act. It has been contended on behalf of the revenue that the words \"after the debts and encumbrances allowable\" go to qualify the words \"shall be a first charge on the immovable property so passing\", occurring earlier ; whereas, it has been contended by Mr, Anjaneyulu, on behalf of the accountable person, that these words, which are under immediate consideration before us, qualify the words \"immovable property so passing\". It is obvious that, if estate duty has to be the first charge on the immovable property passing on the death of the deceased--if provision is not made for the debts and encumbrances which the deceased had either incurred or created on his own property--the person in whose favour such debts' or encumbrances are created, would be at a disadvantage and, therefore, the debts and encumbrances which are allowable under Part VI of the Act, rank in priority over the payment of estate duty. It is for this purpose that Section 74(1) which creates a first charge in respect of the estate duty, so far as the immovable property is concerned, also provides that the first charge must rank in priority \"after the debts and", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-29", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "property is concerned, also provides that the first charge must rank in priority \"after the debts and encumbrances\" allowable under Part VI of the Act. If it ranks in priority \"after the debts and encumbrances\" allowable under Section 44, then, it is obvious that it cannot form part of those debts and allowances, after which it ranks in priority. It is not possible for us to accept the contention advanced on behalf of the accountable person that the words \"after the debts and encumbrances allowable under Part VI of this Act\" qualify the words \"immovable property so passing\" occurring in the earlier part of Section 74(1). There is no reason to place such an interpretation on those qualifying words, so far as immovable property passing on the death of the deceased is concerned. Section 74(1) of the Act clearly provides that, for the purpose of payment of estate duty, first charge on the immovable property so passing, shall rank in priority \"after the debts and encumbrances\" allowable under Part VI of the Act. It is, therefore, obvious that estate duty can never form part of the debts and encumbrances allowable under Part VI of the Act, after which alone it ranks in priority. Section 44, which deals with debts and encumbrances to be allowed while determining the principal value of an estate which passes on the death of a deceased, is one of the Sections in Part VI of the Act, and, therefore, so far as Section 44 is concerned, the debts and encumbrances mentioned therein can never include estate duty payable on the estate which passes on the death of the deceased.", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-30", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "20. We may point out that this interpretation which has appealed to us had also appealed to the Division Bench of the Mysore High Court in V. Pramila v. Controller of Estate Duty , where a Division Bench, consisting of Govinda Bhat C.J. and Srinivasa Iyengar J., has held that estate duty payable on the death of a deceased person is not liable to be deducted under Section 44 of the Act and, in arriving at this conclusion, the Division Bench has relied upon the interpretation of Section 74(1) of the Act. The reasoning which appealed to the learned judges of the Mysore High Court is practically on the same lines as the reasoning which has appealed to us, though there is a slight difference between our respective approaches. What is more important is that Govinda Bhat C.J., delivering the judgment of the Mysore High Court, has pointed out at page 225 : \n\"The Act (Estate Duty Act) is modelled after its counterpart in the United Kingdom and not infrequently do we refer to the English law and practice on most of the issues arising under the Act. Section 5(1) of the Act corresponds to Section 1 of the U. K. Finance Act, 1894 (57 & 58 Vict. c. 30). Section 44 of the Act corresponds to Section 7(1) of the U. K. Finance Act, 1894. The language of Section 44 of the Act and of Section 7(1) of the U. K. Finance Act, 1894, are identical. Although estate duty has been in force in the United Kingdom since 1894, it was never contended under the said Act that estate duty is liable tto be deducted in determining the principal value of the estate of a deceased person.\"", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-31", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "21. A perusal of the standard text books, like Green's Death Duties, seventh edition, and Dymond's Death Duties, fourteenth edition, confirms this conclusion of the learned judges of the Division Bench of the Mysore High Court. It is, therefore, clear that, at least so far as the practice in England is concerned, in determining the principal value of an estate, which passes on the death of a deceased person, estate duty is never deducted as one of the debts and encumbrances on the estate which so passes. If English practice or procedure is to be of any guide, the question referred to us must be decided against the accountable person. However, we are not deciding the said question merely on the basis of practice and procedure in England, but on an interpretation of the provisions of the Estate Duty Act before us. \n22. We do not want to decide the question before us on a mere metaphysical approach--as it is called--to the problem as to what is meant by \"moment of death of the deceased\" and the moment at which the estate passes on the death of a deceased person. There may be a little difference between the two; but, for all practical purposes, it is very difficult to arrive at a conclusion with almost a metaphysical distinction, as drawn in Graham's Trustee's case [1971] SLT 46 (HL). In our opinion, therefore, in the light of the provisions of the Estate Duty Act, it must be held that, at least in the light of Section 74(1) of the Act, the debts and encumbrances which are spoken of in Section 44 are not the debts and encumbrances referred to in Section 74(1).", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-32", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "23. The only point which now requires to be considered is whether, apart from the provisions of Section 74(1) of the Act, estate duty can be said to be an encumbrance in the sense of a burden on the estate which passes on the death of a deceased person. It is true that, under Section 53, the liability of an accountable person is to the extent of the estate received by the accountable person, either actually or constructively; but that, as pointed out by Bhagwati CJ. in Indumati Ratanlal's case [1968] 70 ITR 353 (Guj), limits the personal liability of the accountable person under Section 53(1). A charge by way of further security to the revenue, is created on such immovable property which passes on the death of the deceased. It is undoubtedly true that estate duty is a burden on the estate which passes on the death of a deceased person. In that sense, on a broader interpretation of the word \"encumbrance \", it can be said to be an encumbrance subject to which the \"estate passes on the death of the deceased. But, in this case, we are not concerned with encumbrances in general; we are concerned only with the expressions \"debts\" and \"encumbrances \"occurring in Section 44 of the Act.", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-33", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "24. The next question relates to the determination of the principal value which a property would fetch if sold in the open market at the time of the deceased's death, as contemplated by Section 36(1) of the Estate Duty Act. It is, no doubt, true that estate duty would be a burden on the estate, but it is not the type of encumbrance which is contemplated by a mortgage created under the provisions of the Transfer of Property Act, or a charge created under Section 100 of the Transfer of Property Act. It is a burden of the type which has to be discharged by the accountable person, because the principal liability for payment of estate duty is that of the accountable person. In the notional sale which is contemplated by Section 36(1) of the Act, for the purposes of ascertaining the market value of the property as at the moment of the passing of the property on the death of a deceased person, what is to be taken into consideration is, what the property would fetch if sold in the open market, as explained by the Supreme Court in Pandit Lakshmikant Jha's case . If the payment of estate duty is a liability cast on the accountable person and if it is not an encum- brance within the meaning of Section 44 of the Act but a first charge on the immovable property passing on the death of a deceased person as contemplated by Section 74(1), then, the market value of the property, i.e., in the sense what a willing purchaser would offer to pay for the property which passes oa the death of a deceased person, would be the total value which it would fetch, viz., including estate duty, and not excluding estate duty, as would be the case if there had been a mortgage or any other charge contemplated under the Transfer of Property Act, or Section 74(1) of the Estate Duty Act. In Shirinbanoo's case , the court was concerned with", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-34", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "of the Estate Duty Act. In Shirinbanoo's case , the court was concerned with a regular mortgage to which the property was subject; but, if an encumbrance in the sense of the broader meaning of that term is to be considered, a willing purchaser of the property who is not liable to pay estate duty himself, would not pay a price less estate duty payable on the estate. Under these circumstances, even the alternative meaning of the word \"encumbrance\", for which Mr. Anjaneyulu for the accountable person has contended, cannot help the accountable person in this case.", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "085843722685-35", "Titles": "Controller Of Estate Duty vs Estate Of Late Omprakash Bajaj on 20 July, 1976", "text": "25. Our conclusion, therefore, is that estate duty is neither a debt nor an encumbrance and is not an encumbrance either within the meaning of Section 74(1) of the Act, or within the broader meaning of the word \"encumbrance\" referred to above. In view of this conclusion, it must follow that estate duty payable on the estate was not deductible while computing the estate duty payable on the principal value of the estate passing on the death under the Estate Duty Act. The question referred to us is, therefore, answered in the negative, i.e., in favour of the revenue and against the accountable person. The accountable person will pay costs of this reference to the Controller of Estate Duty. Advocate's fees Rs. 250.", "source": "https://indiankanoon.org/doc/718944/"}
+{"id": "66d95abf72c5-0", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "ORDER S. Dasaratharama Reddy, J.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-1", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "1. The Superintending Engineer, Thermal-IH, Andhra Pradesh State Electricity Board (briefly referred to as 'the Board') issued tender notice PCT V3/91 dated 8-12-1991 inviting quotations in two parts, namely, Prequalification and Technical Bids. (Part-I) and Price Bids (Part-II) for the supply, erection and commissioning of 220 K.V. Switchyard extension for Vijayawada Thermal Power Station (briefly referred to as 'V.T.P.S.')Stage-IIIat Ibrahimpatnam, Krishna District. As per Clause 1 (a) of Annexure-1 to the Tender Specifications, one of the prequalification requirements is that \"the bidder musthave, with total responsibility, successfully designed,engineered, supplied, erected, tested and commissioned two EHV Sub-stations of 220KV or higher voltage comprising of atleast six bays during the past six years which must be in satisfactory operation for a period of two years. \"Clause l(c) requires \"that the bidder must have financial standing to execute works of this nature and cost and produce evidence in support.\" Clause-3 however says \"Notwithstandingany thing stated above, the Board reserves the right to assess the bidder's capability and capacity to execute the contract, should the circumstances warrant such assessment in the overall interest of the Board\". The appellant, the 4th respondent and three others, who are not parties to this appeal, submitted their tenders in two parts. The Board opened the Part-I bids of all tenders on 11th March, 1992 and sent them to Desein Private Ltd., New Delhi, the 3rd respondent, which was appointed by the Board as consultant for this Project under agreement dated 21-12-1990, for their evaluation report. The Chief Engineer of the Board recommended opening of Part-II bids of the appellant and two others who are not parties to this appeal.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-2", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "recommended opening of Part-II bids of the appellant and two others who are not parties to this appeal. Though this was initially approved by all the members of the Board except the Chairman, later, on recirculation, all the members agreed with the views of the Chairman to open Part-II bids of all the tenderers. Accordingly, Part-II bids of all the tenderers were opened on 30-4-1992 and evaluated by the Board as follows:-", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-3", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Sl.     Name of the tenderer         Price quoted     Price evaluated\nNo.                                                   by the Board\n                                     Rs.     Rs.\n1.      Controls & SchematicsLtd.    2,18,43,650/-    2,76,54,014/-\n        (4th respondent).               \n2.      Crompton Greaves Ltd.        2,84,29,100/-    2,87,23,822/-\n3.      Alluminium Industries Ltd.   2,14,86,145/-    3,13,23,986/-\n4.      Larsen & Tubro Ltd.          3,10,97,737/-    3,32,55,905/-\n5.      Bhanu Construction Company   3,12,96,835/-    3,34,03,387/-\n        Ltd. (Appellant).", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-4", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "2. As per the above evaluation, the price quoted by the appellant as well as the price evaluated by the Board on that quotation is the highest, while the price quoted by the 4th respondent is the second lowest and the evaluated price thereon is the lowest of all. The Board held negotiations with the 4th respondent and awarded the contract to it for Rs. 2,37,43,650/- by letter of intent dated 18-9-1992. The appellant has filed the writ petition for declaring the impugned proceedings as illegal and for a direction to the Board to award contract to it, contending that--\n(1) (a). The tender of the 4th respondent is invalid as it was filed by a consortium of three companies;\n(b) Even assuming that the experience of three consortium partners can be taken into consideration, they do not possess the prequalification requirements prescribed by the Tender Notice and hence the tender of the 4th respondent ought to have been rejected. \n\n2. The designs and drawings of the 4th respondent are not in accordance with tine tender prequalifications and as such its tender should have been rejected. \n\n3. The decision of the Board to open Part-II bids without waiting for the report of the consultant on the prequalification requirements or all the tenderers is contrary to the Tender Notice. \n\n4. The Board is bound to,accept the recommendations made by its consultant. \n\n5. In any event, the exercise of the power by the Board differing from the opinion of the Consultant was mala fide with an intention to help the 4th respondent. \n\n6. The method of evaluation of the tenders adopted by the Board is not correct and the evaluated price with reference to the price quoted by the appellant will be the lowest, if correct evaluation is made.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-5", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "7. The Board should have taken the previous experience of the appellant into consideration and awarded the contract to it, even if the rate quoted by it is higher, and lastly,\n \n\n8. The Board has acted mala fide in not only agreeing to pay the 4th respondent higher price than what has been quoted by it but also to confer some extra benefits on it.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-6", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "3. The Board has filed counter-affidavit and additional counter-affidavit. The stand of the Board is that the recommendation of its consultant is not binding on it; that the evaluation of prequalification bid is not covered by the agreement with the consultant which is only concerned with designing, engineering, construction and commissioning of the project; that the Board has not given the contract to the appellant because of the higher price quoted by it and not because of its unsound financial incapacity that after the report of the Consulant was received on 11-5-1992, the matter was referred to the Financial Adviser of the Board on 7-7-1992 for arthimatical verification and after receipt of report from him on 16-7-1992, referred the matter to the Stores Purchase Committee which met on 18-8-1992 and wanted the 4th respondent to be called for negotiations with Negotiating Committee consisting of Member (Project). Member (Accounts) and Member (Secretary) and accepting its recommendations, the Board accepted the tender of 4th respondent on 18-9-1992; that the appelIant has not raised any objection against the opening of the price bids till 1-9-1992; and that in case of Rayalaseema Thermal Project also persons not qualified in the prequalification bids including the appellant were considered and awarded contracts and that there is nothing unusual in the case of VTPS. The Board has also stated that there is nothing irregular or arbitrary in the evaluation of the price bids which were not always referred to the consultant. The Board has also denied the allegation of mala fides and stated that Sri V.V. Reddy, the then Chairman died on 3-5-1992. It is also the case of the Board that even if the offer of tine 4th respondent is rejected, the appellant would not have got the contract as the evaluated bid offered by", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-7", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "respondent is rejected, the appellant would not have got the contract as the evaluated bid offered by the Crompton Greaves Ltd., will be the lowest. The learned counsel has also produced before us the file relating to this contract. From the file it is seen that the Board has accepted Hie offer Of the 4th respondent on 28-4-1993 and awarded the work to it for Rs. 2,37,43,650. The learned counsel for the Board has stated that the work has commenced at the end of April, 1993 and that the 4th respondent is satisfactorily executing the work.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-8", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "4. The 4th respondent has filed counter-affidavit almost similar to that of the Board. It has also averred that if previous experience is made the only eligibility, it results in monopoly; that there is no prohibition of submitting the tender through consortium; that the Consultant did not disqualify the 4th respondent on this aspect; that the opinion of the Consultant on the prequalification is not complete and that the appellant who has never raised any objection before the Board till the time of consideration of price bids, cannot now raise any objection after having lost the contract. \n\n5. The learned single Judge rejected all the contentions of the appellant and dismissed the writ petition. \n\n6. Sri B.S.A. Swamy, the learned counsel for the appellant has raised the following contentions:-\nI. Prequalification bid:-\n(a) The evaluation of the prequalification bids was not done by the Board properly and that the tender of the 4th respondent ought to have been rejected since it is in effect by consortium of companies which is not permitted by the tender notice. \n\n(b) Even assuming that the consortium is eligible to quote, it does not fulfil the prequalification requirement as per the opinion of the consultant which is binding on the Board. \n\n(c) The Board ought not to have opened the price bids without receipt of the report of the consultant on prequalification bids and the price bids were opened in order to help the 4th respondent. \n\n(d) Non-obstante clause cannot nullify the main operative provision and hence cannot be invoked at all. \n\n(e) Even otherwise, the clause can be invoked only after opening of price bids and not before. \n\n(f) Even if the Board can invoke non-obstante Clause before opening price bids, it has not recorded any valid reasons to differ from the report of the Consultant.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-9", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "II: Price bids:-\n(g) The price bids ought to have been referred to the Consultant as per the agreement. \n\n(h) The method of evaluation of the price bids adopted by the Board is incorrect and arbitrary and if the bids are properly evaluated, the price quoted by the appellant will be the lowest,\n \n\n(i) The appellant was being awarded contracts by the Board eversince 1984 and the Board cannot deny the present contract on the ground that it has no financial capability to execute the work. \n\n(j) The action of the Board is vitiated by mala fides as the Board accepted the offer of the 4th respondent though the designs and drawings submitted by it are not in accordance with the Tender specifications and the Board has not only agreed to pay the 4th respondent higher price than what has been quoted by it, but also agreed to confer some extra benefit on it.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-10", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Preliminary objection:\n7. Before considering the various contentions urged regarding prequalification bids, a preliminary objection raised by the respondent may be takenup. The respondents say that the appellant, having not raised any objection at the time of evalution of price bids before the Board considering the tender of the 4th respondent cannot raise the same in this Court having lost the award of the contract. They rely on Manual Thomas v. State, in which the following observations of the Kerala High Court are apposite:", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-11", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "\"It is however, necessary to advert to one or two contentions pressed for our aceptance by the appellants. It was contended that the 4th respondent did not satisfy the qualifications prescribed for pretender registration and it was therefore wrong to have allowed the 4th respondent to submit tenders. This contention is based on the fact that the prequalification tender notification stated that the contractors/firms who have carried out building construction worth more than Rs. 150/- lakhs per single multistoreyedR.C.C. building alone need apply and that the 4th respondent did not construct any single build ing worth more than Rs. 150/- lakhs, though they have constructed buildings worth more than that amount and even though they would have undertaken to construct buildings of greater value. This contention is not acceptable for more than one reason. When the 4 th respondent participated as a tenderer and the tenders were opened in the presence of the parties, the appeIlants knew that the 4th respondent was all owed to be a tenderer on that ground. The appellants, then thought, that as the4th respondent's tender amount was higher, the appellants had a better chance than the 4th respondent and therefore it did not matter whether the 4th respondent was allowed to submit its tender or not. When once their tenders were rejected, they raised this objection then. The appellants were therefore sitting on the fence and cannot be allowed to raise this contention now\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-12", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "8. This is opposed by the learned counsel for the appellant who contends that there can be no estoppel against the statute or against waiver of fundamental rights and relies on Air India v. Nergesh Meerza , A.C. Jose v. Sivan Pillai, and Olga Tellis v. Bombay Municipal Corporation, . \n\n9. In all these cases, it was held that there can be no estoppel against the statute and that no one can be estopped from contending that the act complained of is a violation of any fundamental right. There is no d ispute about this proposition. Here, no statutory provision or regulation is challenged as unconstitutional and the complaint of the appellant is that the Board has not followed the terms of the tender specification. We fail to see how these cases help the appellant. The learned counsel has also feebly attempted to distinguish the decision of Kerala High Court1, on the ground that there both were qualified tenderers. We have no hesitation in holding that the decision of Kerala High Court is apposite and in Kerala case one of he tenderers was unqualified. Accordingly, we uphold the plea of the respondents that the appellant is not entitled to raise this contention at this stage. \n\n10. Now let u.s examine the various contentions raised by the learned counsel for the appellant. \n\nContention 1 (a)", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-13", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Contention 1 (a)\n \n\n11. According to Sri B.S.A. Swamy, the learned counsel for the appellant, the prequalification requirement as per Tender Notice dt. 8-12-1991 is that the bidder should have commissioned at least two E.H.V. Sub-stations of 220 K.V. by himself and that the expression \"by himself\" means one person either natural person or legal entity and that it does not include consortium. It is significant to note that the words \"by himself\" are not found in Clause 1 of Annexure-1 to Bid Qualification Requirements. The learned counsel relies on Clause 4 of General Conditions of Contracts which reads as follows:\n \"The contractor shall not, without the consent in writing of the Engineer or purchaser which shall not be unreasonably withheld, assign or sub-let his contract.\"", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-14", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "12. According to the learned counsel, this implies that a consortium cannot tender and as the offer of the 4th respondent is on behalf of the consortium consisting of itself, M/s. Information Managementlndia Pvt. Ltd., Hyderabad and M/s. Sapphire Construction Company, Vijayawada, the 4th respondent is not qualified to participate in the tenders. On the other hand, the Board and the 4th respondent contend that the 4th respondent is a manufacturer of L.T. Switch gear penels, while M/s. Information Management India Pvt. Ltd., is Engineering and Design Consultant and M/s. Sapphire Construction Company deals in installation, testing and commissioning work and all the three of them are independently doing other contracts for the Board and even assuming that the contractor cannot sub-let the contract, it does not follow that consortium cannot participate in the bid in the absence of specific prohibition to that effect. It is also their contention that Clause 4 relied on by the appellant does not prohibit sub-letting of the contract and on the other hand implies that the contract can be sub-let, but with the permission of the Board. It is also their contention that the consultant did not disqualify the 4th respondent on this aspect. The respondents also contend that if the Clause is interpreted to mean that consortium cannot bid it amounts to encoruraging monopoly of existing contractors and such an interpretation has to be avoided. They also rely on Clause 11.08.00 (vi) of sub-section (A) of Section VIII of Technical Specifications which says mat the tenderer while submitting tender must indicate the name of the Sub-contractor to whom he intend s to sub-contract part of the work and the nature and extent of such work. They relay on the decision of the Supreme Court in Rasbihari v. State of Orissa, . In that case, the Governmetn of Orissa, instead of inviting tenders for sale", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-15", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": ". In that case, the Governmetn of Orissa, instead of inviting tenders for sale of Kendu leaves, invited offers from individuals who carried out contracts in the previous year without default to the satisfaction of the Government and excluded new entrants. The Supreme Court held that the Scheme was violative of Articles 14 and 19(1)(g) of the Constitution. The Supreme Court held as follows:", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-16", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "\"The classification based on the circumstance that certain exising con tractors had carried out their obligations in the previous year regularly and to the satisfaction of the Government is not based in any real and substantial distinction bearing a just and reasonable relation to the object sought to be achieved i.e., effective execution of the monopoly in the public interest. Exclusion of all persons interested in the trade, who were not in the previous year licensees is ex facie arbitrary: it had no direct relation to the object of preventing exploitation of plockers and growers of kendu leaves, nor had it any just or reasonable relation to th securing of the full benefit from the trade, to the State.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-17", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Validity of the law by which the State assumed the monopoly to trade in a given commodity has to be judged by the test whether the entire benefit arising therefrom is to ensure to the State, and the monopoly is not used as a cloak for conferring privte benefit upon a limited class of persons. The scheme adopted by the Government first of offering to enter into contracts with certain named licensees, and later inviting tenders from licensees who had in the previous year carried out their contracts satisfactorily is liable to be adjudged void on the ground that it unreasonably excludes traders in Kendu leaves from earring on their business. The scheme of selling Kendu leaves to selected puchasers or of accepting tenders only from a specified class of purchasers was not \"integrally and essentially\" connected with the creation of the monopoly and was not on the view taken by this Court in Akadasi Pudhan's case, protected by Article 19 (6) (ii); it had therefore to satisfy the requirement of reasonableness under the first part of Article 19 (6). No attempt was made to support the scheme on the ground that it imposed reasonable restrictions on the fundamental rights of the traders to carry on business in kendu leaves. The High Court also did not consider whether the restrictions imposed upon persons excluded from the benefit of trading satisfied the test of reasonableness under the first part of Article 19(6). The High Court examined the problem from the angle whether the action of the State Government was vitiated on account of any oblique motive, and whether it was such as a prudent person carrying on business may adopt.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-18", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "No explanation has been attempted on behalf of the Stateas to why an offer made by a well known manufacturer of bid is interested in the trade to purchase the entire crop of kendu leaves for the year 1968 for rupees three crores was turned down. If the interests of the State alone were to be taken into consideration the State stood to gain more than rupees one crore by accepting that offer. We are not suggesting'that merely becuase that offer was made, the Government was bound to accept it. The Government had to consider, as prudent businessman whether, having regard to the circumstances, it should accept the offer, especially in the light of the financial position of the offerer, the security which he ws willing to give and the effect which the acceptance of the offer may have on the other traders and the general public interest.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-19", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "The learned Judges of the High Court have observed that in their view the exercise of the discretion was not shown to be arbitrary, nor was the action shown to be lacking in bona fides. But that conclusion is open to criticism that the Government is not shown to have considered the prevailing prices of kendu leaves about the time when offers were made, the estimated crop of kendu leaves, the conditions in the market and the likelihood of offerers at higher prices carrying out their obligations, and whether it was in the interests of the State of invite tenders in the open market from all persons whether they had or or had not taken contracts in the previous year. If the Government was anxious to ensure due performance by those who submitted tenders for purchase of kendu leaves, it was open to the Government to devise adequate safeguards in that behalf. In our judgment, the plea that the action of the Government was bona fide cannot be an effective answer to a claim made by a citizen that his fundamental rights were infrigned by the action of the Government, nor can the claim of the petitioners be defeated on the plea that the Governmet in adopting the impugned scheme committed an error of judgment. That plea would have assisted the Government if the action was in law valid and the objection was that the Government erred in the exercise of its discretion. It is unnecessary in the circumstances to consider whether the Government acted in the interest of their party men and to increase party funds in devising the schemes for sale of Kendu leaves in 196 .\" \n\n13. The learned counsel for the 4th respondent contends that in view of the above judgment the terms of the contractors have to be interpreted as not to exclude bid by consortium and not ristricting it to the contractors who have experience in the type of work. We agree with the respondents and reject the contention of the appellant.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-20", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Contention No. 1 (b):-\n14. The next contention is that even assuming that consortium is eligible to quote, the 4th respondent does not fulfi the prequalification requirement of adequate experience. The learned counsel for the appellant Sri B.S. A. Swamy. relies on the report of tine consultant though it is marked confidential. We are surprised how the appellant could procure copy of this confidential parer and more so file it in this Court. According to the consultant, the 4th respondent does not meet the specified qualifying criteria regarding experience in the execution of two 220 K.V. or higher voltage switchyards traction sub-stations with at least 6 Bays; their proposal are also deficient in respect of several technical details; and the structural desings enclosed by the 4th respondent are found to be totally inadequate and unacceptable. According to him as per the agreement dated 21-12-1990 entered into between the Board and the consultant, the opinion of the consultant is binding on the Board. On the other hand, Sri C.V. Nagarjuna Reddy, the learned counsel for the Board and Sri K. Subrahmanya Reddy, the learned senior counsel for the 4th respondent say that the consultant was asked to give opinion only on technical a spects and not on prequalification requirement and that its opinion on prequalification bid is not binding on the Board.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-21", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "15. Dehors the report of the consultant, the Chief Engineer of the Board was of the opinion that the consortium and another tenderer Alluminium Industries Ltd., had no adequate required experience for this project and hence, are not eligible to tender. But the Board took a decision to open the price bids of all the tenderers including the appellant, who was also disqualified from the financial aspect, evidently invoking non-obstante clause about which we shall deal in succeeding paragraphs. Further, the report of the consultant was received by the Board on 11-5-1992 while price bids were opened on 30-4-1992. Thus, the question whether the report of the consultant is binding on the Board and whether the Board ought to have rejected the tender of the 4th respondent following the report of the consultant are both academic. However, as these are relevant for deciding the next contention or the appellant, we have to consider them. The relevant clauses of the agreement may now be noticed. \n\n\"Cl.1.1(d): DESEIN should study the Existing State I & II units; and design to specify schemes for the proposed State III units making provision for interconnections wherever possible such as Auxiliary Steam system, DM Water Makeup system, Compressed Service Air system, Instrumentation Air system, Oil Handling system, Electrical systems, Communication systems, Trippers and Coal Bunkers Feeding systems etc. Cl. 2.1:DESEIN shall assume full responsibility for engineering adequacy, quality, co-ordination and timely completion of design construction, start up commissioning and all other activities, the execution of the Project as developing on them under the provisions of this contract. Desein shall be fully responsible for the complete designing and engineering of all the Civil, Electrical, Mechanical and Instrumention works of the Project.\"", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-22", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Cl. 2.3 (h): Tender drawings and specifications shall be prepared with the utmost expedition and promptly furnished to the Board. \n\nCl. 2.4: Study and evaluate the offers received technically and economically and make purchase recommendations to the Board within a month from the date of receipt with complete technical and financial analysis. Where a composite tender for Civil, Electrical and Mechanical works is invited, DESEIN shall furnish their analysis for the complete tender including Civil Works, the analysis for all the tenders shall be submitted in 25 copies. In case where confirmations/clarifications on technical details are necessary from the bidders, these shall be obtained directly only once by DESEIN with copies to the Board. While furnishing the analysis DESEIN shall indicate loading for all the technical and commercial deficiencies apart from giving the final list or confirmations/ clarifications still to be obtained from the bidders before placing the orders. Were the lowest offer is not recommended for acceptance, DESEIN shall furnish a list of deviations from the specifications giving the reasons why these are not acceptable. \n\nCl. 13: Variation in Scope of Work:\nThe Board reserves the right to delete any item or items of work from the scope of the consultants and execute the same by itself or through any other agency separately appointed by the Board. This provision shall apply at any time during currency of the contract. The total contract price in such case shall stand suitably adjusted by proportionately reducing the cost of the deleted item from the contract price.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-23", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "16. Thus, from the above it can be seen that the Consultant is responsible for engineering adequacy, quality coordination and timely completion of designing construction and commissioning and other activities in the execution of the project. In particular, the consultant has to study and review the details of the engineering specific features and scope of plant and equipment to be supplied by the Board or other suppliers. It shall also carry out the basic duties and various systems of the station and prepare basic engineering and consortium designing for the same. It shall also prepare technical specifications and draft enquiry document for the supply and erection of all power station branches and equipment such as boilers without auxiliaries, lifts etc. It shall also draft as many specifications as are necessary for the completion of the project. Thus, the agreement does not provide for giving any opinion by the consultant on the prequalification requirement of the tenderers and even assuming mat the consultant could give its opinion. There is no clause in the agreement to the effect that such an opinion is binding on the Board. \n\nContention No. 1 (c):-\n17. The next contention is that in order to help the 4th respondent, the Board opened the Part-II price bids without waiting for the consultant's report regarding Part-I prequalification technical bids of all the tenderers and that it is contrary to the tender notice.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-24", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "18. The learned counsel for the appellant contended that the Board anticitipating that the consultant is likely to disqualify the 4th respondent, opened the price bids of all the tenderers in order to help the 4th resondent in whom Sri V.V. Reddy, the then chairmam of the Board was interested. The contention or the Board is that the consultant is not required to give report on the prequalification requirement of the tenderers and hence there is no obligation to wait for the report of the consultant and that it is competent to open the price bids in over all interest of the Board invoking the non-obstante clause 3 of Annexure-I to bid Qualification requirements, which reads as follows:\n \"Notwithstanding anything stated above the Board reserves the right to assess the tenderer's capability to execute the contract should the circumstances warrant such assessment in the overall interest of the Board\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-25", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "19. The further case of the Board is that it is usual practice of the Board and that in the case of Rayalaseema Thermal Power Project, Muddnuru, Cuddapah District also similar decision was taken by the Board and contract was awarded to the appellant. It is also the further contention of the Board that the Board does not consist of the Chairman alone, but of other members also who were responsible officers of high rank and there is nothing suggest that they were pressurised by the then Chairman. It is further contended that though the apellant, 4th respondent and the Alluminum Industries Ltd., were not qualified for the prequalification requirement, the 5 members of the Board evidently invoking the non-obstante clause, were of the opinion that price bids of the appellant may be opened, and when the Chariman suggested opening of all the bids, the members concurred with his suggestion. In the counter, the allegation of mala fides is denied. It is also stated by the learned counsel for the Board that Sri V. V. Reddy, who was the then Chairman and who was to lay down his office on 4-5-92, died on 3-5-1992 long before filing of the Writ Petition. \n\n20. The submission of the appellant proceeds on the assumption that it is qualified to submit the tender. Sri Swamy, the learnd counsel for the appellant contends that financial capacity is not one of the prequalification requirements and that the appellant cannot be disqualified on that count. Clause 1 (c) of Annexure-1, which prescribes Bid qualification requirements, reads as follows:\n \"The bidder must have financial standing to execute works of this nature and cost and produces evidence in support\". \n\n21. Thus, Sri Swamy is not right in contending that financial capacity is not one of the prequalification requirements and that the appellant is not disqualified on that count.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-26", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "22. We have already held while dealing with the preceding contention that the consultant is not required to give its opinion on the prequalification eligibility of the tenderers, that its duty is only to advise the Board on technical aspects and that such a report is not binding on the Board. Hence, it follows that the Board need not wait for the receipt of the report of the consultant before opening the price bids. In fact the Chief Engineer of the Board recommended opening of the price bids excluding the bid of the 4th respondent and the bid of Alluminium Industries Ltd., even before receipt of the report of the consultant. Thus, the grievance of the appellant seems to be more against opening of the bid of the 4th respondent and not so much against the timing of the opening of the bids as such. \n\n23. Another contention is that when the Board came to the conclusion that the appellant is not eligible a s per prequalification requirement, it ought to have returned the appellant's bid istead of opening the bid along with other bids. We fail to appreciate how the appellant is prejudiced by this. If its bid were to be lowest, the appellant would have been granted the contract and thus having taken the chance, the appellant without then raising this plea, cannot now complain having lost the constract.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-27", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "24. We have perused the file produced by the learned counsel for the Board. The Chief Engineer in his note to the Board has not expressed his view about the financial status of the bidders, except by merely saying that the financial statements of the bidders are enclosed. He recommended that the appellant may be considered as qualified on the ground of having experience and that the 4th respondent does not have the required experience and hence it is disqualified. He accordingly recommended opening of price bids of all the tenderers except 4th respondent and Alluminiurn Industries Ltd. This note was approved by the five members of the Board who however did not record any reasons. But the Chairman Sri V.V. Reddy endorsed on 21-4-1992 as follows:\n \"When we can consider the tender of M/s. Bhanu, I do not see why we cannot open other tenders. Better all tenders are opened.\"", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-28", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Then the file was recirculated to the members who agreed with the views of the Chairman. The allegation that the price bids of all the tenderers were opened in order to help the 4th respondent is without substance since the offers of all the tenderers were in sealed covers and not known to anybody until they were opened. Though no reasons are recorded by the Board, as to why price bids of all the tenderers were opened, the reason suggested in the counter was that the Board invoked the non-obstante Clause 3. Sri Swamy contends that giving reasons in the counter is not enough in the absence of those reasons finding place in the file and relies on the decision of the Supreme Court in Mohinder Singh v. Chief Election Commr., This is without substance since there is no reason recorded by other members as to why the price bids of the appellant whose financial capacity was not discussed, should be opened, that too, even before receipt of the report of the consultant. We must not forget that these are administrative matters and one cannot expect the authorities to record detailed reasons in support of the decisions which are generally preceded by deliberations. Of course, it would have been better had the Board indicated some reasons in the note file. But merely because they have not noted, we cannot hold that the Board is not competent to indicate the reason in the counter-affidavit. So the decision of the Supreme Court is distinguishable. Further, the learned counsel for the appellant has proceeded on the premises that the Board in its counter has justified its action on the ground that it will result in saving of Rs. 75 lakhs to the Board. There is no such reason disclosed either in the counter-affidavit or additional counter-affidavit. Thus, we hold that the Board has not acted illegally in invoking the non-obstante clause and in considering bids of all the tenderers, and even before receipt of the report of the consultant by invoking non-obstante clause.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-29", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Contention No. 1 (d):-\n25. It is next contended by Sri Swamy, the learned counsel for the appellant that the non-obstante clause cannot be interpreted to have effect of scuttling the clear mandatory term in the tender notice and relies on the decision of the Supreme Court in Dominion of India v. Sreen Bhai in which it is held that, \". ...it is however necessary to observe that althogh ordinarily there should be a close approximation between the non-obstante clause and the operative part of the section the non-obstante clause need not necessarily and always be co-extensive with the operative part, so as to have the effect of cutting down the clear terms of an enactment. If the words of the enactment are clear and are capable of only one interpretation on a plain and grammatical construction of the words thereof a non-obstante clause cannot cut down the construction and restrict the scope of its operation. In such cases the non-obstante clause has to be read as clarifying the whole position and must be understood to have been incorporated in the enactment by the Legislature by way of abundant caution and not by way of limiting the ambit and scope of the operative part of the enactment....\" \n\n26. In that case, Clause 3 of Requisitioned Land (Continuance of Powers) Ordinance (19 of 1946) fell for consideration. The Clause reads as follows:. \n\nCl. 3: 'Continuance of requisitions':-\nNotwithstanding the expiration of the Defence of India Act, 1939 (35 of 1939), and the rules made thereunder, all requisitioned lands shall continue to be subject to requisition until the expiry of this Ordinance and the apporpriate Government may use or deal with any requisitioned land in such manner as may appear to it to be expedient.\"", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-30", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "27. We fail to seen how this decision is of any assistance to the appellant. The other decisions relied on by the learned counsel for the apellant in Chief Inspector of Mines v. K.C. Thapars , L.I.C. of India v. S.V. Oak , Flnnmnar Nath v. Tek Chand, and Chief Justice of A.P. v. L.V.A. Dikshitulu do not throw any light on the point in discussion. \n\nContention No. 1(b):-\n28. The next contention of the learned counsel for the appellant is that the non-obstante clause can be invoked only after the price bids are opened and not carrier. We are afrid we cannot agree. The non-obstante clause does not make any such distinction or restriction. \n\n29. The learned counsel for the appellant relies on the decision of the Supreme Court in Ramana v. International Airport Authority of India, . In that case, the tender notice by the International Airport Authority, which is a statutory body stated that:\n \"the sealed tenders in the prescribed form are hereby invited from Registered II Class Hoteliers having at least 5 year's experience for putting up and running a II Class Restaurant and two Snack Bars at this Airport for a period of 3 years\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-31", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "30. But the Airport authority has accepted the tender of the person who does not satisfy the requirement of the tender notice. It was held by the Supreme Court that the requirement mentioned in the tender notice is a condition of eligibility which is an objective test and not a subjective one and accordingly it was observed that it is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it profasses its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. It has further held that, \"It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweat will and like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norm which is not arbitrary, irrational or irrelevant. The power of discretion of the Government in the matter of grant of largess including award of jobs, contracts quotas, licences etc.,must be confined and structured by rational, relevant and nondiscriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory.\" \n\nLater again the Court observed:\n \"The Corporation acting as an instrumentality or agency of Government, obviously be subject to the same limitation in the filed of constitutional and administrative law as Government itself though in the eye of law there is distinct and legal entities.\"", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-32", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "31. It can be seen that the minimum requirement prescribed in that tender notice was absolute and there was no power of relaxation available to the authorities unlike in the present case. Thus, this case is distinguishable. \n\n32. The learned counsel for the appellant relied on two other decisions of the Supreme Court in M. Lachia Setty & Sons Ltd. v. Coffee Board Bangalore, and Harminder Singh v. Union of India, for the propositation that offer of a person not eligible to participate in the tender, cannot be considered by the Government. In M. Lachia Setty & Sons Ltd., case, as per condition No. 6 of conditions of sale, the Coffee Board does not bind itself to accept the highest or any bid and the Board need not assign any reasons for doing so and its decision shall be final and conclusive. The highest bid was not accepted by the Coffee Board for some reason and the Coffee Board thereupon acepted the lawest bid of and her tenderer. The Supreme Court on construction of that condition held that the Coffee Board is empowered to accept the lower bid in preference to any higher bid. We fail to see how this helps the appellant.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-33", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "33. The next case relied on by the learned counsel for the appellant is Haraminder Singh's case, . In that case, tenders were invited for supply of mik. Though the tender of Harminder Singh, the appellant therein was the lowest, the Government accepted the higher tender of Government Milk Scheme. The award of contract of milk scheme was set aside by the Supreme Court on the ground that the tenders were to be adjudged on their own intrinsic merits in accoidure with the terms and conditions of that tender notice and that as the tender notice do not indicate any preference to any Government Undertaking, the authority concerned acted arbitrarily in allowing 10% price to Government Milk Scheme. This decision is not relevant since as in International Air Port' Authority's case (12 supra), in this case also there is no power of relaxation available to the authorities unlike the present case.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-34", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "34. On the other hand, the learned Counsel for the respondents relied on M/s. G.J. Fernandes v. State of Karnatakai, which deals with the permissibility of relaxation of prequalification requirements. It is held in the said decision, \"Thirdly, the conditions and stipulations in a tender notice like this have two types of consequences. The first is that the party issuing the tender has the right to punctiliously and rigidly enforce them. Thus, if party does not strictly comply with the requirements of paras III, V or VI of the Notification Inviting Tenders (NIT), it is open to the Karnataka Power Corporation Ltd., (KPC) to decline to consider the party for the contract and if a party conies to Court saying that the KPC should be stopped from doing so, the Court will decline relief. The second consequence, indicated by this Court in earlier decisions, is not that the KPC cannot deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination. It comes in for application where the non-conformity with, or relaxation from, the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general. For example, in this very case, the KPC made some changes in the time frame originally prescribed. These changes affected all intending applicants alike and were not objectionable. In the same way, changes or relaxations in other directions would be unobjectionable unless the benefit of those changes or relaxations were extended to some but denied to others. The fact that a document was belatedly entertained from one of the applicants will cause substantial prejudice to another party who wanted, like wise, an extension of time for filing a similar certificate or document but was declined the benefit. It may perhaps be said to cause prejudice also to a party which can show that if had refrained from applying for", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-35", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "be said to cause prejudice also to a party which can show that if had refrained from applying for the tender documents only because it thought it would not be able to produce the document by the time stipulated but would have applied had it known that the rule was likely to be relaxed. But neither of these situations is present here. Sri Vaidhyanathan says that in this case one of the applicants was excluded at the preliminary stage. But it is not known on what grounds that application was rejected nor has that party come to Court with any such grievance. The question, then, is whether the course adopted by the KPC has caused any real prejudice to the appellant and other parties who had already supplied all the documents in time and sought no extension at all? It is true that the relaxation of time schedule in the case of one party does affect even such a person in the sense that he would otherwise have had one competitor less. But, we are inclined to agree with the respondent's contention that while the rule in Ramana's case (supra) will be readily applied by Courts to a case where a person complains that a departure from the qualifications has kept him out of the race, injustice is less apparent where the attempt of the applicant before Court is only to gain immunity from competition. Assuming for purposes of argument that there has been a slight deviation from the terms of the NIT, it has not deprived the appellant of its right to be considered for the contract; on the other hand, its tender has received due and full consideration. If, save for the delay in filing one of the relevant documents, MCC is also found to be qualified to tender for the contract, no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the MCC and in the KPC going in for a choice of the better on the merits\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-36", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "35. Thus, we hold that non-obstante clause can be invoked even before opening of price bids and that as both the appellant and the 4th respondent did not satisfy the prequalification requirements, the Board invoked the non- obstante Clause and opened the price bids of all the tenderers and there is nothing illegal about it. \n\nContention No. 1 (f):-\n36. The next contention of the learned Counsel for the appellant is that even if the Board can invoke non-obstante clause before opening price bids, it has not recorded any valid reasons to differ from the report of the consultant. This is ex facie without substance since the price bids were opened on 30-4-1992 while the consultant's report was received on 11-5-1992. Thus, we reject this contention II. Price Bids:-\n37. Contention No. II (g):- The learned counsel for the appellant next contended that the price bids ought to have been referred to the Consultant for evaluation. This is opposed by the Counsel for the Board who contends that evaluation of price bids is not covered by the agreement with the Consultant. To appreciate this contention, it is necessary to refer to Clauses 2.1,2.4 and 5.1 of the agreement. Though clauses 2.1 and 2.4 are extracted elsewhere in this judgment, they are extracted again here for the sake of convenience:\n2.1: DESE1N shall assume full responsibility for Engineering adequacy, quality, co-ordination and timely completion of design construction strartup commissioning and all other activities, the execution of the Project as devolving on them under the provisions of this contract. DESEIN shall be fully responsible for the complete designing and engineering of all the Civil, Electrical, Mechanical and Instrumentation works of the Project.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-37", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Cl.2.4: Study and evahtate the offers received technically and economically and make purchase recommandations to the Board within a month from the date of receipt with complete technical and financial analysis. Where a composite tender for Civil, Electrical and Mechanical works is invited, DESEIN shall furnish their analysis for the complete tender including Civil works, the analysis for all the tenders shall be submitted in 25 copies. In case where confirmations/clarifications on technical details are necessary from the bidders, these shall be obtained directly only once by DESEIN with copies to the Board. While furnishing the analysis, DESEIN shall indicate loading for all the technical and commercial deficiencies part from giving the final list of confirmations/ clarifications still to be obtained from the bidders before placing the orders. Where the lowest offer is not recommended for acceptance, DESEIN shall furnish a list of deviations from the specifications giving the reasons why these are not acceptable.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-38", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Cl. 5.1: For all services indicated in Article No. 2 herein above including for the services of Resident erection and commissioning supervisory Engineers as detailed in Clauses 2.31 and 2.32, Board shall pay DESEIN a lumpsum firm fee of Rs. 105.25 lakhs (Rupees One Hundred and Five lakhs twenty five thousand only), as per the following breakup details:\n38. No doubt, these clauses indicate that the Consultant can also evaluate the bids. But according to the Board it is not always obligatory on its part to refer price bids for evaluation to the Consultant whose main function is to advise on the technical side. The learned counsel for the Board has filed list of 34 contracts relating to Rayalaseema Thermal Power Project and V.T.P.S. State-Ill in respect of which price bids were not earlier sent to the Consultant to show that there is nothing unusual about the procedure adopted in the instant case. We agree with this plea of the respondents. \n\nContention No. II(h):-\n39. The next contention is that the method of evaluation of the price bids adopted by the Board is incorrect and arbitrary and if the bids are properly evaluated, the price quoted by the appellant would be the lowest. \n\n40. As already seen, the prices quoted by the appellant and the 4th respondent and the avaluated prices by the Board are as follows:\n                                   Quoted price.    Evaluated price.\n                                 Rs.              Rs.\n1. M/s. Bhanu Construction\nCo. Ltd. (Appellant).            3,12,96,835      3,36,03,387\n2. M/s. Controls & Schematics\nPvt. Ltd. (4th respondent)       2,18,43,650      2,76,54,014", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-39", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "41. Sri B.S.A. Swamy, the learned Counsel has taken us through various technical details like loading, off-loading etc. and vehemently argued that the evaluation of the price bids is illegal. For example, he says that the quantities offered by the 4th respondent in civil works are mostly inadequate and hence the bid of the 4th respondent in civil works has to be 'loaded'. Similarly, in Structural Steel, Bus Bar System and Equipment, the contention of the appellant is that as a result of wrong evaluation done by the Board, the evaluated price of the bid offered by the 4th respondent became the lowest and the price of the appellant became the highest. \n\n42. On the other hand, the learned Counsel for the Board and the 4th respondent contended that the bids were properly evaluated and all tenderers were treated equally arid the bid of the 4th respondent being the lowest, the 4th respondent was awarded the work after negotiations when certain conditions were imposed in accordance with the opinion of the Consultant. It is also their contention that small deviations are magnified by the appellant due to the business rivalry with the 4th respondent.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-40", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "43. From the perusal of the file produced, it is seen that the valuation process was completed on 7-7-1992 and the file was sent to the Financial Adviser for arithmetical check-up and the Financial Adviser returned it to the Board on 16-7-1992. The Store Purchase Committee consisting of entire Board and two Officers of the Government met on 18-8-1992 and after considering the Tender Analysis documents came to the conclusion that the evaluated bid of the 4th respondent is the lowest but wanted the 4th respondent to be called for negotiations with the negotiating Committee consisting of Member (Projects), Member (Accounts) and Member (Secretary). The offers were kept valid till 27-8-1992 and hence the tenderers were not asked to revalidate the tenders and finally after negotiations, tender of the 4th respondent was accepted with the addition of Rs. 19 lakhs towards the cost of extra Structural Steel required to make up for 215 tons and 47.52 tons of Reinforced Steel required to be used in accordance with the opinion of the consultant.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-41", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "44. The appellant is not consistent about the evaluatd price of his bid as well as bid of the 4th respondent as can be seen from the following statement:\n                     Page-8 of          Page-37of           Page-8 of addl.\n                   Sec. II (at        Sec. IX material    papers\n                   the time of        (during argu-       (filed during\n                   filing W.P.)       ments of W.P.)      hearing of W.A.)\n                     Rs.              Rs.     Rs.\nAppellant (M/s.                 \nBhanu Construc-                 \ntion Co.)          3,03,44,000*       3,15,48,900**       3,10,43,259\"*\n4th Respondent     3,47,94,700****    3,42,90/048         3,42,90,048\n(*).  Rs. 3,03,85,000.    (**). Rs. 3,15,50,935\n(***) Rs. 3,09,45,935.    (****) Rs. 3,46,94,700....Due to Arithmetical\n                          mistakes.\n \n\nThe appellant has taken its quoted price at Rs. 3,12,76,935/- while the correct figure is Rs. 3,12,96,835/-. If this difference of Rs. 19,900/- is taken into consideration, the evaluated prices of the Appellant will be nearly Rs. 19,900/- more than those indicated above in the table.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-42", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "45. The figures of loadings and off-loadings relating to the appellant are different in the three statements as can be seen from tine following table.\n                          Page-8 of     Page-37 of    Page-8B of\n                        Sec.II.       Sec. IX       addl. material\n                        (in lakhs)    (in lakhs)    papers.\n                        (1)           (2)           (3)\n1. Civil Works          nil           -0.32         nil.\n2. Structural Steel.    + 12.10       + 10.29       + 8.97\n3. Bus Bar System       - 23.77       - 15.70       -15.70\n4. Equipment            + 2.50        + 2.38        + 2.38\n5. D.C. Boards          + 0.25        + 0.22        + 0.23\n6. Financial Loading    Not made      + 5.87        + 5.87\n7. Rebate for excess    Not made      Not made      - 5.06\nProvision.                      \n                        - 8.92*        + 2.74**     - 3.31***\n(*). Not-9.32 lakhs; (**) not + 2.72 lakhs. (***)not-2.34 lakhs.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-43", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "46. The appellant has also filed a statement (found at page-20 of Sec. IX) computing its evaluated bid at Rs. 2,97,06,343 with reference to \"short falls of the offer of the 4th respondent\", compared to its offer. As per this statement, the 4th respondent's evaluated bid is Rs. 3,18,91,970/-. But the appellant has not chosen to give the comparable evaluated bids of other tenderers to prove that its bid is the lowest. \n\n47. These disputed bid valuation figures with all their technical features like loading, off-loading, cannot evidently be gone into the writ proceedings. What all this Court has to see is whether the decision is arrived at by the authorities applying the correct test and considering tenders dispassionately and without bias. The Court can interfere if the decision making process of the authorities is vitiated on any ground, but cannot interfere with the decision arrived at. This has been so held by the Supreme Court in Sterling Computers Ltd. v. M/s. M.N. Publications Ltd, 1993 (1) SCC 116 and F.C.I, v. M/s. Kamadhenu Cattle Feed Industries, . \n\n48. In Sterling Computers Ltd. case, '\" the Supreme Court held:\n\"While exercising the power of judicial review, in respect of contracts entered in to on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the \"decision making process\". In this connection reference may be made to the case of Chief Constable of North Wales Police v. Evans where it was said that: (p. 144-a).", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-44", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "\"The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according fair treatment, reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the Court\". \n\nBy way of judicial review the Court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State Courts have inherent limitations on the scope of any such enquiry. But at the same time as was said by the House of Lords in the aforesaid case, Chief Constable of the North Wales Police v. Evans the Courts can certainly examine whether \"decision making process\" was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution. \n\nIf the con tract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, the Court cannot act as an appellate authority by substituting its opinion i n respect of selection made for entering into such contract. But, once the procedure adopted by an authority for purpose of entering into a contract is held to be against the mandate of Article 14 of the Constitution, the Courts cannot ignore such action saying that the authorities concerned must have some latitude or liberty in contractural matters and any interference by Court amounts to encroachment on the exclusive right of the executive to take such decision\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-45", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "49. In F.C.I. 's case, the Supreme Court observed as follows:\n \"7. In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article-14 of the Constitution of. which non-arbitrariness is a significant facet. There is no unfettered discretion in public law. A public authority possesses powers only to use them for public good: This imposes the duty to act fairly and to adopt a procedure which is 'fairplay in action'. The observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his inter action with the State and its instrumentalities, with this element forming a necessary component of the decision making process in all State actions. To satisfy this requirement of non-arbitrariness in a State action, it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. The decision so made would be exposed to challenge on the ground of arbitrariness. Rule of law does not completely elimiate discretion in the exercise of power as it is unrealistic, but provides for control of its exercise by judicial review\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-46", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "50. A feeble argument was advanced by the learned Counsel for the appellant that there are two different statements of valuation of price bids both dt. 7-9-92 - one typed and one in manuscript. We have seen the file. Tine allegation is absolutely without substance. As per the office practice, the manuscript is the draft and typed one is the fair and there is absolutely no difference between the two. The stand of the Board is that the object of loading and off-loading is not to award contract on the evaluated price, but to know whether the bidder is having any idea about scope of the work and whether any reasonable person in this line can quote those prices. \n\n51. Another contention urged by Sri Swamy is that negotiating with only one tenderer is bad. He relies on the following observations in M/s. C.J. Fernacleiz's case (15 supra), at page-967. \n\n \"Assuming for purpose of argument that there has been a siight deviation from the terms of the NIT, it has not deprived the appellant of its right to be considered for the contract; on the other hand, its tender has received due and full consideration. If, save for the delay in filing one of the relevant documents, MCC is also found to be qualified to tender for the contract, no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the MCC and in the KPC going in for a choice of the better on the merits. The appellant had no doubt also urged that the MCC had no experience in this line of work and that the appellant was much better qualified for the contract. The cooperative merits of the appellant vis-a-vis MCC are, however, a matter for the KPC (counselled by the TCE) to decide and not for the Courts. We were, therefore, rightly not called upon to go into this question\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-47", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "52. We fail to see how these observations are of any assistance to the appellant. Here, the bids of all the tenderers including the appellant and the 4th respondent were considered and the bid of the 4th respondent was found to be the lowest and hence it was given the contract. In fact this is the decision relied on by the learned Counsel for the 4th respondent. \n\n53. We agree with the learned Counsel for the Board who has also raised a plea that in any event, the appellant cannot get the contract as it is only Alluminium Industries Ltd., whose evaluated bid of Rs. 3,13,23,986 is the lowest, that could have got the contract. We accordingly hold that the complaint of the appellant that price bids were arbitrarily evaluated by the Board is not justified. \n\nContention No. II (i):-\n54. The next contention of the learned Counsel for the appellant is that even if it is found that the rates quoted by the appellant are higher, the Board ought to have awarded the contract to it in view of its previous experience. To appreciate this contention, Clause 2.8.1 of Section 2 of Tender Specifications is relevant and it reads as follows:\nCl. 2.8.1. - Experience:\n \"While being equal of comparable on other aspects preffrence will be given to those who had supplied similar plant/equipment/materials to that specified du ring the last 5 years or supplying now under a running contract. A list of such supplies should be given in a schedule\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-48", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "55. From tlis, it i s clear that preference wil1 be given to the persons who have experience provided the other things are equal. It is a matter of policy decision and especially when awarding contract to a party, who has quoted more for doing the work, there should be compelling and strong reasons to award to it in preference to the one who quoted less. Merely because it was earlier given work of Rayalaseema Thermal Power Project when its financial position was 25 the same, it does not follow that the appellant should be preferred for this work also even though it has quoted higher rates. It is also to be remembered that the appellant was not given the contract in question not because of its financial capability, but because the evaluated price of its bid was found to be more than that of the 4th respondent. Hence, the contention that the Board ought to have relaxed from the requirement of financial capability has no force. The learned Counsel has relied on voluminous documents filed by him in support his contention that the appellant has got many claims pending settlement against the Board to the extent of Rs. 2.75 crores, that it is now executing many contracts with the Board to its satisfaction and that mere accumulation of losses of about Rs. 5.96croresason31-3-1991 does not disabletheappellantfromtakingup and executing the work. But all these are not material since the appellant was denied the contract not because of its financial incapacity, but because its bid was not the lowest.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-49", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "56. The learned Counsel for the appellant relies on the principle of legitimate expectation laid down in U.O.I. and Ors. v. Hindustan Development Corporation and Ors., where the Supreme Court observed as follows:\n \"A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfil. The protection is limited to that extent and a judicial review can be within those limits. But as discussed above a person who bases his claim on the doctrine of legitimate expectation, in the first instance, must satisfy that there is a foundation and thus has locus standi to make such a claim. In considering the same several factors which give rise to such legitimate expectation must be present. The decision taken by the authority must be found to be arbitrary, unreasonable and not taken in public interest. If it is a question of policy, even by way of change of old policy, the Courts cannot interfere with a decision. In a given case whether there are such facts and circumstances giving rise to a legitimate expectation, it would primarily be a question of fact. If these tests are satisfied and if the Court is satisfied that a case of legitimate expectation is made out then the next question would be whether failure to give an opportunity of hearing before the decision affecting such legitimate expectation is taken, has resulted in failure of justice and whether on that ground the decision should be quashed. If that be so then what should be the relied is again a matter which depends on several factors\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-50", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "57. Explaining the theory in its application, the Supreme Court went on, \"....By and large they (legitimate expectations) arise in cases of promotions which are in normal course expected, though not guaranteed by way of a statutory right, in cases of contracts, distribution of largess by the Government and in somewhat similar situations. For instance in cases of discretionary grant of licences, permits or the like, carries with it a reasonable expectation, though not a legal right to renewal or nonrevocation, but to summarily disappoint that expectation may be seen as unfair without the expectant person being heard. But there again the Court has to see whether it was done as a policy or in the public interest either by way of G.O. rule or by way of a legislation........\" \n\n58. The grounds on which the administrative action can be assailed and the relief that can be given to a party are laid down by the Supreme Court in the same case as under:\n\"....If that be so, a decision denying a legitimate expectation based on such grounds does not qualify for interference unless in a given case, the decision or action taken amounts to an abuse of power.......\" \n\n xxx xxx xxx \"......For instance if an authority who has full discretion to grant a licence and if he prefers an existing licence holder to a new applicant, the decision cannot be interefered with on the ground of legitimate expectation entertained by the new applicant applying the principles of natural justice. It can therefore be seen that legitimate expectation can at the most be one of the grounds which may give rise to judicial review but the granting of relief is very much limited......\"", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-51", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "xxx xxx xxx \"If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatary, unfair or biased, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well known grounds attracting Article-14 but a claim based on mere legitimate expectation without anything more can not ipso facto give a right to invoke these principles....\" \n\n xxx xxx xxx \"As cautioned in Attorney General for New South Wales' case the Courts should restrain themselves and restrict such claims duly to the legal limitations. It is a well-meant caution. Otherwise a resourceful litigant having vested interests in contracts, licences etc. can successfully indulge in getting welfare activities mandated by directive principles thwarted to further his own interests. The caution, particularly in the changing scenario, becomes all the more important.\" \n\n59. We are afraid that this decision is not of any help to the appellant. First of all there is no pleading to this effect either in the Writ Petition or in the Writ Appeal. Even otherwise, there is no change of policy here. If the appellant was denied the contract on the ground of its financial position, it could have some justification to contend that hitherto it was given contracts by the Board inspite of its financial position and that there are no reasons to depart from the practice in deciding this contract, without notice to the appellant. Whether in such circumstances the appellant is entitled to the benefit of theory of legitimate expectation is also doubtful and we need not express any opinion in this case since it is academic. Thus, we reject this contention. \n\n60. Sri Swamy, the learned Counsel for the appellant also contended that the price quoted by the 4th respondent is predatory and that the three members of the consortium formed cartel and relied on the observations of the Supreme Court in Hindustan Development Corporation case (18 supra), in para 15.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-52", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "\"The cartel therefore is an association of producer who by agreement among themselves attempt to control production, sale and prices of the product to obtain a monopoly in any particular industry or commodity. Analysing the object of formation of a cartel in other words, it amounts to an unfair trade practice which is not in the public interest. The intention to acquire monopoly power can be spelt out from formation of such a cartel by some of the producers. However, the determination whether such agreement unreasonably restrains the trade depends on the nature of the agreement and on the surrounding circumstances that give rise to an inference that the parties intended to restrain the trade and monopolise the same\". \n\n61. Later, the Supreme Court said in Matsushita Electric Industrial Co. Ltd., et al v. Zenith Radio Coloration et al 89 L.Ed. 2d 538, that predatory pricing conspiracies are by nature speculative and that the agreement to price below the competition level requires the conspirators to forego profits that free competition would offer them\". \n\n62. On the other hand, Sri Subrahmanya Reddy, the learned Counsel for tine respondents relied on the very same judgment at paras 17 and 19. \n\n\".....Therefore mere offering of a lower price by itself, though appears to be predatory, cannot be a factor for inferring formation of a cartel unless an agreement amounting to conspiracy is also proved\". \n\n\"1.9. A mere offer of a lower price by itself does not mainfest the requisite intent to gain monopoly and in the absence of a specific agreement by way of a concerted action suggesting conspiracy, the formation of a cartel among the producers who offered such lower price cannot readily be inferred\". \n\n63. Here, neither the question of cartel nor the question of predatory price arises. Further, this plea has not been taken by the appellant either in the Writ Petition or in the Writ Appeal.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-53", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "Contention No. II (J):-\n64. The last contention of the learned Counsel for the appellant is that the award of contract to the 4th respondent is vitiated by mala fides, since it was selected though the designs and drawings submitted by it are not in accordance with tender specifications and the Board not only agreed to pay higher price than what has been quoted by i t, but aIso conferred some extra benefits on it. The learned Counsel for the Board drew our attention to Clauses 6.3.0 and 6.4.0 of sub-section-D of Technical Specifications which are extracted hereunder:\nCl. 6.3.0: Contracts shall submit design calculations in support of the design and fabrication drawings submitted by him for the approval of ConsuItant /Purchaser. \n\nCl.6.4.0: Contractor shall check erection clearance and ensure that detailing of connection is carefully planned for easy erection. \n\n65. Relying on these clauses, he contended that as the consultant has pointed out number of defects and deficiencies in the contract submitted by the 4th respondent, the Board took an undertaking from it that it will execute the work as per the specifications given by the consultant and as such there is no reason to reject the tender on that ground.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-54", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "66. Coming to the higher price being paid, it is true that the 4th respondent has quoted Rs. 2,18,43,650/-. In the negotiations the 4th respondent was given extra amount of Rs. 19 lakhs to cover the cost of additional tonnage to make up 215 M.Tons of structural steel and 47.52 tons of R.C.C. steel as per the requirement pointed out by the consultant. The learned Counsel for the appellant criticises the stipulation of payment of extra amount to the 4th respondent in case any extra structural steel is required to be used over and above the estimated 215 M.Tons. The learned Counsel for the Board says that the possibility of using extra steel over 215 M.Tons is a remote one in view of the fact that the appellant itself has estimated use of 229.1 tons and even otherwise that the amount may be meagre. He has also drawn out attention to the Clause in the Final Acceptance of the offer dated 28-4-1993 to the effect that extra reinforced steel if any required to be used has to be borne by the 4th respondent. He has also stated that in fact the amount at which the contract was awarded was far less than the evaluated price and the Board has gained by about Rs. 39 lakhs (Rs. 2,76,54,014 the evaluated price Bid less Rs. 2,37,43,650 the price at which awarded) and that the price quoted by the appellant (Rs. 3,12,96,835) is nearly Rs. 75 lakhs higher than the price at which the contract was awarded to the 4th respondent. We agree with the contention of the learned counsel for the Board.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-55", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "67. The learned counsel for the appellant has relied on clause 2.03 of subsection (B) of Standard Specification and Clauses 2.2.3. and 2.26.4 of Tender Specifications, which read as follows:\nCl.2.03.00: Should major deviations be desired by the Bidder, then a Base Offer shall be made in compliance with the specification and a separate Alternate offer may be made. Evaluation comparisons will, however, be made on the basis of Base offer only and the Alternate offer will be considered only when the Base offer of the Bidder is competitive otherwise and technically acceptable. \n\nAlternate offer exhibits improved technology and economy over its Base Officer. Bids without Base Offer will be rejected as 'Irresponsive'. \n\nCl.2.2.3.: Clarifications, amplications and/or any other correspondence from the tenderer subsequent to the opening of the tender, will not be entertained. The tenderers are, therefore, advised to ensure that their tenders sent in COMPLETE SHAPE at the first instance itself. Post tender rebates, revisions or deviations in quoted prices and /or conditions or any such offers which will give a benefit to the tender over others wil1 not only be rejected but the ORIGINAL TENDER ITSELF WILL GET DISQUALIFIED ON THIS ACCOUNT AND THE TENDERER'S EARNEST MONEY DEPOSIT FORFEITED. \n\nCl.2.26.4: Under no circumstances shall tenderer alter his price during the validity period after tenders are opened, any tenderer who does so resulting in recalling of tenders by the Board or additional expenditure to the Board shall not only lose his Earnest Money Deposit but also run the risk of being black listed by the Board which reserves the right under the Law to recover damages resulting therefrom.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-56", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "68. The learned counsel for the appellant contended that in view of any major deviation proposed by the 4th respondent the base offer ought to have been rejected and the quoted price cannot be enhanced in any circumstances. These clauses do not indicate such a prohibition. These clauses also indicate that the tenderers while submitting their Base Offers can also submit alternate offer with major deviations if any. But evaluation of the bids will be madeonly on the basis of Base Offer. The Clauses also advises the tenderers that they should firm offers at the first instance itself and post tender modification or alteration of the price giving benefit to the tenderers over others will result in disqualification of the original tender itself. As can be seen, these apply to unilateral alteration of price due to any reason including as a result of major deviations. But here the amount of Rs. 19 lakhs is the amount agreed to by the Board through negotiations and not the amount demanded by the 4th respondent unilaterally. Further, by this enhancement of Rs. 19 lakhs, the 4th respondent does not derive any benefit over the other tenderers since even after the addition of Rs. 19 lakhs, the evaluated price bids of all the tenders are not disturbed and the bid of the 4th respondent continued to be the lowest of all the tenderers.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-57", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "69. The plea of mala fides raised by the appellant is without any merit. It is well settled that the burden of establishing mala fide is on the person who alleges the same. (See: E.P. Royappa v. State of Tamil Nadu, and M. Sankaranarayana, IAS v. State of Karnataka, . In E.P. Royappa's case, the Supreme Court, observed as follows:", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-58", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "\"92. Secondly, we must not also overlook that the burden of establishing mala fides is very heavy on the person who alleges it. The allegations of. mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility. Here the petitioner, who was himself once the Chief Secretary, has flung a series of charges of oblique conduct against the Chief Minister. That is in itself a rather extraordinary and unusual occurrence and if these charges are true, they are bound to shake the confidence of the people in the political custodians of power in the State and therefore, the anxiety of the Court should be all the greater to insist on a high degree of proof. In this context it may be noted that top administrators are often required to do acts which affect others adversely but which are necessary in the execution of their duties. These acts may lend themselves to misconstruction and suspcion as to the bona fides of their author when the full facts and surrounding circumstances are not known. The Court would, therefore, be slow to draw dubious inferences from incomplete facts placed before it by a party, particularly when the imputations are grave and they are made against the holder of an office which has a high responsibility in the administration. Such is the judicial perspective devaluating charges of unworthy conduct against ministers and other high authorities, not because of any special status which they are supposed to enjoy, nor because they are highly placed in social life or administrative set up - these considerations are wholly irrelevant in judicial approach - but because otherwise, functioning effectively would become difficult in a democracy. It is from this stand-point that we must assess the merits of the allegations of mala fides made by the petitioner against the second respondent\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-59", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "70. In Sankaranarayana's case , the Supreme Court observed that it may be permissible in an appropriate case to draw reasonable inference of mala fides from the facts pleaded and established. But such inference must be based on factual matrix, which cannot remain in the realm of insinuation, surmise or conjecture. \n\n71. The learned Counsel for the appellant heavily relied on the decision of a Full Bench of this Court in Kranth Sangram Parishath v. Sri N. Janardhan Reddy, 1992 (3) ALT 99 (F.B.). It was held in that case, \"It is of paramount importance that decisions affecting the lives and liberties of citizens are rendered by people who are impartial, act fairly and bring to bear a dispassionate and objective consideration to the issues involved\". \n\n72. There is absolutely no dispute about this proposition and whether there is bias or not has to be decided on the facts and circumstances of each case. In the instant case, there is no material to show bias on the part of any member of the Board or Chairman or late Chairman in favour of the 4th respondent or against the appellant.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-60", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "73. Apart from this, there is another hurdle in the way of the appellant. The appellant did not raise this plea of bias before the Board at various levels when the matter was considered and took a chance of getting a favourable order from the Board awarding the contract. Having failed, it is not now open to it to allege bias. The observations of the Supreme Court in G. Sarana v. Lucknoxv University, are apposite:\n\"We do not, however, consider it necessary in the present case to go into the question of the reasonableness of bias or real likelihood of bias as despite the fact that the appellant knew all the relevant facts, he did not before appearing for the interview or at the time of the interivew raise even his little finger against the constitution of the Selection Committee. He seems to have voluntarily appeared before the Committee and taken a chance of having a favourable recommendation from it. Having done so, it isnot now open to him to turn round and question the constitution of the Committee. This view gains strength from a decision of this Court in Manak Lal's case (supra) wherein more or less similar circumstances, it was held that the failure of the appellant to take the identical plea at the earlier stage of the proceedings created an effective bar of waiver against him. The following observations made therein are worth quoting:-\n \"It seems clear that the appellant wanted to take a chance to secure a favourable report from the tribunal which was constituted and when he found that he was confronted with an unfavourable report, he adopted the devise of raising the present technical point\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-61", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "74. In reply to the contention raised by the respondents that in any event it is only Alluminium Industries Ltd., which is the lowest tenderer that could complain, and which has not come to the Court and it is not for the appellant to champion its cause, the learned Counsel for the appellant relied on the decision in Bangalore Medical Trust v. B.S. Muddappa, wherein the Supreme Court observed as follows:\n \"....It is too late in the day, therefore, to claim that petition filed by inhabitants of a locality whose park was converted into a nursing home had no cause to invoke equity jurisdiction of the High Court. In fact public spirited citizens having faith in rule of law are rendering great social and legal service by espousing couse of public nature. They cannot be ignored or overlooked on technical or conservative yardstick of the rule of locus standi or absence of personal loss or injury. Present day development of this branch of jurisprudence is towards free movement both in nature of litigation and approach of the Courts. Residents of locality seeking protection and maintenance of environment of their locality cannot be said to be busy bodies or interlopers . Even otherwise physical or personal or economic injury may give rise to civil or criminal action but violation of rule of law either by ignoring or affronting individual or action of the executive in disregard of the provisions of law raises substantial issue of accountability of those entrusted with responsibility of the administration. It furnishes enough cause of action either for individual or community in general to approach by way of writ petition and the authorities cannot be permitted to seek shelter under cover of technical) ties of locus standi nor they can be heard to plead for restraint in exercise of discretion as grave issues of public concern outweight such considerations\".", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "66d95abf72c5-62", "Titles": "Bhanu Construnctions Company ... vs A.P. State Electricity Board, ... on 1 March, 1994", "text": "75. The learned Counsel for the appellant contends that applying the above principle, this can be treated as a public interest litigation. On the other hand, in Janata Dal v. H.S. Choudary, , Justice Ramaval Pandian speaking for the Bench, a fter reviewing all the cases of public in terest litigation held that persons acting bona fide and having sufficient interest in instituting an action for redressal of public wrong or public injury, to advance the cause of community or disadvantaged groups and individuals can maintain public interest litigation. The Supreme Court also held that mere busy body or a meddlesome interloper or way farer or officious intervener has no locus standi to file public interest litigation for personal gain or private motivation or any other oblique consideration or for glare of publicity. \n\n76. In the instant case, no interest of any disadvantaged group of individuals is vindicated. The appellant does not come within the parameters laid down by the Supreme Court in the Janata Dai's case (24 supra). As already seen, the Writ Petition and the Writ Appeal have been filed due to the business rivalry of the appellant with the 4th respondent and because he was not successful in getting the contract. \n\n77. For the above, reasons, the Writ Appeal is dismissed with costs. Advocates fee Rs. 1,000/-. \n\n78. After pronouncing the judgment Sri B.S.A. Swamy, the learned Counsel for the Appellant, has sought oral leave for appeal to Supreme Court. We do not think that this case involves any substantial question of law of general importance which needs to be decided by the Supreme Court. Accordingly leave is refused.", "source": "https://indiankanoon.org/doc/16663/"}
+{"id": "2e41037f91d3-0", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "JUDGMENT Anantanaravana Avyar, J.   \n1. Veguntha Basavayya, as sole plaintiff, filed O.S. No. 209 of 1952 in the Court of the Principal District Munsif, Eluru, for a dissolution of partnership business carried on between him (plaintiff) and the defendant and for accounts. The case of the plaintiff was that he and the defendant were partners of a partnership firm and did business from 1944 to 1947 in sundry articles and cloth. The defendant contested the suit raising various contentions which result ed in various issues. Of them, Additional Issue No. 1 framed on 31-7-1954 was: \"Whether the suit is not maintainable by reason of the suit partnership being void\"? The learned Principal District Munsif heard this as a preliminary issue and held that the suit partnership was illegal, void and unenforceable and that the suit was not main tainable. Accordingly he dismissed the suit with costs. The plaintiff filed A.S. No. 36 of 1955 before the learned Subordinate Judge, Eluru. The latter framed 3 single point for decision, namely, \"Whether the suit is maintainable or not\". He agreed with the trial Court and dismissed the appeal. Thereupon the plaintiff filed this second appeal. \n 2. When the second appeal originally came up for hearing before our learned brother, Seshachalapathi, J. he passed an order dated 3-8-1961 as follows :", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-1", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "\"The two Courts below have relied upon the decislcn in Pisupati Rama Rao v. Tadepalli Papayya, 1954-2 MLJ (Andh) 103 : (AIR 1954 Andh 51). That decision had been rendered on the language of an express prohibition erected under Sections 13 and 16 of the Rice Rationing Order of 1943. It is not in dispute that the Madras Cloth (Dealers) Control Order of 1948 does not in express terms contain a prohibition analogous to Sections 13 and 16 of the Rice Rationing Order of 1943 referred to above. The question is bereft of any direct authority of this Court. A decision of the Calcutta High Court in Matizuddin Khan Choudhury v. Habibuddin Sheikn, (S) , has been brought to my notice which, while dealing with the terms of the Bengal Silk Control Order of 1945, held that forming a partnership for running the licensed business is neither illegal nor opposed to public policy. In view of the importance of question and the large number of similar cases that may arise, I direct that this Second Appeal may be posted before a Bench.\" \n Accordingly, this appeal has come up before this Bench. \n 3. The points which arise are: \n (1) Whether the suit partnership is void? And (2) Whether the suit is not maintainable on that ground?  \n 4. The relevant facts of the case are as follows: \n The partnership is alleged to have been formed in 1944 for carrying on business in sundry articles and cloth.On   26-10-1948,  the   plaintiff  obtained  a  licence (Ex.  A-1)\nunder the Madras Cloth (Dealers) Control Order, 1944. The", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-2", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "under the Madras Cloth (Dealers) Control Order, 1944. The\nlicence  mentions the  plaintiff as the  licensee and   gives\nhis father's name.    It describes the business as follows:", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-3", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "\"6. Nature of business for   Retail business in\nwhich   licence  has                     mill-made doth on\nbeen issued.                            his own account.\"  \n \n\n It also elves the exact description and boundary of the premises where the business was to be carried on as 'in his own house at Dharmajigudem'. The plaintiff alleged\n\nthat the defendant was in management of the partnership business, from 1946 up to the end of 1950 which means that the defendant was the managing partner from prior to the obtaining of the licence. \n \n\n 5. Section 81 (2) of the Defence of India Rules runs as follows: \n  \n\n \"The Central Government or the Provincial Government so far as appears to it to be necessary or expedient for securing the defence of British India or the efficient prosecution of the war or for maintaining supplies and services essential to the life of the community may by order provide", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-4", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "(a) for regulating or prohibiting the production, treatment, keeping, storage, movement, transport, distribution, disposal, acquisition, use or consumption of articles of any description whatsoever and in particular for prohibiting the withholding from sale either generally or to specified persons or classes of persons of articles or things kept for sale to be sold either generally or to specified persons or classes of persons or in specified circumstances. \n (b) for controlling the prices or rates at which articles or things of any description whatsoever may be sold or hired and for relaxing any maximum or minimum limits otherwise imposed on such prices or rates.\" Rule 81 (4) runs as follows:  \n \"If any person contravenes any order made under this rule, he shall be punishable with imprisonment for a term, which may extend to three years or with fine or with both.\"  \n The Government of Madras, in exercise of the powers conferred by Rule 81 (2) (b), made the Madras Cloth (Dealers) Control Order (hereinafter referred to for convenience as the M.C.D.C. Order) in 1944. Both sides have placed before us the above Order of 1944 and proceeded on the basis that the provisions of that Order were subrtantially in force during the relevant period concerned in this case and were substantially the provisions under which the licence (Ex. A-1) was issued. We also proceed accordingly. Clause 3(c) of the M.C.D.C. Order defines a 'dealer' as follows: \n dealer means a person carrying on the Business, whether on his own account or as commission agent, or selling or storing for sale cloth, whether wholesale of re tail, and whether or not in conjunction, with any other business and includes a hawker.\"", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-5", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "Clause 4 reads: , \"Save as hereinafter provided, no person shall carry on business as a dealer or hawker or store cloth for sale on or after 2nd May, 1944, except under and in accordance with the terms and conditions of a licence granted under this Order by the licensing authority. \n Note: Where a dealer has more than one shop or place of business, whether in the same town or village or in different towns or villages, he shall obtain a separate licence in respect of each shop or place of business.\" \n Clause 17 runs:  \n \"if any person contravenes any of the provisions of this Order, then, without prejudice to any other punishment to which he may be\" liable, any Court trying the offence may order that any stocks together with the packages and coverings thereof. In respect of which the Court is satisfied that the offence has been committed, shall be forfeited to His Majesty.\" \n 6. The two lower Courts relied on the decision of this Court in 1954-2 Mad LJ (Andh) 108 : (AIR 1954 Andh 51). The facts in that case were the plaintiff and defendants formed a partnership for running a rice ration shop business from 3-9-1944 and conducted that business on the basis of a ration shop licence issued in the name of the first defendant and the suit was filed by the plaintiff for a declaration that the firm had been dissolved on the 1st September 1945 and for settlement of accounts and other allied reliefs. The sole question which arose in the second appeal was whether the suit partnership was illegal. Subba Rao, C. J. (as he then was) obseived as follows: at p. 109 (of Mad LJ (Andh)); (at p. 52 or AIR):", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-6", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "\"It is seen from the aforesaid provisions that the Ration Older was passed for maintaining supplies and services essential to the life of the community. It was intended to ensure an equitable distribution of rice to the members of the public at controlled rates, to achieve that object, it was necessary that the person, who buys and sells rice, should be under the control of the authorities concerned and subject to the regulations made to prevent abuse. The Order, therefore, enabled the authorities concerned to issue an authorisation to a retail dealer to buy and sell rice subject to the conditions laid down in the said Order. Under Section 13, the authorisation cannot be used by any person other than the person to whom it was issued. Under Section 16, such a person is prohibited from transferring a ration document to any other parson ..... It is, therefore, obvious that 'any contract involving the transfer of a ration document not only contravenes the express prohibition' contained in Section 13 of the Order 'but also relates to an act which is made an offence punishable' under the Defence of India Rules. Such a contract would be void under Section 23 of the Contract Act as the object of that contract involves something illegal or contrary to public policy.\" \n The learned Judge relied on the decision in Nalan Padmanabhan v. Badrinath Sarda, 21 Mad LJ 425 and the decision of the Full Bench in Velu Padayachi v. Slvasoariam Pillai, and observed as follows: at p. 111 (of Mad LJ (Andh)) : (at p. 53 of AIR):", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-7", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "\"In my view, the principles laid down in the aforesaid decisions equally apply to the facts of the instant case. The partnership business of buying rice and selling the, same in the retail shop was carried on with the aid of a licence in favour of the 1st defendant. When the licence was issued to the 1st defendant, it was intended that he should and none else (should) use that for doing Business. Instead, the plaintiff and other partners, who had no ration card along with the 1st. defendant bought and sold rice. 'It certainly was a user of the ration card by persons other than the one to idiom it was issued in contravention of Section 13 of the Rationing Order'. It also involved the transfer of a ration document prohibited by Section 16 of the Rationing Order.\"  \n The above decision is based on the following grounds: \n (1) That the licence issued to the 1st defendant was intended that he and no one else should use that for doing business. \n (2) When the partnership did the business, not only D. 1 (the licensee) but also the other partners including the plaintiff did the business though they had no ration card. \n(3) So, it was the user or the ration card by persons other than those to whom it was issued and thus a contravention of Section 13 of the Madras Rationing Order. \n (4) The forming of the partnership involved transfer of a ration document prohibited by Section 16 of the Madras Rationing Order. \n (5) The forming of the partnership related to an act which was an offence punishable under the Defence of India Rules.  \n (7) In (FB), Horwill, J. observed as follows: at pp. 320-321 (of Mad LJ) : (at pp. 446-447 of AIR):", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-8", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "\"..... when a licence, 'which is a personal privilege to vend', is acquired by one partner. It is certainly his licence and not the licence of the partnership. Since it was granted to him on the express understanding that it was to be used by him and by him alone, its use by the partnership would involve a transfer in precisely the same way as it would if the partnership were entered into 'after the licence was issued. 'On the question of public policy it is difficult to see any difference between the object of a partnership entered into before the licence was granted and one entered into after it was granted'. In either case, the partnership would be entered into for the purpose of bringing about a result prohibited by law i.e., the vending of arrack by a person who had no licence to do so.\" \n (8) In 21 Mad LJ 425, the learned Judges observed thus: (at pp. 430-431): \n \"But 'if one person carrying on a trade and possessing stock' and capital, 'admits another into partnership' with himself, making the stock and capital, the joint property of both, 'it is impossible to contend that there is not a transfer in such a case .....", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-9", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "We are not concerned in construing a statute like the Opium Act with the mere form of the transaction but with the substance of it.\" \n 9. It has been held in In Re Manu Iyer, also that the licence issued to a person under Clause 4(1) of the M.C.D.C. Order was personal to the licences and would not enure for the benefit of his heirs after his death. \n 10. Thus, it is clear that the licence (Ex. A-l) was a personal privilege granted to the plaintiff to deal in cloth and that if it was used by the partnership there was in substance and in effect, a transfer of the licence to the partners other than the plaintiff and dealing under the licence by the partnership would amount to those partners, in addition to the plaintiff, also dealing under that licence. \n 11. Both the lower Courts proceeded on the basis that the decision in 1954-2 Mad LJ (Andh) 103 : (AIR 1954 Andh 51), which related to the Madras Rationing Order 1943, also applied to the present case. In the judgment of the trial Court, it is observed that a licence issued under the provisions of Cloth Dealers' control Order comes within the definition of a 'ration document' under Section 2 (9) of the Rationing Order and that, therefore, Sections 13 and 16 of the Madras Rationing Order directly applied. The learned Subordinate Judge, in his appeal judgment, has referred to the Madras Cloth (Dealers) Control Order 1944 in two places wrongly as Cloth Rationing Order. 'Ration document' is defined in Section 2 (9) of the Madras Rationing Order, 1943 as follows:", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-10", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "\" 'ration document' includes a ration book, a ration card or any part of any ration book or ration card or any ration coupon or any declaration, authority, permit or other 'document issued' or made by or 'under' the provisions of this Order.\" \n The licence (Ex. A-1) clearly shows that it was issued under the M.C.D.C. Order, 1944 and was not issued under the Madras Rationing Order, 1943. It is not a 'ration document', as defined in Section 2(9) of the Madras Rationing Order, 1943, in spite of the fact that the definition mentions the word 'includes'. \n 12. The learned District Munsif also mentions in his judgment as follows : \n \"It is conceded that during the relevant period, the mill cloth was a rationed article and that no person can deal with mill cloth without first obtaining a licence.\" \n Shri N. Bapiraju, the learned counsel for the appellant, contends before us that mill cloth for which the licence (Ex. A-1) was issued was not a rationed article but he is not able to substantiate his contention by placing any material before us. Shri N.C.V. Ramanujachari for the respondent, also does not produce any material. In view of the fact that there was a concession made before the trial Court obviously by the party against whose interest that concession was made, we do not find sufficient reason to held that the above observation by the trial court is wrong or without adequate basis. But, even then, the licence (Ex. A-1) is not a ration 'document' as defined in Section 2(9) of the Madras Rationing Order, 1943,", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-11", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "13. Both sides have argued elaborately before us on the question as to whether the above decision in 1954-2 Mad LJ (Andh) 108 : (AIR 1954 Andh 51), is applicable to the present case purely on the basis of the M.C.D.C. Order. \n 14. Sections 13 and 16 of the Madras Rationing Order, 1943 run as follows : \n \"Section 13. A ration document shall not be used for obtaining any rationed article except by or on behalf of the person to whom such document was issued.\" \"Section 16. No person shall transfer to any other parson a ration document issued to himself.\" \n It is beyond doubt or dispute that there is no clause in the M.C.D.C. Order laying down express prohibition of transfer of a licence like Ex. A-l, corresponding to Section 16 of the Madras Rationing Order. As seen above, the partnership conducting the business amounted to transfer of rights under the licence by the plaintiff to the defendant who was a partner but was not a licensee tinder Ex. A-l. The question is whether the absence of any such express prohibition by a clause in the M.C.D.C. Order makes a material difference.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-12", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "15. Shri Bapi Raju contends that there is no clause in the M.C.D.C. Order corresponding to Section 13 of the Madras Rationing Order and that, therefore, the operation by me partnership of the licence which was issued in the name of the plaintiff was not illegal. It is true that though there is no clause in the M.C.D.C. order which is exactly in terms of Section 13 of the Madras Rationing Order, there is Clause 4 which we have already extracted earlier in this judgment. Shri Bapi Raju argues that operation of licence by the partnership was not in conflict with Clause 4 and that it can be reconciled with Clause 4 as being in conformity with it. He contends that the defendant as partner and also the plaintiff as partner carried business only in accordance with the terms and conditions of the licence (Ex. A-1). It is true that the business if done by the plaintiff alone would have been in accordance with the terms and condition of the licence (Ex. A-1). But that fact does not mean that it was done in conformity with Clause 4 when the defendant as partner, in effect, did the business.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-13", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "Defendant did business as 'dealer'. Dealer as defined in Clause 3 (e) of the M.C.D.C. Order has to do Business under and in accordance with the terms of licence which means that he must do business under a licence granted to him as dealer. As already pointed out by us above and held by the various Madras decisions including the Full Bench in , the licence (Ex. A-1) is a personal privilege and gave lawful sanction to business by the Plaintiff alone as dealer and not the defendant as dealer. Shri Bapi Raju points out that the note in Clause 4 of the M.C.D.C. Order mentions that when a dealer has more than one shop, he should have a licence in respect of each shop. This does not mean that when a dealer had one shop and one licence, the business could be conducted in that shop under that licence by any dealer other than that licenced dealer even if the former be a partner of the licenced dealer. We find that this contention of Shri Bapi Raju is not tenable.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-14", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "16. In Marudamuthu Pillai v. Rangasaml Moopan, ILR 24 Mad 401, A held a licence for sale of toddy while B held a licence for sale of arrack and A entered into an agreement of partnership with 8 in the business of vending arrack and toddy at a time when there was a rule in force under the Abkari Act prohibiting a person having a licence for the sale of toddy from being interested in the sale of arrack and prohibiting a person having a licence for the sale of arrack from being interested in the sale of toddy. A filed a suit against B for dissolution of partnership. The suit was held to be not maintainable and was dismissed. The learned Judges of the High Court held that the contract was void ab initio as being in contravention of the rule which was made not merely for the protection of the revenue but also in the interests of the public and that the contract vas also invalid on another ground as follows (at pp. 404-405) :- \n \"Apart from this, we should hold that the contract was invalid also on the ground that the licence in each case was to be obtained by only one of the partners .....To hold that a person who has not got a licence could still be partner with one who has a licence and as such partner carry on the business with or without the other would enable the unlicensed partner to evade the liabilities intended by the law to be cast on persons carrying on abkari business.\" \n In the present case also, it is clear that the M.C.D.C. Order was passed not merely for the protection of reveres but also in the interests of the public. The ground mentioned in the above passage holds good independent of the rule under the Abkari Act and applies to the present case.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-15", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "17. In ILR 35 Mad 582, which was under the Opium Act, the learned Judges of the Division Bench held that the contract of partnership was void and the suit vas not maintainable on two main grounds: \n (1) that the transfer without sanction of the collector was prohibited; and (2) that there was contravention of provisions of Clause 20 of the licence which prohibited the transfer of the right.  \n In this case, the conditions of the licence do not include any express prohibition of transfer but the first term in the licence is that it was granted subject to the provisions of M.C.D.C. Order 1944 and the other conditions specified in it. \n 18. In Ramanayudu v. Seetharamayya, AIR 1935 Mad 440 : 41 Mad LW 521 (FB) the highest bidder at an abkari auction of toddy shop entered into a partnership with another to work the abkari business of the shop without getting previous permission of the Collector for such partnership and the partnership ran the business though the licence was only in the sole name of the highest bidder. It was held that the suit for recovery of the advances made by him to the partnership business was not maintainable. The learned Judges relied on the decision in ILR 24 Mad 401 and other decisions and held that the partnership was illegal and that the suit was not maintainable.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-16", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "19. In a Full Bench held that a partner in a partnership entered into for the purpose of vending arrack under a licence granted to only one of the partners could not sue for the balance due on settlement of accounts as the contract was void ab initio whether it was entered into before the licence was granted or afterwards. The learned Judges approved of the decisions in ILR 24 Mad 401, ILR 35 Mad 582, AIR 1935 Mad 440 : 41 Mad LW 521 (FB) and observed as follows at p. 324 (of Mad LJ) : (at pp. 449-450 of AIR): \n \"If the licensee holds his licence for the partnership or by an act of volition shares his licence with his partner, then there is a transfer which offends Rule 27. If it be found that the licensee does not hold the licence for the partnership, because it is illegal for him to do so, or because for any other reason the non-licenced partner does not purport to sell, by himself or through his partner, under his partner's licence, then there is no transfer; but the non-licensed partner would then commit a breach of Section 15 of the Act. In either case, a punishable offence would be committed; and a partnership formed that would lead to a breach of these provisions would be illegal, either because an offence would necessarily be committed or because it would be against the general public policy underlying the enactment that only approved persons, specifically licensed, should be allowed to sell liquor.\" \n Section 15 of the Abkari Act which is substantially similar to Clause 4 of the M.C.D.C. Order ran as follows: \n \"He liquor or intoxicating drug shall be sold without a licence from the Collector\".", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-17", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "\"He liquor or intoxicating drug shall be sold without a licence from the Collector\". \n (20) In (S) the learned Judges of the Division Bench of the Calcutta High Court discussed the above decision in AIR 1935 Mad 440 (FB) In para 50 and observed as follows: at p. 341 \"The Madras High Court applied R. 27 framed undo1 the Madras Abkari Act and strictly enforced the same. The strict provisions of R, 27 may be so interpreted, but we do not think that the rules of public policy which were attempted to be applied or introduced were properly applied in that case AIR 1935 Mad 440 (FB).....", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-18", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "Suffice it to say for the present that, in our view, the consideration of an object of agreement will not be deemed to be forbidden by law unless in the circumstances related above there is a specific provision forbidding transfer or sale of a right made under a license\". \n On an interpretation of the facts of that case including the relevant provision of the Silk Control Order, which did not prohibit the formation of any partnership for the starting of a filature or for carrying on silk business and only required that the owners of a filature should get themselves registered, the learned Judges held that the arrangement under the partnership was not prohibited under the Silk Control Order and that there was no contravention of Section 23 of the Contract Act on the ground that the object of the partnership was opposed to public policy. The Full Bench decision of the Madras High Court in that a partnership's conducting a business under a licence which stood in the name of one of the partners is opposed to public policy for the purpose of Section 23 of the Contract Act is binding on this Court.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-19", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "21. In the Calcutta case, it was observed that the first defendant in that case whose name was registered as owner of the filature under the Silk Control Order had been in sole charge of the management of the filature. Such a fact would not make any difference in the present case and the position would be the same in this case if plaintiff, in whose name the licence stood, had been doing the management in view of the decisions of the Madras High Court which we have referred to above and which we respectfully follow. But, all the same, as a matter of fact, the case of the plaintiff is that the defendant was in management of the partnership business and conducted the business. In effect, the Calcutta High Court held on the basis of the specific provisions of the Silk Control Order that the formation of a partnership was not prohibited by law and was not opposed to public policy.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-20", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "22. In Bhushayya v. Chinnappa Reddy, it was held by a Division Bench of this Court consisting of Syed Qamar Hasan, J. and Jaganmohan Reddy J. that a partnership by persons who are licensed under the Central Excises and Salt Act (1 of 1944) with those who had no licences was not prohibited (by law). This was based on the provisions of Section 6 of that Act and certain rules framed under that Act. In particular, Rule 178(4) merely required that intimation should be given to the authority concerned within a month from the date of an unlicensed person becoming a partner with a licensed person. A penalty of fine vas provided for failure to make such intimation. It was held by the learned Judges in at in view of the fact that there was special provision that, notwithstanding the omission to give intimation as mentioned above, an unlicensed person who became a partner with a licensed person would still be responsible for the terms and conditions of the licence, it did not appear that the intention of the rule was to declare such partnership as illegal or invalid. They also observed as follows: at p. 553 (or Andh WR) : (at p. 41 of AIR):", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-21", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "\"Apart from the fact that under the rule there is a clear distinction, cases under the Abkari, Opium and Forest Acts have no application in determining the validity of partnerships made in contravention of the provisions of the Central Excises and Salt Act, as the prohibition is for the protection or convenient collection of revenue (but not in furtherance of a public policy as in the Abkari and Opium Acts). Where, therefore, a statute merely imposes a penalty without declaring it to be illegal or void, the imposition of penalty by itself does not in our view have the effect of making any contract made in contravention of a specific provision of the statute -- illegal or void. It must further be seen whether 'he statute was designed as a whole to further a public policy\". \n They relied on a passage in Anson's Law of Contract as follows:  \n \"The effect in such a case depends on the proper construction of the particular statute. But where the words of the statute leave room for doubt as to its intention, it is material to ask whether the object of the Act in imposing the penalty is merely to protect the revenue or whether its object or one of its objects-is to protect the general public or some class of the general public by requiring that the contract shall be accompanied by certain formalities or conditions, as, for example, registration in the case of a money-lender. In the latter case. It is probable that the act for the doing of which the penalty is imposed is impliedly prohibited by the statute and therefore illegal.\" \n This makes it clear that the act for the doing of which penalty was imposed can be impliedly prohibited and that, therefore, the prohibition need not necessarily be in express terms. In particular, in the present case, prohibition of formation of partnership or transfer of licence under the M.C.D.C. Order can be implied and inferred even though it is not mentioned in that Order in express terms.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-22", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "23. The above decision was relied on by a later Division Bench of this Court in Venkatadri v. Govindaraju, 1960-2 Andh WR 151. The learned Judges held that it was indisputable that the Abkari Act and the Opium Act were designed in furtherance of a public policy and not merely for fiscal purposes and that, on the other hand, the Central Excises and Salt Act was designed with the avowed object of levy and collection of duties and that, therefore, the principle of the decision of the Full Bench in did not apply to the case of a holder of licence under the Central Excises and Salt Act (1 of 1944) entering into a partnership in regard to a business covered by the licence and contravening the provisions of the concerned rule by failing to report the fact of partnership within 30 days. They took into account the fact that, notwithstanding the omission to give intimation to the licensing authority within 30 days which was punishable with a penalty, the unlicensed partners were responsible under the rules for the terms and conditions of the license. \n 24. Section 23 of the Contract Act runs as follows: \n \"Section 23. The consideration or object of an agreement is lawful, unless", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-23", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "(i) it is forbidden by law or", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-24", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "(ii) is of such a nature that, if permitted, it would defeat the provisions of any law; or -  \n (iii) is fraudulent;  \n (iv) or involves or implies injury to the person or property of another; \n (v) or the Court regards it as (a) immoral, or (b) opposed to public policy.\"", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-25", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. For purposes of convenience of reference, we have givne numbers (i) to (v) and letters (a), (b) to the various portions in the above section. In this case, we are concerned only with items (ii) and (v) (b). The question as to whether a contract of partnership is valid or not depends on whether it comes under category (ii) or (v) (b). A licence, such as is concerned in the present case namely, a licence issued to a person under the M.C.D.C. Older, is a personal privilege given to the licensee (See (FB)). The privilege granted under it cannot extend to any persons with whom the licensee chooses to form a partnership Vide . M.C.D.C. Order was designed not merely for the protection of public revenue but in furtherance of a public policy. This is clear from the nature of the provisions in We order, formation of a partnership in effect amounts to transfer of rights under the licence by the licensee mentioned in that licence to his partners. Section 21 Mad LJ 425. If transfer of rights or formation of partnership in the above manner were expressly prohibited by law (M.C.D.C. Order), then the dealing in the business by the partnership would amount to an offence punishable under Rule 81(4) of the Defence of India Rules and also to the penalty of confiscation of stocks etc., under Clause 17 of the M.C.D.C. Order which is also a punitive provision.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-26", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "The mere fact that punishment is provided for formation of a partnership may not render the partnership illegal if there is no express provision of the Act concerned making it illegal provided that the object of the Act is merely for protection of the revenue. But if the abject of the Act is furtherance of a public policy, the formation of the partnership would become illegal under category (v) (b) as being opposed to public policy. me formation of the partnership can be illegal if it falls under category (ii) of Section 23, i.e., such partnership, if permitted, would defeat the provisions of the M.C.D.C. Order. If a partnership such as existed in the present case is allowed, it would enable a person who has not got a licence to evade the liabilities intended by the law to be cast on persons carrying on the business of dealing in cloth. So, it would come under category (n) of Section 23 it would also come under category (v) (o) of Section 23. The decision of the Full Bench in as well as the other decisions of the Madras High Court already referred to by us including ILR 24 Mad 401 are applicable to this case.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-27", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "25. It is true that the M.C.D.C. Order does not contain an express prohibition of the formation of partnership or transfer of licence or an express provision that formation of partnership or transfer of licence is illegal. But prohibition of transfership and of transfer of licence and their being illegal need not necessarily be declared in express terms. They can be implied and they can be inferred from the provisions of the statute and the rules in (FB) It was held that (a) if the licensee held his licence for the partnership and shared his licence with the partner, then the transfer attended against Rule 27 and trial (o) if the licencee did not hold the licence for the partner ship, then the unlicensed partner committed a breach of Section 15 of the Act because of selling without a licence and that in either case, an offence would be committed and that, therefore formation of partnership was illegal because an offence would be committed or it would be against the general public policy underlying the enactment that only approved persons specifically licensed should be allowed to do business under the license. \nIn the present case also, it is clear that the public policy underlying the enactment especially as seen from Clause 4 of the M.C.D.C. Order is that only approved persons specifically licensed should be allowed to do the cloth business under the licence and the formation of partnership would be against that general public policy and would, if permitted, defeat the implied provisions of the M.C.D.C. Order especially Clause 4. So, me formation of partnership is illegal. The provisions of the M.C.D.C. Order show that by implication though not by express terms in the Order, the formation and working of partnership by a licensee with non-licensees was prohibited and amounted to a violation of the conditions of the licence (Ex. A-1).", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-28", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "26. In an unreported judgment of the supreme Court in Govinda Rao v. Nathmal, (unreported judgment of the Supreme Court in C.A No. 30 of 1960, D/- 11-4-1952 the question of maintainability of a suit for accounts of a dissolved firm came up for decision under the following circumstances. Plaintiff filed a suit for accounts of a dissolved firm which, according to him, had existed as a partnership between himself and the defendants by formation in October 1946 under which the firm was to trade in food-grains. The defendants challenged the partnership on the ground that it contravened the Central Provinces and Berar Food Grains Control Order (1945) and was, therefore, illegal. That plea of the defendants was accepted by the two lower courts and came up on appeal by the plaintiff to the Supreme Court. The two defendants held a licence in the name of their joint family firm in Rajnandgaon State under the law in force in that State for dealing in foodgrains there. That State was an Indian State outside British India. The plaintiff held a licence under the Central Provinces and Berar Food Grains Control Order, 1945, for dealing in food-grains as a wholesale dealer in the Nagpur District. In October 1946 the plaintiff entered into a partnership with the two defendants for dealing in food-grains. This partnership conducted two transactions of purchase in Central Provinces. It was the admitted case of the plaintiff that the partnership was formed for the specific purpose of exporting food-grains to places outside the Central Provinces and was formed because the two defendants, who were not registered dealers in the Central Provinces, could not get permits for export from the Central Provinces. \n 27. The relevant provisions in the C.P. and Berar Food-Grains Control Order, 1945, were as follows:-", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-29", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "\"Section 3(1). No person shall deal in food-grains as a wholesale dealer except under and in accordance with a licence issued by the Deputy Commissioner of the district.\" The phrase 'deal in food-grains' is defined as follow: \n \"To engage in the business of purchase, sale or storage for sale of food-grains whether on one's own account or on account of or in partnership or in association with any other person or as a commission agent or arhatiya, and whether or not in conjunction with are other business; and the words 'dealer' and 'dealing' shall be construed accordingly.\"  \n A 'wholesale dealer', under the Food Grains Control Order, was a dealer dealing in food-grains in quantities above a certain weight. \n 28. Their Lordships of the Supreme Court observed as follows:   \n \"Without going into the pleas of the defendants, it is quite clear that the appellant (plaintiff) was making it easy for the respondents to trade in food-grains in Central Provinces and Berar without holding a licence, thus abetting an offence of the contravention of the Food Grains Control Order by the respondents. If not committing an offence himself. The definition of the phrase 'deal in food grains' which we have quoted above, clearly shows that every person who dealt in food-grains in a place where the Order applied, had to possess a licence. The word 'person' in Section 3(1) must include a group or association of persons like a firm of partners. A licence in the name of one of the partners was not enough. The partnership thus was an illegal one, because the object of the partnership was illegal. .....", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-30", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "What we have to find out is whether the partnership was legal, because the suit was for accounts of that dissolved partnership. If the partnership was illegal or was for an unlawful purpose, then the Court will give no assistance to a plaintiff In such a case. It is obvious that the partnership was not licensed as a partnership. Therefore, the partnership could not deal in food-grains in Central Provinces and Berar. The licence in the name of the appellant was not one in favour of the partnership, and the whole of the transaction by the partnership was in contravention of the Food Grains Control Order. A Court would not enforce any claim arising from this illegal partnership ..... The suit was not for the enforcement of any money claim against the respondents, but was one for accounts of the dissolved firm, which we have already shown, was an illegal firm. The suit was, therefore, rightly\\dismissed.\" \n It will be observed that Section 3(1) of the C.P. and Berar Food-Grains Control Order is substantially similar in relevant particulars to Clause 4 of the M.C.D.C. Order. There is some difference Between the two provisions but it is not material for the purpose of this case. Both are in agreement on the material feature that no person shall deal in the concerned article as a dealer except under and in accordance with the terms and conditions of a licence duly granted. The definition of 'dealer' in Clause 3(c) of the M.C.D.C. Order is substantially in agreement in relevant particulars with the definition of the phrase 'deal in food-grains' and the indication in it as to how the word 'dealer' was to be construed on that basis in the C.P. and Berar Food Grains Control Order. Their lordships came to the conclusion that the partnership was illegal on the following grounds:-", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-31", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "(1) The word 'person' in Section 3 (i), corresponding to Clause 4 of the M.C.D.C. Order, included a firm of partners. \n (2) The licence in the name of one of the partners did not amount to a licence in favour of the partnership so as to authorise a partnership to deal lawfully as 'dealer' under that licence. \n (3) Therefore, the object of the partnership namely, dealing by the partnership in food-grains under the licence, which was in the name of one-partner (Plaintiff) alone was illegal as the partnership was not licensed as a partnership. So the dealing by the partnership in food-grains was in contravention or the C.P. and Berar Food-grains Control Order and was illegal. \n (4) Suit for accounts of such a dissolved partnership was not maintainable.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-32", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "(4) Suit for accounts of such a dissolved partnership was not maintainable.     \n All the above grounds apply to the present case on the basis of the provisions of the M.C.D.C. Order which are substantially similar to the corresponding provisions of the C.P. and Berar Food-Grains Control Order on which those grounds are based by the Supreme Court. Consequently the decision of the Supreme Court applies directly to the present case and is sufficient to decide it, being ample authority of the highest court in the land, in particular, the decision of the Supreme Court does not rely upon any express prohibition of transfer such as contained in Section 13 and Section 16 of the Madras Rationing Order 1943. The decision shows that the illegality of the partnership does not depend on there being an express prohibition such as contemplated in Sections 13 and 16. That question, as to whether the absence of such express term affected the illegality of a partnership such as concerns in the present case was bereft of direct authority cf this Court when our learned brother, Seshachalapathl, J., made the reference on 3-8-1961, But, subsequently, direct authority of the highest Court has come into existence on this question when the Supreme Court passed judgment on 11-4-1962.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "2e41037f91d3-33", "Titles": "V. Basavayya vs N. Kottayya on 5 July, 1963", "text": "Their Lordships of the Supreme Court did not consider the question as to whether the C.P. and Berar Food-Grains Control Order and the prohibition of dealing without a licence under that order was merely to protect the, revenue or whether the object was the furtherance of public policy or the question as to whether the partnership would be illegal if the object of the C.P. and Berar Food-Grains Control Order had been only for the protection of the revenue and not in furtherance of public policy. But, we find that it does not affect the present case in view of the substantial similarity of the relevant provisions of the M.C.D.C. Order with the relevant provisions of the C.P. and Berar Food-Grains Control Order. The principle of the decision of the Supreme Court directly applies to the present case and the position mains unaffected by the decision of the Calcutta High Court in (S) . It is clear that the partnership was illegal and that the suit was not maintainable. \n 29. Though the decision of the Supreme Court is direct authority which is sufficient and ample to decide the present case, we have dealt with the various other decisions as they were cited and relied upon by the learned Advocates in the course of their arguments. \n 30. We, therefore, hold that the suit partnership is void and that the suit is not maintainable. Consequently, we uphold the judgment of the Court below and dismiss the second appeal with costs.", "source": "https://indiankanoon.org/doc/1962918/"}
+{"id": "e541c35e7670-0", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "JUDGMENT Umamaheswaram, J.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-1", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "1. This is an appeal brought by the plaintiff as against the judgment and decree at the District Judge of West Godavari at Eluru dismissing his suit for recovery of damages for breach, of a contract dated 29th September 1950. According to the plaintiff, the defendant gave an order for a wagon load of black gingelly by a telegram dated 29-9-1959 and that the price was fixed at Rs. 84-3-0 per bag of 164 Lbs. F. O. R, Eluru. \n The plaintiff, who accepted the order, on the same day applied to the M. and S. M. Railway for a wagon and a railway wagon was allotted on 15th October. The goods, viz., 251 bags of gingelly were loaded in the wagon on the same day. The railway receipt was obtained in the name of the plaintiff and endorsed to the Central Bank, Eluru. He also drew a hundi for the amount of the price on the defendant and delivered it to the Bank. \n After the plaintiff sent a telegram intimating the dispatch of the goods, the defendant by an ante-dated postcard informed the plaintiff that the latter may not book the goods if not already despatched. Another ante-dated post card was sent by the defendant stating that the goods would not be accepted as the plaintiff had delayed in sending the consignment. The wagon reached Cochin on 26th October and the defendant refused to pay the hundi and toke delivery of the goods. \n Further correspondence passed between the parties and the plaintiff through P. W. 1 arranged for the resale of the goods. The suit was instituted by the plaintiff for recovery of Rs. 4144-8-9 as damages on the basis of the prices fetched at the resale. He claimed the freight charges, demurrage, commission and brokerage paid at the time of resales.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-2", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "2. The defendant resisted the suit on the ground that the plaintiff alone committed default inasmuch as he did not consign the goods immediately after the order was placed on him. He contended that the contract was validly terminated by him and that he was consequently not liable to pay any damages. He further pleaded that even assuming that he had committed the breach of the contract, he was not liable to pay damages on the basis of the prices realised at the resales held by P. W. 1. \n 3. Seven issues were framed by the District Judge. He found in paragraph 6 of the judgment that the case of the defendant that the goods should be immediately booked and delivered was not true, that the plaintiff took all the necessary steps to fulfil his part of the contract and that the contract was not validly terminated by the defendant. \n In paragraph 7, he found that the plaintiff had no right \"to resell the goods either under the contract or under law\", that on the date of the breach viz., 16-10-1950, the market price was higher than the contract price and that the plaintiff was consequently not entitled to any damages. He overruled the plea of the defendant that the Court had no jurisdiction to entertain the suit. In the result, he dismissed the plaintiffs suit. The appeal has consequently been preferred by the plaintiff to this Court. \n 4. The questions that arise for decision are those covered by issues 4 and 5. Sri K. Ramachandra Rao, the learned advocate for the respondent, stated at the opening that he was not challenging the findings of the District Judge in regard to issues 1 to 3 viz., that the respondent had committed the breach of the contract. So, the only question that has to be decided is whether the plaintiff has established his claim to recover damages, railway freight, demurrage, commission and other expenses of resale.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-3", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "5. Sri Sankara Sastri, the learned advocate for the appellant, strenuously contended that the contract dated 29-9-1950 related to a sale of specific foods, that the title to the goods passed to the defendant on the plaintiff accepting his order and that the plaintiff was entitled to exercise a right of resale on the defendant committing the breach of contract. In order to appreciate his argument it is necessary to set out a few relevant facts. On 29-9-1950, the defendant sent a telegram Ex. A-20 to the plaintiff in the following terms : \n \"Received. If immediately bookable despatch one wagon Kumppellu cheaply eighty four eight.\" \n He confirmed the telegram by a letter and directed the plaintiff to wire the result after booking. The plaintiff thereupon sent a wire thus : \n  \"Received.    Purchased     Wagon     Karupapillu Eighty Four Eight Booking..........\"", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-4", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "By his letter marked as Ex. A-22, he wrote in the following terms : \n  \"We have purchased for you black gingelly at Rs.  84-8-0 per hag of  164 Lbs.  to he booked to rail   at  Eluru   and  came  to this  village.  We  have intended  for  a  wagon.    As  soon   as   it is  allotted we will book the goods and send them..........\"", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-5", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "Though according to the correspondence set out above, the plaintiff states that he had purchased the goods and despatched them in the wagon, but the Managing Partner of the plaintiff's firm, who was examined as P. W. 2, deposed that on 29-9-1950 the plaintiff's firm had 281 bags of gingelly and that they supplied 251 bags out of that quantity. He stated that on the date of loading, they had more than 281 bags of gingelly. \n In the course of the cross-examination, he stated that the plaintiff did not purchase any goods on 29-9-1950 as they had sufficient stock with them and that the expression \"purchased\" used by them in the correspondence was only a business term. It is therefore clear from his evidence which I accept, that the subject-matter of the contract was not specified goods as defined in Section 2 (14) of the Indian Sale of Goods Act, hereinafter referred to as the Act. \n According to the definition, \"specific goods\" means goods identified and agreed upon at the time a contract of sale is made. I have no doubt that the goods, which were despatched in the wagon, were not actually identified. The mere fact that they were capable of identification does not bring it within the terms of the definition. As the goods were not identified and agreed upon at the time when the contract was made viz.,. 29-9-1950, they are generic or unascertained goods within the meaning of the Act.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-6", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "In this view, I am unable to accept the contention of the learned Advocate for the appellant that the terms of Section 20 or Section 21 of the Act apply to the case. I am clearly of opinion that as the contract was for the sale of unascertained goods, section 23 is attracted. The question for consideration is whether there was an unconditional appropriation within the meaning of Sections 23 (2) and 25 (1) of the Act. Section 23 (2) runs as follows : \n \"Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the rights of disposal, he is deemed to have unconditionally appropriated the goods to the contract,\" \n Section 25 (1) is as follows : \n ''Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of disposal of the goods until certain conditions are fulfilled. In such cases, notwithstanding the delivery of the goods to a buyer, or to a carrier or other bailee for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled.\"", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-7", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "6. The Point for consideration in the appeal is whether, when the plaintiff delivered the goods to the carrier, i.e., railway company, for the purpose of transmission to the buyer, he reserved the right of disposal and consequently there was no unconditional appropriation of goods to the contract. As stated supra, the plaintiff had obtained the railway receipt in respect of the goods in his own name. Ho endorsed the railway receipt in favour of the Central Bank, Eluru and delivered the hundi with a direction that the railway receipt should be delivered to the buyer only when the hundi was honoured and the price of the goods was paid. \n According to Sri K. Ramachandra Rao, the learned advocate for the respondent, the fact that the railway receipt was taken in the name of the seller himself is Prima facie evidence that he intended to reserve the right of disposal of the goods and that the title would pass to the buyer only when he honoured the hundi and paid the price of the goods. \n In support of his contention he strongly relied upon a decision of the Division Bench of this Court in State of Madras v. Venkataramaniah and Sons, (A). The learned Judges held that the fact that the goods had undergone the selective process, weighed and were delivered to the common carrier for transport did not show that there was an unconditional appropriation. \n They further held that the question whether the appropriation was unconditional turned upon the construction of Section 25 of the Sale of Goods Act i.e., whether the seller reserved the jus disponendi. They observed that as the railway receipt, which is a document of title, was taken out in the name of the seller, he must be deemed to have manifested an intention to remain the owner and to retain control over the goods till the buyer made the payment through the bank. They added ;", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-8", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "\"If on the other hand the seller books the goods to self the appropriation can be said to have been affected only when full payment is made to the seller.\" \n I am inclined to hold that the facts if this case are directly governed by the Bench decision. \n 7. The learned advocate for the respondent further relied on a decision of the Bombay High Court reported in Ford Automobiles v. Delhi Motor Co., AIR 1923 Bom 125 (B). This decision was no doubt delivered prior to the passing of the Indian Sale of Goods Act. The learned Judge discussed the principles of English law and held that the railway receipts stand on the same footing as bills of lading and that the fact that the railway receipt was taken in the name of the seller was prima facie evidence that he intended to reserve the right of disposal. \n He referred to the decision in Mirabita v. Imperial Ottoman Bank, (1878) 3 Ex. D 164 at p. 172 (C). The second rule extracted by the learned Judge from the judgment of Cotton L. J. in Mirabita v. Imperial Ottoman bank (C) (supra) is as follows : \n \"If, however, the vendor, when shipping the articles which he intends to deliver under the contract, takes the bill of lading to his own order and does so not as agent, or on behalf of the purchaser, but on his own behalf, it is held that he thereby reserves to himself a power of disposing of the property, and that consequently there is no final appropriation, and the property does not on shipment pass to the purchasers.''", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-9", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "8. The question as to when the seller is deemed to reserve the right of disposal is discussed by Mr. Benjamin in his treatise on the Law of Sale of Personal Property, 5th Edition, at p. 359. The learned author states as follows : \n \"The cases which illustrate the reservation of the right of disposal arise chiefly where parties at a distance from each other contract by correspondence, and where the seller wishes to secure himself against the insolvency or default of the buyer.\" \n He points out that although the seller might write to the buyer and specify the packages and marks identifying the goods and although he may accompany this with an invoice, stating that the specific goods are shipped for buyer's account and in accordance with the buyer's order, mating his election final and determinate, the property in the goods will nevertheless remain in the seller till the bill of lading has been endorsed and delivered to the buyer. \n 9. In The Prinz Adalbert, 1917 AC 586 (D), Lord Sumner dealt with the general law where the seller pledged the bill of lading with a banker. The relevant observations are at pages 589 and 590 and are as follows ; \n \"Possession of the indorsed bill of lading enables the acceptor to get possession of the goods on th& ship's arrival. If the shipper, being then owner of the goods, authorises and directs the banker, to whom he is himself liable and whose interest it is to continue to hold the bill of lading till the draft is accepted, to surrender the bill of lading against acceptance of the draft, it is natural to infer that he intends to transfer the ownership when this is done, but intends also to remain the owner until this has been done. Particular arrangements made between shipper and consignee may modify or rebut these inferences ........\"", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-10", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "This decision was followed by the Supreme Court in Commr. of Income-tax, Madras v. Mysore Chromite Ltd., (E). Das, J. {as he then was) held that the property in the goods passed in London where the bill of lading was handed over to the buyer's bank against the acceptance of the relative bill of exchange. It was pointed out that the payment by the Eastern Bank Limited, Madras, was nothing but an advance made by them to their own customer on the security of the goods covered by the bill of lading. \n 10. That the rule applicable to delivery of goods by carriers by sea is equally applicable to delivery of goods by carriers by land and to Canal Boat Companies is pointed out by Mulla, J. at page 129 in AIR 1923 Bombay 125 (B) by reference to the decisions in Dutton v, Solomonson, (1803) 3 B and P 582 : 127 E. R. 314 (F) and Fragano v. Long, (1825) 4 B and C 219 : 107 E. R. 1040 (G). \n According to the learned Judge, there is no difference in principle between taking the bill of lading and the railway receipt in the name of the seller. The same view was taken by the Lahore High Court in Sundar Singh v. Gulab Singh, AIR 1927 Lah 269 (H). \n 11. The identical question came up for decision before the Patna High Court after the passing of the Indian Sale of Goods Act in Governor General of India in Council v. Joynarain, AIR 1948 Pat 36 (I). Referring to Section 25 (2) of the Act, Meredith, J. observed as follows at p. 37 :", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-11", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "\"Though this provision is expressed as relating to the shipment of goods, the same principle will apply to their transmission by rail; see Firm Ugarchand Gajanand v. Firm Motiram Ghanshamdas, AIR 1938 Sind 18 (J); AIR 1923 Bombay 125 (B) and AIR 1927 Lah 269 (H). In the last mentioned case it was held that where goods are sent by railway, the railway receipt being addressed to self to be delivered to the purchaser only on receipt of the price of the goods, the property in the goods does not pass to the purchaser till the price is paid.\" \n The same view was taken by the Allahabad High Court in Ram Karan Das v. Sardar Singh, 1950 All L. J. 145 (K) and by the Assam High Court in Ramniwas v. Commr. of Taxes, Assam, AIR 1952 Assam 178 (L). The decisions are all uniform that the rule which applies to the bills of lading is equally applicable to railway receipts. \n The actual difference between delivery to a common carrier and delivery on board a vessel is however pointed out by Mr. Benjamin in his treatise on Sale, which is extracted at page 114 of the Indian Sale of Goods Act and Partnership Act by Pollock and Mulla, Second edition, in the following words : \n \"Where goods are delivered, by the seller in pursuance of an order to a common carrier for delivery to the buyer, the delivery to the carried passes the property, he being the agent of the buyer to receive it, and the delivery to him being equivalent to a delivery to the buyer.\"", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-12", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "\"Where goods are delivered on board a vessel to be carried, and a bill of lading is taken the delivery by the seller is not a delivery to the buyer, but to the captain as bailee for delivery to the person indicated by the bill of lading, as the one for whom they are to be carried.\"", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-13", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "But, if the railway receipt or the hill of lading is\ntaken in the name of the seller,     it is regarded in\nEnglish law as prima facie reservation of the right\nof disposal of the goods by the seller.    Sri Sankara\nSastri, the  learned advocate  for the appellant, has\nnot pointed out a single decision to show that there\nI is any  distinction  in  principle   in   regard to   reservation  of  title  in  respect of  a  bill  of lading  and\na railway receipt.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-14", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "12. Sri Sankara Sastri invited my attention to the decision reported in Siddique and Co. v. Rangiah Chettiar, 1947-2 Mad LJ 79 : (AIR 1948 Mad 122) (M). It has no bearing on the facts of this case inasmuch as the contract therein related to the sale of specific goods in a deliverable state and the goods were not entrusted to any common carrier or a railway company. The next decision cited by him, Madras State v. Ramalingam and Co. AIR 1956 Madras 695 (N), has also no bearing on the facts of this case. \n It was held by the learned Judges on an interpretation of Section 25 (2) and (3) of the Act that the title to the goods passed in the Madras State inasmuch as the price was paid by the negotiating bankers on the receipt of the shipping documents, the bill of lading and the bill of exchange as the agent of the buyer. \n 13. Sri Sankara Sastri, however, raised an interesting and difficult question of law based on the specific language of Section 25 (2) of the Act. He contended that inasmuch as the Legislature specifically enacted Sub-sees. (2) and (3) only in regard la bills of lading and not railway receipts and provided that if the goods are deliverable to the order of the seller or his agent, the seller is prima facie deemed to have reserved the right of disposal, no such presumption or prima facie reservation of the right of disposal would arise in the case of a seller taking the railway receipt in his own name.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-15", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "There is considerable force in this contention. This argument has not been noticed in the several decisions decided after the passing of the Act except by the Assam High Court in AIR 1952 Assam 178 (L). The answer furnished at page 183 is not very convincing. As I am bound by the decision of the Division Bench of this Court in (A) and as the several decisions referred to supra take the same view I hold that the title in the goods did not pass to the buyer as contended by the appellant, I, therefore, agree with the District Judge that the appellant was not entitled to resell the goods I under the terms of Section 54 (2) of the Act. \n 14. Following the decision in Motilal v. Mool Chand, (O), I hold that the appellant is only entitled to claim the difference between the contract rate and the rate prevailing on the date of the breach by way of damages. \n 15. The finding arrived at by the learned District Judge that the goods sold by P. W. 1 between 8-11-1950 and 30-11-1950 were not the goods of the plaintiff is however, in my opinion, erroneous. The correspondence shows that when the defendant refused to take delivery of the goods, he instructed Chakola Lonappan Paul of Cochin to dear the goods from the wagon and dispose of them. \n Intimation was given to the defendant under Ex. A-39 D/- 4-11-1950 that the plaintiff had given orders to Chakola Lonappan Paul of Cochin to sell the goods in open market. Exhibit A-55 is the letter sent by the plaintiff to Messrs. Chakola Lonappan Paul firm. P. W. 1 was examined on behalf of the plaintiff to show that the sales were accordingly held as evidenced by Exs. A-l to A-16.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-16", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "The mere fact that Exs. A-3, A-9, A-11 and A-12 did not disclose the name of the plaintiff, does not lead to the conclusion that the goods of others, were sold under those documents. P. W. 1 is quite specific that all the 251 hags cleared from the wagon were separately stocked and were sold under exhibits A-l to A-16. I accept his evidence and hold that what was sold under Exhibits A-l to A-16 were the goods of the plaintiff despatched under the suit contract. \n There is no satisfactory evidence on behalf of the respondent to show that the sales were not duly conducted by P. W. 1 or that the price realised did not represent the market rates on the dates of those sales. \n 16. Sri Sankara Sastri next contended that ' even assuming that the appellant was not entitled to resell the goods under Section 54 (2) of the Act, the prices realised at those sales might be taken as representing the market, rates on those dates and damages awarded on that footing. In support of this argument. he relied upon the decision of the Madras High Court in Muthukrishna Reddiar and Sons v. Madhavji Devichand and Co. Ltd., (P). \n It was held by the learned Judges that the price realised at the resale might be taken as the true value of the damaged goods if there was no unreasonable delay on the part of the purchaser in selling the goods. It was further held that the damages must be assessed on the basis of the market-value prevailing at the place of delivery.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-17", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "The question to be considered in the present case is whether there was no unreasonable delay on the part of the plaintiff in selling the goods and the market rate prevailing on the date of resale represents the market rate as on the date of the breach. As the goods were resold only on and after 8-11-1950 after the market had considerably fallen, I am inclined to agree with the District Judge that those rates should not be adopted as representing the market rate as on the date of the breach of the contract. \n 17. I however do not agree with him that the date of the breach was 16-10-1950 and that the market price was higher than the contract price. He proceeded on the erroneous view that the market rate prevailing at Eluru as on the date of the breach should be taken into account. \n He ought not to have relied on the terms of the telegram Exhibit B-4 in which the plaintiff wrote that the market rate for black gingelly at Eluru as on 17-10-1950 was Rs. 85/8/0 or Rs. 86/-. He ought to have determined, as held in (P), the market rate of the goods as at the place of delivery on the date of the breach. \n 18. Before dealing with the question as to the date of the breach, it is necessary to dispose of a preliminary objection raised by Sri K. Ramachandra Rao, learned advocate for the respondent, based on the decision in Angulliah and Co. v. Sassoon and Co.. ILR 39 Cal 568 (Q). At p. 579, Sir Lawrence Jenkins held as the plaintiffs claim for damages rested on resale, the Court should not have awarded damages on a totally different basis.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-18", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "He expressed the opinion that if the defendant challenged the plaintiff's right to claim damages on the basis of resale, he should immediately apply for amendment of the plaint and claim damages on the difference between the contract price and the market price on the date of the breach. This decision was not followed by the Bombay High Court in Narsinggirji Manufacturing Co. v. Budansaheb, AIR 1924 Bom 390 (R). Macleod, C J. observed at p. 391 as follows : \n \"In the next place, the fact that the plaintiff claimed as the measure of damages the difference between the price, which he realised on the resale of goods and the contract price, would, in my opinion, be no reason for the Court to refuse to award damages according to the correct measure. With all due respect to the Judges who decided ILR 39 Cal 568 (Q), it seems to us that it, is going too far to hold that when a plaintiff has made a mistake in demanding damages on a wrong basis, the Court must refuse to set right the mistake by directing the damages to be calculated in the proper way unless the plaint i; amended,\" \n I am inclined to follow the liberal view of the Bombay High Court in preference to that of the Calcutta High Court. Out of abundant caution, Sri Sankara Sastri made an oral application to permit him to amend the plaint if I was inclined to accept the Calcutta view. But, as I am in agreement with the Bombay view that even without an amendment the Court is entitled to award the proper measure of damages if there is sufficient evidence on record, I think it is unnecessary to direct the amendment of the plaint.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-19", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "19. The next question which has to be determined is one of fact as to when the breach of the contract took place. The learned District Judge found that the breach took place on 16-10-1950 when the defendant intimated to the plaintiff that he need not send the goods. Having carefully perused the evidence, I am not inclined to agree that the breach took place on that day and that the market rate of the goods as on that date should be taken into account. \n The correspondence makes it clear that the defendant ordered one wagon kumpellu and that the plaintiff immediately applied for a wagon. After the wagon was allotted on 15th October, the goods were loaded and sent to Cochin. The goods were received at Cochin on 26th October. The intimation given by the defendant under Exs. A-28 and A-29 that he would not receive the goods was before the due date of performance. \n It was open to the plaintiff either to accept the intimation given by the defendant or to keep open the contract till the date of performance. On 26th October, the plaintiff sent a wire to the defendant under Ex. B-5 requesting the defendant to pay the price of the goods and honour the hundi. On 28-10-1950, he wrote to the defendant to accept the delivery. A further telegram was sent on 29th October, that the wagon was not cancelled and that the defendant should take delivery without hesitation. The defendant sent a reply wire marked as Ex. A-37 on 31st October in the following terms :", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-20", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "\"Your letter addressed Trichur reached Cochin camp yesterday as desired and authorised examined both files arrived decision follows up to demurrage about five hundred despatch delay loss three rupees per bag comes seven hundred and fifty altogether one thousand two hundred fifty from that you suffer five hundred ourselves seven hundred fifty hence instructed Bank receive less five hundred this decision only considering our future relationship please note this without prejudice to the legal rights of either side.\" \n As the plaintiff was not agreeable to the new terms proposed in Ex. A-37 he requested Chakola Lonappa Paul of Cochin to clear the goods and sell them. Reading the correspondence as a whole, I am inclined to take the view that the breach of the contract had taken place only after the goods reached Cochin and the defendant refused to take delivery and sent Ex. A-37 i.e. on or after 31st October. The date of Exhibit A-28 or Exhibit A-29 under which the defendant intimated that he would not accept the goods should not be taken as the date' of breach inasmuch as the plaintiff-seller had not accepted the rescission of the contract by the defendant. The facts of this case are directly governed by the decision in Phillpotts v. Evans, (1839) 5 M and W 475 : 151 E. R. 200 (S), which is given as second illustration at page 243 in Pollock and Mulla's Indian Sale of Goods Act and Indian Partnership Act, second edition, The headuote in (1839) 151 E. R. 200 (S) correctly sets out the decision and is in the following terms :", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-21", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "Where A contracted for the purchase of wheat, to be delivered at Birmingham as soon as vessels could be obtained for the carriage thereof; 'and subsequently (the market having fallen) gave the seller notice that he would not accept it if it were delivered, the wheat being then on its transit to Birmingham.' Held, in an action against A for not accepting the wheat, that the proper measure of damages was the difference between the contract price and the market price on the day when the wheat was tendered to him for acceptance at Birmingham and refused; and not on the day when the notice was received by the seller.\"  \n At page 823, Mr. Benjamin in his treatise on the Law of Sale of Personal Property, 8th edition, refers to this case and states as follows : \n \"Lord Campbell said, in relation to (1839) 151 E.R. 200 (S) that it had been properly decided, but that the Exchequer of Pleas had not determined in that case that the seller would not have had the right of treating the bargain as broken, if he had chosen to do so, as soon as the buyer gave him notice that he would not accept the goods, without being compelled afterwards to make a tinder of them; and that the true point, decided in Ripley v. M'Clure, (1849) 4 Ex. 345 (T) was that a refusal' by the buyer to accept in advance of the arrival of the cargo he had agreed to purchase was not necessarily a breach of contract, but that, if unretracted down to the time when the delivery was to be made, it showed a continuing refusal, dispensing the seller from the necessity of making tender.\" \n Following this decision, I hold that the time for ascertaining the damages for non-acceptance is the date when the goods were finally refused to be taken delivery of by the defendant.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-22", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "20. Sri K. Ramachandra Rao, the learned advocate for the respondent, contended that as no specific date of delivery had been fixed under the terms of the contract, it was not open to the plaintiff to avail himself of the terms of Section 60 of the Act and wait till the date of delivery and that the date of reptidiation under Exhibit A-28 should he taken as the date of the breach of the contract. He referred in this connection to the decision in Millett v. Van Heek and Co. (1921) 2 KB 369 (U). \n What was held by the Divisional Court (Bray and Sankey JJ.) in that case was that when a contract provided for delivery within a reasonable time after a future date, it was not a contract for delivery at a fixed time within the meaning of Section 51, Sub-section (3) of the Sale of Goods Act, 1893. The learned Judges of the Court of Appeal reserved their opinion on that question. Atkin L. J., however observed at p. 378 that it was difficult to see why it should he said that the contract for delivery at times which could be determined by a Jury was not a contract for delivery at fixed times. He added: \n \"It seems to me that a meaning could be given to the words, \"if no time was fixed,\" by reading them as referring to a contract such as to deliver goods on demand or to deliver goods as required by the purchaser.\"", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-23", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "The expression used in Section 60 of the Act is not exactly the same as that contained in Section 51(3) of the Act. The expression employed is the \"date of delivery\". I am inclined to take the view on the facts of this case that the terms of Section 60 apply inasmuch as the defendant repudiated the contract before the date of delivery i.e., the wagon of goods reached Cochin. I am not inclined to agree with Sri Ramchandrarao's contention that as no specific or definite date of delivery was fixed the terms of Section 60 do not apply. \n 21. Even assuming that the terms of Section 60 do not apply and that the contract should he regarded has one to be performed within a reasonable time. I am inclined to apply the decision in (1921) 2 KB 369 (U) and hold that the damages are to be fired in reference to the time for performance of the contract subject to questions of mitigation. At p. 377, Atkin L. J. observed as follows: \n \"But it is said that, if no times have been expressed in the contract, and the contract would e construed by law as one for delivery by reasonable instalments over a reasonable time, even though those tunes might be ascertained as a question of fact by the jury, the plaintiff suing may not merely have an option, but is compelled, to fix his damages in reference to the market price at the time when the repudiation takes place.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-24", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "That, it seems to me, would introduce an anomaly entirely without any kind of principle to justify it. I am satisfied that the code never intended to make that distinction or to vary what was the rule of law at the time when it was passed, a rule which has been recorded in countless decisions since the doctrine of repudiation of contract has received its development in Frost v. Knight, (1872) 7 Ex. 111. (V), namely, that the damages are to be fixed in reference to the time for performance of the contract subject to questions of mitigation.\"  \n The Court of Appeal confirmed the view of the Divisional Court as to the measure of damages. When the defendant refused to accept delivery except on the terms mentioned in Exhibit A-37 dated 31st October, the plaintiff had requested Chakola Lonappa Paul to take delivery and sell the goods. It appears from the telegram sent by Chakola Lonappa Paul marked as Exhibit A-7 that the market rate of gingelly as on 2-11-1950 was Rs. 80/- per bag. \n I am inclined to adopt that figure as the market rate on the date of the breach. The defendant has not adduced any evidence to show that the plaintiff could have mitigated those damages. Calculating the damages on that footing, the plaintiff would be entitled to recover 251x Rs. 4-8-0 per bag i.e., Rs. 1129-8-0. \n 22. The next question which has to he determined is whether the plaintiff is entitled to the railway freight incurred by him as special damage under Section 61 of the Act. Sri K. Ramachandra Rao contended that there was no pleading in regard to the railway freight. 1 am not inclined to accept his contention as the sum of Rs. 4144-8-9 claimed in the plaint includes this amount.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-25", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "The mere fact that the plaintiff had not claimed this sum under the specific head of \"special damages\" does not, in my opinion, preclude him from claiming that amount. There is no doubt that the contract was F. O. R. and the defendant was bound to pay these charges at the time of taking delivery. The damages are such which the parties knew when they made the contract to be likely to result from breach of it, and are special damages within the meaning of Section 61 of the Act. \n In Ramalingam Chettiar v. Gokuldas Madavji and Co., AIR 1926 Mad 1021 (W), the cartage charges for taking the goods from Virudupatti to Tuticorin were allowed. Similarly, in Madhusudan Koer v. Badridas, AIR 1920 Cal 426 (X), the cost of freight and bags was allowed. Following these decisions, I am inclined to allow the plaintiff's claim in repard to the railway freight i.e., a sum of Rs. 758-4-0. \n 23. In regard to demurrage charges paid by the plaintiff, I am inclined to agree with the contention of Sri K. Ramachandra Rao that they cannot be allowed inasmuch as the plaintiff was bound to clear the goods when the defendant refused to take delivery. Similarly, in regard to the commission and brokerage paid by the plaintiff at the time of resale, I hold that the plaintiff cannot claim those charges as I have found that he was not entitled to exercise the right of re-sale under Section 54(2) of the Act. In the result, I hold that the defendant would be liable to pay Rs. 1129-8-0 and Rs. 758-4-0 with interest from the date of plaint upto the date of payment.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "e541c35e7670-26", "Titles": "Majety Balakrishna Rao vs Mooke Devassy Ouseph And Sons on 3 December, 1957", "text": "24. The decree of the lower Court is set aside, and there will be a decree in favour of the plaintiff as indicated above. As the appeal is partly allowed, the parties will receive and pay proportionate costs throughout.", "source": "https://indiankanoon.org/doc/754134/"}
+{"id": "0189766b91c1-0", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "IN THE COURT OF SH. HARVINDER SINGH,\n                       SPECIAL METROPOLITAN MAGISTRATE - 05,\n                             DWARKA COURTS, NEW DELHI.\n\n\nM/s Fullerton India Credit Co. Ltd.\n\nthrough its Authorized Representative\n\nSh. Salman Hameed                           ....................Complainant\n\n\n\nVersus\n\n\n\nLokesh Kumar                                ....................Accused\n\n\n\n                                            C.C.NO.18900/10 dated 18.05.2010\n                                            PS \u00ad ANAND VIHAR\n                                            Under Section 138 of N. I. Act, 1881\n\na)       Sl. No. of the case                : 18900/10\n\nb)       Date of commission of offence      : 01.05.2010 Approximately\n\nc)       Name of the complainant            : M/s Fullerton India Credit Co. Ltd.\n\nd)       Name of the accused, and his       : Lokesh Kumar\n                                              S/o Late Sh. Sewa Dass,\n                                              R/o 5297, Bharat Nagar, Basant Lane,\n                                              Paharganj, New Delhi - 110 055.\n\ne)       Offence complained of              : Under Section 138 of N. I. Act, 1881\n\nf)       Plea of accused                    : Pleaded not guilty\n\ng)       Final order                        : Convicted\n\nh)       Date of such order                 : 22.10.2011\n\ni)        Brief   \n                  statement of the reasons for the decision :", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-1", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "i)        Brief   \n                  statement of the reasons for the decision :\n                                                             \n\n1. By way of this judgment, I shall dispose of complaint under Section 138 .....................Contd/\u00ad Negotiable Instruments Act, 1881 filed by the complainant i.e. M/s Fullerton India Credit Co. Ltd. through its authorized representative Sh. Salman Hameed against the accused Lokesh Kumar S/o Late Sh. Sewa Dass, R/o 5297, Bharat Nagar, Basant Lane, Paharganj, New Delhi \n\n- 110 055.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-2", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "2. The brief facts of this case as per allegations of the complaint are that the complainant i.e. M/s Fullerton India Credit Co. Ltd. (Earlier known as First India Credit Co. Ltd.) is a Non\u00adBanking Financial Company duly incorporated under the provisions of Companies Act, 1956 and the complainant is engaged in the business of loans including personal loans, mortgage loans, vehicle loans etc. As per the para no.04 of the complaint, it is alleged by the complainant that the accused was sanctioned and granted a personal loan to the tune of Rs.1,15,000/\u00ad vide loan agreement no.6825000021890. It is further alleged by the complainant that the accused in partial discharge of his liability, issued three cheques bearing nos.166558, 166559 and 166560 each dated 06.03.2010 for a sum of Rs.57,500/\u00ad, Rs. 28,750/\u00ad and Rs.11,322/\u00ad respectively and each drawn on ICICI Bank Limited in favour of the complainant. It is further alleged in the complaint that complainant presented the above said cheques to its banker which were returned dishonored vide cheques returning memos each dated 23.03.2010 with the remarks ''Funds Insufficient''. It is further alleged in the complaint that complainant served upon the accused a Legal Demand Notice dated .....................Contd/\u00ad 13.04.2010 dispatched on 13.04.2010 through its advocate thereby demanding the payment of above said cheques amount in question within 15 days of the receipt of the said notice. It is further alleged in the complaint that accused failed to comply with the notice and to make the payment against above\u00adsaid cheques within 15 days of receipt of Legal Demand Notice. Accordingly, this complaint was filed by the complainant on 18.05.2010.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-3", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "3. After filing of complaint, authorized representative of the complainant namely Sh. Salman Hameed led his pre\u00adsummoning evidence by way of affidavit and after hearing Ld. Counsel for complainant, summoning order was passed against the accused vide order dated 29.05.2010 and after the appearance of accused, a separate notice under Section 251 of Cr. P.C was put to the accused on 06.08.2010 to which accused pleaded not guilty and claimed trial, thereafter the matter was fixed for CE and cross\u00adexamination.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-4", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "4. To prove the case of complainant, Sh. Salman Hameed, AR of the complainant got examined himself as complainant witness and tendered his post summoning evidence by way of affidavit Ex.CW1/A1 and relied on the documents already exhibited in pre\u00adsummoning evidence i.e. Ex.CW1/1 to Ex.CW1/8 and further reiterated the contents of the complaint on oath before this Court. The power of attorney of Sh. Salman Hameed is exhibited as Ex.CW1/2, original cheques as Ex.CW1/3 (Collectively), cheques returning ....................Contd/\u00ad memos as Ex.CW1/4 (Collectively), Legal Demand Notice as Ex.CW1/5, original postal receipt as Ex.CW1/6, original POD as Ex.CW1/7 and loan repayment schedule as Ex.CW1/8. Thereafter, the witness of the complainant was cross examined by Sh. S. S. Draal, Ld. Counsel for the accused in length. CW2 Sh. S. S. Pandey, Public Relation Inspector, Postal Department was examined as witness by the complainant to prove the delivery of notice to the accused person. CW2 exhibited Booking Slip as Ex.CW2/A and Delivery Slip as Ex.CW2/B. The said witness was also cross\u00adexamined by the Ld. Counsel for the accused. After that, complainant's evidence was closed on the statement of the Ld. Counsel for the complainant on 13.01.2011.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-5", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "5. After that the statement of the accused was recorded under Section 313 of Cr. P.C. r/w 281 of Cr. P.C. on 08.04.2011 in which all incriminating evidence along\u00adwith exhibited documents were put to the accused Lokesh Kumar in which he admitted that he had availed loan from the complainant bank vide loan agreement no.6825000021890. It was further admitted by the accused person that all the cheques in question bear his signatures, but, stated that the signatures on the cuttings on the cheque bearning no.166560 dated 06.03.2010 are not his signatures. Accused person further stated that the cheques in question are security cheques and all the particulars except signatures have been filled by the complainant. In answer to another question, whether the cheques were dishonored vide .....................Contd/\u00ad returning memos Ex.CW1/4 (Collectively) with the reasons \"Funds Insufficient\", the accused admitted that the cheques were returned dishonored due to above\u00adsaid reason vide above\u00adsaid returning memos, but, further stated that the cheques were presented without intimation to him. The accused further submitted that neither he had received Legal Demand Notice nor AD card is signed by him. In answer to another question in his statement under Section 313 of Cr. P.C. r/w Section 281 of Cr. P.C., the accused stated that he wants to lead defence evidence.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-6", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "6. In defence, accused examined Sh. Ramji Lal, Parcel Supervisor, posted at Parcel Office, New Delhi Railway Station as DW1 on 28.07.2011. The DW1 exhibited leave record of the accused person as Ex.DW1/A and deposed before this Court on oath that accused was on duty on 15.04.2010 from 08:00 am to 04:00 pm. The DW1 was cross\u00ad examined by Sh. A. K. Singh, Ld. Counsel for the complainant. The accused closed his defence evidence on 28.07.2011 and thereafter, the matter was fixed for final arguments. \n\n7. I have heard Ld. Counsels for both the parties and I have also perused the record of the case file and evidence on record. \n\n\n8. Following Points arise for determination by this court :\n ....................Contd/\u00ad (1) Whether complainant has proved on record the essential ingredients of offence under Section 138 of Negotiable Instruments Act, 1881 against the accused. \n\n (2) Final order. \n\n\n9. Point No. (1) - To decide this point lets analyze the main ingredients of Section 138 of Negotiable Instrument Act, 1881 and the evidence on record regarding these ingredients : \u00ad\n\n (a) Whether the cheque was drawn/issued by the accused person to the complainant on an account maintained by him with the bank for discharge, in whole or in part, of any debt or other liability?", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-7", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "AR of the complainant has deposed in para no.04 of his affidavit Ex.CW1/1A that the complainant granted and sanctioned personal loan to the accused to the tune of Rs. 1,15,000/\u00ad vide loan agreement number 6825000021890 dated 28.07.2009 and that the accused in partial discharge of his liability, issued three post dated cheques bearing nos. 166558, 166559 and 166560 each dated 06.03.2010 for a sum of Rs.57,500/\u00ad, Rs.28,750/\u00ad and Rs.11,322/\u00ad respectively and all drawn on ICICI Bank Limited respectively in favour of the complainant. On this point, the main contentions of the accused person are : \u00ad .....................Contd/\u00ad\n\n 1. That the accused had settled the matter with the complainant on 30.04.2010 in the sum of Rs.1,14,197/\u00ad and had made a payment of Rs.30,000/\u00ad on 30.04.2010 itself and the complainant has filed this complaint even after settlement of the loan account. \n\n 2. That the cheques in question are security cheques which were given as blank signed cheques at the time of grant of loan and all the particulars except signatures have been filled by the complainant. \n\n 3. That the signatures on the cuttings on cheque no.166560 are not the signatures of the accused person and are forged and fabricated one.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-8", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "I have carefully considered the contentions of the accused person and I have also gone through the evidence on record. It is pertinent to mention here that the accused person has not disputed his liability towards the complainant and has in fact admitted in his statement under Section 313 of Cr. P.C. r/w 281 Cr. P.C. that he has availed loan from the complainant as alleged by the complainant. \n\n Now, this Court is dealing with the 1st defence of the accused that since the accused person had settled the matter with the complainant on 30.04.2010 and had made a payment of Rs.30,000/\u00ad on 30.04.2010 i.e. before expiry of 15 days from the receipt of notice as alleged by the complainant and before filing of this complaint, therefore, this complaint is not maintainable. \n\n Admittedly, the accused person had made payment on 30.04.2010 vide .....................Contd/\u00ad Ex.CW1/D2 against offer for settlement of loan account, the same being exhibited as Ex.CW1/D3. On this issue, the law as per Section 59 and 60 of Indian Contract Act, 1881 which can be helpful is as under :\u00ad Section 59 : Application of payment where debt to be discharged is indicated :\u00ad \"Where a debtor, owing several distinct debts to one person, makes a payment to him, either with express intimation, or under circumstances implying that the payment is to be applied to the discharge of some particular debt, the payment, if accepted, must be applied accordingly.\"", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-9", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "Section 60 : Application of payment where debt to be discharged is not indicated :\u00ad \"Where the debtor has omitted to intimate and there are no other circumstances indicating to which debt the payment is to be applied, the creditor may apply it at his discretion to any lawful debt actually due and payable to him from the debtor, whether its recovery is or is not barred by the law in force for the time being as to the limitation of suits.\" \n\n In view of the above\u00adsaid law provided in Section 59 and 60 of Indian Contract Act, 1881 and of the fact that the payment was admittedly made against the offer for settlement of loan account and not against the cheques amount in question demanded through legal demand notice, therefore, the contention of the accused person that this complaint is not maintainable is hereby rejected. \n\n Now, this Court is dealing with the 2nd defence of the accused person that the cheques in question were security cheques which were taken by the complainant at the time of grant of loan as blank signed cheques and all the particulars have been filled by the complainant. \n\n .....................Contd/\u00ad The relevant law in this regard is : \u00ad Section 46 of Negotiable Instruments Act, 1881 : \"Delivery\u00ad The making, acceptance or indorsement of a promissory note, bill of exchange or cheque is completed by delivery, actual or constructive.\" \n\n Section 118 of Negotiable Instruments Act, 1881 \"Section 118 : Presumptions as to negotiable instruments : Until the contrary is proved, the following presumptions shall be made :\u00ad\n\n (a) of consideration \u00ad that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-10", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "(b) as to date \u00ad that every negotiable instrument bearing a date was made or drawn on such date;\n (c) as to time of acceptance \u00ad that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad\u00ad.\" \n\n Section 139 of Negotiable Instrument Act, 1881 \"It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.\" \n\n In view of presumptions provided by the Section 118 and Section 139 of Negotiable Instrument Act, 1881, presumption is that the cheques were issued/drawn for consideration and further the cheques were drawn or made on date which they bear. So, the onus was on the accused to rebutt these presumptions. In this case, the accused person has not brought any evidence to substantiate his defence, but, has relied upon the admission of the AR of the complainant that the mode of payment of EMIs in this case was through ECS, .....................Contd/\u00ad therefore, it supports the case of the accused that the cheques in question were security cheques given by the accused person as blank signed cheques at the time of grant of loan. \n\n First of all, lets discuss the law on security cheques. On security cheques in the matter of Collage Culture & Ors. Vs. Apparel Export Promotion Counsil reported 2007 (99) DRJ 251 in Crl. M. C. No. 3011/2004, Hon'ble High Court of Delhi has held as under :", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-11", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "\"It is urged that no actionable cause exists in favour of the complainant to make out the offence under Section 138 of Negotiable Instruments Act, 1881. It is urged that the sine qua non for the applicability of Section 138 of Negotiable Instrument Act, 1881 is the issuance of cheque for a debt which is due towards discharge of a liability. It is urged that a cheque given as a collateral security or as a security for payment of an amount which may become payable at a future date upon the happening or the non\u00adhappening of an event i.e. towards a contingency can not be the foundation of an action under Section 138 of Negotiable Instruments Act, 1881.\" \n\n \"It would be relevant to note that the statute does not refer to the debt being payable, meaning thereby, a post dated cheque for a debt due, but payment postponed at a future date would attract Section 138 of the Negotiable Instruments Act, 1881. But, the cheque issued not for an existing due, but issued by way of a secuirty, would not attract Section 138 of the Negotiable Instruments Act, 1881, for it has not been issued for a debt which has come into in existence.\" \n\n The above\u00adsaid law has been reiterated by Hon'ble High Court of Delhi in the matter of \"Ravi Kumar D......... Vs. State of Delhi & Anr.\" passed on 01.03.2011.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-12", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "I have gone through the evidence of the accused and cross\u00adexamination of the AR of the complainant and the case of the accused is that the accused issued 03 blank signed .....................Contd/\u00ad cheques to the complainant at the time of grant of loan for the purpose of security. Since, in this case, the case of the accused person is not that the cheques were issued before his liability has actually become due and further since, no evidence has been brought by the accused person to substantiate his defence, so, the law laid down by the Hon'ble High Court of Delhi in the matters of Collage Culture & Ors. Vs. Apparel Export Promotion Counsil reported 2007 (99) DRJ 251 in Crl. M. C. No. 3011/2004 and \"Ravi Kumar D......... Vs. State of Delhi & Anr.\" is not applicable to the present facts and circumstances of this case and we have to fall back on the presumption provided under Section 118 of N. I. Act, 1881 as to date. In view of the law and reasons discussed above, the accused has not being able to rebutt the presumption as to date provided under Section 118 Negotiable Instrument Act, 1881, therefore, the defence of the accused that the cheques in question were given by the accused at the time of grant of loan is hereby rejected.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-13", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "The law on blank signed cheques as laid down by Hon'ble High Court of Delhi in the matter of \"Ravi Chopra Vs. State & Anr.\" decided on 13.03.2008 in paragraphs number 15 to 21 is as under : \u00ad Para 15 : \u00ad \"What appears to be clear from the above definitions that an essential feature of a cheque is that it has to be signed by the maker..............................But what about the other material particulars? Can the word \"cheque\" occurring in Section 138 NI Act include a blank cheque which is signed by the drawer but the material particulars of which are left unfilled at the time it was handed over to the payee? ..............................\" \n\n .....................Contd/\u00ad Para 16 : \u00ad \"..............................Section 87 - Effect of material alteration : \u00ad ..............................The provisions of this section are subject to those of Sections 20, 49, 86 and  \n\n125.\" \n\nPara 17 : \u00ad \"While it is correct that in terms of the above provision, any material alteration to a cheque without the consent of the drawer unless it is made to carry out the common intention of the original parties thereto renders the cheque void, the expression \"material alteration\" has not been defined. Significantly, Section 87 has been made subject to Sections 20, 49, 86 and 125 NI Act..............................\" \n\nPara 18 : \u00ad \"Section 20 NI Act talks of \"inchoate stamped instruments\" and states that if a person signs and delivers a paper stamped in accordance with the law and \"either wholly blank or have written thereon an incomplete negotiable instrument\" such person thereby gives prima facie authority to the holder thereof \"to make or complete as the case may be upon it, a negotiable instrument for any amount specified therein and not exceeding the amount covered by the stamp.\" Section 49..............................\"", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-14", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "Para 19 : \u00ad \"The above provisions have to be read together with Section 118 NI Act which sets out various presumptions as to negotiable instruments. The presumption is of consideration, as to date, as to time of acceptance, as to transfer, as to endorsement, as to stamp. The only exception to this is provided in proviso to Section 118 which reads as under :\n\n Provided ..............................\" \n\nPara 20 : \u00ad \"A collective reading of the above provisions shows that even under the scheme of the NI Act it is possible for the drawer of a cheque to give a blank cheque signed by him to the payee and consent either impliedly or expressly to the said cheque being filled up at a subsequent point in time and presented for payment by the drawee..............................\" Para 21 : \u00ad \"The position in law has been explained in the judgment of the Division Bench of the Kerala High Court in Lillykutty v. Lawrance 2003 (2) DCR 610 in the following words:\n\n ..............................We are of the view, by putting the amount and the name there is ....................Contd/\u00ad no material alteration on the cheque under Section 87 of the Negotiable Instruments Act. In fact there is no alteration but only adding the amount and the date..............................\" \n\n So, in the light of the above\u00adsaid law, even if, for the sake of arguments, we may presume that the cheques in question were given by the accused to the complainant as blank signed cheques, even then, it is no defence in the eyes of law.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-15", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "Now, this Court is dealing with the defence of the accused that since the mode of payment of the EMIs was through ECS, therefore, there was no occasion for issuance of cheques in question by the accused. I have considered this contention of the accused. The AR of the complainant has deposed in the para no.04 of affidavit exhibited as Ex.CW1/1A that the accused issued cheques in question in favour of the complainant towards partial discharge of his liability. In the opinion of this Court, there is no bar on payment through cheques, even in cases, where the mode of payment of EMI is through ECS and the accused has also not brought any evidence on record to prove that payment through cheques could not have been accepted by the complainant bank in this case, therefore, this contention of the accused is also rejected. \n\n Now, this Court is dealing with the last defence of the accused person that the signatures on the cuttings on the cheque number 166560 are not his signatures and are false and fabricated signatures. Perusal of the cheques in question exhibited as Ex.CW1/3 (Collectively) reveal that the earlier amount mentioned in words and figures on cheque .....................Contd/\u00ad bearing number 166560 was of Rs.10,926/\u00ad and the later amount mentioned in words and figures after altering is of Rs.11,322/\u00ad, so, there is a little difference between the two amounts i.e. of Rs.396/\u00ad only. In these circumstances, this Court sees no reason why the complainant would forge the signatures of the accused person after altering the amount of the cheque to increase it in the sum of Rs.396/\u00ad only.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-16", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "Furthermore, bare perusal of signatures on the cuttings by naked eye shows that they are apparently similar to the admitted signatures of the accused on two other cheques and on the cheque number 166560. Since, two signatures can never be identical and can only be similar, therefore, the contention of the accused that the signatures on the cuttings on cheque number 166560 are not his signatures is hereby rejected. \n\n In view of above\u00adsaid discussions, I am of the opinion that the complainant has proved on record that cheques were drawn/issued by the accused on dates mentioned on the cheques in question to the complainant on an account maintained by him with the banker for discharge of his partial debt and liability towards the complainant. \n\n (b) Whether the cheques were presented to the bank within a period of six months or within period of its validity? \n\n The AR of the complainant deposed in his examination in chief in para no.05 of the affidavit Ex.CW1/A1 that the complainant presented the cheques in question for .....................Contd/\u00ad encashment to its banker, but, were returned dishonored by its banker vide return memos Ex.CW1/4 (Collectively) with remarks \"Insufficient Funds\". \n\n Perusal of record reveals that cheques in question Ex.CW1/3 (Collectively) are dated 06.03.2010 which got dishonored vide returning memos Ex.CW1/4 (Collectively) dated 23.03.2010. The accused person chose not to cross\u00adexamine the complainant witness on this point. In view of the fact that evidence of the complainant has gone un\u00adcontroverted to this factum, so, it is proved on record that the cheques were presented and within six months from the date of issuance of cheques and within period of their validity.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-17", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "(c)      Whether   the   cheques   so   presented   for   encashment   were \n\n\ndishonored?\n\n\n In this case, AR of the complainant who appeared as a witness on behalf of complainant has exhibited the cheques returning memos as Ex.CW1/4 (Collectively). This factum of dishonourment is also not controverted by the accused person and he chose not to cross\u00adexamine the complainant witness on this point and has further admitted in his statement under Section 313 of Cr. P.C. r/w 281 of Cr. P.C. that the cheques were dishonored vide return memos as alleged, but, submitted that the cheques were presented without intimation to him. Therefore, in view of the evidence of the AR of the complainant ....................Contd/\u00ad and of the fact that the evidence of the complainant witness is not controverted by the accused person, it is proved on record that the cheques in question were dishonored vide cheques returning memos Ex.CW1/4 (Collectively) dated 23.03.2010 with the reason ''Funds Insufficient''. \n\n\n (d) Whether the payee/complainant of the cheques issued a Legal Demand Notice within 30 days from the receipt of information from the bank regarding dishonourment of the cheques?", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-18", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "On this fact, the complainant witness has stated in his examination in chief that the complainant got issued a Legal Demand Notice dated 13.04.2010 which is exhibited as Ex.CW1/5 through its counsel and was sent to the accused on 13.04.2010 vide registered post, UPC and AD and the receipt and UPC being exhibited as Ex.CW1/6 (Collectively) and AD card being exhibited as Ex.CW1/7. Perusal of the case file reveals that return memos exhibited as Ex.CW1/4 (Collectively) are dated 23.03.2010, the Legal Demand Notice exhibited as Ex.CW1/5 is dated 13.04.2010 and the postal receipt and UPC being exhibited as Ex.CW1/6 (Collectively) are dated 13.04.2010. The accused person chose not to cross\u00ad examine the complainant witness on this point and has stated in his statement under Section 313 of Cr. P.C. r/w 281 of Cr. P.C. that he had not received any such Legal Demand Notice. \n\n .....................Contd/\u00ad Now, as far as this factum that the legal demand notice was issued and dispatched within 30 days from the receipt of return memos is concerned, there is no dispute about this fact and the accused chose not to cross\u00adexamination the complainant witness on this point. So, it is proved on record that complainant issued legal demand notice within 30 days from the receipt of information from the bank regarding dishonourment of the cheques. \n\n (e) Whether drawer of the cheques failed to make the payment within 15 days of receipt of afore\u00adsaid Legal Demand Notice?", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-19", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "In this case, AR of the complainant has deposed in para no.06 of his affidavit exhibited as Ex.CW1/A1 in his examination in chief that the accused failed to pay the cheques amount in question within stipulated time despite service of legal demand notice exhibited as Ex.CW1/5 and the AD card exhibited as Ex.CW1/7 is proof of service of legal demand notice on the accused. The CW2, Sh. S. S. Pandey, Public Relation Inspector, Postal Department has exhibited Booking Slip as Ex.CW2/A and Delivery Slip Ex.CW2/B. The CW2 has further deposed on oath before this Court that as per Delivery Slip, the post in question was delivered by Sh. Satya Prakash, Postman, Beat No.05, Batch No.01 on 15.04.2010. On this issue, the accused person has taken the defence that he has not received the legal demand notice as alleged by the complainant and the signatures of the accused .......................Contd/\u00ad person on AD card Ex.CW1/7 and the Delivery Slip Ex.CW2/B are forged one. The accused person has brought a witness namely Sh. Ramji Lal, Parcel Supervisor, presently posted at Parcel Office, New Delhi Railway Station as DW1 to substantiate his defence. The DW1 has deposed in his examination\u00adin\u00adchief that the accused Lokesh Kumar is working under him and was on duty on 15.04.2010 from 08:00 am to 04:00 pm and has exhibited the Leave Record as Ex.DW1/A. \n\n It is pertinent to mention here that the accused has not disputed the address mentioned on the legal demand notice, therefore, it can be safely presumed that the notice was dispatched to the correct address of the accused person.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-20", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "Now, as far as the contention of the accused is concerned that he had not received any Legal Demand Notice, this Court sees no substance in the plea of accused, particularly in view of AD card Ex.CW1/7 and Delivery Slip Ex.CW2/B. The Ld. Counsel for the accused person submitted that since the accused person was on duty till 04:00 pm on 15.04.2010, therefore, there was no occasion for the accused to receive the post and sign the acknowledgment card Ex.CW1/7. Perusal of the case file reveals that the address of the accused is of Paharganj, New Delhi which is adjacent to New Delhi Railway Station where the accused person is employed. So, the accused person could have easily reached his home before 05:00 pm and would have received the post at his home on 15.04.2010 itself. Moreover, this Court sees no reason why the postal department would forge the records ......................Contd/\u00ad regarding delivery of the legal demand notice to the accused person. \n\n In view of above\u00adsaid reasons, the contention of the accused that he has not received the legal demand notice and that his signatures on the document Ex.CW1/7 and document Ex.CW2/B are forged one is hereby rejected as being false and bogus defence only taken for the purpose of taking defence.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-21", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "Moreover, it is pertinent to mention here the judgment passed by the Hon'ble Supreme Court of India in the matter of \"C. C. Alavi Haji Vs. Palapetty Mohammed & Anr.\" passed on 18.05.2007. In this judgment, the Hon'ble Supreme Court of India has held that \"Any drawer who claims that he did not received the notice sent by post, can, within 15 days of receipt of summons from the court in respect of complaint Under Section 138 of the Act, make the payment of the cheque amount and submit to the court that he had made the payment within 15 days of the receipt of summons (by receiving a copy of complaint with the summons) and, therefore, the complainant is liable to be rejected. A person who does not pay within 15 days of receipt of summons from the court along\u00adwith the copy of complaint Under Section 138 of the Act, can not obviously contend that there was no proper service of notice as required Under Section 138, by ignoring statutory presumption to the contrary Under Section 27 of G. C. Act and 114 of the Evidence Act.\" \n\n\n In view of the law and reasons discussed in the above paragraphs, it is proved on record that the notice was duly served upon the accused person on 15.04.2010. In view of the discussions in para no.09(a) and of the evidence of the AR of the complainant that accused failed to pay the amount of dishonored cheques within stipulated time, it is proved ......................Contd/\u00ad on record that the accused has not made the payment qua cheques amount in question within 15 days of receipt of legal demand notice.", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "0189766b91c1-22", "Titles": "The Matter Of Collage Culture & ... vs . Apparel Export Promotion ... on 22 October, 2011", "text": "10. (ii) Final order :\n In view of above\u00adsaid discussions, I am of the considered opinion that complainant has proved against the accused all ingredients of the offence under Section 138 of Negotiable Instruments Act, 1881 beyond shadow of any reasonable doubt. Accordingly, accused Lokesh Kumar S/o Late Sh. Sewa Dass, R/o 5297, Bharat Nagar, Basant Lane, Paharganj, New Delhi - 110 055 stands convicted for the offence under Section 138 of Negotiable Instruments Act, 1881. \n\n Copy of the judgment be supplied to the accused free of cost. \nAnnounced in the open Court on this day of October 22, 2011. \n\n (HARVINDER SINGH) Spl. M.M.\u00ad05/Dwarka Courts, New Delhi/22.10.2011", "source": "https://indiankanoon.org/doc/64050465/"}
+{"id": "18a7470adcdf-0", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "IN THE COURT OF VIPLAV DABAS\n                METROPOLITAN MAGISTRATE\n         DISTRICT-NORTH, TIS HAZARI COURTS, DELHI\n\nM/s Narang Leasing & Finance            Date of institution of case: 20.01.2004\nVS                                      Date of decision of case : 24.12.2011\nMr. Sanjay Samrat\n\n                                                Unique ID No.02401R5323162004\n                                                CC.NO.151/A/2010\n                                                P.S.-Daryaganj\n                                                U/S 138 Negotiable Instrument Act\n\n\nJUDGMENT\n1. Date of the commission of offence    :       20.01.2004\n\n2. Name & address of the complainant    :       M/s Narang Leasing & Finance\n                                                having Regd. Office at\n                                                3728, Netaji Subhash Marg,\n                                                3rd Floor, Daryaganj,\n                                                New Delhi\n\n\n3. Name & address of the accused        :       Sh. Sanjay Samrat\n                                                S/o Sh.Dharmpal Singh\n                                                R/o H.No.57, Sector-5,\n                                                Pushp Vihar,\n                                                New Delhi\n\n4. Offence complained of                :       U/s.138 of Negotiable Instruments Act\n\n5. Plea of accused & examination if any :       Pleaded not guilty.\n                                                Examination u/s.313 Cr.PC\n                                                Examination u/s 315 Cr.P.C\n                                                No other defence evidence was led.\n\n6. Final order                              :   Acquitted\n\n7. Date of such order                       :   24.12.2011\n\n\n\n\n\n BRIEF FACTS AND REASONS FOR DECISION OF THE CASE", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-1", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "BRIEF FACTS AND REASONS FOR DECISION OF THE CASE\n\n\n1. By way of the present judgment, this court shall decide the complaint case under section 138 Negotiable Instruments Act, 1881 (as amended upto date) filed by the partner of the complainant Sh. Dinesh Narang M/s Narang Leasing & Finance against the accused Sh. Sanjay Samrat.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-2", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "2. Brief facts necessary for the disposal of the present case as per the allegations in the complaint, are as follows :-\n The complainant is a registered partnership firm and engaged in the business of finance and use to give vehicles on hire-purchase and lease basis. On 11.11.2000, the accused Sh. Sanjay Samrat along with Ms. Anita Singh and Smt. Ramwati approached the complainant for taking a Maruti Zen Car on hire-purchase basis. The complainant gave vehicle Maruti Zen car of 1999 Model bearing Engine number 0364431 chasis number 0371241 with Registration No. DL-6CE- 8842 on hire purchase basis in terms of Hire Purchase Agreement executed by the accused on 11.11.2000. Under the aforesaid Hire Purchase Agreement accused agreed to pay the total Hire money of Rs. 2,59,000/- payable in 36 monthly installments and the interest on late payment of the installments. The above mentioned two persons namely Ms. Anita Singh and Smt. Ramwati stood as Guarantors and they signed the Hire Purchase Agreement dated 11.11.2000 for due performance of the Agreement on the part of the accused. The accused did not adhere to the schedule of payment and defaulted in payment of monthly installments and interest and as on 30.062002 a sum of Rs. 89,433/- towards unpaid hire installments, Rs. 21,244/- for additional hire purchase for late payment and expenses and a sum of Rs. 89,433/- towards installments still to fall, was due and in all Rs. 2,00110/- was due against the accused.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-3", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "The complainant reported the matter to Sh. D.L. Bhargava, Advocate for his sole adjudication of disputes in terms of arbitration clause contained in the hire purchase agreement. After giving notice of the arbitral proceedings, the Ld. Arbitrator gave his Award dated 24.05.2003 directing the accused and his guarantors to pay a sum of Rs. 1,10,677/- towards unpaid hire installmnets and incidental charges besides return of the vehicle or to pay Rs. 1,00,000/- in lieu thereof. \n\n That the accused failed to pay the above amount but on the warning given by the complainant, the accused issued nine cheques of Rs. 7,194/- each for a total amount of Rs 64,746/- drawn on Oriental Bank of Commerce, Panchsheel Park, New Delhi towards discharging the above liability of abritral award. However, on presentation of the same, the cheques were dishonoured vide cheque returning memo dated 13.12.2003, 15.12.2003 and 17.12.2003 with remarks \" INSUFFICIENT FUNDS\". The complainant has thereafter given legal notice of demand dated 02.01.2004 to the accused which was sent by Registered Post & UPC thereby calling upon the accused to make the payment of the cheques. It is alleged that accused has failed to pay any sum in response to the legal notice of demand. As a result of which the complainant filed the instant complaint for prosecution of the accused u/s 138 of the Negotiable Instruments Act, 1881.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-4", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "3. After considering the entire material and documents on record, summons were issued my Ld. Predecessor against the accused vide order dated 27.01.2005 for the offence u/s 138 of the Negotiable Instruments Act, 1881. On appearance of the accused, a separate notice u/s.251 of the Code of Criminal Procedure, 1973 was served upon the accused on 20.04.2007 to which accused pleaded not guilty and claimed trial. \n\n4. In order to prove the case, Sh. Dinesh Narang, Partner of complainant M/s Narang Leasing & Finance got himself examined as CW1 and reiterated the contents of the complaint on oath before this court by filing an affidavit in evidence which is EX.CW-1/A, wherein the documents relied upon by the complainant were exhibited as EX.CW-1/1 to EX.CW-1/29 respectively. \n\n Sh. Dinesh Narang, Partner of the complainant was cross examined by learned counsel for the accused and discharged. Thereafter, the complainant evidence was closed on statement of Ld. Counsel for complainant.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-5", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "5. After that the statement of accused was recorded u/s 313 of the Code of Criminal Procedure, 1973 in which all the incriminating evidence alongwith exhibited documents were put to the accused Sh. Sanjay Samrat. The accused admitted that the aforesaid cheques Ex.CW1/5 to Ex.CW1/13 were issued and signed by him which were undated. Accused stated that he had already paid the amount in cheques to the complainant in 2001. It was further stated by the accused that the complainant had filed arbitration proceedings against him and proceeded ex-parte against him without issuing any notice and filed execution proceedings against him. The accused denied the receiving of legal notice and submitted that the complainant has misused the cheques and filed false complaint. \n\n6. Opportunity for leading the defence evidence was given to accused. The accused got himself examined u/s. 315 Code of Criminal Procedure, 1973 after the application u/s.315 Code of Criminal Procedure, 1973 was allowed by this court on 17.03.2011. Accused was examined, cross examined and discharged. Opportunity for examining other witness if any, was granted to the accused, which the accused did not avail and defence evidence was closed on statement of accused. Thereafter, the case was fixed for final arguments. \n\n7. The court heard the arguments advanced by the learned counsels for both the parties at length and perused the entire record of the case file as well as evidence on record. Written arguments filed on behalf of the complainant were also perused. \n\nLegal Discussion\n8. Before proceeding further, it would be appropriate to quote the Hon'ble Supreme Court in Rangappa Vs. S.Mohan arising out of SLP (Crl) No.407/2006 (2010) NSC 373 decided on 07.05.2010.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-6", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "\"Ordinarily in cheque bouncing cases, what the courts have to consider is whether the ingredients of the offence enumerated in section 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by section 139 of the Act.\" \n\n8.1. In order to bring home the conviction of the accused, the complainant has to prove the ingredients of the offence complained of. The main ingredient of Section 138 of the Negotiable Instruments Act, 1881 are as follows:\n (a) The accused issued cheque on an account maintained by him with a bank. \n\n (b) The said cheque has been issued in discharge of any legal debt or other liability. \n\n (c) The cheque has been presented to the bank within the period of six months from the date of the cheque or within the period of its validity. \n\n (d) When the aforesaid cheques were presented for encashment, the same were returned unpaid/dishonoured. \n\n (e) The payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the bank regarding the return of the cheque. \n\n (f) The drawer of the cheque failed to make the payment within 15 days of the receipt of the aforesaid legal notice of demand. If the aforesaid ingredients are satisfied then the drawer of the cheque shall be deemed to have committed an offence punishable u/s. 138 of the Negotiable Instruments Act, 1881. \n\n Offence u/s 138 of Negotiable Instrument Act involves a reverse onus clause and the reverse onus can be rebutted by raising a mere preponderance of probability.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-7", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "8.2. Nature and Extent of Rebuttal\na) A three judges bench of Hon'ble Supreme Court while dealing with presumptions under Prevention of Corruption Act has observed in Trilok Chand Jain vs State Of Delhi 1977 AIR 666 as under:\n \"The presumption however, is not absolute. It is rebuttable. The accused can prove the contrary. The quantum and the nature of proof required to displace this presumption may vary according to the circumstances of each case. Such proof may partake the shape of defence evidence led by the accused, or it may consist of circumstances appearing in the prosecution evidence itself, as a result of cross-examination or otherwise. But the degree and the character of the burden of proof which s. 4(1) casts on an accused person to rebut the presumption raised thereunder, cannot be equated with the degree and character of proof which under s. 101, Evidence Act rests on the prosecution.. While the mere plausibility of an explanation given by the accused in his examination under s. 342, Cr.P.C. may not be enough, the burden on him to negate the presumption may stand discharged, if the effect of the material brought on the record, in its totality, renders the existence of the fact presumed, improbable. In other words, the accused may rebut the presumption by showing a mere preponderance of probability in his favour; it is not necessary for him lo establish his case beyond a reasonable doubt- see Mahesh Prasad Gupta v. State of Rajasthan.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-8", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "Another aspect of the matter which has to be borne in mind is that the sole purpose of the presumption under s. 4(1) is to relieve the prosecution of the burden of proving a fact which is an essential ingredient of the offences under s. S (1) (2) of the Prevention of Corruption Act and s. 161, Penal Code. The presumption therefore can be used in furtherance of the prosecution case and not in derogation of it. If the story set up by the prosecution inherently militates against or is inconsistent with the fact presumed, the presumption will be rendered sterile from its very inception, if out of judicial courtesy it cannot be rejected out of hand as still born.\"", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-9", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "b) To what extent a mere reliance upon the presumptions of law can help the complainant is the question is being discussed in the following paragraphs:-\n Hon'ble High Court of Bombay in Peter Mascarenhas Vs. Monsabre Ashley Oswald Dias, CCC X-2010(4) 234 has dealt with the above aspect in great detail. This was also a case of friendly loan of Rs. 12 lakhs which the complainant had lent to the accused after collecting the same from several other persons. Complainant had examined the persons from who he collected the amount. There was also an agreement executed by the accused person. However, after a detailed factual and legal discussion, Hon'ble High Court has acquitted the accused primarily on the ground that complainant has failed to discharge his onus to establish accumulation of money. It has been observed therein that:\n \"In juxtaposition though the Complainant was faced with the aforesaid material which has come through the cross examination of Cw.2, Cw.3 and Cw.4, the Complainant did not choose to lead any further evidence to discharge the burden of proving the existence of the liability when the burden again shifted to him. Applying the principles that the Complainant has to prove the offence beyond reasonable doubt but the Accused has to only probabilise his defence, in my view, the test has been satisfied by the Accused then the Complainant. The Complainant as can be seen has not led any further cogent evidence to prove the factum of the lending of the money to the Accused and thereby has not discharged the burden which had shifted to him on account of the evidence which has come in cross examination of the Complainant and his witnesses.\"", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-10", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "c) Hon'ble Supreme Court in K. Prakashan vs P.K. Surenderan decided on 10 October, 2007 has also dealt with the aspect of friendly loan and scope of presumptions of law. The facts of the case were:\n \"3. Respondent herein allegedly, on diverse dates, advanced a sum of Rs. 3,16,000/- to the appellant who issued a cheque for the said amount on 18.12.1995. The said cheque was dishonored on the ground of insufficient fund. Allegedly, when the matter was brought to the notice of the appellant, he undertook to remit the amount on or before 30.01.1996. The cheque was again presented but the same was not enchased on the ground payment stopped by the drawer. \n\n 5. The complainant in support of its case led evidence to show that he had advanced various sums on the following terms: On 31-1-94 a sum of Rs. One lakh; on 8-6-94, Rs. 86,000/-; on 12-6-94, Rs. 28,000/-; on 23-4-95, Rs. 50,000/- on 18-6-95, Rs. 40,000/- and on 7-8-95, Rs. 12,000/-.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-11", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "6. Defence of the appellant, on the other hand, was that he had issued blank cheques for the purpose of purchase of spare parts, tyres, etc. in connection with the business of transport services run in the name of his brother. The blank cheques used to be returned by the sellers of spare parts, etc. when the amounts were paid. According to the appellant, the complainant lifted the impugned cheque book put in the bag and kept in his shop. Appellant in support of his case examined the Bank Manager of the Bank concerned. \" Hon'ble High Court having reversed the judgment of acquittal, accused approached the Hon'ble Supreme Court. Hon'ble Supreme Court has observed therein that:", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-12", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "\"14. The learned Trial Judge had passed a detailed judgment upon analysing the evidences brought on record by the parties in their entirety. The criminal court while appreciating the evidence brought on record may have to weigh the entire pros and cons of the matter which would include the circumstances which have been brought on record by the parties. The complainant has been found to be not man of means. He had allegedly advanced a sum of Rs. 1 lakh on 13.01.1994. He although had himself been taking advances either from his father or brother or third parties, without making any attempt to realize the amount, is said to have advanced sums of Rs. 86,000/- on 8.06.1994. Likewise he continued to advance diverse sums of Rs. 28,000/-, Rs. 50,000/-, Rs. 40,000/- and Rs. 12,000/- on subsequent dates. It is not a case where the appellant paid any amount to the respondent towards repayment of loan. He even did not charge any interest. He had also not proved that there had been any commercial or business transactions between himself and the appellant. Whey the appellant required so much amount and why he alone had been making payments of such large sums of money to the appellant has not been disclosed. According to him, he had been maintaining a diary. A contemporaneous document which was in existence as per the admission of the complainant, therefore, was required to be brought on records. He failed to do so. He also did not examine his father and brothers to show that they were men of means and in fact advanced a huge sum to him only for the purpose of grant of loan by him to the appellant. The learned Trial Court not only recorded the inconsistent stand taken by the complainant in regard to the persons from whom he had allegedly borrowed the amount, it took into consideration the deposit of the cheques in the bank commenting: Ext.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-13", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "the amount, it took into consideration the deposit of the cheques in the bank commenting: Ext. D1 the counterfoil of the cheque book issued to the accused from that bank, was proved through him. It contains the counterfoils of the cheques 782451 to 782460. Ext. D2 is the pass book issued to the accused from that bank. SW1 is the Branch Manager of Syndicate Bank,Koyilandy. He would say that in Ext. P4 ledger extract, cheque No. 782460 reached the bank for collection on 30.12.93. The net transaction in that account was in the year 1996. Cheque No. 782451 reached the bank on 8.1.96. Ext. D1 shows that is the first cheque in that book. 782460 is the lost cheque in that book. If the lost cheque i.e. 782460 reached the bank for collection on 30.12.93 in normal and reasonable course the first cheque i.e. 782451 might have been issued even prior to that date. Case of the complainant is that Ext. P1 cheque was given to him by the accused on 5.10.95 and the cheque was dated 18.12.95. Ext. P4, D1 and D2 substantiate the case of the accused that the allegation of the complainant that Ext. P1 cheque was given to him on 18.12.95 is not genuine.\"", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-14", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "Hon'ble Supreme Court has observed therein that: The High Court, as noticed herein before, on the other hand, laid great emphasis on the burden of proof on the accused in terms of Section 139 of the Act. \n\n The question came up for consideration before a Bench of this Court in M.S. \n\nNarayana Menon (supra) wherein it was held:\n \"38. If for the purpose of a civil litigation, the defendant may not adduce any evidence to discharge the initial burden placed on him, a fortiori even an accused need not enter into the witness box and examine other witnesses in support of his defence. He, it will bear repetition to state, need not disprove the prosecution case in its entirety as has been held by the High Court.\" \n\n A presumption is a legal or factual assumption drawn from the existence of certain facts. It was furthermore opined that if the accused had been able to discharge his initial burden, thereafter it shifted to the second respondent in that case. \n\n The said legal principle has been reiterated by this Court in Kamala S. v.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-15", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "The said legal principle has been reiterated by this Court in Kamala S. v. \n\nVidhyadharan M.J. and Another [(2007) 5 SCC 264] wherein it was held:\n \"The Act contains provisions raising presumption as regards the negotiable instruments under Section 118(a) of the Act as also under Section 139 thereof. The said presumptions are rebuttable ones. Whether presumption stood rebutted or not would depend upon the facts and circumstances of each case.\" The nature and extent of such presumption came up for consideration before this Court in M.S. Narayana Menon Alias Mani V. State of Kerala and Anr. [(2006) 6 SCC 39] wherein it was held :\n \"30. Applying the said definitions of proved or disproved to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration dos not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-16", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "\"This Court clearly laid down the law that standard of proof in discharge of the burden in terms of Section 139 of the Act being of preponderance of a probability, the inference therefore can be drawn not only from the materials brought on record but also from the reference to the circumstances upon which the accused relies upon. Categorically stating that the burden of proof on accused is not as high as that of the prosecution, it was held; Presumption drawn under a statute has only an evidentiary value. Presumptions are raised in terms of the Evidence Act. Presumption drawn in respect of one fact may be an evidence even for the purpose of drawing presumption under another. \" \n\n Reliance is also placed upon a decision of this Court in Goaplast (P) Ltd. v.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-17", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "Chico Ursula DSouza and Another [(2003) 3 SCC 232] wherein this Court opined:\n \"The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. This presumption coupled with the object of Chapter XVII of the Act which is to promote the efficacy of banking operation and to ensure credibility in business transactions through banks persuades us to take a view that by countermanding payment of post-dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act. A contrary view would render Section 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of ones own wrong. If we hold otherwise, by giving instructions to banks to stop payment of a cheque after issuing the same against a debt or liability, a drawer will easily avoid penal consequences under Section", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-18", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "138. Once a cheque is issued by a drawer, a presumption under Section 139 must follow and merely because the drawer issued notice to the drawee or to the bank for stoppage of payment it will not preclude an action under Section 138 of the Act by the drawee or the holder of the cheque in due course. This was the view taken by this Court in Modi Cements Ltd. v. Kuchil Kumar Nandi. On same facts is the decision of this Court in Ashok Yeshwant Badave v. Surendra Madhavrao Nighojakar. The decision in Modi case overruled an earlier decision of this Court in Electronics Trade & Technology Development Corpn. Ltd. v. Indian Technologists & Engineers (Electronics) (P) Ltd. which had taken a contrary view. We are in respectful agreement with the view taken in Modi case. The said view is in consonance with the object of the legislation. On the faith of payment by way of a post-dated cheque, the payee alters his position by accepting the cheque. If stoppage of payment before the due date of the cheque is allowed to take the transaction out of the purview of Section 138 of the Act, it will shake the confidence which a cheque is otherwise intended to inspire regarding payment being available on the due date. \" No exception to the aforementioned legal principle can be taken. What, however, did not fall for consideration in the aforementioned case was as to how the said burden can be discharged.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-19", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "It is now trite that if two views are possible, the appellant court shall not reverse a judgment of acquittal only because another view is possible to be taken. The appellate courts jurisdiction to interfere is limited. [See M.S. Narayana Menon (supra) and Mahadeo Laxman Sarane & Anr. v. State of Maharashtra, 2007 (7) SCALE 137]. The High Court furthermore has not met the reasons of the learned Trial Judge. It proceeded on the premise that the appellant had not been able to discharge his burden of proof in terms of Section 139 of the Act without posing unto itself a further question as to how the said burden of proof can be discharged. It furthermore did not take into consideration the legal principle that the standard of proof upon a prosecution and upon an accused is different. \" \n\n Hon'ble Supreme Court in Kamala S vs Vidyadharan M.J. & Anr Appeal (crl.) 233 of 2007, decided on 20.02.2007 observed that :\n \"The Act contains provisions raising presumption as regards the negotiable instruments under Section 118(a) of the Act as also under Section 139 thereof. The said presumptions are rebuttable ones. Whether presumption stood rebutted or not would depend upon the facts and circumstances of each case. \n\n This Court clearly laid down the law that standard of proof in discharge of the burden in terms of Section 139 of the Act being of preponderance of a probability, the inference therefor can be drawn not only from the materials brought on record but also from the reference to the circumstances upon which the accused relies upon.......\"", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-20", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "Hon'ble Supreme Court in Krishna Janardhan Bhat v. Dattatraya G. Hegde 2008 AIR SCW 738 has observed that:\n \"30. The proviso appended to the said section provides for compliance with legal requirements before a complaint petition can be acted upon by a court of law. Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability. \n\n 31. The courts below, as noticed herein before, proceeded on the basis that Section 139 raises a presumption in regard to existence of a debt also. The courts below, in our opinion, committed a serious error in proceeding on the basis that for proving the defence the accused is required to step into the witness box and unless he does so he would not be discharging his burden. Such an approach on the part of the courts, we feel, is not correct. \n\n 32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of the accused and that of the prosecution in a criminal case is different. \n\n 34. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of the accused is 'preponderance of probabilities'. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-21", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "45. We are not oblivious of the fact that the said provision has been inserted to regulate the growing business, trade, commerce and industrial activities of the country and the strict liability to promote greater vigilance in financial matters and to safeguard the faith of the creditor in the drawer of the cheque which is essential to the economic life of a developing country like India. This however, shall not mean that the courts shall put a blind eye to the ground realities. Statute mandates raising of presumption but it stops at that. It does not say how presumption drawn should be held to have been rebutted. Other important principles of legal jurisprudence, namely, presumption of innocence as a human right and the doctrine of reverse burden introduced by Section139should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same.\" \n\nd) It may be pertinent to mention here that a three judges bench of the Hon'ble Supreme Court in Rangappa Vs. S. Mohan (2010) 11 SCC 441 has considered the dictum of Krishna Janardhan Bhat (supra) and overruled the view so far as existence of liability is concerned, however, has not dissented with other parameters observed and laid down in the said case. It has been observed therein that:\n \"14. In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat (supra) may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. \"", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-22", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "e) This court is of the opinion that an accused has a right to rebut the presumption by placing reliance upon the circumstances brought and material placed by the complainant. Hon'ble Supreme Court in Rangappa Vs. S. Mohan (2010) 11 SCC 441 has further held that:\n \"However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.\"", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-23", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "9. Version of Accused The Accused was in need of money for marriage of his sister, so he approached the complainant for loan. Complainant advanced a sum of Rs. 1 lac only as loan to the accused. Accused issued blank, undated, and signed cheques including cheques in question as advance cheques, at the time of execution of agreement, which have been misused by complainant. Accused deposed that amount mentioned in the cheques has already been paid by the accused in year 2001. After clearing the loan amount the accused demanded the cheques back but the complainant did not return the same despite assurance. The accused denied to have ever entered into hire purchase agreement with the complainant and stated that blank loan agreement signed by him as well as his gaurantour was handed over to L.R Sh.Narang, partner of the complainant. Accused denied to have issued the cheques in question towards discharge of arbital award. \n\n10. Now let us deal with the each ingredient of the section 138 of the Negotiable Instruments Act, 1881 to see whether the case against the accused has been proved or not.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-24", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "By virtue of the affidavit filed at the time of pre-summoning evidence, wherein legal demand notice and postal receipts have been duly exhibited , requirement of proviso (b) & (c) appended to Section 138 of the Negotiable Instrument Act, 1881 stands satisfied (presumption of law arising under section 27 General Clauses Act is bound to arise). By virtue of Cheque Returning Memos, dishonour stands proved vide section 146 Negotiable Instrument Act, 1881. (Moreover, the accused has not controverted any of the above presumptions by even giving any suggestion in the cross examination of the complainant to negate the aforesaid presumptions). Nine cheques Ex.CW1/5 to Ex.CW1/13 dated 12.12.3003, 13.12.2003 and 15.12.2003 had been presented on 12, 13 and 15 Dec., 2003, which is within six months of date of issuance and was returned unpaid on 13.12.2003 ,15.12.2003 and 17.12.2003 vide return memos Ex.CW1/17 to Ex.CW1/25 due to the reason \"FUNDS INSUFFICIENT\". Notice dated 02.01.2004 Ex.CW1/26 was dispatched on 03.01.2004 which is within 30 days of dishonor of cheques in question. The complaint has been filed on 17.01.2004 which is prior to the arising of the cause of action, which in the present complaint arose on 20.01.2004 but the cognizance was taken on 27.01.2005 and thus, the defect in the pre-mature filing of the present complaint was cured as the accused got ample time till 19.01.2004 (the day when the 15 days time expired), to", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-25", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "till 19.01.2004 (the day when the 15 days time expired), to make the payment of the cheques amount as per the mandate of section 138 of the Negotiable Instruments Act, 1881.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-26", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "11. By virtue of mandatory presumptions of law arising under section 118 and 139 of the Negotiable Instruments Act, 1881 legal liability can be treated as proved. It is pertinent to mention that the mandatory presumptions extend to the existence of legally enforceable debt or liability. (See a three judges bench decision of Hon'ble Supreme Court in Rangappa Vs. S. Mohan arising out of SLP (Crl) No.407/2006; (2010) NSC 373 decided on 07.05.2010. \n\n12. Complainant has primarily relied upon the mandatory presumption of law in respect of legal liability. The issuance of cheque being admitted, signatures admitted & dishonor being proved presumption u/s 118 and 139 of the Negotiable Instruments Act, 1881 has to arise. So, it must be presumed that the liability as alleged was existing at the time when cheques were given. \n\n13. Now it has to be seen whether the accused has been able to rebut the aforesaid presumption or not:\n It is a settled law that accused is entitled to discharge the onus placed on him even on the basis of materials brought on record by the complainant. It is not obligatory on the accused to separately adduce evidence or to enter into witness box if he can successfully gather the material from the evidence of complainant which would sufficiently disprove the presumptive facts by a rising a mere preponderance of probability without resorting to proof beyond reasonable doubt, particularly in relation to the pre-existence of legal liability of the debt for the discharge of which cheque was given. In the present case, the accused has relied on the material brought by the complainant and has preferred to lead defence evidence by deposing as defence witness u/s 315 Cr.P.C.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-27", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "13.1. In tune with the suggestions put to the complainant during his cross examination, the Accused deposed in his examination in chief that he was in need of money for marriage of his sister, so he approached the complainant for loan. Complainant advanced a sum of Rs. 1 lac only as loan to the accused. It is further deposed by the accused that blank, undated, and signed cheques including cheques in question were issued by the accused, as advance cheques, at the time of execution of agreement, which have been misused by complainant. Accused deposed that amount mentioned in the cheques has already been paid by the accused in year 2001. This version of the accused was not rebutted as even a suggestion in this regard was not given on behalf of complainant. Accused affirmed during his cross examination that he requested the complainant for loan and denied to have approached the complainant for financing the vehicle. By asking this question and from the answer given by the accused, complainant got accused's version affirmed that the accused took the loan and did not enter into hire purchase agreement as per complainant's version. Accused deposed in his chief that he handed over a blank agreement bearing his own and his guarantors' signatures to Sh.L.R.Narang, partner of the complainant, who gave the accused a cheque of Rs.1.0 lac. This version of the accused is affirmed by the complainant in his cross examination by admitting that he can not tell the series of cheques but the same were not handed over at the time of advancement of loan of Rs.1.0 lac. The denial regarding handing over the cheques at the time of advancement of loan of Rs.1.0 lacs infers that the complainant subscribed to the factum of advancement of a loan of Rs.1.0 lac as the complainant did not say anything by explaining or volunteering", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-28", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "loan of Rs.1.0 lac as the complainant did not say anything by explaining or volunteering that loan of Rs.1.0 lac was never advanced. This factum is further substantiated from the voluntary clarification of the complainant in his cross examination that one cheque was given to the accused and the cheque was for an amount of Rs.1.0 lac or 75000/- but the complainant do not remember the exact amount of the cheque. Accused stated in his examination in chief that 14 cheques of Rs.7194/- each without name and date bearing his signatures were given by the accused to the complainant. This testimony of the accused has gone un-rebutted as no suggestion to impeach the same was put to the accused during his cross examination. Accused deposed that Rs.75000/- was paid in cash to accused after advancement of loan and the complainant did not issue any receipt for the same. It is further deposed that five cheques out of fourteen cheques issued for Rs.7194/-each were honored on its presentation. This defence of the accused has not only gone un-rebutted but the complainant admitted in his cross examination that he received Rs.75,000/- from the accused after advancement of loan and that no receipt was issued in respect of payment. It means that the complainant admitted and subscribed to this testimony of the accused.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-29", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "The aforediscussed omissions of complainant to rebut and active admissions of the accused's version amount to affirmation of accused's version by the complainant. \n\n13.2 Accused deposed that after clearing the loan amount accused demanded the cheques back but the complainant did not return the same despite assurance. Accused further deposed that amount in cheques is not due against him. This testimony of the accused was also not rebutted by the complainant either by leading any evidence or by even putting a suggestion which amounts to admission of accused's version that no amount is due in respect of the cheques in question and cheques have been misused by the complainant which falsify the complainant's version that the cheques in question were issued by the accused towards discharge of arbitral award.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-30", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "13.3. Accused specifically denied that he approached the complainant for financing of CAR No. DL-6CE-8842. Accused's version of issuing cheques in question as advance cheques while taking loan and not entering into hire purchase agreement is further substantiated from the following facts:-\n Complainant admitted that the agreement exhibited CW1/3 was not signed by any witness but complainant placed carbon copy of hire purchase agreement on record during his cross examination, which is having the signature of firm's employee namely Anil as witness. The complainant upon being asked about signatures of Anil admitted that the signatures of Anil were obtained later on by the firm. Perusal of photocopy, EX.CW1/3 reveals that signatures of Anil were not present on it. When asked whether Anil signed on the original agreement or photocopy, the witness gave evasive reply by stating that he is not aware and by again saying that he does not remember. It shows that the complainant has forged the alleged hire purchase agreement and has not approached the court with clean hands which probablises the defence of handing over of blank signed loan agreement which has been fabricated into hire purchase agreement. When the complainant can dare to file forged and fabricated documents before the court the possibility of fabricating & manufacturing of hire purchase agreement becomes highly probable. Further, the complainant admitted that the vehicle was not hypothecated. Non hypothecation means that there was no hire purchase agreement in existence which shows that version of accused is probable and that he approached for a loan of Rs.1.0 lac for the marriage of his sister and not for hire purchase agreement against which cheques in question were issued as advance cheques which are being misused by complainant.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-31", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "13.4 The falsity of complainant's version and fabrication of hire purchase agreement is further evident from the fact that the complainant admitted that the seal of partner was affixed only on original agreement but perusal of Ex.CW1/3 (photocopy) reveals that said stamp is also affixed on photocopy. It further shows that if the aforesaid deposition of complainant is believed then Ex.CW-1/3 (photocopy) is also fabricated document. It follows from the aforesaid discussion that the accused handed over a blank document/agreement bearing his and his guarantors signatures, which has been fabricated by complainant by filling it up later, according to his convenience. So, the complainant's documents do not support the version of hire purchase agreement & probablise the accused version of taking a loan of Rs.1.0 lac against which cheque in question were issued as advance cheque. \n\n13.5 Complainant admitted at one place that he did not remember when the cheque in question were received by him, whereas in later part the complainant improved his version that the cheques were issued in lieu of arbitral award passed by the court. This Flip flop creates serious doubt on the version of the complainant as to the issuance of the cheques after passing of arbitral award, whose benefit must go to the accused.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-32", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "13.6. Further, it is the case of the complainant that the accused issued the cheques in question towards discharge of awarded amount after the complainant warned him of instituting the execution proceedings. In his cross examination, the complainant said that the cheques were issued in lieu of awarded amount. Complainant did not say that cheques were issued for part payment of arbitral award. The awarded amount is Rs.1,10,677/- while the cheques are for an amount of Rs.64,746/-. It is very strange and unbelievable that the complainant accepted the cheques for sum of Rs.64746/- while the awarded amount was Rs.1,10,677/- despite the fact that the accused issued the cheques under the influence of warning as per complainant's version. The complainant could have compelled the accused to issue the cheque for entire amount as the accused was under the influence of complainant's warning as per complainant's version. Complainant got it admitted by the accused during his cross examination that the cheques were handed over without any force or pressure. This suggestion and its answer shatter the complainant's version of giving warning to the accused under influence of which accused allegedly issued the cheques as warning implies some sort of pressure which the accused denied to be present while answering the aforesaid suggestion. So, when the existence of warning stands disproved then the story of issuance of cheques under the influence of the warning after passing of arbitral award also stands disproved and the version of the accused that the cheques in question were issued as advance cheques voluntarily while entering into the loan agreement and not towards discharge of arbital award stands substantiated.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-33", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "13.7. It is also very strange and unbelievable that the accused issued cheques to the complainant for the same amount all drawn on the same bank bearing dates falling after a gap of one or two days each as no reasonable person would do so. It is further beyond imagination that three cheques for equal amount drawn on same bank account bearing the same date are issued by accused to the same person. No person would issue three cheques as above, while the same purpose can be fulfilled by a single cheque of that date for entire amount covering the three cheques and no reasonable person would accept such cheques as single cheque would suffice the purpose. It shows that undated cheques issued by accused bearing his signatures were lying blank with the complainant and complainant abruptly filled these cheques without permission of the accused and thus misused the same. Though issuance of blank singed cheques can not come to the rescue of the accused in normal circumstances but in highly suspicious circumstances as herein before discussed the misuse of blank signed cheques by financier becomes a relevant fact benefit of which must go to the accused.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-34", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "13.8. Complainant admitted that signatures of the accused are written by one pen and other parts of the cheques including dates have been written by a different pen. Complainant admitted that cheques were presented on the same day when they were issued. Three cheques were issued on 12.12.2003, another three on 13.12.2003 and the remaining three on 15.12.2003. Usually while issuing completely filled up cheques, the same pen is used and it is rarity that two different pens are used for this purpose, as people are very particular in filling the cheque, sensing the fear of rejection of the same. Still if it is assumed that the accused used two different pens to sign & fill up different parts of single cheque then it is impossible to believe that he used two different pens on all the nine cheques and on all the three dates when the cheques were issued. It may have been so in one or two case but such a thing happening in all cases implies that some other person on behalf of complainant has filled up the undated cheques which were issued in blank by the accused bearing his signature only & thus misused the cheques under the garb of arbitral award. \n\n13.9. It is also beyond the understanding of a reasonable or prudent man that despite having an arbitral award that too ex-parte award, the complainant approached the accused to warn him of filing execution proceedings. In such circumstances a prudent man would have never approached the accused & had directly gone for execution. Moreso when the accused had already defaulted in making payments, the question of taking cheques from a defaulter against whom an exparte arbital award is in force seems to be highly unreasonable & renders the complainant's version unbelievable and improbable.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-35", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "Complainant's version is that nine cheques of Rs.7194/- each were issued by the accused but perusal of the record reveals that the cheque No 2645 dated 15.12.2003 Exb.CW1/13 is drawn for Rs.7195/- and some alteration is visible on the amount written in words as the word five has been over written and changed to four. The pay in slip Exb. CW1/16 has also been falsely filled for Rs.7194/- while the banker issued the memo for Rs.7195 in respect of this cheque. This is major contradiction in the complaint and cheques filed by the complainant which falsifies the version that cheques in question for Rs.7194/- each were issued towards discharge of arbitral award. \n\n Complainant is himself not sure as to whether the cheques are for an amount of Rs 64,746/- or Rs 64,747/- which is reflected from para 6 of complaint, wherein the complainant mentioned that the accused issued nine cheques for a sum of Rs 7,194/- each (totaling Rs 64746/-), while in para 11, the complainant mentioned that the accused failed to pay the cheque amount of Rs 64,747/-. This is a material contradiction in the complainant's case, which indicates that the complainant has misused the cheques issued by the accused as advance cheques.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-36", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "The documents Ex.CW1/3 relied upon by the complainant proves to be the last nail in the coffin as the schedule of payment reflects installment of Rs.7194 & 7195 both. It indicates that the cheques in question were issued in blank by the accused, at the time of loan agreement in the year 2000 and the same have been filled up according to installment schedule by the complainant which falsify the complainant's version of issuance of cheques in question by the accused after passing of arbitral award.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-37", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "13.10. Alleged hire purchase agreement Exb.CW1/3 brought by the complainant on record shows that the monthly installment of Rs.7195/-, 7194/- and 7192/- were to be paid by the accused over a period of 36 months commencing from 10.12.2000. As per clause III of the aforesaid agreement installment were to be paid in cash or by demand draft. But the agreement does not prescribe for the payment to be made by way of cheques. However the complainant admitted during his cross examination that the accused used to pay the monthly payment through cheques and four-five cheques were encashed. This admission fortifies the version of the accused as to issuance of cheque at the time of execution of blank agreement. Complainant's version is that nine cheques of Rs.7194/- each were issued on 11, 12, 15 December 2003 towards discharge of arbitral award of Rs.1,10,677/-. Perusal of agreement exb.CW1/3 reveals that installment to be paid during the year 2003 till 10.12.2003 were all of 7194/- each and last one was of Rs.7192/-. It is not the case of the complainant that the cheques in question were issued for payment of installments but the same were issued towards discharge of arbitral award passed after the accused defaulted in making the payment in installment as per hire purchase agreement. It is not only strange but unbelievable also that the complainant accepted the cheques for amounts equal to the installment payable during the time as per installment schedule and did not ask for a single cheque for the entire arbitral award, despite the accused already having defaulted in making payments. It is not a mere co-incidence that the cheques allegedly issued by the accused are bearing the same amount as mentioned in the installment schedule but considering the afore discussed", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-38", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "issued by the accused are bearing the same amount as mentioned in the installment schedule but considering the afore discussed points, which probablize that the accused had not issued the cheques after passing of arbitral award, so the complainant was left with no other option but to misuse the blank undated cheques already delivered by the accused which, the financier as a matter of practice, usually fill in the amounts as per the installment schedule immediately after delivery of cheques.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-39", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "14. Perusal of cheque no.2645 dated 15.12.2003 reveals that an amount of Rs. 7195/- is mentioned in figures and the word five in the amount written in words column has been changed to four so that cheque amount becomes 7194/- instead of Rs.7195/- as written in the figures column. It means that the accused deliberately changed the amount of this cheque to 7194/-. This fact is further evident from the pay in slip Exb.CW1/16 duly proved by the complainant through his affidavit wherein an amount of Rs.7194/- is mentioned against this cheque. It can not be said that the amount of Rs.7194/- is written due to a typographical, accidental or inadvertent error as the total amount in the pay in slip Exb.CW1/16 is mentioned as 21582/- which has been correctly calculated after adding the amount in three cheques of Rs.7194/- each. Had the complainant considered the said cheque of Rs.7195/- then at least this amount must have been mentioned in the pay in slip against the said cheque. That the said cheque had been altered to appear to be a cheque of Rs.7194/- is further substantiated from the notice, complaint and the affidavit wherein the complainant clearly mentioned that the accused issued nine cheques of Rs.7194/- each. So, the complainant considered this cheque to be of Rs 7,194/-", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-40", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "It is pertinent to mention section 18 of the Negotiable Instrument Act, which provides that when the amount is stated differently in figures and words, the amount stated in words shall be the amount undertaken or ordered on demand. So, the cheque Exb.CW1/13 is to be considered to have been issued for 7194/- (the amount mentioned in words). The total amount demanded by way of legal notice of demand should be Rs.64,746/- while the notice has been given demanding a sum of Rs. 64,747/- which is an amount more then that covered by the nine cheques in question. It is settled law that the payee or the holder in due course must demand payment of the amount covered by the cheque. If the demand is for a lesser amount or an higher amount not covered by the cheque then the prosecution must fail as the statutory requirement of the provision is not fulfilled [1997(1) Civil Court Cases 603(Calcutta): 1997(2) All India Criminal LR(Calcutta) 0664: 1995(3) Civil LJ 0897: 1995(3) RCR(CRL.) 0646: 1996(2) Banking Cases 0515: 1997(1) Crimes 0127: 1995 CRL.L.J.3412: 1996(4) CCR0174: 1997(1) CCR 0249: 1996(2) KLT 0886: 1995(2) CHN 0037: 1996 CCLR 0040]. The notice in this case which has been issued for an amount more than the amount of cheque is defective notice which goes to roots of the case and amounts to no notice of at all. So, notice which is an essential ingredient of Section 138 of Negotiable Instrument Act for completion of offence is inherently defective which amounts", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-41", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "essential ingredient of Section 138 of Negotiable Instrument Act for completion of offence is inherently defective which amounts to no notice at all and the complaint is liable to be dismissed on this ground also.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-42", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "15. Considering the above discussion, it is thus clear that version of the accused that blank, undated, and signed cheques including cheques in question were issued by the accused as advance cheques at the time of execution of agreement which have been misused by complainant, that the cheques were not issued towards discharge of arbitral award and that the amount mentioned in the cheques has already been paid by the accused in year 2001, is tenable and probable. \n\n16. No doubt complainant was well within his right to rely upon mandatory presumptions of law. However, the same are rebuttable even by showing a preponderance of probability and if certain defects are established by the accused, the complainant should try other ways to support his case. In the present case, however, the complainant did not make such efforts on his own peril. The complainant has to bear the consequences. No blemishes in the story of the accused can give a right to the complainant to claim that his story should be preferred. It is well settled law hat if from the facts and circumstances two views are possible, the one which makes no interference in life and liberty i.e. the one which goes in favour of the accused should be preferred. \n\n17. From the above discussion, this court is of the considered opinion that accused has successfully rebutted the mandatory presumptions of law arising in favour of the complainant. Viewed from any angle, as complainant failed to discharge the burden which was shifted on him, no criminal liability could be fastened upon the accused. Accordingly, the complaint is hereby dismissed. \n\n18. This court accordingly returns a finding of not guilty.", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "18a7470adcdf-43", "Titles": "Supreme Court In Rangappa vs . S.Mohan Arising Out Of Slp (Crl) ... on 24 December, 2011", "text": "18. This court accordingly returns a finding of not guilty. \n\n19. The accused is hereby acquitted. Surety is discharged. Bail Bond/Surety Bond is cancelled. Endorsement be cancelled and FDR be returned, if any. Original documents, if any be returned after retaining its photocopy on record. File be consigned to Record Room. \n\nAnnounced in the open court                                     VIPLAV DABAS\ntoday i.e. 24.12.2011                                        Metropolitan Magistrate\n                                                                  North/Delhi\n                                                                   24.12.2011\n\n\n\n\n\n CC No.151/A/10\n24.12.2011\nPresent:-     Complainant with Ld. Counsel.\n              Accused with Ld. Counsel.\n Vide separate judgment of even date announced in open court the accused is acquitted. Complaint is hereby dismissed. Surety is discharged. Bail Bond/Surety Bond is cancelled. Endorsement be cancelled and FDR be returned, if any. Original documents, if any be returned after retaining its photocopy on record. \n\n File be consigned to Record Room. \n\n VIPLAV DABAS MM/North/Delhi 24.12.2011", "source": "https://indiankanoon.org/doc/7444775/"}
+{"id": "67b814bf99de-0", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "1\n\n            IN THE COURT OF MS. ANU GROVER BALIGA\n                        MM, NEW DELHI\nCC No. 4516/1\nAnnamalai Finance Ltd.\n26/25, Old Rajinder Nagar,\nNew Delhi -110060.\n\n       VS\n\nAshok Kriplani\nR/o. 17/13, Old Rajender Nagar\nNew Delhi - 110060.\n05.03.2007\n                         JUDGMENT\n1. ) Briefly stated the averments on the basis of which the present complaint has been filed are as follows :\ni) It is averred that the complainant is a public limited company doing the business of finance and having its office at Coimbatore. \n\nii) According to the complainant the accused had approached them for a loan of Rs. 6 Lacs and in lieu thereof had executed three promissory notes dated 04.04.95, 12.04.95 and 26.04.95 in favour of the complainant. It is the averment of the complainant that the promissory notes executed by the accused clearly stipulated that the rate of interest agreed between the parties was 26.78%. It is further stated that on 28.03.97, the accused had issued a cheque for a sum of Rs. 9,99,301/- in favour of the complainant company in order to discharge his liability to pay the loan amount alongwith the interest. \n\niii) The case of the complainant is that this cheque on presentation was dishonoured for reasons of '' insufficient funds'' on 29.05.97 and that the same information was received by the complainant on 04.06.97.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-1", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "iv)A legal notice and a telegram was sent to the accused calling upon him to make the payment of the dishonoured cheque. However, since he failed to do so, the present complaint has been filed. \n\n2) It is relevant to mention herein that, that the complaint was originally filed before the the court of Ld. Judicial Magistrate, Coimbatore, but was thereafter, on a petition moved by the accused, transferred to the Delhi Court vide orders of the Hon'ble Supreme Court. \n\n3) Notice U/s. 251 Cr.PC was framed against the accused on 21.04.2003 to which he pleaded not guilty and claimed trial. \n\n4) The complainant in support of its case examined three witnesses. PW 1 Shri R. Parmashivam, authorized representative of the complainant has filed his affidavit for the purposes of evidence. In the same the contents of the complaint have more or less been reiterated. The cheque in dispute has been exhibited as Ex. PW1/B. The original cheque return memos have been exhibited as Ex. PW1/C and PW1/D. The copy of the legal notice sent to the accused has been exhibited as Ex. PW1/E. The returned envelope sent at the address of the accused has been exhibited as Ex. PW1/F. The certified copy of the legal notice sent by telegram at the office of the accused has been exhibited as Ex. PW1/G. The certified copy of the telegram issued at the residence of the accused has been exhibited as Ex. PW1/H. The letter issued by the department of telecommunication confirming the delivery of the telegram has been exhibited as Ex. PW1/I. The said witness PW 1 was duly cross examined by the accused himself.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-2", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "5) CW 2 Shri R.K. Anand, Officer of the Oriental Bank of Commerce, has brought on record the statement of account of the accused, which has been exhibited as Ex. CW2/1. He also confirmed that the return memo Ex. CW1/D has been issued by Oriental Bank of Commerce. \n\n6) CW 3 Senthil Kumaran, Officer of Karur Vaishey Bank, has deposed that Ex. PW1/C is the return memo issued by his bank. This witness was also duly cross examined by the accused and in his cross examination this witness stated that the collection charges of Rs. 1500/- was levied upon the complainant for the dishonouring of the cheque. \n\n7) The entire incriminating evidence was put to the accused and his statement was recorded u/s 313 Cr. P.C. In the said statement the accused admitted that he had taken a loan of Rs. 6 Lacs from the complainant, however, he denied that the rate of interest agreed between the parties was 26.78%. He further stated that he did not issue the cheque in dispute towards the repayment of principle loan amount and the interest and according to him he had given the cheque in blank in February 1996 on the request of the complainant. He further stated that the cheque was either given by him as a security or towards the outstanding interest that was pending as on February'1996. He has asserted that he never received any legal notice from the complainant, as his office was lying closed since the year 1996 and he was himself residing at Rajasthan. The accused has produced eight witnesses in his defence.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-3", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "8) The accused himself appeared as a defence witness, DW1 and filed his affidavit for the purposes of evidence. In the said affidavit he has deposed that the promissory notes have been materially altered by the complainant with regard to the dates and the interest rate. He has deposed that the rate of interest that was agreed between him and the complainant was 22% per annum and not 26.78%. He also deposed that at the time of taking a loan he had pledged shares worth more than Rs. 8 Lacs and immovable property worth Rs. 12 Lacs with the complainant. The promissory notes have been exhibited as Ex. DE-1/A, Ex. DE-1/B and Ex. DE-1/C. \n\n9) The accused has also deposed that during the year 1996 - 97, he had shifted to Alwar (Rajasthan). He has placed on record the rent agreement Ex. DE-1/O. Various documents have also been filed by the accused to show that his place of residence in the year 1997 was Alwar and that he did not receive the legal notice sent by the complainant. \n\n10)DW 2, is the Executive Officer from National Stock Exchange, Janpath. This witness was summoned by the accused to prove the rates of the shares pledged by him with the complainant Company. \n\n11)DW 3 is a Supervisor of Telegraph Office, Prasad Nagar. This witness was summoned by the accused to produce the text message and record of telegram dated 07.06.97 allegedly sent by the complainant to him. This witness merely stated that he could not bring the summoned record because the same has been destroyed. The requisite certificate in this regard has been exhibited as Ex. DW3/A.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-4", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "12)DW 4 Shri S. Narainan, is the Manager of the complainant company, who had worked with the complainant company w.e.f 1989 till March 1996. This witness has stated that he does recall by whom were the promissory notes Ex. DE-1/A to C attested. \n\n13)DW 5 Pradeep Godwani has deposed that the accused was his employee in the year 1995-98 and that the accused was posted as Commercial Manager at Alwar in the entire year 1997. In his cross examination this witness admitted that he had not brought on record any proof of his identity or the fact that the accused was his employee. \n\n14)DW 6 R.K. Anand, Officer of Oriental Bank of Commerce has brought on record the certified copy of the statement of account of the accused for the period 01.04.95 to 31.05.95 and the same has been exhibited as Ex. DW6/A to DW6/3. He has also filed on record the relevant pages of the ''cheque issue'' register, which has been exhibited as Ex. DW6/4 and DW6/5. This witness has further deposed that as per their statement of account, on 04.05.96 an amount of Rs. 20,020/- was paid from the account of the accused to the complainant vide cheque bearing no.501444 and another amount of Rs. 5000/- was paid to the complainant from the account of the accused vide chqeue bearing no. 508727. The statement of account of the accused in this regard has been exhibited as Ex. DW6/6. \n\n15)DW 7, the Manager Sterilite Industries has been summoned by the accused to prove the enhancement of the shares prices of this Company.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-5", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "16)DW 8, Shri B.S. Meena has deposed that the accused was his tenant at Alwar for the period February' 1997 to December' 1997 at monthly rent of Rs. 4000/-. \n\n17)DW 9 Deepak Dhull, Cashier, Indian Overseas Bank has brought on record the certified statement of account of the complainant for the year 1995 and the same has been exhibited as Ex. DW9/A. \n\n18)The Ld. Counsel for the complainant and the accused appearing in person have relied upon the various authorities in support of their respective stands. According to the Ld. Counsel for the complainant, the complainant has brought on record sufficient evidence to prove that all the ingredients of the offence U/s. 138 of N.I. Act are clearly made out against the accused. On the other hand the accused has contended that he had issued a blank cheque in favour of the complainant and that the cheuqe was not issued for any liability or debt. It is also been contended by the accused that the legal notice sent by the complainant was never served upon the accused and therefore the complaint on this ground alone is liable to be dismissed. It has also been contended by the accused that the cheque in dispute was presented by the complainant twice with their bankers i.e. Kurur Visya Bank at Coimbatore and according to the accused, on both the occasions the bankers discounted bounced cheque and thus became the purchaser of the dishonoured cheque U/s. 59 of N.I, Act. He has therefore submitted that only the bankers have a remedy to file the present complaint and the complainant cannot now maintain the present complaint.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-6", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "19)I will first deal with the objections of the accused as regards the non service of the legal notice upon him. In this regard it will be relevant to consider firstly the evidence that has been brought by the complainant on record. Ex PW 1/F is the registered envelop through which the legal notice was sent to the accused at 17/13, Ground Floor, Old Rajender Nagar, New Delhi. This registered envelop was received back by the complainant with the report that the house of the accused was found locked on seven occasions when the postal offcial went to deliver the same. Ex PW 1/G & H are the certified copies of the telegram that was sent to the accused by the complainant at his residence and office address respectively. The letter issued by the department of the Tele-communications confirmed that the telegram Ex DW1/I was delivered at both the addresses of the accused.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-7", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "20)All the aforementioned documents clearly show that the complainant took all the steps that were necessary to serve upon the accused, its demand of payment. The accused has admitted during the trial that his residence was 17/13, Ground Floor, Old Rajender Nagar, New Delhi, but his only defence is that during the year 1997 he was not residing at his Delhi address and was residing at Alwar. Admittedly the accused has failed to prove on record that he had informed the complainant on or before year 1997 that he was not residing in Delhi in the year 1997 and that his place of residence has shifted to Alwar. In other words the complainant had no information or knowledge that the accused had temporarily shifted from his last known address at Delhi. In such circumstances, according to me the complainant fulfilled its duty by sending the legal notice to the last known address of the accused. Even if the registered envelop was returned back to the complainant with remarks \"house locked\", the complainant was under no legal duty or obligation to trace out any fresh address of the accused. In this respect in the judgment reported as State of M. P. vs Hira Lal & Ors (96), 7SCC523, Hon'ble Supreme Court has held that where the notice sent is returned with postal remarks ''not available in the house'', ''house locked'' and ''shop closed, such notices are deemed to have been served upon the addressee. Similarly in other case reported as K Bhaskaran vs SankaranVaidhyan Balan (1997) 7SCC, Hon'ble Supreme Court has held that :", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-8", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "''The context envisaged in Section 138 of the Act invites a liberal interpretation for the person who has the statutory obligation to give notice because he is presumed to be the loser in the transaction and it is for his interest the very provision is made by the legislature. The words in clause (b) of the proviso to Section 138 NI Act show that the payee has the statutory obligation to ''make a demand'' by giving notice. The thrust in the clause is on the need to ''make a demand''. It is only the mode for making such demand which the legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is dispatched his part is over and the next depends on what the sendee does.'' Maxwell's Interpretation of Statutes, relied on ''If a strict interpretation is given that the drawer should have actually received the notice for the period of 15 days to start running no matter that the payee sent the notice at the correct address, a trickster cheque drawer would get the premium to avoid receiving the notice by different strategies and he could escape from the legal consequences of Section 13 8NI Act. It must be borne in mind that the court should not adopt an interpretation which helps a dishonest evader and clips an honest payee as that would defeat the very legislative measure''", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-9", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "21.The contention of the accused is that he was not residing at his Delhi address in the year 1997 and therefore he was not actually served with the notice. He contends that as per the judgment of Hon'ble Supreme Court reported as '' D. Vinod Shivappa Vs. Nanda Belliappa, 2006, Cr. L.J, 2897 '' the service of the legal notice upon him cannot be deemed. In the said judgment, the Hon'ble Supreme Court has held that it is for the drawer to prove that he was not really served with a legal notice and that he was not responsible for such non service and if the drawer, accused is able to prove these facts, the presumption of service of legal notice cannot be made upon him, only on the basis of the postal receipts / documents filed by the complainant. In my considered opinion, though the accused has been able to show that he was not residing in Delhi in the year 1997, however, he has failed to show that he informed this fact to the complainant and thus according to me it is the accused himself who is responsible for the non service of the legal notice sent to him by registered post.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-10", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "22.Even otherwise the Ld. counsel for complainant has rightly contended that the notice that was issued to the accused through telegram also satisfies the requirements of the legal notice as envisaged by section 138 NI Act. It is rightly contended by the Ld. Counsel for complainant that section 138 N.I. Act does not specify a particular mode by which the legal notice u/ 138 NI Act is to be sent nor does it specify the language to be used in such notices. In SIL Impex vs Exim Aides, 1999 (4 SCC 567), it has been held by the Hon'ble Supreme Court that a notice u/s 138 NI Act can be sent through any mode and that it is not necessary that it should be sent vide registered post or through a messenger. Hon'ble Supreme Court in this case accepted that fax transmission of a notice is valid. On the basis of the observations made by the hon'ble Supreme Court, it is rightly contended by the Ld. Counsel for complainant that legal notice sent by the complainant to the accused by telegram is also valid. A perusal of telegram Ex PW 1/H clearly shows that the complainant has made specific demand of the cheque amount from the accused. Further the certified copies of the telegram and the certificate issued by the Postal Authorities in respect of the delivery of this telegram clearly raises a presumption with regard to the delivery of this telegram and this presumption has no where been rebutted by the accused at all. \n\n23.In view of my discussions hereinabove I am of the considered opinion that the complainant has discharged its duty by proving that it has served the legal notice to the accused demanding the cheque amount from him and the complaint can not be dismissed on the ground that the accused did not receive the same as he was not residing at his permanent address at that time.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-11", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "24.As regards, the further contention of the accused that the bankers of the complainant in the present case became the holder in due course of the cheque in dispute and therefore they alone were entitled to maintain a complaint U/s. 138 of N.I. Act against the accused, it is suffice to state that the accused has not brought any evidence on record to show that the said cheque was purchased by the bankers of the complainant nor was any suggestions made in this respect, either to the complainant's AR nor to the bank witnesses. \n\n25.Now coming to the next issue between the parties namely whether the cheque was issued by the accused in consideration of an existing debt or liability, it is rightly contended by the Ld. Counsel for complainant that as per the provisions of the Section 118 and 139 of Negotiable Instrument Act and the law laid down by the Hon'ble Supreme Court in a catena of judgments, once when the execution of a negotiable instrument is admitted, there is a presumption that it is supported by consideration and thereafter it is upon the accused to rebut this legal presumption against him.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-12", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "26.In a case reported as Bharat Barrel and Drum Manufacturing Company Vs. Amin Chand Payrelal, AIR 1999 SC 1008, the Hon'ble Supreme Court was dealing with section 118 of N.I. Act and while so discussing laid down the principles which are applicable in suits / cases involving the execution of Negotiable Instruments Act. In Para 12 of its judgment the Hon'ble Supreme Court has held that :", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-13", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "''once execution of the promissory note is admitted, the presumption under section 118 (a) would arise that it is supported by consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would dis-entitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event the defendant is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled o the benefit of presumption arising under section 118 (a) in his favour. The Court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as existence of negative evidence is neither possible nor contemplated and even if led is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption the defendant has to bring on record such facts and circumstances, upon consideration of which the Court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist''", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-14", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "27.In another judgment reported as M.S. Narayana Menon Vs. State of Keral (2006) 6SCC 39, the Hon'ble Supreme Court has reiterated the observations made by it in the judgment of Bharat Barrel's case. \n\n28. Therefore what is to be examined in the present case is whether the accused has been able to discharge this onus or not. According to the Ld. counsel for complainant the accused has miserably failed to discharge this onus. Ld. counsel for complainant has pointed out that the accused in his statement recorded u/s 313 Cr. P. C., admits that he took a loan of Rs. 6 lacs from the complainant and that he executed promissory notes in possession of the complainant. It is also contended that the accused himself deposes in his affidavit that he had also pledged some of his shares and had mortgaged him immoveable property with the complainant as security against the loan taken. It is also an admitted position between the parties that the accused did not repay the loan on 28.03.07. Ld. counsel for complainant therefore submits that the fact of an existing debt or liability as on 28.03.07 is not at all disputed by the accused and further the issuance of the cheque in favour of the complainant is also not disputed by the accused. Thus according to the Ld. counsel for complainant the only conclusion is that the accused is taking a false defence that the cheque was not given by him in consideration of an existing debt or liability.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-15", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "29.On the other hand the accused submits that as he had issued a blank cheque in favour of the complainant in the month of February 1996, wherein the amount of the cheque and the date were left blank and according to him this cheque was issued by him towards the re-payment of interest that had accrued as on February 1996 or as a security. It is also pointed by the accused that the complainants have admitted in their reply to a discharge application filed by the accused, that the cheque was infact blank as regards the date and the amount. It is further pointed out by the accused that PW 1 in his cross examination also admits this fact. It is further contended by the accused that the allegation of the complainant that the cheque in dispute was given to them on 28.03.97 is falsified by the own testimony of PW 1 in as much as this witness states in his cross examination that the cheque was given on 28.3.97 at the Delhi office of the complainant, though in the affidavit of PW 1 it is clearly stated that the cheque in dispute was presented for encashment for the first time on 28.03.97 in Coimbatore, an act which could not have been possible if that cheque was received at Delhi on 28.03.97. This anamoly, according to the accused is sufficient to prove that the complainant is taking a false stand that the cheque was given to them in March 1997.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-16", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "30.It is further submitted by the accused that the ledger being maintained by him and filed on record (EX DE-1/N) clearly shows that the cheque in dispute was issued by him in favour of the complainant in February 1996. He therefore points out that the blank cheque given by him in February 1996 could not have been filled up by the complainant in March 1997 as on that date they had no implied authority of the accused to fill up an amount of Rs. 9,99,301/- in the cheque. For this contention accused has relied upon the following authorities 1.1995 Cr. LJ 560\n\n2. III (2002) BC 419\n3. 2004(I) RCR (Crl.) 284\n4. Griffiths vs Dalton (1940) 2.K.B. 264\n\n31.It is also contended by the accused that not only has the cheque in dispute been materially altered by the complainant but the complainant has also materially altered the promissory notes executed by the accused in favour of the complainant. According to the accused the rate of interest and the dates in the promissory notes have been altered by the complainant in as much as neither the promissory notes were executed on the dates mentioned therein nor was the rate of interest ever agreed between the parties @ 26% per annum. It is the submission of the accused that the promissory notes have thus become void u/s 87 of Negotiable Instruments Act and this by itself rebuts the presumption raised against him u/s 118 and 139 of Negotiable Instrument Act. For this contention accused has relied upon the following authorities.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-17", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "1. AIR 1935 RANGOON131\n2. 1965 RLW 47 (Raj)\n3. AIR 1966 A. P. 267\n4. AIR 1974 MADRAS 4\n5. AIR 1982 KANT. 227\n6. AIR 1983 ALL. 81\n7. AIR 1986 A.P. 120\n8. 1995 Cr.L.J. 560\n9. AIR 1998 MADRAS 67\n\n32.The accused has further contended that even if it is presumed that the complainant had the authority to fill up the cheque with the amount that was due from the accused as on 28.03.97, even then the cheque in question is invalid in as much as if the amount due from the accused is calculated at the rate of interest 26.7% per annum and the accused is given credit of the two payments of Rs. 25,000/-, only an amount of Rs. 8,90,177/- was due from the accused as on 28.03.97. He therefore contends that the complainant could not have filled up the cheque for an amount higher then this amount and that this itself takes the present case outside the purview of the Section 138 NI Act.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-18", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "33.In rebuttal to the aforementioned contentions of the accused Ld. Counsel for complainant states that the accused has miserably failed to show that the promissory notes were materially altered or that the rate of interest of 26.78% was not agreed between the parties. According to him, none of the judgments relied upon by the accused are applicable to the facts of the present case, since the complainant has not sued on the basis of the promissory notes but has sued on the basis of the cheque issued by the accused. He further submits that even if the accused has not been given a credit of the payment already paid by him in March 1996, while coming to the figure 9,99,301/-, even then it does not exculpate him of the offence u/s 138 NI Act. In this respect, Ld. counsel for complainant has relied upon an authority of the Hon'ble High Court of Kerala reported as R. Gopikuttan Pillai vs Sankara Narayanan Nair, Equivalent citation:I(204)BC.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-19", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "34.I have gone through all the judgments filed by both the parties and have also given careful consideration to the submissions made by them. According to me, the one distinguishing feature in the present case, is that the cheque in dispute issued by the accused is admittedly, an incomplete negotiable instrument. No doubt under Section 20 NI Act, the complainant was within its right to complete the same before its presentation, however the date and amount that could have been filled up in the cheque was to have been agreed to, between the parties expressly or impliedly. The contention of the accused is that he did not give any authority, express or implied, to the complainant to fill up the date of 28.03.97 and the amount of Rs. 9,99,301/- in the cheque. To rebut the presumption raised against him by virtue of Section 118(b) NI Act with respect to the date filled up in the cheque, the accused has brought on record a ledger maintained by him, the pages of which have been exhibited as Ex DE-1/N. I have myself tallied the entries made therein along with the entries in Ex DW 6/1, EX DW 6/2 and Ex DW6/3, the statement of account of accused proved by his Banker DW6. According to me, the fact that some of the entries in the aforementioned documents do tally, show that the ledger was maintained by the accused in his ordinary course of business and by virtue of Section 34, Evidence Act, it can be read in evidence. This ledger shows that the cheque in dispute was issued by the accused in favour of the complainant in February 96 and not on 28.03.97 as is being alleged by the complainant. The deposition of PW 1 to the extent that the cheque was handed over in Delhi on 28.03.97 and the fact of its presentation on 28.03.07 at Coimbatore,", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-20", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "and the fact of its presentation on 28.03.07 at Coimbatore, being totally inconsistent with each other, also falsify the stand of the complainant with respect to the date of receipt of the cheque. According to me, accused is rightly contending that as on 28.03.07 the complainant had no authority to fill up a cheque given in February 96, as a reasonable period had elapsed thereafter. The judgment reported as ''Griffiths vs Dalton (1940) Kings Bench Division clearly supports this contention of the accused. It lays down that an undated cheque can be filled up by the creditor within a reasonable period of time and the question what is a reasonable period of time within which an undated cheque can be filled up, is a question that depends upon the facts and circumstances of each case. In the admitted facts and circumstances of the present case namely that the loan was disbursed in April/May 95 & was repayable within on year, the complainant had in its possession shares of accused which it had a right to sell if the accused failed to make payment with in a year, the huge amount of interest that accumulated between the date and issuance of cheque in February 96 and before its presentation in 28.03.97, I am inclined to hold that a reasonable period of time had elapsed after the cheque was issued in February and that the complainant had no authority to fill it up on 28.03.97", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-21", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "35.Now coming to the amount that has been filled up in the cheque, according to Ld. counsel for complainant the accused had executed three promissory notes Ex DE1/A to 1/C, in favour of the complainant, expressly agreeing therein to pay interest @ 26.78% on the principle amount and therefore the amount of Rs. 9,99,301/- was filled up in the cheque after calculating the interest @ 26.78% p.a. on the principle amount. As discussed herein above accused has taken a contention that the promissory notes have been materially altered by the complainant as the date and the rate of interest were inserted in the promissory notes after their execution. To support his contention the accused has pointed out that PW 1 in his cross examination and in the admission/denial of the promissory notes carried out by him with respect to the promissory notes, has admitted that the promissory notes were written and attested by him. He has further admitted that in none of the promissory notes, rate of interest was written by him and in two of the promissory notes namely Ex DE 1/B and 1/C, the dates were not written by him, though all the promissory notes, as per his admission were executed by accused in his presence in Delhi. In other words the only inference that can be drawn from the cross examination and the admission and denial carried out by this witness is that, the date of promissory notes and the rate of interest were inserted in the promissory notes by the complainant on its own after their execution.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-22", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "36.Further there can not be any presumption raised against the accused in this regard and the authorities/judgments relied upon by the accused would be applicable, since the complainant by filling up the cheque amount as per the term of the promissory notes is clearly suing on the basis of the promissory notes. Thus as per the law laid down in the judgments AIR 1974 MADRAS 4 and AIR 1982 KANT.227, it was clearly for the complainant to have proved that the rate of interest @ 26.78 % p.a. was filled in the promissory notes with the consent of the accused. The Hon'ble High Court, Karnataka in one of its judgment reported as N. Narayanaswamy vs Madanlal, AIR (1982) Karnataka 227, has held that :\n ''Where in a printed pro note form all the particulars were filled up but the interest column was left blank it was not an incomplete document under S. 20 of the Negotiable Instruments Act entitling the promisee to fill it up since S. 80 made a specific provision that in such a case interest at 6% p.a. was payable. The filling up of the note by the promisee without the consent of the promisor would render it void under S. 87.''", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-23", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "37)I am unable to accept the contention of the Ld. Counsel for complainant that as per the agreement Ex DE - 1/D or as per the prevalent practices the complainant had the absolute right to decide the rate of interest unilaterally and fill up the same in the promissory notes without even informing the accused about the same. The fact that the accused has not also been able to prove that the rate of interest agreed was 22 % p.a. and not 26.78%, does not ipso facto imply that the complainant's assertion that it was 26.78% p.a. without any proof in support thereof is to be accepted. \n\n38)Therefore in my considered opinion the complainant has failed to prove that the amount of Rs. 9,99,301/- was filled up in the cheque with the consent of the accused.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-24", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "39)Further apart from the above discussed lacunae, in my considered opinion even if the contention of the complainant with respect to the rate of interest being 26.78% p.a. is accepted, even then the complaint has to fail because of another very material lacunae. Admittedly the accused had paid an amount of Rs. 25,000/- to the complainant in the month of March and May 1996. DW6, R. K. Anand, Official, Oriental Bank of Commerce, Rajender Nagar, in his deposition has stated that as per the statement of account, Ex. DW 6/6, on 22.3.96 an amount of Rs. 20,020/- was paid to the complainant vide cheque bearing No. 501444 and on 04.05.96 another amount of Rs. 5,000- was paid to the complainant by the accused vide cheque bearing No. 508727. His deposition has not been questioned at all. Now if the accused is given the credit of these payments made by him in March and May 1996 and even if the interest is calculated @ 26.78%, (as is contended by the complainant), the amount due from the accused as on 28.3.97 does not total up to Rs. 9,99,301/-. According to the accused Ex DE 1/I is the statement of account filed by the complainant in one of civil suit pending between the parties - though it is rightly contended by the counsel for complainant that this document has not been proved by the accused as per the rules of Evidence Act, however according to me this document merely contains mathematical calculation of the amount due from the accused and the same can be considered in evidence since no discrepancy in the calculations made therein have been pointed out to me by the Ld. Counsel for complainant. The calculation made therein clearly shows that the", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-25", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "to me by the Ld. Counsel for complainant. The calculation made therein clearly shows that the complainant arrived at the figure of Rs. 9,99,301/-, as the amount due from the accused, without giving him any credit of the payments made by him in March and May 1996. Admittedly there was no other transaction between the parties where the payment made by the accused could not have been credited. In other words, the amount due from the accused as on 28.03.97 was less then Rs. 9,99,301/-and therefore in my considered opinion the complainant could not have been said to have any authority to fill up the cheque for an amount, in excess of the liability of the accused.", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-26", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "40)Ld. Counsel for complainant has tried to contend that even if the credit of the payments made by the accused in the year 1996 has not been given to him, that itself does not make the present complaint not maintainable. For this contention he has relied upon a judgment of the Hon'ble High Court of Karnataka reported as R. Gopikuttan Pillai vs Sankara Narayanan Nair, Equivalent citation:I(204)BC34. In the said judgment the Hon'ble High Court has held that a part payment made by the accused towards the cheque in dispute, whether before or after the legal notice, can not absolve the accused of the culpability of the offence u/s 138 NI Act. I have gone through the said judgment. According to me the judgment is not at all applicable to the facts and circumstances of the present case. The facts before the Hon'ble High Court of Karnataka were that a post dated cheque for Rs. 72,750/- dt./ 19.09.93 had been issued by the accused to the complainant and the accused had made some part payments before the actual date of the cheque in dispute. It was in those circumstances that the Hon'ble High Court has held that a part payment will not absolve the accused of the culpability u/s.138 NI Act. The cheque in the case before the Hon'ble High Court was duly filled in at the time of its issuance and on the date of its issuance the accused admitted that he would have to pay Rs. 72,750/- on 19.9.93, (the date of the cheque in dispute). The facts of the present case, which have been discussed at length here in above, clearly are distinguishable - the complainant has on its own filled up Rs. 9,99,301/- on 28.03.07, even after realising that this was not the amount due from the accused", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-27", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "even after realising that this was not the amount due from the accused as on 28.3.97. Thus it can by no stretch on imagination be stated that the complainant has rightly filled up the cheque on 28.03.97 without the cheque amount being due from the accused as on that date. I am supported in my view by the judgment of the Hon'ble High Court of Karnataka in the matter reported as M/.s Shreyas Agro Services Pvt. Ltd vs Chandrakumar S. B., 2006 CRL L.J. 3140. The Hon'ble High Court has held that :", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-28", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "''If the drawee were to dishonestly fill up any excess liability and the extent of liability if it becomes bona fide matter of civil dispute in such case, the drawer has no obligation to facilitate the encashment of cheque and the dishonour of cheque under such circumstances does not attract prosecution u/S 138 NI Act''", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "67b814bf99de-29", "Titles": "Judgment Reported As State Of M. P. vs Hira Lal & Ors (96), on 5 March, 2007", "text": "41. In view of my discussions hereinabove the dishonour of the cheque in the circumstances of the present case does not at all attract the provisions of the section 138 NI Act. In view thereof accused is hereby acquitted for the offence u/s 138 NI Act. His bail bond stands cancelled, surety stands discharged, endorsement on the documents if any be cancelled as per rules. File be consigned to Record Room. \n\nAnnounced in the open court on 05.03.2007. \n\n (Anu Grover Baliga) Metropolitan Magistrate New Delhi", "source": "https://indiankanoon.org/doc/2911307/"}
+{"id": "8ceb74595747-0", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "THE COURT OF MS. NEHA PALIWAL\n METROPOLITAN MAGISTRATE\u00ad03, KKD, EAST, NEW DELHI \n\nComplaint No. 242/01/2011\nUnique ID No. 02402R0257242011\n\nM/s Fashion Link,\nThrough its Proprietor,\nSmt. Anju Arora, \nA\u00ad20, Gali No.3, Jagatpuri, Delhi - 110051.                          .....Complainant\n\n                                               Versus\n\n1. M/s Knit & Fit Fashions (India) Ltd., A\u00ad67, Sector 7, Noida, U.P. \n\n Also at :\n M/s Knit & Fit Fashions (India) Pvt. Ltd., Glamour Line Inc., 1205, Broadway Suite No. 208, New York - 10001, USA. \n\n2. Mr. Naresh Kumar Bansal, Director, M/s Knit & Fit Fashions (India) Pvt. Ltd., A\u00ad67, Sector 7, Noida, U.P. .....Accused Persons COMPLAINT U/s 138 OF THE NEGOTIABLE INSTRUMENTS ACT Offence complained of : U/s 138 N.I. Act Plea of accused person : Not guilty CC No. 242/01/2011 Page no. 1 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors Complaint filed on : 26.8.2011 Final Arguments heard & Concluded on : 21.06.2014 Date of decision of the case : 28.6.2014 Final order : Convicted U/s 138 NI Act. \n\n BRIEF FACTS AND REASONS FOR DECISION OF THE CASE", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-1", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "BRIEF FACTS AND REASONS FOR DECISION OF THE CASE\n\n 1. The present case has been instituted on the complaint of Smt. Anju Arora, Proprietor of M/s. Fashion Link, U/s 138 Negotiable Instrument Act 1881 (as amended up to date) against the accused company M/s. Knit & Fit Fashions (India) Pvt. Ltd and its Directors. However, in the present matter only the company and one of its Director Naresh Kumar Bansal were summoned by the Court as by the statement made by the complainant before the court on 27.8.2011, she was allowed to withdraw her case against the other Directors. \n\n 2. As per the complaint, it is the case of the complainant that in the month of Jan/Feb 2011, accused no.1 company through its Directors approached the husband of the complainant namely Sh.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-2", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "CC No. 242/01/2011 Page no. 2 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors Satish Arora, who was looking after the day to day conduct and business of the complainant to enter into a business transaction of manufacturing and selling export quality garments to the accused as per their requirements. It is the case of the complainant that thereafter the accused placed orders of Rs. 3 lacs in the month of April 2011 and Rs. 2 lacs in April 2011 and Rs. 5 lacs in April 2011 and the said orders were fulfilled and only after the prior payment made by the accused to the complainant through RTGS, goods were supplied to the accused persons.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-3", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "3. It is further the case of the complainant that the accused placed a further order of Rs. 13,92,008/\u00ad with the complainant in the month of April 2011 and paid an advance of Rs. 5,00,000/\u00ad to the complainant vide cheques bearing no. 184243 dated 5.3.2011 and vide cheque No. 402003 dated 24.3.2011. However, the accused persons directed the complainant to hand over a cheque of Rs. 5,00,000/\u00ad as security with the assurance that the same will be returned to the complainant after delivery of goods. It is the case of the complainant that accordingly her husband Satish Arora issued a cheque bearing no. 539333 dated 10.5.2011 for an amount of Rs. 5,00,000/\u00ad in favour of accused no.1 with the specific understanding CC No. 242/01/2011 Page no. 3 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors that the aforesaid cheque will be returned to the complainant at the time of delivery of goods.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-4", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "4. It is the case of the complainant that after manufacturing the goods as per the requirements of the accused persons, the complainant informed the accused persons about the same with the request to make payment of balance amount of Rs. 8,92,008/\u00ad as was agreed before actual delivery of goods. However, the Directors of accused company expressed their inability to make the payment at that time and requested the complainant to deliver the goods with assurance that soon after the delivery of the goods that they shall be making the payment to the complainant. \n 5. It is the case of the complainant that on relying upon the assurances given by the accused persons, the complainant delivered the goods to accused persons vide Bill/Cash Memo No. 001 dated 17.5.2011 for an amount of Rs. 13,92,008/\u00ad and requested the accused persons to return the aforesaid cheque bearing no 539333 dated 10.5.2011 for an amount of Rs. 5,00,000/\u00ad. However, the Directors of the accused company informed the complainant that the aforesaid cheque has been misplaced and the same will be returned to the complainant whenever the same is found by them. In CC No. 242/01/2011 Page no. 4 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors the meantime the complainant further supplied the goods for Rs. 1,50,000/\u00ad to the accused persons vide Bill No. 002 dated 10.6.2011 against advance payment of Rs. 1,50,000/\u00ad received by the complainant on 8.6.2011 through RTGS.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-5", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "6. It is the case of the complainant that since then the complainant has been requesting the accused persons to make the payment of outstanding amount of Rs. 8,92,008/\u00ad. However the accused persons deliberately avoided in making the payment of said amount to the complainant. \n\n 7. It is the case of the complainant that upon her persistence, the accused persons, in partial discharge of their admitted debts and liability towards the complainant, issued a cheque bearing no. 402041 dated 17.6.2011 for an amount of Rs. 1,00,000/\u00ad drawn on Andhra Bank, Preet Vihar, New Delhi - 110002 in favour of Complainant\"Fashion Link\" signed by accused Sh. Naresh Kumar Bansal. \n\n 8. It is further the case of the complainant that however, when she presented the said cheque for encashment, it was dishonoured with the remarks \"Payment stopped by drawer\", vide cheque returning memo dated 18.6.2011. Thereafter she got issued legal CC No. 242/01/2011 Page no. 5 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors demand notice dated 12.7.2011, dispatched on 14.7.2011 to the accused persons, whereby the accused persons were asked to pay the amount of said cheque within 15 days and the said notice was duly served upon the accused persons in ordinary course of postal delivery.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-6", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "9. It is the case of the complainant that as accused persons have not replied to the said notice within the period of 15 days nor have paid the said amount to the complainant, the present complaint was filed by the complainant against the accused persons. Thus it is prayed by the complainant that the accused persons be tried and punished for the offence U/s 138 NI Act. \n\n 10. In the present matter the complaint was filed before the court on 26.8.2011. The cognizance of the offence was taken and after pre\u00adsummoning evidence and hearing arguments on the point of summoning accused company and accused Naresh Kumar Bansal were summoned for the offence by the Ld. Predecessor of the court, vide order of the court dated 27.8.2011, as the complainant withdrew her case against the other accused persons.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-7", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "11. Thereafter, on 29.10.2011, accused Naresh Kumar Bansal was admitted to bail and notice was served upon him on behalf of CC No. 242/01/2011 Page no. 6 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors himself as well as on behalf of accused company by the Ld. Predecessor of this Court to which he pleaded not guilty and claimed trial. \n 12. It was submitted by the accused at the stage of framing notice that the company had entered into an agreement with the complainant as per which the complainant was to prepare garments for them and the impugned cheque was issued as security for the consideration amount of the agreement. It was further submitted that on the same day he had transferred Rs. 1,50,000/\u00ad to the account of the complainant through RTEGS. It was further submitted that as the complainant had not delivered goods as per terms of said agreement, therefore, he got the payments of the cheque stopped and intimated to the complainant to this effect. The accused Naresh Kumar Bansal further admitted that he is the director of accused company and had received the legal notice of the complainant, however, he submitted that he had not pecuniary liability towards the complainant and pleaded not guilty and claimed trial.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-8", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "13. As it was submitted by Ld. Counsel for complainant that he has no objection if the opportunity is granted to the accused to cross CC No. 242/01/2011 Page no. 7 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors examine the complainant, Ld. predecessor of this court put the matter straightaway for the purpose of cross examination of complainant and dispensed with the requirement of moving the application U/s 145(2) NI Act.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-9", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "14. In order to prove her case, the complainant examined herself as CW\u00ad1 and adopted her affidavit Ex. CW\u00ad1/1, which was led in pre\u00adsummoning evidence in post summoning evidence. She had relied upon the documents Ex. CW\u00ad1/A to Ex. CW\u00ad1/F which are as under:\u00ad\n\n (a) Ex. CW\u00ad1/A , is cheque bearing no. 402041 dated 17.6.2011, drawn on Andhra Bank. \n\n (b) Ex. CW\u00ad1/B is cheque returning memo dated 18.6.2011 containing remarks 'Payment stopped by drawer'\n\n (d) Ex. CW\u00ad1/C is Legal Notice dated 12.7.2011. \n\n (e) Ex. CW\u00ad1/D1 (Colly.) and Ex. CW\u00ad1/D2 (Colly.) are postal receipts and courier receipts dated 14.7.2011. \n\n                (f)      Ex. CW\u00ad1/E (Colly.) are AD cards.\n\n                (g)      Ex. CW\u00ad1/F is the complaint.\n\n 15. Post summoning complainant's evidence was closed in the present matter vide order of the Court dated 20.4.2012 and the CC No. 242/01/2011 Page no. 8 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors matter was fixed for statement of accused.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-10", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "16. Statement of accused U/s 313 read with Section 281 Cr.P.C. was recorded before the court on 2.5.2012 wherein it was submitted by the accused that he had business dealing with the complainant firm regarding garments and he had ordered certain ladies skirts from the complainant and issued the present cheque as security. But as the complainant failed to supply the goods on time despite repeated extensions and as a result of which he could not fulfill his commitment with his purchasers, therefore, he had stopped the payment of cheque in question. It was further submitted by the accused that he wishes to lead evidence in his defence.  \n\n 17. Thereafter, the matter was fixed for defence evidence. An application U/s 315 Cr.P.C. was moved by the accused for getting himself examined as a witness and the same was allowed vide order dated 7.7.2012 passed by Ld. Predecessor of this court. Accused was examined as DW\u00ad1. The accused has in his evidence relied upon the following documents:\u00ad\n\n (a) Ex. DW\u00ad1/1original agreement dated 7.4.2011. \n\n (b) Ex. DW\u00ad1/2 original bill/cash memo dated 17.5.2011. \n\n (c) Ex. DW\u00ad1/3 original bank certificate. \n\n\nCC No. 242/01/2011 Page no. 9 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors\n (d) Mark C copy of e\u00admail dated 6.4.2011. \n\n (e) Mark D Copy of e\u00admail dated 28.4.2011.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-11", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "18. As it was submitted by the accused that he does not wish to examine any other witness in his defence, defence evidence was closed vide order of the Court dated 31.1.2014 and the matter was fixed for final arguments. \n\n 19. I have heard the arguments as advanced by the Ld. counsels for the complainant and the accused and have gone through the material placed on record. \n\n 20. Before adverting to the case in hand it is necessary to discuss the law of the land as applicable to the present case in hand. The main ingredients of Section 138 of the Negotiable Instruments Act are as follows:\u00ad\n\n (a) The accused issued a cheque on an account maintained by him with a bank. \n\n (b) The said cheque has been issued in discharge of any legal debt or other liability. \n\n (c) The cheque has been presented to the bank within the period of six months from the date of the issuance of the cheque or within the CC No. 242/01/2011 Page no. 10 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors period of its validity. \n\n (d) When the aforesaid cheque was presented for encashment, the same was returned unpaid/ dishonoured. \n\n (e) The Payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the Bank regarding the return of the cheque. \n\n (f) The Drawer of the cheque failed to make the payment within 15 days of the receipt of the aforesaid legal notice of demand. \n 21. If the aforesaid ingredients are satisfied then the drawer of the cheque shall be deemed to have committed an offence punishable u/s 138 Negotiable Instruments Act.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-12", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "22. As per Section 141 NI Act if the person committing the offence U/s 138 NI Act is a company every person who at the time of the offence was committed was incharge of and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty for the offence and shall be liable to be proceeded against and punished CC No. 242/01/2011 Page no. 11 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors accordingly. \n\n 23. In the present case in hand accused persons are the company and one its Directors who has signed the cheque in question. Accused Naresh Kumar Bansal (hereinafter referred to as accused no.2) on behalf of himself and on behalf of accused company (hereinafter referred to as accused no.1) has admitted in his cross\u00ad examination that the impugned cheque Ex. CW1/A bears his signatures and was issued by him in favour of the complainant and was filled by him in his own handwriting. It was further admitted by him that he has instructed his bankers to stop the payment of the cheque. The receipt of the legal notice was also admitted by the accused no.2 and it was further admitted that he had not given any written reply to the same. \n\n 24. Thus the existence of the cheque, the drawing of the cheque on the account maintained by the accused persons, its dishonour and the sending of the legal notice has been established before the court. The only question which remains to be determined is whether the cheque was issued for the discharge of any debt or liability.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-13", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "25. Section 118 NI Act raises a number of presumptions of consideration, date, time of acceptance, time of transfer and status CC No. 242/01/2011 Page no. 12 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors of holder in due course unless the contrary is proved. The section lays down special rule of evidence applicable to negotiable instruments and presumptions are one of law and the court shall presume that the negotiable instrument which is the cheque in the present case, was made for consideration, was made on the date which it bears and that it was handed over to the complainant by the accused in due course.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-14", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "26. Section 139 of Negotiable Instruments Act raises presumption that the holder of the cheque which is the complainant in the present case received the cheque for the discharge in whole or in part of any debt or other liability.  \n 27. However, these presumption U/s 118 and Section 139 NI Act are rebuttable in nature. These presumptions have to be compulsorily raised as soon as the execution of cheque by the accused is admitted or proved by the complainant and thereafter the burden is shifted to accused to prove otherwise. A presumption is not itself evidence, but only makes a prima facie case for a party for whose benefit it exists.  \n 28. In the case of Kumar Exports VS Sharma Carpets 2009 II AD (SC) 117 it was held by the Hon'ble Apex Court that to rebut CC No. 242/01/2011 Page no. 13 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors the statutory presumptions the accused may either adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist on every case that the accused should disprove the non\u00adexistence of consideration and debt by leading direct evidence, because the existence of negative evidence at all times is neither possible nor contemplated. At the same time mere denial of passing of consideration and existence of debt also would not serve the purpose of accused, something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. It was further held that once the rebutal evidence is adduced and accepted by the court the evidential burden shifts back upon the complainant and thereafter, the presumptions U/s 118 and 139 of the Act will not again come to the complainant's rescue.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-15", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "29. Thus the accused has to bring before the court something probable in his support in order to shift the burden back to the complainant. \n 30. The accused persons have taken a defence at the stage of notice that they had issued the cheque as security for the CC No. 242/01/2011 Page no. 14 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors consideration amount of the agreement and as the complainant had not delivered the goods as per agreement, they got the payment of the cheque stopped and intimated the complainant to this effect. In the statement of accused recorded u/s. 281 Cr.P.C read with Section 313 Cr.P.C. the defence taken was that as the complainant had failed to supply the goods on time, despite repeated extensions as a result to which the commitment made by the accused to its purchasers could not be fulfilled, therefore, they stopped the payment of cheque in question. \n\n 31. The accused in his examination in\u00adchief has relied upon Ex.DW1/1 which is the agreement dt. 07.04.11. The said agreement is not mentioning anything about the handing over of security cheque by the accused to the complainant or vice\u00adversa. The accused has further placed on record the bill/cash memo Ex.DW1/2 dt. 17.05.11 as per which goods worth Rs.12,83,040/\u00ad were received by the accused.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-16", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "32. It is deposed by the accused that he had no transactions with the complainant except transaction dt. 17.05.11, however, the bank statement Ex.DW1/3 shows transactions prior to that date between the parties i.e of 08.03.11 and 25th March, 2011. The bill as per the CC No. 242/01/2011 Page no. 15 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors case of the accused itself was subsequent to the agreement dt. 07.04.11 and therefore, the commercial transaction prior to 7th April 2011 goes contrary to the deposition of the accused.  \n\n 33. Furthermore, it is admitted by the accused no.2 in his cross examination that he had obtained the consent of the buyer (i.e his purchasers) and the goods supplied by the complainant were accepted even though there was delay. Once there is an admission on the part of the accused that the goods supplied were accepted by him the defence taken by the accused that he could not fulfill his commitments with 3rd party as a result of the failure of the complainant to supply goods on time hold no force. \n\n 34. More so, in the present matter the cheque in question is dated 17.06.11 and the accused no.2 has admitted the entire filling of the cheque in his own handwriting. Once as per Ex.DW1/2 the goods were delivered on 17.05.11 the issuance of a subsequent cheque goes contrary to the defence raised by the accused that the cheque was given as a security for the consideration amount of the agreement or that as he could not fulfill his commitment with purchasers due to failure of supply of goods on time, he got the payment of the impugned cheque stopped.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-17", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "CC No. 242/01/2011 Page no. 16 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors\n 35. In Negotiable Instruments Act presumptions are there in favour of complainant and burden is upon the accused to rebut the same. In the present matter in view of the above said discussions accused persons have failed to rebut the presumption of NI Act. Mere denial of liability or averment without any substantial evidence to corroborate the same is of no aid to the accused. Nothing has come in the cross examination of the complainant which can assail her credibility before the court or rebut the presumption u/s 118 & 139 NI Act.   \n 36. The complainant in support of her case has proved before the court the existence of cheque. The signatures and execution of the cheque are even admitted by the accused at all stages. This cheque was presented on an account maintained by the accused and was dishonored on the ground 'Payment stopped'. Receipt of legal notice has been admitted by the accused. The accused persons thus have not been able to rebut the presumptions of Section 118 and 119 NI Act.", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "8ceb74595747-18", "Titles": "M/S Fashion Link vs M/S Knit & Fit Fashions (India) ... on 28 June, 2014", "text": "37. Thus, in the present case in hand, the existence of cheque duly signed by the accused no.2 on behalf of accused no.1 is proved before the court and in view of the presumption of Section 118 and CC No. 242/01/2011 Page no. 17 of 18 M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors 139 of NI Act which are not rebutted by the accused persons, it is presumed that the cheque was drawn for consideration and on the date which it bear and that the complainant is the holder of the cheque in due course and that she received the cheque for the discharge in whole or part of debt or liability. \n\n 38. The complainant has further proved before the court that the cheque was dishonoured with the reasons 'Payment stopped' and that the accused persons have not paid the amount of cheque in question to the complainant, despite receipt of legal notice. The ingredients of Section 138 NI Act are fulfilled. In view of the same accused no.1&2 are convicted for the offence U/s 138 NI Act. \n\n 39. Let they be heard separately on the point of sentence. \n\n 40. Let convicts be provided with a copy of judgment free of cost.\nAnnounced in the open Court \ntoday i.e. 28.6.2014                                           (NEHA PALIWAL)\n                                                                 MM\u00ad3:East: KKD:DELHI\n\n It is certified that the judgment contains 18 pages and all pages bear my signatures.         \n                                                               (NEHA PALIWAL)\n                                                                 MM\u00ad3:East: KKD:DELHI\n\nCC No. 242/01/2011                                                                  Page no. 18 of 18\n M/s Fashion Link Vs M/s Knit & Fit Fashions (India) Pvt. Ltd. & Ors", "source": "https://indiankanoon.org/doc/44760901/"}
+{"id": "1569100656db-0", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "IN THE COURT OF Ms.RIYA GUHA, MM\u00ad02\n( NEGOTIABLE INSTRUMENTS ACT) CENTRAL DISTRICT,\n                          TIS HAZARI COURTS, DELHI\nM/S Aneja Agencies\nB\u00ad14, (FF), Sangam Market,\nKatra Neel , Chandni Chowk, Delhi\nThrough its partner Mr. Gurpreet Singh                          ......Complainant\n                                   Versus \n1.    M/S R.K. Apparels\n     17\u00adA/2B, W.E.A, Ajmal Khan Road, \n     Karol Bagh, New Delhi\n     Through its partner/proprietor \n     Mr. Arun  Singhal\n1.    Mr. Arun Singhal, Proprietor\n     Authorized signatory\n     M/S R.K. Apparels\n     17\u00adA/2B, W.E.A, Ajmal Khan Road, \n     Karol Bagh, New Delhi                                        ........Accused\n\n                                                    JUDGMENT\nComplainant Case No                 :      2526/1/11\n\nDate of institution                :       29/09/2009\n\nOffence alleged                     :      Under Section 138 N.I. Act\n\nPlea of the accused                 :      Not pleaded guilty\n\nFinal order                         :      Conviction\n\nDate of Decision                    :      25/06/2014\n\n                                               BRIEF FACTS", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-1", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "1. Brief facts of the present case are that complainant is a registered partnership firm and the present complaint is filed by Sh.Gurpreet Singh, one CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 1 of 15 of the partners. It is further stated that the complainant is a wholesale distributer of suitings and shirtings and that the accused no.2 Arun Singhal is the proprietor of the accused no.1 firm, and that he used to purchase goods/fabrics from the complainant firm from time to time on credit basis. It is further allaged that as per the books of accounts maintained by the complainant in the name of the accused no.1, a sum of Rs.1,68,553/\u00ad was due and payable by the accused to the complainant, which was inclusive of part interest. In order to discharge the above said liability, the accused no.2 issued three post dated cheques bearing cheque no. 341517 dated 28\u00ad01\u00ad 2009 of amount Rs.50,000/\u00ad, cheque no. 341518 dated 28\u00ad02\u00ad2009 of amount Rs.50,000/\u00ad and, cheque no.341519 dated 28\u00ad03\u00ad2009 of amount Rs.68,553/\u00ad, all drawn on Syndicate Bank, Ajmal Khan Road, Karol Bagh, New Delhi and the same are Ex.CW1/4 to Ex.CW1/6. The complainant presented the cheques in question for encashment through his banker but the same was got dishonored by the banker of accused with the remarks \"Funds Insufficient\" vide returning memos dated 29.07.2009 which are Ex.CW1/7 to Ex.CW1/9. Hence, the complainant issued the mandatory notice U/s 138", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-2", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "Ex.CW1/9. Hence, the complainant issued the mandatory notice U/s 138 NI Act dated 13\u00ad08\u00ad2009 i.e. Ex.CW1/10 and the same was served upon the accused vide postal receipts/registered AD and U.P.C. The same are Ex.CW1/11 to Ex.CW1/13.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-3", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "2. When the accused failed to fulfill the conditions of the said legal notice CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 2 of 15 Ex.CW1/10 within 15 days of its presumed service, then the complainant has filed the present complaint case U/s 138 of Negotiable Instrument Act 1881 (hereinafter the Act) against the accused. \n\n\n3. After the institution of the present complaint, the complainant adduced his pre summoning evidence U/s 200 Cr. P.C. on which basis the accused was summoned via order dated 09\u00ad10\u00ad2009 to face trial for the offence U/s 138 NI Act. After the service of the summons, the accused entered his appearance whereupon the provisions of Sec. 207 Cr. P.C. were also complied. The accused was admitted to bail and the notice U/s 251 Cr. P.C. for the offence U/s 138 NI Act was served upon accused Arun Singhal on 15\u00ad 12\u00ad2010 after hearing the contesting parties. The accused pleaded \"Not Guilty\" and claimed trial. He further stated in his plea of defence that the cheques in question were given as security and that no amount is due and payable by the firm RK Apparels. He further stated that the statement of account filed by the complainant is incorrect and that the complainant has not placed the complete record. He further stated that as per the records of the accused firm, the complainant is liable to pay to the accused and that the cheques in question were issued without consideration.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-4", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "4. In order to substantiate the case of the complainant, Sh.Gurpreet Singh, the partner in the complainant firm examined himself as the witness CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 3 of 15 CW\u00ad1 and adopted the presummoning evidence as his examination in chief, the contents of which are a mere repetition of what had already been mentioned above and hence are not repeated for the sake of brevity. The CW\u00ad1 was duly cross\u00adexamined by the counsel for the accused. \n\n5. The matter was thereafter fixed for statement of the accused and the same was recorded on 22\u00ad08\u00ad2012. All the incriminating circumstances, appearing in the evidence against the accused were put in order to unable him to offer his explanation. In his explanation u/sec 313 Cr.P.C r/w sec 281 Cr.P.C, the accused Arun Singhal stated that the cheques Ex.CW1/4 to Ex.CW1/6 were given as a security to the complainant and that there is no outstanding payable to the complainant. It was further stated by accused Arun Singhal that an amount of Rs.6 lakhs was made to the complainat by way of cheque which the complainant had illegally adjusted in the account of Ahuja Apparels Pvt. Ltd. \n\n6. Despite sufficient opportunity the accused has not lead any defence and finally the defence was closed by the order of the Court on 17\u00ad12\u00ad2013. Thereafter, final arguments were advanced. I have also perused the record.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-5", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "7. For the offence under Section 138 NI Act to be made out against the accused, the complainant must prove the following points that: CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 4 of 15\n (a) The accused issued a cheque on an account maintained by him with a bank. \n\n(b) The said cheque had been issued in discharge, in whole or in part, of any legal debt or other liability. \n\n(c) The said cheque has been presented to the bank within a period of six months from the date of the cheque or within the period of its validity. \n\n(d) The aforesaid cheque, when presented for encashment, was returned unpaid /dishonoured. \n\n(e) The payee of the cheque issued a legal notice of demand to the drawer within 30 days from the receipt of information by him from the bank regarding the return of the cheque. \n\n(f) The drawer of the cheque failed to make the payment within 15 days of the receipt of aforesaid legal notice of demand.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-6", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "8. Hence, the complainant must firstly show that the cheque in question was issued by the accused in its favour. Hence, firstly, the complainant must prove that the accused had issued the impugned cheques Ex.CW1/4 to Ex.CW1/6 in its favour. There is no denial by the accused that the signatures on the cheques in question are not his or that the account was not of the accused firm. However, the accused has alleged that he did not have the liability in respect of the said cheques as they were issued in lieu of security. CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 5 of 15", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-7", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "9. During the cross examination, the CW1 stuck to his stand that the cheques in question were issued by the accused in discharge of liability due and payable towards the complainant. To prove the stand of the accused, Ld. Counsel for the accused put questions to the CW1 that the complainant had received six cheques totalling upto Rs. 6 lakhs dated from 10/06/2007 to 26/06/2007. The CW1 affirmed to such suggestion but he also clarified that such cheques totalling upto Rs. 6 lakhs were issued in order to discharge the liability of M/S Ahuja Apparels Ltd. However, he also admitted that these cheques totalling upto Rs. 6 lakhs were issued by M/S R.K. Apparels from its bank account. The CW1 further went on to state that he had been given oral communication that the said cheques of Rs. 6 lakhs be adjusted against the dues of M/s Ahuja Apparels. With such questioning, the accused had tried to establish that firstly, with the payment of Rs. 6 lakhs given by way of these six cheques, which by the way were mentioned for the first time only during the cross examination of the CW1, there was no outstanding liability towards M/S R.K. Apparels. Secondly, the accused also tried to prove that the complainant had unjustifiedly and wrongly adjusted the payments made by these six cheques into the account of M/s Ahuja Apparels when they were meant to be issued towards discharge of liability of the accused firm.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-8", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "10. However it is pertinent to note that these 6 cheques were all dated of CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 6 of 15 the month of June, 2007 whereas the cheques in question Ex.CW1/4 to Ex.CW1/6 were dated 28/01/2009, 28/02/2009 and 28/03/2009. Apart from such questioning, the accused has not been able to show that the cheques in question were issued as security. No statement of account of the accused firm has been produced . It is an admitted position that the complainant firm and the accused firm were having ongoing business transactions. Merely by questioning the CW1 that he has received certain sundry cheques would not tantamount to rebutting the presumption in favour of the complainant that the three cheques in question Ex. CW1/4 to Ex. CW1/6 were issued in lieu of discharge of legally enforceable liability and the same were issued against consideration. \n\n\n11. The presumptions provided U/s 118 NI Act and 139 NI Act would come to the rescue of the complainant once the execution of the cheque in question is proved on record. As per section 118 NI Act, it is to be presumed in favour of the complainant during the trial that the cheque in question was given against consideration by the accused and that the complainant was the holder of the said cheque in due course. Further as per Sec. 139 NI Act, it is to be presumed in favour of the complainant during the trial that the cheque in question was received by the complainant against a legally enforceable debt or liability (\"Rangappa Vs. Sri Mohan\" SLP (Crl.) 407/06, Dated:\u00ad 07.05.2010).", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-9", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 7 of 15\n 12. In order to have the positive outcome in his favour, the complainant was required to show that the cheques in question Ex.CW1/4 to Ex.CW1/6 were given by the accused to discharge his liabilities which was dishonoured via returning memo whereafter the accused had also failed to comply with the requirements of the legal notice Ex. CW1/10. On the other hand, the accused was required to show his defence on the scale of preponderance of the probabilities that he is not liable to pay the amount involved in the present case to the complainant.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-10", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "13. It is well settled that both the aforesaid presumptions U/s 118 & 139 NI Act are rebuttable in nature and the onus to rebut the same squarely rests upon the accused. The accused can rebut these presumptions not merely by examining his own witnesses but also through the cross\u00adexamination of the complainant and his witnesses thereby bringing on record through the entire evidence available on record (inclusive of complainant's evidence and defence evidence, if any), that the complainant has set up a false case, and that their was no existing liabilities between the parties and that the cheque in question was misused. It must be kept in mind that once evidence is brought on record from both sides, it becomes an evidence of the case and court can draw inferences from the said entire evidence either in favour or against any of the parties. \n CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 8 of 15\n 14. Preponderance of probabilities is the standard of proof upon the accused to rebut the above presumptions, which is not as high as that of the prosecution whereby the accused is only required to show the existence of a probable defence so as to rebut the above presumptions. If the accused succeeds in raising a probable defence by referring to his own evidence (if any) and from the evidence of the complainant, then the onus would shift on to the complainant, who then would have to show beyond reasonable doubt the existence of consideration/existence of a legally recoverable debt or liability in respect of the cheque in question.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-11", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "15. It is argued by the Ld. counsel for complainant that from evidence on record, the complainant has proved that cheques in question were signed by the accused which were dishonoured vide bank memos and despite the legal notice accused did not make the payment. It is argued that during the cross examination of complainant nothing material has come out and the complainant has been able to prove his case. It is further argued that accused has failed to discharge the burden upon him to rebutt the presumption in favour of the complainant under the Act. \n\n16. Now the question is whether the complainant proved his case, that whether the amount was legally enforceable debt. Offence under Section CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 9 of 15 138 of the Act is a technical offence and the complainant is only supposed to prove that the cheques issued by the accused were dishonoured, his statement that cheques were issued against liability or debt is sufficient proof of the debt or liability and the onus shifts to the accused to show the circumstances under which the cheques were issued and this could be proved by the accused only by way of cogent evidence. \n\n\n17. The Ld. Counsel for accused had argued that the the document Ex.CW1/3, that is the statement of account, is a manufactured document and the payment of Rs.6 lakhs has not been reflected in this document. He further argued that there was no written instructions from the accused's side to adjust the amount of Rs.6 lakhs in the account of Ahuja Apparels.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-12", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "18. Accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence/evidence on preponderance of probabilities to prove that cheques in question were not supported by consideration and that there was no debt or liability to be discharged by him. However, there is no need that the accused should disprove the non existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time it is clear that bare denial of the passing of the consideration and existence of debt, apparently CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 10 of 15 would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. \n\n\n19. The plea of the defence raised by the accused at different stages are inconsistence and contrary to each other. At the time of framing of notice, accused had raised the defence that he has issued the cheques in question to the complainant as a security. During the statement under Section 313 CrPC and during the cross examination of the complainant, the accused has raised the defence that an amount of Rs.6 lakhs was given to the complainant by way of cheque(s), but the complainant had illegally adjusted the amount in the account of the other entity, M/S Ahuja Apparels. \n\n20. Therefore the inconsistent and improved version of defence raised by the accused does not inspire any confidence and does not hold water because the accused has improved his plea of defence at the every stage of trial.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-13", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "21. In a landmark judgment V.S. Yadav Vs. Reena Crl A No.1136 of 2010 Decided on 21.09.2010 it is observed by Hon'ble High Court of Delhi that a bare definition of cheque shows that cheque is a bill of exchange drawn on specified banker and is an order by drawer on his own agent i.e CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 11 of 15 bank for payment of certain sum of money to the bearer or the order to person in whose favour cheque is drawn. This order of payment by person to the holder of cheque is not made in casual manner just for the sake of fun. This order is made for consideration and that is why Section 139 of NI Act provides that the holder of a cheque is presumed to have received the cheque in discharge of whole or in part of a debt or liability. It was sufficient for complainant to prove the debt and liability by making a statement that the cheques were issued by the respondent for payment of debt. It is further observed that it must be borne in mind that the statement of accused under Section 281 Cr.P.C. Or under section 313 Cr.P.C. is not the evidence of the accused and it cannot be read as part of evidence. The accused has an option to examine himself as a witness. Where the accused does not examine himself as a witness, his statement 281 Cr.P.C. or 313 Cr.P.C. cannot be read as evidence of accused and it has to be looked into only as an explanation of the incriminating circumstances and not as evidence. There is no presumption of law that explanation given by the accused was truthful.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-14", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "22. If the accused wanted to prove any of the above said plea of defence, he was supposed to appear in the witness box and testify and get himself subjected to cross examination. His explanation that the cheque in question was issued as security and that he has no liability towards CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 12 of 15 complainant qua the cheques in question is not proved by evidence and this is liable to be rejected since the accused did not appear in the witness box to dispel the presumption in favour of the cheque as provided under the Act. Mere suggestion to the complainant or mere explanation given in that statement of accused under section 313 Cr.P.C r/w Section 281 Cr.P.C, does not amount to proof. Therefore the plea as set up is only after thought and is having no factual basis. Hence, the defence version of the accused is suspicious and is unbelievable. \n\n\n23. The accused has also argued that he has not been served with the legal demand notice. However, the legal demand notice dated 13\u00ad08\u00ad2009 Ex.CW1/10 was sent to the same address of the accused Arun Singhal which is also mentioned in the memo of the parties of the present case. The accused never disputed the said address at any stage of the trial. Hence in present scenario, there is presumption in favour of the complainant U/s 27 of the General Clauses Act. So, I am of considered view of that accused was duly served by legal demand notice.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-15", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "24. Therefore, mere pleading not guilty and stating that the cheques were issued as security and were wrongly adjusted by the complainant would not amount to rebutting the presumption raised under Section 139 of N.I Act. In the present case accused has not produced any cogent proof in support of CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 13 of 15 the defence version which makes it improbable that the cheque in question was not issued towards the discharge of legal liability as alleged by the complainant but at the same time strengthens the present complaint case. Further, nothing has been proved by the accused to show that he did not have the legally enforceable liability towards the complainant. \n\n25. Having considered the testimonies the issuance of cheque was not in dispute which were dishonored by bank returning memo. Accused Arun Singhal was served with legal notice through registered post within the stipulated period and despite that no payment has been made by him. \n\n26. Reading of the evidence on record in its entirety, would show that the evidence is not supportive with the innocence of the accused and as such same is liable to be dismissed out rightly. Secondly, accused has not produced any cogent proof in support of his defence on record. This court is of the opinion that the defence set up is neither definitive nor consistent with innocence of the accused. It was sole burden and duty of the accused to prove no liability by raising probable defence when he was defending presumption, which was supporting the dishonoured cheque. The accused has failed to discharge the onus. Thus, this court holds that the accused has not been able to rebut the presumptions under section 139 and 118 NI Act standing in favour of complainant.", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "1569100656db-16", "Titles": "In The Court Of Ms.Riya Guha vs Brief Facts Of The Present Case Are ... on 25 June, 2014", "text": "CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 14 of 15\n 27. Having considered the entire evidence, complainant successfully proved all the essential requirements of Section 138 of the Act. Accordingly, accused is guilty for committing the offence punishable u/s 138 of the Act, he is hereby convicted for the offence under section 138 of the Act. \n\n28. Let he be heard on point of sentence separately on 30.06.2014 Announced in open court on 25.06.2014 (RIYA GUHA) MM (C\u00ad02) /Delhi 25.06.2014 CC No. 2526/1/11 M/s Aneja Agencies vs M/S R.K. Apparels 15 of 15", "source": "https://indiankanoon.org/doc/108880998/"}
+{"id": "09c30fcb37b8-0", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "IN THE COURT OF SH. RAVINDER SINGH\u00adII, METROPOLITAN \n                         MAGISTRATE (NI) ACT - 07\n                       DWARKA COURTS, NEW DELHI.\n\nCase No. : 4750/14\nUnique Case ID No: 02405R0132702012\n\n\nINDIABULLS FINANCIAL SERVICES LTD.\nThrough its Authorized Representative\nHaving Registered Office At: F\u00ad60\nSecond Floor, Malhotra Building,\nConnaught Place, New Delhi.                                          .............COMPLAINANT\n\n\n\n                                               Vs.\n\n\nSUBE SINGH\nR/o D\u00ad1/481, Sultanpuri\nGeeta Senior Secondary School\nDelhi \u00ad 110041\n\nAlso at:\n\nMCD, Circle No 35, Avatika\nRohini Sector\u00ad1\nWater Tank, MCD Flut\nNew Delhi                                                               .....................ACCUSED\n\n\nDate of Institution:                                                            03.07.2012\nPlea of the accused:                                                        Pleaded Not Guilty\nDate of Reserving Judgment:                                                     19/04/2014\nDate of Judgment:                                                               27/05/2014\nSentence/final Order:                                                             Acquitted\n\n\n\n                                       JUDGMENT\n1. By way of present judgment I shall decide the present complaint case under Section 138 of the Negotiable Instruments Act 1881 (as amended up to date, herein after said as NI Act) filed by the complainant Indiabulls through its authorized representative against the accused Sube Singh S/o Sh. Fateh Singh. \n\nCC No. 4750/14 Indiabulls Vs. Sube Singh Page1 /11 FACTS OF THE PRESENT COMPLAINT CASE", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-1", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "2. The factual matrix as per the allegations in the complaint which are necessary for disposal of the present case are that, the accused approached the complainant and requested for personal loan. It is alleged that the complainant sanctioned and disbursed a loan of Rs. 35412/\u00ad to the complainant under the scheme of personal loan vide loan account no. S000012754. It is further alleged that the accused promised to make timely and regular payment of the scheduled EMI's but miserably failed to make the regular payment of EMI's in terms of the loan agreement. \n\n3. It is further alleged that the accused in order to discharge his legal liability has issued a cheque bearing No.85472 dated 16.05.2012 amounting to Rs. 37,604/ drawn on State Bank of India in favour of the complainant. It is further alleged that the complainant on the basis of assurance and instructions of the accused presented the said cheque for encashment however the same was dishonored vide cheque returning memo dated 22.05.2012 with the remarks \"Drawer's Signature Differs\". The complainant thereafter has given a legal notice of demand dated 30.05.2012 to the accused which was sent to the accused through courier on 02.06.2012 thereby calling upon the accused to make the payment of the cheque amount within 15 days of the receipt of the legal demand notice. It is alleged that the accused has failed to pay any sum in response to the legal demand notice as a result of which the complainant has filed the present complaint for prosecution of the accused U/s 138 of the NI Act.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-2", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "4. After complaint was filed, Sh Mahesh Kumar Authorized representative of the complainant (herein after said as AR) lead his pre summoning evidence by way of an affidavit and after hearing the Ld. Counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused by the Court vide order dated 08.08.2012 for the offence U/s 138 of the NI Act. On appearance of the accused a separate notice U/s 251 Criminal Procedure Code (herein after said the Code) dated 21.06.2013 was given to the accused CC No. 4750/14 Indiabulls Vs. Sube Singh Page2 /11 to which he pleaded not guilty and claimed trial. Thereafter, an opportunity to file an application U/s 145 (2) of NI Act was given to the accused. Thereafter the accused moved an application U/s 145 (2) of NI Act and the same was allowed and the case was listed for cross examination of the complainant witnesses. \n\n COMPLAINANT'S EVIDENCE", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-3", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "COMPLAINANT'S EVIDENCE\n\n5. Sh. Mahesh Kumar AR for the complainant got himself examined as CW\u00ad1 and adopted his evidence affidavit Ex. CW1/J. CW\u00ad1 also relied upon documents Ex. CW1/A to Ex. CW1/I. Ex. CW1/A is the copy of the amalgamation certificate of the complainant company, Ex. CW1/B is the copy of certificate of incorporation of the complainant company, Ex. CW1/C is the power of attorney in favour of the AR (CW\u00ad1). Ex. CW1/D is the original cheque in question. Ex. CW1/E is the Cheque returning memo. Ex. CW1/F is the legal notice of demand dated 30.05.2012. Ex. CW1/G and Ex. CW1/H are the courier receipts along with the delivery report vide which the aforesaid demand notice was sent to the accused and Ex. CW1/I is the complaint under disposal. \n\n6. CW\u00ad1 also tendered statement of account of the accused as Ex. CW1/X and copy of the resolution in favour of Vipin Saroha as Ex. CW1/Y. CW\u00ad1 (AR) was cross examined by the Ld. Counsel for the accused. Thereafter, the complainant's evidence was closed at request of the AR of the complainant.  \n STATEMENT OF THE ACCUSED UNDER SECTION 313 OF THE CODE", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-4", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "7. After Complainant's evidence the statement of accused was recorded U/s 313 of the Code in which all the incriminating evidence along with exhibited documents were put to the accused Sube Singh. The accused admitted that he has taken loan from the complainant but further stated that he has repaid the entire loan to the complainant. The accused further submitted that the cheque in question does not bear his signature and the CC No. 4750/14 Indiabulls Vs. Sube Singh Page3 /11 particulars on the same have also not been filled by him. It was further submitted by the accused that the blank cheque in question was given by him to the complainant as a security at the time of taking loan from the complainant. The accused further denied the receipt of the legal demand notice. The accused further stated that the statement of account filed by the complainant is also false. The accused also stated that he has not issued the cheque in question in discharge of his liability. The accused further stated that he owes no liability towards the complainant as he has repaid the entire loan to the complainant. The accused further stated that the complainant has filed the false complaint case by misusing his security cheque. The accused all together denied all his liability.    \n DEFENCE EVIDENCE\n\n8. Thereafter, the case was fixed for defence evidence. An application U/s 315 of the Code was moved by the accused for examining himself as a defence witness. The said application was allowed and accused examined himself as DW\u00ad1. DW\u00ad1 was cross examined by the Ld. Counsel for the complainant and thereafter, defence evidence was closed at request of the accused and the case was fixed for final arguments.  \n FINAL ARGUMENTS", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-5", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "9. Final arguments were addressed on behalf of both the parties. I have heard the Ld. Counsels for both the parties and have given my anxious and thoughtful consideration to submissions made, further I have perused the entire record of the case file and the evidence on record. Before proceeding further it is imperative for me to go through the relevant provisions of law \"138. Dishonour of cheque for insufficiency, etc., of funds in the account:\u00ad Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt CC No. 4750/14 Indiabulls Vs. Sube Singh Page4 /11 or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:\n Provided that nothing contained in this section shall apply unless \u00ad\n (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;\n (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-6", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-7", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "Explanation:\u00adFor the purpose of this section, \"debt or other liability\" means a legally enforceable debt or other liability. \n\nAPPRECIATION OF EVIDENCE IN THE LIGHT OF INGREDIENTS OF THE OFFENCE U/S 138 OF THE NI ACT (I) ISSUANCE OF CHEQUE IN QUESTION, ITS PRESENTATION AND DISHONOUR", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-8", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "10. It is not disputed by the accused that the cheque in question Ex. CW1/D is drawn on the account maintained by him. Further signature on the cheque in question has also not been disputed by the accused. The accused has himself admitted to have signed and issued the cheque in question to the complainant while answering to the question at the time of framing of notice U/s 251 of the Code and also during his examination in chief as DW\u00ad1 but it was also stated by the accused that he has given the blank signed cheque in question to the complainant at the time of taking of the loan. However the accused throughout the trial also stated that he has not filled all the particulars in the Cheque in question. During the course of CC No. 4750/14 Indiabulls Vs. Sube Singh Page5 /11 arguments Ld. Counsel for the accused also submitted that the complainant has taken security cheque from the accused at the time of granting loan and except signature other particulars in the cheque in question Ex.CW1/D has not been filled by the accused. It is trite to say that by putting the name and date there is no material alteration on the cheque U/s 87 of the NI Act. There is no rule of banking business that the name of the payee as well as the amount should be written by the drawer himself as no law provides that in case of cheque the entire body has to be written by the drawer only. Therefore, once the signature on the cheque in question is admitted as has happened in the instant case the plea that particulars in the cheque in question has not been filled by the drawer is of no consequence unless some cogent evidence has been lead by the accused that he has not expressly or impliedly authorized the payee to fill the particulars therein which is totally absenting in the instant case. Therefore, In light of the evidence on record and my discussion above, it stands proved that the cheque in question Ex", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-9", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "light of the evidence on record and my discussion above, it stands proved that the cheque in question Ex CW1/D bears the signature of the accused and the same has been issued by the accused from his own account.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-10", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "11. Further record reveals that the cheque in question Ex. CW1/D dated 16.05.2012 was got dishonored vide cheque returning memo dated 22.05.2012 which is Ex. CW1/E. The presentation, dishonor of the cheque in question and the cheque returning memo has also not been challenged by the accused. Therefore, considering the entire evidence on record it stands duly proved that the cheque in question Ex. CW1/D was dishonored vide cheque returning memos Ex. CW1/E with the reason \"Drawer Signature Differs\". \n\n(II) SERVICE OF THE LEGAL NOTICE OF DEMAND UPON ACCUSED", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-11", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "12. In the instant case, AR for the complainant (CW\u00ad1) Sh .Mahesh Kumar, has specifically stated in his evidence affidavit that he has got issued the legal notice of demand dated 30.05.2012 which is Ex. CW1/F to the accused and it was sent to the accused on 02.06.2012 vide courier receipts of which are Ex. CW1/G and Ex. CW1/H. The courier tracking report is also CC No. 4750/14 Indiabulls Vs. Sube Singh Page6 /11 exhibited along with the courier receipts.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-12", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "13. The accused at the time of framing notice under section 251 of the code stated that he has received one paper but he cannot say whether that was legal demand notice CW1/F. Further the accused during his statement under section 313 of the code and also during his evidence as DW\u00ad1 has denied the receipt of legal demand notice CW1/F. Interestingly, the accused has himself admitted during his cross examination as DW\u00ad1 that he resides at the D1/481, Sultanpuri, Near Geeta Senior Secondary School, Delhi 110041 which is one of the addresses mentioned in the legal demand notice and the complaint which establishes that the legal demand notice CW1/F was sent to the accused at the correct address. Moreover, the summons were served upon the accused at the aforesaid address and the accused has put his appearance in compliance thereof. Further it is well settled principle of law that where the accused raises a defence that he has not received the Legal demand notice, but has received copy of the complaint with the summons as has happened in the instant case, then he can within 15 days of the receipt of summons make payment of the cheque amount and he then cannot contend that there was no proper service of the legal demand notice (See C.C. Alavi Hazi Vs. Palapetty Mohd. & Anr. (2007) 6 Supreme Court case 555). Therefore. I hold that the legal notice of demand Ex. CW1/F was duly served upon the accused.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-13", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "(III) ISSUANCE OF THE CHEQUE IN QUESTION IN DISCHARGE OF LEGAL DEBT OR LIABILITY. \n\n14. The crux of penal liability under Section 138 of the NI Act is that the cheque must be issued by the drawer for the discharge of any legal debt or liability. Existing of legal debt or liability is sine qua non for constituting the offence.  \n15. Before I advert to the above said ingredients, it is imperative for me to notice the provisions of Sections 118(a) and 139 of the NI Act which read as under:\n \"118. Presumptions as to negotiable instruments.--Un\u00ad til the contrary is proved, the following presumptions CC No. 4750/14 Indiabulls Vs. Sube Singh Page7 /11 shall be made\u00ad\n (a) of consideration.--that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, nego\u00ad tiated or transferred for consideration;\" \n\n \"139. Presumption in favour of holder.--It shall be pre\u00ad sumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. \n\n16. The Division bench of Hon'ble Supreme Court in Krishna Ja\u00ad nardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54, has held that the accused can discharge the burden of presumption U/s 118 and U/s 139 of the NI Act by raising a probable defence on the strength of \"preponder\u00ad ance of probabilities\".", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-14", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "17. In Rangappa Versus Sri Mohan AIR 2010 SC 1898 the Hon'ble Supreme Court has held that it is a settled position that when an accused has to rebut the presumption under Section 139 of the NI Act, the standard of proof for doing so is that of `preponderance of probabilities' and if the ac\u00ad cused is able to raise a probable defence which creates doubts about the ex\u00ad istence of a legally enforceable debt or liability the prosecution can fail and for this the accused can even rely on the materials submitted by the com\u00ad plainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-15", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "18. From the reading of the above said provisions and the judg\u00ad ments the position of law which emerges is that once the execution of the promissory note is admitted as has happened in the instant case, the pre\u00ad sumption under Section 118(a) and Section 139 of the NI Act would arise that it is supported by a consideration. Such a presumption is rebuttable. The accused can prove the non\u00adexistence of a consideration by raising a probable defence. If the accused discharges the initial onus of proof show\u00ad ing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the Complainant who will be obliged to prove it as a matter of fact and upon its failure to prove would CC No. 4750/14 Indiabulls Vs. Sube Singh Page8 /11 disentitle him to the grant of relief on the basis of the negotiable instru\u00ad ment. The burden upon the accused of proving the non\u00adexistence of the consideration can be either direct or by bringing on record the preponder\u00ad ance of probabilities by reference to the circumstances upon which he re\u00ad lies. In case, where the accused fails to discharge the initial onus of proof by showing the non\u00adexistence of the consideration, the complainant would in\u00ad variably be held entitled to the benefit of presumption arising under Section 118(a) and Section 139 of the NI Act in his favour.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-16", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "19. Now coming to the case in hand, in the instant case the accused has examined himself as DW\u00ad1 and has admitted that the cheque in question Ex. CW1/D bears his signatures. Further the accused has admitted that he has taken loan of Rs. 35,000/\u00ad from the Complainant in the year 2005. However with respect to the cheque in Question Ex. CW1/D the accused has stated that he has not issued the same in discharge of his liability and the same was given by him to the complainant as a security at the time of taking of the loan in the year 2005.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-17", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "20. As per the statement of account Ex. CW1/X which is placed on record by CW\u00ad1 it is also clear that the loan of Rs. 35412/\u00ad was granted by the complainant to the accused on 07.09.2005 and the same was to be repaid by the accused in 36 monthly installments of 1865/\u00ad each. Therefore it is evident that the entire loan amount was to be repaid by the accused till September 2008. Interestingly, perusal of statement of account Ex. CW1/X reveals that a payment of Rs. 1900/\u00ad has been received by the complainant from the accused on 11.09.2007 and thereafter no payment has been received by the complainant from the accused till 31.01.2011 when last payment of Rs. 4000/\u00ad is alleged to have been given by the accused on 31.01.2011. It is surprisingly to see that when loan was to be repaid by the accused till September 2008 the complainant chooses to remain silent for more than 2 years. It is highly improbable that a finance company would remain silent when no payment is being received by it from the borrower for more than 2 year after expiry of the loan tenure. Further the complainant has not even disclosed as to when the accused has approached them for the CC No. 4750/14 Indiabulls Vs. Sube Singh Page9 /11 purposes of handing over of the cheque in question Ex. CW1/D.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-18", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "21. Further it is the case of the complainant that in discharge of his outstanding liability arising out of the agreement dated 07.09.2005 the accused agreed to pay a sum of Rs. 37,604/ vide cheque in question Ex. CW1/D bearing No.85472 dated 16.05.2012 i.e. six years after the agreement. This acknowledgment even as per the complaint was much after the statutory period of three years which is the prescribed period of limitation for the recovery of an outstanding amount. Furthermore an acknowledgment to be encompassed within the ambit of Section 18 and 19 of the Limitation Act has to be an acknowledgment in writing as well as within the prescribed period of limitation. It was thus not a valid acknowledgment as the Cheque in question Ex. CW1/D was clearly outside the period of limitation. The complainant has also not placed on record any document which states that there was an acknowledgment on the part of the accused well before the prescribed period. Therefore, the cheque cannot be even said to be issued in respect of legally recoverable debt\n\n22. In Vijay Polymers Pvt. Ltd. & Anr 162 (2009) DLT 23 relying upon the judgment of Hon'ble Supreme Court in Sasseriyil Joseph vs. Devassia 2001 Crl.LJ 24 the Hon'ble Delhi High court had held that cheques issued on a time barred debt would not fall within the definition of 'legally enforceable debt' which is the essential requirement for a complaint under Section 138 of NI Act. \n\n23. In the instant case, the cheque which is the subject matter of this complaint was for the discharge of a liability of a debt arising out of the agreement dated 07.09.2005 which debt had become time barred. Therefore this debt was not a legally enforceable debt within the meaning of Section 138 of the NI Act.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-19", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "24. All the aforesaid circumstances/factors rebut the presumptions provided under Section 139 of the NI Act. This court do not find any force in the arguments advanced by the learned counsel for the Complainant that CC No. 4750/14 Indiabulls Vs. Sube Singh Page10 /11 the accused has failed to rebut the presumption under Section 139 of the NI Act. Presumption is not in itself evidence but it only enables a party in whose favour it exists to show that he has a prima facie case. In the case in hand the presumptions under Section 139 of NI Act alone cannot be the sole basis to prove the case of the complainant. The materials and evidence available on the record brought by the complainant do not bridge the gap. Therefore, I hereby hold that the Complainant has not been able to prove and substantiate the allegations that the cheque in question CW1/D was issued by the accused in discharge of legally recoverable debt or other liability. \n\n25. Furthermore, mere non payment of cheque amount within 15 days of receipt of legal notice is not itself sufficient to fasten any liability U/s 138 of the NI Act as it is established that the cheque in question was not issued by the accused in discharge of a legal recoverable debt. \n\n26. In view of the aforesaid discussion, I hereby hold that the complainant has not been able to prove and substantiate its allegation against the accused. Accordingly, accused Sube Singh S/o Sh. Fateh Singh is hereby acquitted for the offence u/s 138 NI Act. \n\nThis judgment contains 11 pages. Every Page of this judgment has been signed by me Announced in the open Court (RAVINDER SINGH \u00adII) Dated 27.05.2014 MM (NI Act \u00ad07) DWARKA/NEW DELHI.", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "09c30fcb37b8-20", "Titles": "Indiabulls Financial Services ... vs . on 27 May, 2014", "text": "CC No. 4750/14 Indiabulls Vs. Sube Singh Page11 /11", "source": "https://indiankanoon.org/doc/20323225/"}
+{"id": "7b2f68c02423-0", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "IN THE COURT OF SH. ASHOK KUMAR, MM\u00ad07, \n                        SOUTH EAST,  SAKET  COURTS, NEW DELHI\n\n\nCC No. 349/2/14\nU/S 138 NI Act \n\nMR.  PRAKASH CHAND NIMBORIA\nS/o Sh.  Hukam Chand,\nR/o VPO\u00ad Smalaka,\nNew Delhi.                    .......................Complainant\n      Versus \nMR.   RAHIMUDDIN\nProprietor of R.K. Meet Shop,\nAt RZ\u00ad3/23, Shahnagar,\nManglapuri, Palam,\nNew Delhi\u00ad110045.             .............................. Accused\n\n\nOffence Complaint off or proved.                                  : Section 138 of Negotiable \n                                                                    Instrument Act. \nPlea of accused                                                   : Pleaded not guilty\n\nDate of Institution                                             :  19.02.2003\n\nDate of Reserving order                                        :  02.05.2014\n\nFinal order                                                    :  Convicted\n\nDate of pronouncement                                          : 26.05.2014", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-1", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "JUDGMENT\nFACTS OF THE CASE 1\u00ad The facts of the case as per the complaint and pre\u00adsummoning evidence of the complainant filed by way of affidavit which is also adopted as post\u00adsummoning <span class=\"hidden_text\" id=\"span_1\">CC No. 349/2/14 Page 1 of 15</span> evidence by the complainant are that the complainant and accused had friendly relations with each other since a long time. The accused took a friendly loan of Rs. 60000/\u00ad from the complainant in the year 2001 for which the accused issued three PDCs as mentioned herein below. Thereafter, the complainant presented the cheques for encashment which became dishonoured on account of \"insufficient funds\". On the said intimation on returning memo dated 11.01.2003, the complainant served a legal notice dated 18.01.2003 to the accused. TRIAL PROCEEDINGS 2\u00ad Thereafter, the complainant filed the complaint under Sec. 138 NI Act after the accused failed to make the payment within 15 days of the receipt of legal notice. On the said facts, the accused was summoned and notice under Sec. 138 NI Act was framed against the accused to which he pleaded not guilty and claimed trial. The complainant adopted the pre\u00adsummoning evidence in his post\u00ad summoning evidence also. Thereafter complainant was cross examined. Thereafter, statement of accused under Sec. 313 CrPC was recorded and the accused thereafter examined his father Sh. Khacheru Khan as DW1 and his father's friend as DW2 as defence witnesses. The following documents were relied by the complainant in his evidence :", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-2", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "Complainant proved the following documents in his pre\u00adsummoning evidence :\u00ad i\u00ad Cheuqes with bank endorsement Ex. CW\u00ad1/A, CW1/B and CW1/C.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-3", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "ii\u00ad      Bank returning memos Ex. CW1/D, CW1/E and CW1/F.\n\n<span class=\"hidden_text\" id=\"span_2\">CC No. 349/2/14                                                                                 Page 2 of 15</span>\n             ii\u00ad      Legal notice dated 18.01.2003 Ex. CW1/G.\n\n            iv\u00ad      Registered AD and UPC Ex. CW\u00ad1/H and CW1/I.\n\n Accused proved the following document in his defence evidence : i\u00ad Copy of account statement of DW1 Khacheru Khan mark A. 3\u00ad The complainant was duly cross\u00adexamined by the counsel for the accused and thereafter the accused was examined under Sec. 313 CrPC. All the evidence appearing against the accused was put to him. The explanation of the accused was that he had asked for the loan from the complainant and on demand of the complainant he gave the advance cheque without taking the loan because the complainant represented that he would extend the loan to the accused in a few days. However, after some days the complainant did a U turn and refused to extend the loan because he had a dispute with father of the accused to whom the complainant had advanced the loan but even after he father returned the loan amount complainant was demanding more money from him. Hence, here the accused admits that three cheques in question were executed by him. Thereafter, the accused led the defence evidence and examined his father Khacheru Khan as DW\u00ad1 and also examined one Sh. Kishan Lal his father's friend as DW2 who were cross\u00adexamined by the complainant. \n4\u00ad RELEVANT LAW", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-4", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "138. Dishonour of of cheque for insufficiency, etc. of funds in the account\u00ad Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is <span class=\"hidden_text\" id=\"span_3\">CC No. 349/2/14 Page 3 of 15</span> returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for [ a terms which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both :\n Provided that nothing contained in this section shall apply unless \u00ad \n\n (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;\n (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid' and.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-5", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. Explanation - For the purposes of this section, \" debt or other liability\" means a legally enforceable debt or other liability. \n\n 139. Presumption in favour of holder\u00ad It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature <span class=\"hidden_text\" id=\"span_4\">CC No. 349/2/14 Page 4 of 15</span> referred to in section 138, for the discharge, in whole or in part, of any debt or other liability. \n\n Sec. 43 of NI Act interalia provides that a negotiable instrument drawn, accepted, etc. without consideration or for a consideration which fails creates no obligation of payment between the parties to the transaction. \n\n The ingredients to prove the commission of offence under Sec. 138 NI Act have been laid down in Jugesh Sehgal Vs. Shamsher Singh Gogi 2009 (9) SCALE 455. The relevant portion of the said judgment reads as under:\n\n \"9. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled:", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-6", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;\n (ii) The cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;\n (iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;\n (iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;\n<span class=\"hidden_text\" id=\"span_5\">CC No. 349/2/14 Page 5 of 15</span>\n (v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;\n (vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt ofar the said notice\" \n On burden of proof in cases under NI Act From reading of below quoted paragraphs No. 4 to 9 and 20 of Hon'ble Supreme Court in Vijay Vs Laxman 2013 (1) RCR Cr 1028, the following legal ratio emerges with regard to burden of proof in matters under NI Act.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-7", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "i. The prosecution has to prove beyond reasonable doubt that cheque was issued by the accused duly signed by him but this burden is lightened by presumption under Sec. 118 and 139 NI Act. Hence, the complainant has only to make an averment that cheque was issued by accused to complainant for lawful consideration. \n\n ii. Thereafter, the burden shifts on the accused to show that the cheque was not issued in lieu of legally enforceable debt or liability but was issued by way of security or any other reason on account of some business transaction or was obtained unlawfully. \n iii. However, accused can rebut this presumption or discharge his burden by showing a probable defence or preponderance of probability raising genuine doubt <span class=\"hidden_text\" id=\"span_6\">CC No. 349/2/14 Page 6 of 15</span> that no legally enforceable debt or liability exists. \n\n iv. Accused can discharge this burden either from circumstances appearing in the case or the evidence adduced by the complainant or accused in his defence. \n\n v. On reading of definition of word proved or disproved in Sec. 3 of Evidence Act with Sec. 139 NI Act court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non\u00adexistence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. \n\n Above said law is quoted in paragraphs No. 4 to 9 and 20 of Hon'ble Supreme Court in Vijay Vs Laxman and another 2013 (1) RCR Cr 1028.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-8", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "Above said observations were also made by Hon'ble Supreme Court in Kamala S Vs Vidhyadharan MJ 2007 (3) RCR (Cr) 865 and M/s. Kumar Exports Vs M/s Sharma Carpets 2008 (16) SCALE 372 Paras 9 to 12.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-9", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "On service of legal notice in cases under NI Act In this respect it has been provided in the case titled as C.C. Alavi Haji Vs Palapetty Muhammed and Anothers (2007) 6 SCC 555 that the entire purpose of service of legal notice to the accused under Sec. 138 NI Act is to give an opportunity to the drawer to pay the cheque amount within 15 days of the service of legal notice and thereby free himself from the penal consequences. It conceives cases where a well\u00adintentioned drawer may not have made necessary arrangements for reasons beyond his control to honour the cheque drawn by him and hence this <span class=\"hidden_text\" id=\"span_7\">CC No. 349/2/14 Page 7 of 15</span> opportunity has been provided. Hence, this provision is meant to protect honest drawers whose cheque may have been dishonoured for the fault of others or who may have genuinely wanted to fulfill their promise but on account of inadvertence or negligence failed to make necessary arrangements for the payment of the cheque. Hence, any honest drawer who claims that he did not receive the notice sent by post, can, within 15 days of receipt of summons from the court in respect of the complaint under Sec. 138 NI Act, make payment of the cheuqe amount and submit to the court that he has made payment within 15 days of receipt of summons (by receiving a copy of the plaint with the summons) and, therefore, the complaint is liable to be rejected. Where a legal notice is sent under registered cover with proper address and stamp and sent along with the summons and complaint, then if it is contended that legal notice was not received only with a view to cheat the complainant, and such offer of payment was not made within 15 days of receipt of summons, then such dishonest drawer can not contend improper service of the notice by virtue of applicability of presumption under Sec.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-10", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "dishonest drawer can not contend improper service of the notice by virtue of applicability of presumption under Sec. 27 GC Act and 114 Evidence Act.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-11", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "Hence, the accused by a preponderance of probability has to prove the following :\n 1\u00ad That the cheque was issued as security or for any business transaction and there is no legally enforceable debt or liability because the said security is no more enforceable or the debt or liability has been paid.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-12", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "2\u00ad That the cheque was taken unlawfully and wrongfully. 3\u00ad That the debt or liability does not remain legally enforceable due to <span class=\"hidden_text\" id=\"span_8\">CC No. 349/2/14 Page 8 of 15</span> any other reason.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-13", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "In the present case defence of the accused is that there is no legally enforceable debt against the cheques given by the accused to the complainant no loan was extended as per their implied contract. \n5\u00ad ARGUMENTS HEARD AND DEALT WITH I have heard the submissions of both the Ld. Counsel for the complainant as well as the accused. Ld. Counsel for the accused has also filed written submissions and the same have also been considered besides the said submissions and the record.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-14", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "6\u00ad Let us now examine whether the complainant has proved the necessary ingredients of the offence under Section 138 of the Act or not. 6.1 The first ingredient of the offence stands proved as original cheques are placed on record as Ex. CW1/A, CW1/B and CW1/C and issuance of same is admitted by the accused. The accused during the cross examination of the complainant, his own explanation u/s 313 Cr.P.C and defence evidence led by him proceeds on the ground that he has signed the cheques and it is settled law that a signed cheque by the account holder is a complete instrument and the rest of the portions of the cheque can be filled by the complainant. Only defence of the accused is that though he gave cheques in question to the complainant but in return loan was not extended by the complainant and hence he does not owe any liability. Hence it is clear that that the accused has signed the cheque in question. 6.2 The second ingredient of the offence is that the cheque must have been issued in discharge of legal liability. As the signatures on the cheques are admitted, <span class=\"hidden_text\" id=\"span_9\">CC No. 349/2/14 Page 9 of 15</span> the presumptions raised under Section 139 of the Act become applicable and the issuance of cheque in discharge of the legal liability stands proved. The law on this point has been succinctly laid down by the Hon'ble Apex Court in Rangappa v. Sri Mohan AIR 2010 SC 1898.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-15", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "In view of the aforesaid law, the presumption under Sec. 139 NI Act works in favour of the complainant once he files the necessary documents like the dishonored cheques, returning memo, legal notice and delivery proof and avers that the cheques were issued for legally enforceable debt or liability which the accused has failed to pay despite expiry of 15 days of the delivery of legal notice. In the present case the only defence raised by the Ld. Defence Counsel is that the father of the accused and the complainant were working in the same organization namely CPWD and they know each other for about 30 years. Infact father of the accused namely DW1 Khacheru Khan had taken the money in the amount of Rs. 60000/\u00ad for which DW1 has already repaid in the amount of Rs. 70000/\u00ad but the complainant was demanding Rs. 80000/\u00ad. The said DW1 has also filed copy of the account statement Mark A showing that said amount has been returned on 14.01.2002 but despite that the case has been filed against the accused who had given the advance cheque but due to the dispute with father of accused loan was not granted to the accused. Hence, the said cheques being without consideration the defence of the accused is not liable to be upheld on this ground. Even otherwise the said statement is only a copy and it has not been duly certified by the bank as per law and hence, same also has not been exhibited. In view of the said reasons the said account statement cannot be considered. The accused has not <span class=\"hidden_text\" id=\"span_10\">CC No. 349/2/14 Page 10 of 15</span> been able to bring any other documentary evidence in support in his defence evidence to show that he has not taken the loan from the complainant. Further in the cross examination of the complainant the accused could", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-16", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "taken the loan from the complainant. Further in the cross examination of the complainant the accused could not bring any contradiction which may dislodge the presumption in favour of the complainant which is raised u/s 139 of N.I. Act that the cheque was issued by the accused for a legal consideration. The complainant consistently denies the suggestion; that there was no legal consideration; that no legal notice was served; that he took the cheques in question in advance and misused them; that Khacheru Khan has returned the amount of Rs. 70000/\u00ad for cheques in question; that there was dispute with DW1 regarding the loan given to him; that at the time of giving loan to the accused DW1 or DW2 were present there or that the complainant misused those cheques in any manner. Further, as per the account statement mark A the loan was returned in 14.01.2002 but it is very strange as to why the complainant would write the date of September, 2002, November, 2002 and December, 2002 on those cheques if the accused had given these cheques as advance during the time when the complainant had a dispute with DW1. This is against the natural course of conduct. It is also pertinent to note that DW2 friend of DW1 says that the loan was given to the accused at complainant shop at Kapsehra in his examination in chief but in cross examination he denies that the complainant has a shop at that place. The case of the accused proceeds on the basis that the loan was given at the shop of the complainant. Hence on one hand the accused has not been able to show that he did not take any loan from the complainant or that he repaid the amount and on the other hand the presumption in favour of the complainant that <span class=\"hidden_text\" id=\"span_11\">CC No. 349/2/14 Page", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-17", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "id=\"span_11\">CC No. 349/2/14 Page 11 of 15</span> the cheques were issued by the accused to him for a legal consideration stands unrebutted. Hence, I give the finding in favour of the complainant that he received the cheques from the accused for a valid consideration. 6.3 The third ingredient of the offence is that cheque must be presented to the bank within a period of six months from the date mentioned on it. The cheques are Ex. CW1/A, CW1/B and CW1/C were returned back unpaid on 11.01.2003 and the cheques are dated 5.9.2002, 5.11.2002 and 5.12.2002. So it is evident that it was presented for payment within the statutory period of six months. 6.4 The fourth ingredient of the offence is that the cheque(s) must be returned unpaid. The cheque were returned unpaid for the reason \"Insufficient funds\". The original bank return\u00admemos Ex CW1/D to Ex. CW1/E placed on record proves dishonour of cheques by virtue of presumption raised under Section 146 of the Act and during the trial, Ex. CW1/D to CW1/E went uncontroverted. 6.5 The fifth ingredient of the offence is that the demand notice must be issued to the accused within 30 days of the intimation of dishonour of cheque and same be served upon the accused. Accused has denied the receipt of legal notice Ex. CW1/G. The address mentioned in the pre & post summoning affidavit (both are same) and in the complaint on the basis of which summons were issued to the accused and he had appeared is not disputed by the accused. In view of Judgment of CC. Alavi Haji (Supra) this point can not be raised any more by the accused. If the accused", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-18", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "(Supra) this point can not be raised any more by the accused. If the accused had not received the legal notice, then he could have offered the payment within 15 days from the receipt of the summons in view of my aforesaid findings in the second ingredient that cheque was issued in discharge of legal <span class=\"hidden_text\" id=\"span_12\">CC No. 349/2/14 Page 12 of 15</span> liability.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-19", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "6.6 The last ingredient is that the accused must not have made the payment of the cheque amount within fifteen days of the receipt of legal notice. During the evidence, the accused has clearly admitted that because he does not owe anything to the complainant hence he did not make the payment of cheque amount. DECISION \n7. In view of the aforesaid the accused is convicted for the offence under Sec. 138 NI Act and he be separately heard on the point of sentence.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-20", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "Announced in the open                                                (ASHOK KUMAR)\nCourt on 26.05.2014                                             MM\u00ad07,  SOUTH EAST, SAKET\n                                                                   COURTS, NEW DELHI\n\n\n\n\n<span class=\"hidden_text\" id=\"span_13\">CC No. 349/2/14                                                                                 Page 13 of 15</span>\n                      IN THE COURT OF SH. ASHOK KUMAR, MM\u00ad07, \n                       SOUTH EAST,  SAKET  COURTS, NEW DELHI\n\n\nPrakash Chand Nimboria Vs. Rahimuddin.\nCC No. 349/2/14\nU/s  138 NI Act \n\n\n26.05.2014\n\nORDER ON POINT OF SENTENCE\n\n\nPresent :        Complainant  in person with Counsel Sh. D.K. Agarwal. \n\n Accused in person with proxy counsel Ms. Rita Satija. \n Vide separate judgement, the accused is convicted for commission of offence under Sec. 138 NI Act for non\u00adpayment of three cheques amounting to Rs. 60000/\u00ad in total vide separate judgement of even date. \n\n It is stated by the convict that he is managing a Dhaba which is owned by the joint family. The convict has a family consisting of 6 children, all unmarried and minor. It is stated that a lenient view may be taken against the convict while imposing the sentence and convict be not sentenced to imprisonment.", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "7b2f68c02423-21", "Titles": "Mr. Prakash Chand Nimboria vs Unknown on 26 May, 2014", "text": "In view of the fact that the matter is pending since year 2003 and is more than 10 years old and keeping in view the fact that the cases under Sec. 138 NI Act are unduly clogging the dockets of the courts leading to docket explosion and extraction of judicial time which could have been given to other cases and on the other hand due to the dishonest issuance of cheque, the same is eroding of credibility of such instruments, this court does not deem it necessary to extend the <span class=\"hidden_text\" id=\"span_14\">CC No. 349/2/14 Page 14 of 15</span> benefit of Probation of Offender Act to the accused. Such dishonest conduct leads not only to docket explosion which needs to be tackled with a heavy hand but also has resulted in harassment of the complainant holding up the valuable money belonging to him. \n In view of the aforesaid, the convict is directed to suffer simple imprisonment of 2 years and fine of Rs. 1.20 lakhs all of which is directed to be paid as compensation to the complainant and in absence of payment of the same, the convict shall suffer simple imprisonment for 6 months. Copy of judgement and order on sentence be given to the convict. \n\nAnnounced in the open                                                (ASHOK KUMAR)\nCourt on 26.05.2014                                             MM\u00ad07,  SOUTH EAST, SAKET\n                                                                   COURTS, NEW DELHI\n\n\n\n\n<span class=\"hidden_text\" id=\"span_15\">CC No. 349/2/14                                                                                 Page 15 of 15</span>", "source": "https://indiankanoon.org/doc/127394436/"}
+{"id": "da3be485374a-0", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "IN THE COURT OF SHRI SATVIR SINGH LAMBA, MM-01\n               ( NEGOTIABLE INSTRUMENTS ACT) WEST DISTRICT,\n                         TIS HAZARI COURTS, DELHI\n\n\nShri Rajan Gohar\nS/o Late Sh. Bahdra,\nR/o H.No. 258,\nNDPL Colony, Shalimar Bagh,\nNew Delhi-110059.                                              ......Complainant\n\n                                            Vs.\n\nShri Jitender Kumar\nR/o 227, Street No.1,\nThan Singh Nagar,\nAnand Parbat,\nNew Delhi.                                                     ........Accused\n\n\n                                         JUDGMENT\nComplainant Case No.                 :            474/1\nDate of institution                  :            28.07.2006\nOffence alleged                      :            Under Section 138 NI Act\nPlea of the accused                  :            Not pleaded guilty\nFinal order                          :            Conviction\nDate of Decision                     :            26.05.2014\n\n\n\n\n                                         Brief Facts", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-1", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "Brief Facts\n\n\n\n1. Brief facts of the present case are that the complainant and accused were having friendly relations with each other from last many years. It is alleged that the accused approached the complainant for a friendly loan of Rs.30,000/- and considering the need of accused as well as their friendly relations, the complainant advanced friendly loan of Rs.30,000/- to the accused. It is further alleged that in order to discharge his liability, accused issued two post dated cheques to the complainant bearing cheque bearing no.386258 dated 12.01.2006 for Rs.25,000/- i.e. Ex.CW1/1 and cheque bearing no.386251 dated 16.05.2006 for Rs.5,000/- i.e Ex.CW1/2 both drawn on State Bank of India, Tis Hazari Courts, Delhi in favour of complainant. The complainant presented the cheques in question for encashment through his banker National Bank Ltd, Shalimar Bagh, Delhi but the same were got dishonored by the banker with the remarks \"Funds Insufficient\" vide returning memos dated 17.05.2006, which are Ex.CW1/3 and Ex.CW1/3A. Henceforth, the complainant issued the mandatory legal notice U/s 138 NI Act dated 01.06.2006 i.e. Ex.CW1/4 and the same was served upon the accused vide postal receipts, AD card and UPC. The same are Ex.CW1/5 to Ex.CW1/7.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-2", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "2. When the accused failed to fulfill the conditions of the said legal notice Ex.CW1/4 within 15 days of its presumed service, then the complainant has filed the present complaint case U/s 138 of Negotiable Instrument Act 1881 (hereinafter the Act) against the accused. \n\n Pre-Trial Procedure\n\n3. After the institution of the present complaint, the complainant adduced his pre summoning evidence U/s 200 Cr. P.C. on which basis the accused was summoned via order dated 27.05.2008 to face trial for the offence U/s 138 NI Act. After the service of the summons, the accused entered his appearance whereupon the provisions of Sec. 207 Cr. P.C. were also complied. \n\n4. The accused was admitted to bail then notice U/s 251 Cr. P.C. for the offence U/s 138 NI Act was served upon the accused on 25.09.2010 after hearing the contesting parties. Needless to say, the accused pleaded \"Not Guilty\" and claimed trial. \n\n Trial\n\n5. In order to substantiate his case, the complainant lead his evidence by way of his affidavit whose contents are a mere repetition of what had already been discussed under the \"Brief Facts\" and hence are not repeated for the sake of brevity. However, the accused failed to disclose any reasonable grounds for the cross examination of the complainant despite opportunities, hence, the opportunity of accused was closed vide order dated 09.11.2010.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-3", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "6. All the incriminating circumstances, appearing in the evidence against the accused were put in order to unable him to offer his explanation. In his explanation, the accused has not disclosed his plea of defence, however, admitted the issuance of the cheques in question as well as his signatures on the cheques in question. Accused also admitted the receiving of the legal notice and same was duly replied by him. \n\n7. In support of his defence, accused examined four witnesses namely Sh. Vidya Bhushan, his wife Mrs. Renuka, ASI Vinay Paul, P.S. Shalimar Bagh and himself as defence witnesses. The above said defence witnesses were duly cross examined by the complainant. Thereafter, DE was closed vide order dated 20.04.2013 whereupon the trial came to a conclusion and the contesting parties were duly heard. \n\n Facts in Issue\n\n8. In order to have the positive outcome in his favour, the complainant was required to show that the cheques Ex.CW1/1 and Ex.CW1/2 were given by the accused to discharge his liabilities which were dishonoured via returning memo's whereafter the accused had also failed to comply with the requirements of the legal notice Ex.CW1/4. \n\n9. On the other hand, the accused was required to show his defence on the scale of preponderance of the probabilities that he is not liable to the amount involved to the complainant. \n\n Legal Prepositions\n\n10. The presumptions provided U/s 118 NI Act and 139 NI Act would come to the rescue of the complainant once the execution of the cheque in question is proved on record.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-4", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "11. As per section 118 NI Act, it is to be presumed in favour of the complainant during the trial that the cheque in question was given against consideration by the accused and that the complainant was the holder of the said cheque in due course. Further as per Sec. 139 NI Act, it is to be presumed in favour of the complainant during the trial that the cheque in question was received by the complainant against a legally enforceable debt or liability (Refer :- \"Rangappa Vs. Sri Mohan\" SLP (Crl.) 407/06, Dated:- 07.05.2010). \n\n12. It is well settled that both the aforesaid presumptions U/s 118 & 139 NI Act are rebuttable in nature and the onus to rebut the same squarely rests upon the accused.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-5", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "13. The accused can rebut these presumptions not merely by examining his own witnesses but also through the cross examination of the complainant and his witnesses thereby bringing on record through the entire evidence available on record (inclusive of complainant's evidence and defence evidence, if any), that the complainant was a liar, that their was no existing liabilities between the parties and that the cheque in question was misused. It must be kept in mind that once evidence is brought on record from both sides, it becomes an evidence of the case and court can draw inferences from the said entire evidence either in favour or against any of the parties. Evidence is a complainant's evidence and accused's evidence only for the purposes of identifying it, but once it is adduced in the case, it becomes the evidence of the case and then the same has to be read as a whole. The court can not read the evidence of the complainant only to the extent it favours the complainant and overlook the remaining evidence which supports the accused merely on the ground that it is the complainant's evidence. Similarly, from the evidence adduced by the accused, the court can draw inferences either in favour of the complainant or against the accused. The accused has a right to argue his case even on the basis of the cross examination of the complainant & his witnesses to show to the court that there existed no legally recoverable debt or liability between the parties. In order to rebut the legal presumption in question, it emerges that the accused need not require direct evidence to disprove the existence of consideration.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-6", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "14. Preponderance of probabilities is the standard of proof upon the accused to rebut the above presumptions, which is not as high as that of the prosecution whereby the accused is only required to show the existence of a probable defence so as to rebut the above presumptions. If the accused succeeds in raising a probable defence by referring to his own evidence (if any) and from the evidence of the complainant, then the onus would shift on to the complainant, who then would have to show beyond reasonable doubt the existence of consideration/existence of a legally recoverable debt or liability in respect of the cheque in question. \n\n Appreciation of Evidence\n\n15. The present case is proceeded on case law i.e. Rajesh Aggarwal vs. State & Anr. - MANU/DE/1838/2010, vide which it is held by hon'ble High Court of Delhi that \"17. The summary trial procedure to be followed for offences under Section 138 N.I. Act would thus be as under:\n Step I: On the day complaint is presented, if the complaint is accompanied by affidavit of complainant, the concerned MM shall scrutinize the complaint & documents and if commission of offence is made out, take cognizance & direct issuance of summons of accused, against whom case is made out. Step II: If the accused appears, the MM shall ask him to furnish bail bond to ensure his appearance during trial and ask him to take notice under section 251 Cr.P.C. and enter his plea of defence and fix the case for defence evidence, unless an application is made by an accused under section 145(2) of N.I. Act for recalling a witness for cross-examination on plea of defence.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-7", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "Step III: If there is an application under Section 145(2) of N.I. Act for recalling a witness of complainant, the court shall decide the same, otherwise, it shall proceed to take defence evidence on record and allow cross-examination of defence witnesses by complainant. \n\n Step IV: To hear arguments of both sides. \n\n Step V: To pass order/judgment.\" \n\n16. Hon'ble Delhi High Court in the above mentioned case emphasized that once the complainant has brought forward his case by giving his affidavit about the issuance of the cheque, dishonour of cheque, issuance of demand notice etc. he can be cross-examined only if the accused makes an application to the court as to on what point he wants to cross-examine the witnesses and then only the court shall recall the witness by recording reasons there to. \n\n17. In a summary trial, the complainant or his witness cannot be recalled in the court for cross-examination only for the sake of pleasure. In the present complaint case after recording the plea of defence at the time of framing notice, opportunity was given to the accused for disclosing the grounds to cross examine the complainant. However, the accused has not disclosed any reasonable ground for recalling the complainant for cross-examination on his plea of defence. Therefore, there was no reason to recall the complainant or witnesses during summary trial and the evidence already given by the complainant has to be considered sufficient and his opportunity to cross examine the complainant closed vide order dated 09.11.2010. The above said order also attains finality. Thereafter, reasonable opportunities were given to the accused to lead his evidence in defence on the plea of innocence as the evidence of the complainant is already on record.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-8", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "18. In order to prove his innocence, accused examined Sh. Vidya Bhushan, Advocate, Tis Hazari as DW1. DW1 stated that after completing his daily work on 26.05.2006, when he went to his seat Sh. Arvind Dua, Advocate alongwith his another friends were sitting there. DW1 stated that at about 12:00 Noon the said Arvind Dua received a telephone call from the accused informing that the accused was detained by someone near Juvenile Court Complex, Mukherjee Nagar, Delhi. Thereupon, DW1 and the said Arvind Dua reached there separately by their motorcycles. On asking, the accused told that accused and his associates had misbehaved / man handled with him. Thereafter, they reached at Mukherjee Nagar by their respective vehicles. DW1 stated that he reached the police station 10 minutes later than the accused and saw the accused, the complainant with his associates and the said Rajan were talking to each other in the presence of police officials. DW1 stated that he stayed there for 5 minutes. DW1 further stated that the complainant and accused were amicably settled the matter for payments/repayments of Rs. 1,30,000/- and gold, thereafter, he came back to Tis Hazari Courts and other persons were remained in the said police station.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-9", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "19. In his cross examination, DW1 admitted that he had neither received any telephone calls from the accused nor had heard any conversation between the said Arvind Dua and the accused. DW1 further admitted that neither of them had made any written complaint to any lawful authority / bar association regarding the detention of the accused. DW1 further admitted that neither he had seen the accused in detention of any person nor misbehaved/man handled by any person. DW1 further admitted that he had not signed on the alleged settlement between the complainant and the accused in PS Mukherjee Nagar, Delhi. DW1 further admitted that no settlement was arrived between the complainant and accused in his presence and denied of knowledge by whom the alleged settlement was sent. However, all the suggestions put to him were denied. \n\n20. Accused examined his wife Mrs. Renuka as DW2. DW2 stated in his examination in chief that she and her husband had borrowed a sum of Rs.1,30,000/- from the complainant in the month of December 2005 against the pledge of gold ornaments of weighing about 20 tolas. DW2 stated that they had returned a sum of Rs.1.0 lakh on 18.05.2006 but the complainant had refused to return the said gold ornaments. In her cross examination, DW2 admitted that no written document was prepared regarding the pledge of gold ornaments. DW2 admitted that she has not brought any bill/ receipt showing that the above said ornaments were belonging to them. DW2 further admitted that she has never raised any demand regarding the return of the above said gold ornaments. However, all the suggestions put to her were denied.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-10", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "21. Accused examined ASI Vinay Paul, P.S. Shalimar Bagh as DW3 who has brought the summoned record i.e daily register dated 26.05.2006 and same is Ex.DW3/A(OSR). Cross examination of the DW3 was Nil (opportunity given).", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-11", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "22. Lastly accused examined himself as defence witness and stated in his chief examination that he had borrowed a sum of Rs.1,30,000/- against pledging of gold ornaments of his wife weighting around 200 grams. Accused further stated that on 18.05.2006, he had returned a sum of Rs.1.0 lakh to the complainant but the complainant refused to return his above said gold ornaments and asked remaining amount of Rs.30,000/- upon which he issued the cheques in question. Accused further stated that after taking the cheques in question the complainant refused to return the pledged gold ornaments. Accused further stated that on 26.05.2006, the complainant alongwith his brother Bittoo and three associate persons met him at Mukherjee Nagar and confine him for more then half hour upon which the police arrived and took them to the police station Mukherjee Nagar, Delhi where the complainant requested that they will amicably settle the dispute before the police officials of PS Shalimar Bagh. Accused further stated that when he went to PS Shalimar Bagh in the evening the complainant did not turn up there, thereafter, he made a written complaint Ex.DW3/A(colly 1-3 pages) in the said police station against the complainant. Accused further stated that the complainant came there and demanded Rs.1,30,000/- for returning the gold ornaments again in the PS Shalimar Bagh. Accused further stated that considering the attitude and conduct of the complainant, he had filed complaint against the complainant u/s 406/420 IPC in Rohini Courts. The certified copies of the complaint is EX.DW3/B(Colly 1-7 pages). The reply to the legal notice sent by the complainant is Ex.DW3/C (colly 1-4 pages). Ex.DW3/B", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-12", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "is Ex.DW3/C (colly 1-4 pages). Ex.DW3/B (colly 1-3 pages) is the written complaint given to the PS Tis Hazari regarding the theft by complainant and his brother for Rs.30,000/- from the drawer of the accused.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-13", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "23. In his cross examination, the accused admitted that he is an advocate by profession and some other cases are also pending against him regarding the dishonor of the cheques filed by different persons. Accused admitted that he had not obtained any written document/receipt from the complainant regarding the above said pledge of the gold ornaments with the complainant. DW4 further admitted that he had not obtained any receipts from the complainant regarding the payment of Rs.1.0 lakh to him. Accused further admitted that he could not produce any document regarding the alleged PCR call or taking of them to police station Mukherjee Nagar, Delhi by the concerned police officials. Accused admitted that he had not filed any civil suit regarding the above said pledged gold ornaments despite aware of legal remedies. However, all the suggestions put to him were denied. \n\n24. It is argued by the Ld. counsel for complainant that from evidence on record, the complainant has proved that cheques in question were signed by the accused which were dishonoured vide bank memos and despite the legal notice accused did not make the payment. It is argued that the accused failed to cross examine the complainant, hence, nothing material has come out and the complainant has been able to prove his case. It is further argued that accused has failed to discharge the burden upon him to rebutt the presumption in favour of the complainant under the Act.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-14", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "25. Now the question is whether the complainant proved his case, that whether the amount was legally enforceable debt. Offence under Section 138 of the Act is a technical offence and the complainant is only supposed to prove that the cheques issued by the accused were dishonoured, his statement that cheques were issued against liability or debt is sufficient proof of the debt or liability and the onus shifts to the accused to show the circumstances under which the cheques were issued and this could be proved by the accused only by way of cogent evidence. \n\n26. Ld. Counsel for accused argued that the present case is false and frivolous and had concealed material facts from the court. Ld. Counsel for accused argued that accused had availed a sum of Rs,.1,30,000/- instead of Rs.30,000/- from the complainant upon the pledging of gold ornaments of his wife weighing around 20 tolas. Ld. Counsel for accused further argued that despite receiving of the substantial amount of the said loan, the complainant has not returned the gold ornaments of accused. It is further argued that the complainant is misusing the cheques in question with intention to harass the accused and by grabbing the gold ornaments of his wife.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-15", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "27. Accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence/evidence on preponderance of probabilities to prove that cheques in question were not supported by consideration and that there was no debt or liability to be discharged by him. However, there is no need that the accused should disprove the non existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. \n\n28. From the material on record, it is established that the complainant and accused were known to each other and were having friendly relations among themselves. The issuance of the cheques in question is not disputed by the accused. It is further established on record that the cheques in question issued by the accused got dishonored vide bank memo. The signatures on the cheques in question are not disputed by the accused at all. It is also established on record that the cheques in question pertains to the account of the accused. The legal notice sent by the complainant was received by the accused and same was duly replied by him.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-16", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "29. The testimony of DW2 reveals that she and her husband had availed a sum of Rs.1,30,000/- from the accused in December 2005, however, the accused stated in his examination in chief that he availed the said loan amount by way of four installments from the period during December 2005 to March 2006. The alleged averments are inconsistent and contrary to each other. Further the alleged loan was obtained from the complainant against the pledging of the gold ornaments of wife of accused with the complainant. Interestingly, the wife of the accused was not aware of the date of borrowing money, the date of pledging of the said gold ornaments. Moreover, the accused has failed to produce on record any bill / receipt showing that the above said gold ornaments were belonging to them. Further the accused has not furnished on record any document/ proof regarding the payment of Rs.1.0 lakh on 18.05.2006 to the complainant. It is particular to mention here that DW2 who has never raised any demand to the complainant regarding the return of the said gold ornaments. The accused has admitted that he has not filed any civil suit regarding the recovery of the above said gold ornaments. It is explained by the accused and his wife that the above said gold ornaments was her stridhan, however, the accused and his wife has failed to produce any document which shows that the alleged gold ornaments were of 20 tolas or they have ever purchased the alleged gold ornaments nor has brought any photographs which shows that the above said gold ornaments were given to her in her marriage.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-17", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "30. The plea of defence raised by the accused that the complainant had stolen a sum of Rs.30,000/- from his drawer or that the complainant is demanding a sum of Rs.1,60,000/- for the amicable settlement are neither relevant nor related regarding the rebuttal of the presumptions in favour of the complainant regarding the cheques in question. The alleged averments does not bear any relevancy in proving the innocence of the accused towards the dishonoring of the cheques in question. The testimony of the DW1 regarding the alleged amicable settlement in the police station Mukherjee Nagar is not believable because no written compromise/agreement as alleged by the accused was furnished on record during the trial of the present case. Further the DW1 has admitted that no amicable talks took place between the complainant and accused in his presence. Moreso, DW1 has admitted that neither he has signed any agreement regarding the compromise between complainant and accused nor knows by whom the alleged agreement/compromise was signed.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-18", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "31. The plea and the defence taken up by the accused that the cheques in question had been given by him to the complainant for the returning of the alleged gold ornaments is of no consequence. The accused has admitted the signatures on the cheques in question. On the one hand, the accused is admitting that his liability towards the accused was of Rs.1,30,000/- out of which he has already repaid the amount of Rs.1.0 lakh. It is pertinent to mention here that the accused has not produced any iota of evidence regarding the alleged repayment to the complainant. Considering the plea of defence of the accused, it can be inferred that he is admitting the liability of Rs.30,000/- and same was never repaid to the complainant at any point of time. Once he has admitted his signatures on the cheques in question he cannot escaped from his liability on the ground that same has been issued only for the returning of the alleged gold ornaments. When a cheque is signed and handed over it means that the person signing it, has given implied authority to the holder of the cheque for its encashment towards the liability. This shows that cheques had been issued to discharge the alleged liability. It is pertinent to mention here that the cheques in question were dishonored due to funds insufficient instead of any other reason if the accused was of apprehension that the complainant might misuse the cheques he might have intimated his banker for stop payments to avoid the misuse of the cheques but it was not the case in present facts and circumstances.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-19", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "32. Therefore, mere pleading not guilty would not amount to rebutting the presumption raised under Section 139 of N.I Act. In the present case accused has not produced any cogent proof in support of his innocence which makes it improbable that the cheques in question were not issued towards the discharge of legal liability as alleged by the complainant but at the same time strengthens the foundation fabrics of the present complaint case. In the present case, the accused failed to raise a cogent suspicious circumstances in the version of the complainant which belies the foundation of the present complaint case. Further, nothing has been proved by the accused to show that the cheques in question were misused by the complainant and that he did not have the legally enforceable liability towards the complainant. \n\n Conclusion\n\n33. Having considered the testimonies the issuance of cheque was not in dispute which were dishonored by bank returning memo. Accused is served with legal notice through registered post within the stipulated period and despite that no payment has been made by him. \n\n34. Reading of the evidence on record in its entirety, would show that the evidence is not supportive with the innocence of the accused and as such same is li- able to be dismissed out rightly. Secondly, accused has not produced any cogent proof in support of his defence on record. This court is of the opinion that the defence set up is neither definitive nor consistent with innocence of the accused. It is liability of the accused to bring positive evidence, in the wake of denying the liability by bringing evidence showing that accused has no liability towards complainant in the present complaint. It was sole burden and duty of the accused to prove no liability by raising probable defence when he was defending presumption, which was supporting the dis- honoured cheque. The accused has failed to discharge the onus.", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "da3be485374a-20", "Titles": "Shri Rajan Gohar vs . on 26 May, 2014", "text": "35. For rebutting the presumptions under the 'Act', a just need is to raise a probable defence. However, in the present case accused not only failed to show pre- ponderance of probability in his favour but also not succeeded in discharging his ini- tial burden for rebutting the presumption under the NI Act by not leading any cogent evidence in his support. Thus, this court unhesitatingly holds that the accused has not been able to rebut the presumptions under section 139 and 118 NI Act standing in favour of complainant. \n\n36. Having considered the entire evidence, complainant successfully proved all the essential requirements of Section 138 of the Act. Accordingly, accused is guilty for committing the offence punishable u/s 138 of the Act, he is hereby convict- ed for the offence under section 138 of the Act. Let he be heard on point of sentence separately. \n\nAnnounced in open court on                      SATVIR SINGH LAMBA\n26th Day of May, 2014                           MM-01(NI ACT)WEST/DELHI", "source": "https://indiankanoon.org/doc/88773201/"}
+{"id": "b9f5df04d169-0", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "IN THE COURT OF SH. RAVINDER SINGH\u00adII, METROPOLITAN \n                                        MAGISTRATE (NI) ACT - 11\n                                       DWARKA COURTS, NEW DELHI.\n\nCase No. : 241/12\nUnique Case ID No: 5R0771292009\n\nAxis Bank Ltd. (Formerly known as UTI Bank Ltd.)\n4/6B, Asaf Ali Road, New Delhi.\n(Through its Authorized Representative)     ...................COMPLAINANT\n\n                                         Vs.\nPraveen Gupta\nS/o Late Sh. M.S. Gupta\nR/o DG\u00ad2/44A, Ground Floor,\nNear HDFC Bank Ltd.,\nVikas Puri, Delhi\u00ad110018.\nAlso At\n3626/255A, Bhola Ram Market\nMorigate, Delhi\u00ad110006                  ........................................ACCUSED\n\n\n\nDate of Institution:                                                      21.05.2009\nPlea of the accused:                                              Pleaded Not Guilty\nDate of Reserving Judgment:                                               17/12/2013\nDate of Judgment:                                                         17/02/2014\nSentence/final Order:                                                      Convicted\n\n                                     JUDGMENT\n1 By way of present judgment I shall decide the present complaint case under Section 138 of Negotiable Instrument Act 1881 (as amended up to date, herein after said as NI Act) filed by the complainant Axis Bank Ltd. through its Authorized Representative against the accused Praveen Gupta S/o Late Sh. M.S.Gupta.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-1", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "FACTS OF THE PRESENT COMPLAINT CASE 2 The factual matrix as per the allegations in the complaint which are necessary for disposal of the present case are that, the accused is customer of the complainant bank and maintains a personal account bearing No. 245010601468450 with the complainant bank and CC No. 241/12 Axis Bank Vs Parveen Gupta Page1/12 accordingly, the accused has taken a personal loan of Rs. 13,98,000/\u00ad from the complainant bank. It is alleged that for the repayment of the said loan through equated monthly installment the accused handed over two post dated cheque's to the complainant bearing No. 844919 and 844920 dated 20.12.2008 and 20.01.2009 respectively both amounting to Rs. 39,334/\u00ad each, both drawn on Canara Bank Tagore Garden, New Delhi, Branch. It is further alleged that the complainant presented the aforesaid cheque's given by the accused for encashment and on presentation of the same both the cheque's were dishonored vide cheque returning memo dated 21.03.2009 with remarks \"Account Closed\". It is further alleged that the complainant thereafter has given a legal notice of demand dated 09.04.2009 to the accused through registered AD on 13.04.2009 and through U.P.C. on 09.04.2009 and the same was served upon the accused thereby calling upon the accused to make the payment of the cheque's amount. It is alleged that the accused has failed to pay any sum in response to the legal demand notice as a result of which the complainant has filed the present complaint for prosecution of the accused U/s 138 of the NI Act.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-2", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "3 After complaint was filed, the AR for the complainant Sh. Mohit Arora has lead his pre summoning evidence by way of an affidavit and after hearing the Ld. Counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused by the Court vide order dated 05.06.2009 for the offence U/s 138 of NI Act. On appearance of the accused a separate notice U/s 251 Criminal Procedure Code (herein after said \"the Code\") dated 06.10.2010 was given to the accused to which he pleaded not guilty and claimed trial. Thereafter, the case was listed for complainant's evidence. \n\n COMPLAINANT'S EVIDENCE", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-3", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "4. Sh. Govind Singh, AR for the complainant got himself examined as CW\u00ad1 and filed an affidavit in evidence Ex. CW1/A. He got exhibited the certificate of incorporation of the complainant company as Ex. CC No. 241/12 Axis Bank Vs Parveen Gupta Page2/12 CW1/1, authority letter in his favour as Ex. CW1/2A, statement of account of the accused as Ex. CW1/2, the original cheque's in question as Ex. CW1/3 and Ex. CW1/4, the Cheque returning memo as Ex. CW1/5, legal notice of demand dated 09.04.2009 as Ex. CW1/6. Postal receipts and U. P. C. certificate as Ex. CW1/7, Ex. CW1/8 and Ex. CW1/9 respectively, returned AD Card as Ex. CW1/10 and Ex. CW1/11, Statement of Account of the accused as Ex. CW1/13 (wrongly written as Ex CW 1/12 in chief examination dated 22/3/2013) and power of attorney in his favour as Ex CW1/2B (produced during cross examination). CW\u00ad1 Govind Singh was cross examined by the Ld. Counsel for the accused. Thereafter, the complainant evidence was closed at request of the AR for the complainant.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-4", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "STATEMENT OF THE ACCUSED UNDER SECTION 313 OF THE CODE 5 The statement of accused was recorded U/s 313 of the Code in which all the incriminating evidence were put to the accused Praveen Gupta in which he admitted that he has taken loan of Rs. 13, 98,000/\u00ad from the complainant in the year September, 2007. It was further submitted by the accused that he has not delivered the cheque's in question to the complainant for discharging any liability. It was further stated by the accused that the cheques in question were handed over by the accused to the complainant in a blank manner after putting his signatures thereon as a security at the time of taking of the loan from the complainant. Accused further stated that he owes no liability towards the complainant and all the payment have been made by him to the complainant. Accused also stated that he has not received the legal demand notice from the complainant and further also denied the signatures on the return AD Card. The accused further stated that the present complaint case has been falsely instituted against him and his security cheque's are misused by the complainant just to implicate him in the present case. Altogether accused denied all his liability.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-5", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "CC No. 241/12 Axis Bank Vs Parveen Gupta Page3/12 DEFENCE EVIDENCE 6 Thereafter, the case was fixed for defence evidence. Accused has examined himself as DW\u00ad1. DW\u00ad1 was cross examined by the Ld. Counsel for the complainant. Thereafter, defence evidence was closed at request of the accused and the case was listed for final arguments.  \n7 Final arguments were addressed on behalf of both the parties. I have heard Ld. Counsels for both the parties and have given my anxious and thoughtful consideration to submissions made. Further I have also carefully perused the entire case file and the evidence on record.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-6", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "Before proceeding further it is imperative for me to go through the relevant provisions of law \"138. Dishonour of cheque for insufficiency, etc., of funds in the account:\u00ad Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:\n Provided that nothing contained in this section shall apply unless \u00ad\n (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;\n (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and\n (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. \n\n Explanation:\u00adFor the purpose of this section, \"debt or other liability\" means a legally enforceable debt or other liability.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-7", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "CC No. 241/12 Axis Bank Vs Parveen Gupta Page4/12 APPRECIATION OF EVIDENCE IN THE LIGHT OF INGREDIENTS OF SECTION 138 NI ACT\n\n8. The presentation, dishonor of the cheque's in question Ex. \n CW1/3 and Ex. CW1/4 and the cheque returning memo Ex. CW1/5 has not been challenged by the accused. Therefore, considering the entire evidence on record it stands duly proved that the Cheque's in question Ex. CW1/3 and Ex. CW1/4 were dishonored vide cheque returning memo Ex. CW1/5 with the reason \"Account Closed\".", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-8", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "9. In the instant case specifically three fold defence has been taken by the accused Firstly, that he has not been served with any legal demand notice by the complainant Secondly, that apart from the signatures no other particulars in the cheque's in question Ex. CW1/3 and Ex. CW1/4 has been filled by him. Thirdly that he has made payments against the cheque's in question Ex. CW1/3 and Ex. CW1/4 and further he has not given the cheque's in question to the Complainant in discharge of his liability and the same were given by him as security to the complainant at the time of taking of the loan.  \n10 Coming to the first line of defence taken by the accused, in the case in hand AR for the complainant (CW\u00ad1) Sh.Govind Singh, has specifically stated in his affidavit of examination in chief that he has got issued the legal notice of demand dated 09.04.2009 which is Ex. CW1/6 and it was sent to the accused vide registered Post on 13.04.2009 and vide UPC on 09.04.2009, receipts of which are Ex. CW1/7, Ex. CW1/8 and Ex. CW1/9 respectively. The return AD Card Ex. CW1/10 and Ex. CW1/11 is also placed on record by the complainant.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-9", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "11. The accused has denied the receipt of legal demand notice both at the time of his statement U/s 313 of the Code and also in his evidence as DW\u00ad1. Further the accused also stated that the return AD card Ex.CW1/10 and Ex. CW1/11 does not bear his signatures. I have perused the legal notice of demand. It bears the correct address of the accused and the postal receipts issued by the postal authorities in CC No. 241/12 Axis Bank Vs Parveen Gupta Page5/12 ordinary course are also on record. Interestingly during cross examination of the accused as DW\u00ad1 it has been stated by the accused that the address mentioned on the legal demand notice is his correct address. Accused has further stated that he is residing at the address mentioned in the complaint since the year 2007", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-10", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "12. Further Section 27 of General Clauses Act also raises a presumption in favour of the complainant that properly addressed documents sent by the registered post is deemed to have been delivered if not returned back. \n\n Section 114 Illustration (f ) of Indian Evidence Act, 1872 also reads as follows:\u00ad \"114. Court may presume existence of certain facts \u00ad The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. \n\n Illustration The Court may presume \u00ad (f ) That the common course of business had been followed in particular cases; \" \n\n13. Both the presumptions provided in Section 114, Illustration (f ) of the Evidence Act, 1872 and Section 27 of the General Clauses Act, 1897 remains unrebutted through out the trial. Further accused has himself admitted that the address mentioned on the legal demand notice is his correct address and he is residing at the said address since the year 2007. Therefore, in the absence of any cogent evidence mere denial on the part of the accused would not be sufficient to shake the stand of the complainant. Therefore considering the evidence on record, I find that the accused has not brought any credible and cogent evidence to prove that he has not been served with the legal demand notice by the complainant. Therefore, I hold that the legal CC No. 241/12 Axis Bank Vs Parveen Gupta Page6/12 notice of demand Ex. CW1/6 was duly served upon the accused.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-11", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "14. Now coming to the second line of defence taken by the accused that apart from the signatures no other particular in the cheque's in question Ex. CW1/3 and Ex. CW1/4 has been filled by him. It is not disputed by the accused that the Cheque's in Question Ex. CW1/3 and Ex. CW1/4 are drawn on the account maintained by him. Further signature on the cheque's in question Ex. CW1/3 and Ex. CW1/4 has also not been disputed by the accused. During the defence evidence accused as DW\u00ad1 has specifically contended that except signatures other particulars in the cheque's in question Ex. CW1/3 and Ex. CW1/4 has not been filled by him. During the course of arguments Ld. Counsel for the accused also contended that the except signatures other particulars on the cheque's in question Ex. CW1/3 and Ex. CW1/4 has not been filled by the accused. It is trite to say that by putting the name and date there is no material alteration on the cheque U/s 87 of the NI Act. There is no rule of banking business that the name of the payee as well as the amount should be written by the drawer himself as no law provides that in case of cheque the entire body has to be written by the drawer only. Therefore, once the signature on the cheque in question is admitted the plea that particulars in the cheque's in question has not been filled by the drawer is of no consequence. (See T. Nagappa Vs. Y.R. Muralidhar, (2008) 5 SCC 633, Ravi Chopra Vs. State and Another, 2008(2) JCC (NI) 169, Delhi, Jaipal Singh Rana Vs. Swaraj Pal 149 (2008) DLT 682, P.S.A. Thamotharan", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-12", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "Pal 149 (2008) DLT 682, P.S.A. Thamotharan Vs. Dalmia Cements (P) Ltd., 2005 (1) JCC (NI) 96 Madras, Jammu & Kashmir Bank vs. Abhishek Mittal, 2012 CD DCR", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-13", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "189) Therefore the arguments and contentions of the accused in this regard also hold no ground.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-14", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "15. Now coming to the third line of defence taken by the accused that he has made payments against the Cheque's in questions Ex. CW1/3 and Ex. CW1/4 and the cheque's in question were not given by him to the Complainant in discharge of his liability and the same CC No. 241/12 Axis Bank Vs Parveen Gupta Page7/12 were given as security to the complainant at the time of taking of the loan. No doubt the crux of penal liability under Section 138 of the NI Act is that the Cheque in question must be issued for the discharge of any legal debt or liability. Existing of legal debt or liability is sine qua non for constituting the offence. \n\n16. Before I advert to the above said line of defence taken by the accused, it is imperative for me to notice the presumptions under Sections 118(a) and 139 of the NI Act which read as under:\n \"118. Presumptions as to negotiable instruments.--Until the contrary is proved, the following presumptions shall be made\u00ad\n (a) of consideration.--that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negoti\u00ad ated or transferred, was accepted, indorsed, negotiated or transferred for consideration;\" \n\n \"139. Presumption in favour of holder.--It shall be pre\u00ad sumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-15", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "17. The Division bench of Hon'ble Supreme Court in KRISHNA JANARDHAN BHAT Vs. DATTATRAYA G. HEGDE, (2008) 4 SCC 54, has held that the accused can discharge the burden of presumption U/s 118 and U/s 139 of the NI Act by raising a probabale defence on the strength of preponderance of probabilites.  \n18. In RANGAPPA Vs. SRI MOHAN AIR 2010 SC 1898 the Hon'ble Supreme Court has held that it is a settled position that when an ac\u00ad cused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. The accused can rely on the materials submitted by the complainant in order to raise such a defence.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-16", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "19. From the reading of the above said provisions and the judg\u00ad ments the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) CC No. 241/12 Axis Bank Vs Parveen Gupta Page8/12 and Section 139 of the NI Act would arise that it is supported by a consideration. Such presumptions are rebuttable. The accused can prove the non\u00adexistence of a consideration by raising a probable de\u00ad fence. If the accused discharges the initial onus of proof by showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the Complainant who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the nego\u00ad tiable instrument. The burden upon the accused of proving the non\u00ad existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circum\u00ad stances upon which he relies. In case, where the accused fails to dis\u00ad charge the initial onus of proof by showing the non\u00adexistence of the consideration, the complainant would invariably be held entitled to the benefit of presumption arising under Section 118(a) and Section 139 of the NI Act in his favour.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-17", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "20. Now coming to the instant case, in the case in hand the accused has admitted that he has taken loan of Rs 13,98000/\u00ad from the complainant in the year 2007 which was repayable in four years with an EMI of 39,500/\u00ad each. However accused submitted that he has repaid the entire loan and the statement of account Ex CW1/13 which is placed on record by the complainant itself shows his liability as NIL. Further accused as DW\u00ad1 also stated that he has made payment against Cheque's in question Ex. CW1/3 and Ex. CW1/4 by way of demand draft and cheque copies of which are marked as Mark \"A\" and Mark \"B\" respectively. Accused also contended that the cheque's in question Ex. CW1/3 and Ex. CW1/4 are security Cheques which were given by him to the complainant at the time of taking of the loan. \n21. I have perused the copy of demand draft Mark \"A\" and cheque Mark \"B\", it no where states that the said payment is made by the accused against the cheque's in question Ex. CW1/3 and Ex. CW1/4. Further during the cross examination of the accused as DW\u00ad1 it has CC No. 241/12 Axis Bank Vs Parveen Gupta Page9/12 been admitted by the accused that the payment made by him through draft \"Mark A\" and cheque \"Mark B\" does not mention against which dues the same has been given by him to the complainant which itself dents his stand.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-18", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "22. Further during the course of the arguments Ld counsel for the accused also submitted that that the statement of account of the accused Ex. CW1/13 shows the liability of the accused as Nil and this shows that the accused has paid his entire outstanding against the complainant. Per contra Ld Counsel for the Complainant submitted that the account of the accused was \"Written Off\" on 26/11/2009 and because of this, the statement of account shows the liability of the accused as NIL. It is trite to say that \"Writing Off\" is an internal accounting procedure to clean up the balance sheet of the bank. Whenever a there is continuous default on the part of the creditor the loan is declared as a \"NPA\" i.e. Non Performing Asset and is \"Written Off\" by the bank as per the guidelines and rules laid by the Reserve Bank of India. Such \"Written Off\" are restored to by the banks even in cases where bank has not exhausted all the avenues for recovery of the dues, further such written does not affect the right of the bank to proceed against the borrower to collect the dues. Therefore if the liability of the accused has been shown as Nil in the statement of account Ex CW1/13 due to the fact that the loan of the accused has been \"Written Off\" by the bank due to continuous default it cannot be said that the accused has paid all his dues and liability and he further has no liability towards the complainant. Further the payment made by the accused through demand draft Mark \"A\" on 17/04/2010 and by cheque Mark \"B\" on 28/5/2010 itself falsify the claim of the complainant that he has made the entire payment to the complainant, as there cannot be any justification for making payment by the accused in the year 2010 if all the payments have already been made by him and the liability of the accused has ceased in the year", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-19", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "all the payments have already been made by him and the liability of the accused has ceased in the year 2009 when the account was \"Written off\" by the bank.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-20", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "CC No. 241/12 Axis Bank Vs Parveen Gupta Page10/12\n 23. It is trite to say that mere denial on the part of the accused and stating that the entire liability has been paid by him and further labeling the Cheque's in question as security cheque's would not absolve him from any liability. It was for the accused to prove the circumstances under which the cheque's in question Ex. CW1/3 and Ex. CW1/4 were issued by him by leading cogent evidence so as to discharge and rebut the presumption raised against him by the Statute U/s 139 and 118 (a) of the NI Act. \n\n24. The accused has not brought any material on record and also no cogent explanations or any probable defence which would rebut the shadow of presumption existing in favour of the Complainant. This court do not find any force in the arguments advanced by the learned counsel for the accused that he has succeeded in rebutting the pre\u00ad sumption under Section 139 of the Act.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-21", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "25. From the materials brought on record and evidence lead by the parties, It stands duly proved that the accused has failed to rebut the presumptions U/s 118 (a) and section 139 of the NI Act. Therefore, I hereby hold that the Complainant has proved and substantiated the allegations that the cheque's in question Ex. CW1/3 and Ex. CW1/4 were issued by the accused in discharge of his legal liability and for consideration.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-22", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "26. Further CW\u00ad1 has also deposed in his examination in chief by way of affidavit that despite service of legal demand notice Ex CW1/6 the accused has failed to make the payment. Accused has contended that he has made the payment against the Cheque's in question Ex. CW1/3 and Ex. CW1/4 through draft \"Mark A\" and cheque \"Mark B\" on 17/04/2010 and 28/05/2010. Even believing the version of the accused to be correct i.e. the payment made by him to the complainant through draft \"Mark A\" and cheque \"Mark B\" on 17/04/2010 and 28/05/2010 respectively is against the Cheque's in Question Ex. CW1/3 and Ex. CW1/4, still it is apparently clear that the CC No. 241/12 Axis Bank Vs Parveen Gupta Page11/12 said payment is made in the year 2010 i.e. much after the dishonor of the Cheque's in Question Ex. CW1/3 and Ex. CW1/4, which itself proves that payment of the cheque's amount within 15 days of the receipt of the legal demand notice has not been made by the accused. Therefore considering the entire evidence placed on record, it also stands duly proved that the accused has failed to make the payment of the Cheque's in question Ex. CW1/3 and Ex. CW1/4 within 15 days from the receipt of the legal demand notice.", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "b9f5df04d169-23", "Titles": "Axis Bank Ltd. (Formerly Known As ... vs . on 17 February, 2014", "text": "27. Accordingly, In view of the facts, evidence lead by both the parties coupled with my discussion above, I hereby hold that the Complainant has proved and substantiated its allegations against the accused and all the ingredients for the offence under section 138 of the NI Act have been proved against the accused. Accordingly, accused Praveen Gupta S/o Late Sh. M.S.Gupta is hereby convicted of the offence u/s 138 NI Act. \n Copy of this Judgment be provided to the accused free of cost. \n\n This Judgment contains 12 pages. Every Page of this Judgment has been signed by me.\n\n\n      Announced in the open Court                             (RAVINDER SINGH \u00adII)\n      Dated 17.02.2014                                               MM (NI Act \u00ad07)\n                                                                    Dwarka/New Delhi.\n\n\n\n\nCC No. 241/12                  Axis Bank Vs Parveen Gupta                    Page12/12", "source": "https://indiankanoon.org/doc/85909288/"}
+{"id": "c90183242440-0", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "IN THE COURT OF SHRI RAVINDER SINGH\u00adII\n                              METROPOLITAN MAGISTRATE\n                              DWARKA COURTS, NEW DELHI\n\nCase No. : 5176/14\nUnique Case ID No. : R0534662009\n\n\nRaj Kumar Sharma\nS/o Sh. Mali Ram Sharma\nR/o RZ\u00ad672, Street No. 18 E,\nSadh Nagar, Palam Colony,\nNew Delhi\u00ad110045.                         .......................................Complainant\n\n                                                 Versus\n\n1)Pawan Kumar\n    S/o Sh. Jagdish Prasad\n\n2) Jagdish Prasad\nR/o Radhika Collection,\nVPO Khatu Shyam Jee,\nTehsil Danta Ram Garh,\nDistrict Sikar,\nRajasthan.\n\nAlso at\n\nSauragya Panchi Devi Memorial Chikatsalya,\nManda Chauraha,\nVPO Khatu Shyam Jee,\nTehsil Danta Ram Garh,\nDistrict Sikar,\nRajasthan.                                      .......................................Accused\n\n\nDate of Institution:                                                                  25.07.2009\nPlea of the accused:                                                                  Pleaded Not Guilty\nDate of Reserving Judgment:                                                           25/04/2014\nSentence or final Order:                                                              Convicted\nDate of Judgment:                                                                     17/05/2014\n\n\n                                            JUDGMENT\n BRIEF FACTS AND REASONS FOR DECISION OF THE CASE", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-1", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "1. By way of the present judgment, I shall decide the complaint Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 1/12 case U/s 138 Negotiable Instrument Act 1881 (hereinafter Said as NI Act) filed by the complainant Raj Kumar Sharma against the accused persons Pawan Kumar S/o Sh. Jagdish Prasad and Sh. Jagdish Prasad.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-2", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "2. The factual matrix necessary for disposal of the present case as per the allegations in the complaint are that, the complainant is doing the business of garments and both the accused persons Raj Kumar and Jagdish Prasad are alleged to be the relative of the complainant. It is further alleged that accused No. 1 Pawan Kumar was having business terms with the complainant and due to this he was also having close relations with the complainant. It is further alleged that the accused No. 2 Jagdish Prasad is father of accused No. 1 Pawan Kumar. It is alleged that both the accused No. 1 and 2 due to close relationship with the complainant approached the complainant for grant of a friendly loan. It is alleged that both the accused persons approached the complainant for the said loan in the month of July, 2007 at the business place of the complainant at Delhi. It is alleged that both the accused requested the complainant to given a friendly loan of Rs. 2,50,000/\u00ad as both the accused were in need of money. It is further alleged that both the accused persons assured the complainant that they would return the money. It is further alleged that thereafter the complainant gave a loan of Rs. 2,50,000/\u00ad to both the accused persons by way of cash and it was assured by the accused persons that they would return the said loan amount within a period of one year. It is further alleged that after a months time both the accused persons contacted the complainant and requested that instead of one year they would return the loan amount within two years. It is further alleged that thereafter the accused persons in discharge of their liability towards the said loan amount issued a cheque bearing no. 495126 dated 05.04.2009 amounting to Rs. 2,50,000/\u00ad drawn on State Bank of Bikaner & Jaipur, Khatu Shyam", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-3", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "drawn on State Bank of Bikaner & Jaipur, Khatu Shyam Ji branch in favour of the complainant. It is alleged that the accused persons assured the complainant that the cheque will be encashed at the time of presentation. It is further alleged that the complainant had even contacted the accused persons before presentation of the cheque in question and accordingly, the complainant presented the Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 2/12 cheque in question for encashment with its bank i.e. Axis Bank Ltd. and the same was dishonoured vide cheque returning memo dated 26.05.2009 with remarks \"Insufficient Funds\". Thereafter it is alleged that the complainant came to know about the fact of dishonour of the cheque in question on 16.06.2009. It is further alleged that immediately after knowing of the dishonour of the cheque in question the complainant contacted the accused persons herein and requested them for making the payment but they refused to make the payment. Thereafter the complainant has given a legal notice of demand dated 24.06.2009 to the accused which was sent through speed post and U. P. C. on 24.06.2009 thereby calling upon the accused persons to make the payment of the cheque amount. It is alleged that the accused persons have failed to pay any sum in response to the legal notice of demand as a result of which the complainant has filed the present complaint for prosecution of the accused U/s 138 of the NI Act.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-4", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "3. After the complaint was filed, the complainant Raj Kumar Sharma led his pre\u00adsummoning evidence by way of an affidavit and after hearing the counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused No. 1 only i.e. Pawan Kumar by the court vide order dated 31.07.2009 for the offence U/s 138 of NI Act. Hence the complaint of the complainant remained restricted to accused No. 1 Pawan Kumar. On appearance of the accused Pawan Kumar a separate notice U/s 251 of the Criminal Procedure Code, 1973 (hereinafter said as the Code) dated 23.01.2013 was given to the accused to which he pleaded not guilty and claimed trial. Thereafter, the matter was listed for complainant's evidence.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-5", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "4. The complainant Raj Kumar Sharma got himself examined as CW1 and adopted his pre summoning evidence affidavit which is Ex. CW1/A and he also relied on other documents Ex. CW1/1 to Ex. CW1/18. Ex. CW1/1 is the original cheque in question, Ex. CW1/2 is the cheque deposit slip, Ex. CW1/3 is the cheque returning memo, Ex. CW1/4 is the letter forwarding the cheque in question for collection, Ex. CW1/5 is the cheque returning letter, Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 3/12 Ex. CW1/6 is the legal notice of demand dated 24.06.2009, Ex. CW1/7, Ex. CW1/8, Ex. CW1/9 and Ex. CW1/10 are the speed post receipts, Ex. CW1/11 is the UPC vide which the aforesaid demand notice was sent to the accused and Ex. CW1/12 to Ex. CW1/18 are the returned envelopes. The complainant during evidence also tendered his original ledger book as Ex. CW1/19 and the Income Tax Return Ex. CW1/20. Complainant also tendered his account statement dated 14.07.2007 as Ex. CW1/Z. CW\u00ad1 was duly cross examined by the Ld. Counsel for the accused and thereafter, the complainant's evidence was closed at request.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-6", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "STATEMENT OF ACCUSED U/S 313 OF THE CODE. \n\n5. Thereafter, the statement of accused was recorded U/s 313 of the Code in which all the incriminating evidence along with exhibited documents were put to the accused Pawan Kumar in which he stated that he has never taken any loan from the complainant and has also never approached the complainant for availing any loan. The accused however admitted that the complainant is his relative and he was having business relationship with him. The accused further submitted that the cheque in question bears his signatures but he denied that he has filled the contents of the same. The accused further stated that the cheque in question was given by him as a security to the complainant in relation to the goods purchased by him. The accused further stated that he is not aware about the dishonour of the cheque in question and further denied the receipt of the legal demand notice. The accused also stated that the ledger statement Ex. CW1/19 and the statement Ex. CW1/Z are false documents. The accused also stated that the complainant has filed this false complaint case against him and has also deposed falsely against him. He further denied that he owe any liability towards the complainant.  \n DEFENCE EVIDENCE.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-7", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "6. Thereafter the case was fixed for defence evidence. The accused Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 4/12 filed an application U/s 315 of the Code for producing himself as a defence witness. The said application was allowed and the accused deposed as DW1 and stated that he is running the business of readymade garments. The accused also stated that the complainant is also doing the business of readymade garment and he has given the cheque in question as a security to the complainant during the course of the business. It is also stated that he owed certain liability towards the complainant and he has also made payment to the complainant even after filing of present complaint case. The accused also stated that he owes no liability against the cheque in question. The accused also stated that he has not taken any money from the complainant and he has never come to Delhi before filing of the present complaint case. The accused also stated that the complainant used to visit his shop for business purposes. The accused also stated that he has never received the legal demand notice from the complainant against the dishonour of the cheque in question. The accused further stated that the cheque in question bears his signatures but he denied that he has filled the particulars of the same. The accused further stated that he and his father have never visited the house of the complainant and he even does not know where the complainant is residing. DW\u00ad1 (accused) was duly cross examined by Ld. Counsel for the complainant. Thereafter defence evidence was closed at request of the accused and the case was listed for final arguments. \n\n FINAL ARGUMENTS", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-8", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "FINAL ARGUMENTS\n\n7. Final arguments were addressed on behalf of both the parties. I have heard the arguments of Ld. Counsels for both the parties and have also given my anxious and thoughtful consideration to the same and further I have also perused the entire record of the case file. Before proceeding further it is imperative for me to go through the relevant provisions of law. \n\n Section 138 of the Negotiable Instruments Act reads as:\n \"Dishonour of cheque for insufficiency, etc, of funds in the account:Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 5/12 discharge, in while or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-9", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;\n (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and\n\n (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. \n\n Explanation:For the purposes of this section, \"debt or other liability\" means a legally enforceable debt or other liability. \n\nAPPRECIATION OF EVIDENCE IN THE LIGHT OF THE INGREDIENTS OF SECTION 138 OF THE NI ACT & THE DEFENCE RAISED BY THE ACCUSED.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-10", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "8. In the instant case, it is not disputed by the accused that the Cheque in Question Ex. CW1/1 is drawn on the account maintained by him. Further the signature on the cheque in question Ex. CW1/1 is also not disputed by the accused. The presentation, dishonor of the cheque in question and the cheque returning memo has also not disputed by the accused. Therefore, In view of the evidence on record it stands proved that the cheque in question Ex CW1/1 was signed by the accused and the same was drawn on account maintained by him. It also stands proved that the cheque in question Ex. CW1/1 was presented within the period of its validity and the same was dishonoured vide cheque returning Memo Ex. CW1/3 with remarks \"Funds Insufficient\".  \n9. Perusal of the entire evidence reveals that two fold defences have been taken by the accused in the present complaint case. Firstly, that he has not been served with any legal demand notice by the complainant Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 6/12 and secondly that he has not taken any loan from the complainant and he has given the blank signed cheque in question Ex. CW1/1 to the complainant during his business dealings with the complainant and not in discharge of his loan liability as alleged by the complainant.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-11", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "10. Coming to the first line of defence taken by the accused that he has not been served with the legal demand notice from the complainant, it is pertinent to note that complainant Raj Kumar Sharma as CW\u00ad1 has specifically stated in his affidavit Ex. CW1/A that he has got issued the legal notice of demand dated 24.06.2009 to the accused which is Ex. CW1/6 and it was sent to the accused on 24.06.2009 itself vide speed Post and UPC, receipts of which are Ex. CW1/7 to Ex. CW1/10 and Ex. CW1/11 respectively. The Complainant has also placed on record the returned envelopes Ex. CW1/12 to Ex. CW1/18.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-12", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "11. The accused at the time of framing of the notice under section 251 of the Code, in his statement under section 313 of the code and also during his evidence as DW\u00ad1 has denied the receipt of the legal demand Ex. CW1/6. Interestingly, during the cross examination of accused as DW\u00ad1 the accused admitted that the legal demand notice Ex. CW1/6 bears his correct address which evidences that the legal demand notice was sent on the correct address of the accused. Further, on perusal of the returned envelopes Ex. CW1/12 to Ex. CW/18 it is revealed that all of them have been returned unserved with remarks \"refused\". It is trite to say that when there is service of notice by post on the correct address which admittedly has taken place in the present case refusal on the part of the accused would amount to proper service. Otherwise, a trickster cheque drawer would avoid receiving the legal demand notice by adopting different strategies and escape from legal consequences of Section 138 of the NI Act. Therefore, there is always a presumption that the legal demand notice has been duly served upon the accused unless some concrete evidence in rebuttal is adduced by the accused to establish that the Legal Demand Notice has not been served upon him. It was for the accused to rebut the presumption about the service of Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 7/12 notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the postal receipts were incorrect. Except denials and suggestions the accused has not any lead any evidence to corroborate his stand. Therefore its stands proved that the legal demand notice has been served upon the accused. As such non receipt of notice as a defence on part of the accused has no force.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-13", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "12. Now coming to the second line of defence which has been taken by the accused that he has not taken any loan from the complainant and he has given the blank signed cheque in question Ex. CW1/1 to the complainant during his business dealings with the complainant and not in discharge of his loan liability as alleged by the complainant.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-14", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "13. It is trite to say that the crux of penal liability under Section 138 of the Act is that the Cheque in question must be issued for the discharge of any legal debt or liability. Existing of legal debt or liability is sine qua non for constituting the offence. Before proceeding further it is imperative for me to take notice of the provisions of Sections 118(a) and 139 of the NI Act which read as under:\n \"118. Presumptions as to negotiable instruments.--Until the contrary is proved, the following presumptions shall be made\u00ad\n (a) of consideration.--that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;\" \n\n \"139. Presumption in favour of holder.--It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-15", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "14. The Division bench of Hon'ble Supreme Court in Krishna Janardhan Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54, has held that the accused can discharge the burden of presumption U/s 118 and U/s 139 of the NI Act by raising a probable defence on the strength of 'preponderance Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 8/12 of probabilities'.  \n15. In RANGAPPA Versus SRI MOHAN AIR 2010 SC 1898 the Hon'ble Supreme Court has held that it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of 'preponderance of probabilities'. The accused can rely on the materials submitted by the complainant in order to raise such a defence.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-16", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "16. From the reading of the above said provisions and the judgments the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) and Section 139 of the NI Act would arise that it is supported by a consideration. Such presumptions are rebuttable. The accused can prove the non\u00adexistence of a consideration by raising a probable defence. If the accused discharges the initial onus of proof by showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the Complainant who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the accused of proving the non\u00ad existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he/she relies. In case, where the accused fails to discharge the initial onus of proof by showing the non\u00adexistence of the consideration, the complainant would invariably be held entitled to the benefit of presumption arising under Section 118(a) and Section 139 of the NI Act in his favour.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-17", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "17. Now coming back to the present complaint case. In the instant case from the perusal of the entire evidence lead by both the parties it is revealed that both the parties have admitted that they are relatives. However the accused has denied that he has taken any loan from the complainant and has also stated that he has given the cheque in question Ex. CW1/1 to the complainant during his business transaction with the complainant and Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 9/12 not in order to discharge his loan liability as alleged by the complainant. To corroborate his stand the accused has examined himself as DW\u00ad1 and reiterated the same contentions. The accused has also during cross examination of CW\u00ad1 (complainant) has placed on record receipts Ex. Ex. CW1/X (Colly.) and Ex. CW1/Y (Colly.) to show that he was having business dealings with the complainant. Interestingly the complainant in the complaint itself has admitted that he was also having business dealings with the accused. Further the complainant during his cross examination as CW\u00ad1 has also admitted that receipts Ex. CW1/X (Colly.) and Ex. CW1/Y (Colly.) placed on record by the accused has been issued by him but the complainant also stated that the loan transactions and the business transactions are altogether different. Further the complainant has also placed on record the statement of account Ex. CW1/Z maintained by him in regular course of business which also establishes that loan was granted to the accused in July, 2007. The complainant has also placed on record his Income Tax Return Ex. CW1/19 to show his solvency and capacity at the time when loan was granted to the accused. Surprisingly, apart from establishing his business relationship with the complainant which has been admitted by the complainant, the accused has not lead any evidence to", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-18", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "the complainant which has been admitted by the complainant, the accused has not lead any evidence to corroborate his stand. Merely establishing his business relationship with the complainant would not aid the accused in any way as it itself establishes that both the parties are well known to each other and were having regular transactions, and in such proximities loan over and above the business transactions cannot be ruled out.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-19", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "18. During course of arguments Ld. Counsel for the accused also relied upon the judgment titled as John K Abharam Vs. Simon C. Abraham & Anr. (2014) 2 SCC 236 the said judgment cited by the counsel is also in clear contradiction with the fact of the present complaint case as in the case in hand the complainant has been able to clearly establish when the loan was granted by him to the accused and also that he was having sufficient funds available with him at the time of granting of the loan.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-20", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "Case No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 10/12\n 19. It was for the accused to prove the circumstances under which the cheque's in question Ex. CW1/1 was issued by him by leading cogent evidence so as to discharge and rebut the presumption raised against him by the Statute U/s 139 and 118 (a) of the NI Act and mere simplicitor denying the allegations would not be at his advantage. The entire evidence favours and supports the stand of the complainant. The accused has not brought any material on record and also no cogent explanations or any probable defence which would rebut the shadow of presumption existing in favour of the Complainant. Therefore, this court do not find any force in the arguments advanced by the learned counsel for the accused that the accused has succeeded in rebutting the presumption under Section 139 of the Act. From the materials brought on record and evidence lead by the complainant it is sufficient to hold that the accused has taken loan from the complainant and has issued the cheque's in question Ex. CW1/1 in discharge of his liability", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-21", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "20. Now coming to the issue that except signatures other particulars in the cheque's in question Ex. CW1/1 has not been filled by the accused. It is trite to say that by putting the name and date there is no material alteration on the cheque U/s 87 of the NI Act as there is no rule of banking business that the name of the payee as well as the amount should be written by the drawer himself, as no law provides that in case of cheque the entire body has to be written by the drawer only. Therefore, once the signature on the cheque in question is admitted as has happened in the case in hand the plea that particulars in the cheque in question has not been filled by the drawer is of no consequence unless some cogent evidence has been lead by the accused that he/she has not expressly or impliedly authorized the payee to fill the particulars therein, which is absenting in the present case. (See Ravi Chopra Vs. State and Another, 2008(2) JCC (NI) 169, Delhi, Jaipal Singh Rana Vs. Swaraj Pal 149 (2008) DLT 682,) Therefore, this defence of the accused also holds no ground.              \nCase No. : 5176/14 Raj Kumar Sharma Vs. Pawan Kumar Page No. 11/12", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-22", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "21. Considering the evidence on record, It stands duly proved that the accused has miserably failed to rebut the presumptions U/s 118 (a) and section 139 of the NI Act. Accordingly, In view of the facts, evidence lead by both the parties coupled with my discussion above, I hereby hold that the Complainant has been able to prove and substantiate its allegation against the accused and all the ingredients for the offence under section 138 of the NI Act have been proved against the accused. Accordingly, accused Sh. Pawan Kumar S/o Sh. Jagdish Prasad, is hereby convicted for the offence U/s 138 of NI Act.", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "c90183242440-23", "Titles": "Case No. : 5176/14 Raj Kumar Sharma vs . Pawan Kumar Page No. 1/12 on 17 May, 2014", "text": "Copy of this judgment be given to the convict free of cost. \n\nThis Judgment contains 12 pages and every Page of this judgment has been signed by me. \n\nAnnounced in the open Court                                   (RAVINDER SINGH -II\nDated 17.05.2014                                                      MM (NI Act \u00ad07)\n                                                              DWARKA/NEW DELHI.\n\n\n\n\n \n\n\nCase No. : 5176/14                    Raj Kumar Sharma Vs. Pawan Kumar                                      Page No.  12/12", "source": "https://indiankanoon.org/doc/23001186/"}
+{"id": "05371c82f9e9-0", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "IN THE COURT OF SHRI SATVIR SINGH LAMBA, MM-01\n               ( NEGOTIABLE INSTRUMENTS ACT) WEST DISTRICT,\n                         TIS HAZARI COURTS, DELHI\n\nSh. Aman Vij\nProprietor of M/s Aman Services,\n7-8, Mohan Garden,\nMain Najafgarh Road,\nUttam Nagar,\nNew Delhi - 110059.                                            ......Complainant\n\n                                            Vs.\n\nShri Anand Kumar,\nProprietor of M/s Rahul Trading Company,\nB-3, Kushak Road no.2,\nSaroop Nagar,\nNew Delhi - 110042.                                            ........Accused\n\n\n                                         JUDGMENT\nComplainant Case No.                 :            1283/10\n\nDate of institution                  :            22.10.2009\n\nOffence alleged                      :            Under Section 138 NI Act\n\nPlea of the accused                  :            Not pleaded guilty\n\nFinal order                          :            Acquittal\n\nDate of Decision                     :            18.02.2014\n\n\n                                         Brief Facts", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-1", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "Date of Decision                     :            18.02.2014\n\n\n                                         Brief Facts\n\n1. Brief facts of the case are that the complainant is running the business of electronic trading as well as retailing under the name and style of M/s Aman Services. It is alleged that accused is also engaged in the same trade of electronic goods. It is further alleged that the accused approached the complainant to buy certain electronic goods and that the accused issued Ex.A1 i.e. a cheque no. 686428 dated 27.04.2009 amounting to Rs. 25,750/- drawn on Delhi State Cooperative Bank, Samaypur Badli, Delhi. The complainant presented the cheque in question for encashment through his banker but the same was got dishonored by the bankers of accused with the remarks CC No.1283/1 page no.1/11 \"Funds Insufficient\" vide returning memo dated 14.09.2009, same is Ex.A. Henceforth, the complainant issued the mandatory notice U/s 138 NI Act dated 23.09.2009 i.e Ex.B and the same was served upon the accused vide postal receipt, AD/U.P.C. and courier i.e. Ex.C and Ex.D. \n\n2. When the accused failed to fulfill the conditions of the said legal notice within 15 days of its presumed service, then the complainant has filed the present complaint case U/s 138 of Negotiable Instrument Act 1881 (hereinafter the Act) against the accused. \n\n Pre-Trial Procedure", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-2", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "Pre-Trial Procedure\n\n3. After the institution of the present complaint, the complainant adduced his pre summoning evidence U/s 200 Cr. P.C. on which basis the accused was summoned via order dated 16.11.2009 to face trial for the offence U/s 138 NI Act. After the service of the summons, the accused entered his appearance whereupon the provisions of Sec. 207 Cr. P.C. Was also complied. \n\n4. The accused was admitted to bail then notice U/s 251 Cr. P.C. for the offence U/s 138 NI Act was served upon the accused on 03.09.2010 after hearing the contesting parties. Needless to say, the accused pleaded \"Not Guilty\" and claimed trial. \n\n Trial\n\n5. In order to substantiate his case, the complainant examined himself as the witness as CW-1 whose contents are a mere repetition of what had already been discussed under the \"Brief Facts\" and hence are not repeated for the sake of brevity. \n\n6. All the incriminating circumstances, appearing in the evidence against the accused was put in order to unable him to offer his explanation.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-3", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "7. In his explanation u/sec 313 Cr.P.C r/w sec 281 Cr.P.C, the accused admitted the issuance of the cheque in question to the complainant but explained that CC No.1283/1 page no.2/11 he had already made due payment to the complainant by way of Rs.10,000/- in cash on 27.05.2009 under the due signatures of agent of complainant namely Shri Rajesh and remaining amount was paid through a cheque bearing no. 650948 dated 22.06.2009 for the sum of Rs.15,750/- drawn on Delhi State Cooperative Bank Limited. Accused denied the receiving of legal notice. He lastly stated that he is innocent and is falsely implicated in the present case and the complainant is misusing the cheque in question with malafide intention to gain wrongfully. \n\n8. In order to prove his innocence accused examined Shri Surender, clerk, Delhi State Co-operative Bank Limited, Samaypur, Delhi as DW1 and Shri Mahesh Sharma as DW2. Accused also examined himself as DW3. All the defence witnesses were duly cross examined by the complainant. Thereafter the accused closed his defence evidence vide order dated 14.08.2013 whereupon the trial came to a conclusion and the contesting parties were duly heard. \n\n Facts in Issue\n\n9. In order to have the positive outcome in his favour, the complainant was required to show that the cheque in question was given by the accused to discharge his liabilities which was dishonoured via returning memo whereafter the accused had also failed to comply with the requirements of the legal notice. \n\n10. On the other hand, the accused was required to show his defence on the scale of preponderance of the probabilities that he is not liable to the amount involved to the complainant. \n\n Legal Prepositions", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-4", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "Legal Prepositions\n\n11. The presumptions provided U/s 118 NI Act and 139 NI Act would come to the rescue of the complainant once the execution of the cheques in question are proved on record. \n\n12. As per section 118 NI Act, it is to be presumed in favour of the complainant during the trial that the cheques in question were given against CC No.1283/1 page no.3/11 consideration by the accused and that the complainant was the holder of the said cheque in due course. Further as per Sec. 139 NI Act, it is to be presumed in favour of the complainant during the trial that the cheques in question were received by the complainant against a legally enforceable debt or liability (Refer :- \"Rangappa Vs. Sri Mohan\" SLP (Crl.) 407/06, Dated:- 07.05.2010). \n\n13. It is well settled that both the aforesaid presumptions U/s 118 & 139 NI Act are rebuttable in nature and the onus to rebut the same squarely rests upon the accused.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-5", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "14. The accused can rebut these presumptions not merely by examining his own witnesses but also through the cross examination of the complainant and his witnesses thereby bringing on record through the entire evidence available on record (inclusive of complainant's evidence and defence evidence, if any), that the complainant was a liar, that their was no existing liabilities between the parties and that the cheques in question were misused. It must be kept in mind that once evidence is brought on record from both sides, it becomes an evidence of the case and court can draw inferences from the said entire evidence either in favour or against any of the parties. Evidence is a complainant's evidence and accused's evidence only for the purposes of identifying it, but once it is adduced in the case, it becomes the evidence of the case and then the same has to be read as a whole. The court can not read the evidence of the complainant only to the extent it favours the complainant and overlook the remaining evidence which supports the accused merely on the ground that it is the complainant's evidence. Similarly, from the evidence adduced by the accused, the court can draw inferences either in favour of the complainant or against the accused. The accused has a right to argue his case even on the basis of the cross examination of the complainant & his witnesses to show to the court that there existed no legally recoverable debt or liability between the parties. In order to rebut the legal presumption in question, it emerges that the accused need not require direct evidence to disprove the existence of consideration.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-6", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "15. Preponderance of probabilities is the standard of proof upon the accused to rebut the above presumptions, which is not as high as that of the prosecution whereby the accused is only required to show the existence of a CC No.1283/1 page no.4/11 probable defence so as to rebut the above presumptions. If the accused succeeds in raising a probable defence by referring to his own evidence (if any) and from the evidence of the complainant, then the onus would shift on to the complainant, who then would have to show beyond reasonable doubt the existence of consideration/existence of a legally recoverable debt or liability in respect of the cheques in question. \n\n Appreciation of Evidence\n\n16. The present case is proceeded on case law i.e. Rajesh Aggarwal vs. State & Anr. - MANU/DE/1838/2010, vide which it is held by hon'ble High Court of Delhi that \"17. The summary trial procedure to be followed for offences under Section 138 N.I. Act would thus be as under:\n Step I: On the day complaint is presented, if the complaint is accompanied by affidavit of complainant, the concerned MM shall scrutinize the complaint & documents and if commission of offence is made out, take cognizance & direct issuance of summons of accused, against whom case is made out. Step II: If the accused appears, the MM shall ask him to furnish bail bond to ensure his appearance during trial and ask him to take notice under section 251 Cr.P.C. and enter his plea of defence and fix the case for defence evidence, unless an application is made by an accused under section 145(2) of N.I. Act for recalling a witness for cross-examination on plea of defence.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-7", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "Step III: If there is an application under Section 145(2) of N.I. Act for recalling a witness of complainant, the court shall decide the same, otherwise, it shall proceed to take defence evidence on record and allow cross-examination of defence witnesses by complainant. \n\n Step IV: To hear arguments of both sides. \n\n Step V: To pass order/judgment.\" \n\n CC No.1283/1 page no.5/11\n 17. Hon'ble Delhi High Court, in the above mentioned case, emphasized that once the complainant has brought forward his case by giving his affidavit about the issuance of the cheque, dishonour of cheque, issuance of demand notice etc. he can be cross-examined only if the accused makes an application to the court as to on what point he wants to cross-examine the witnesses and then only the court shall recall the witness by recording reasons there to. \n\n18. In a summary trial, the complainant or his witness cannot be recalled in the court for cross-examination only for the sake of pleasure. In the present complaint case after recording the plea of defence at the time of framing notice, opportunity was given to the accused for filing of the proper application. However, the accused made no application under section 145(2) of the Act for recalling the complainant for cross- examination on his plea of defence. Therefore, there was no reason to recall the complainant or witnesses during summary trial and the evidence already given by the complainant has to be considered sufficient and the matter proceeded accordingly.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-8", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "19. In order to prove his innocence accused examined Bank official of Delhi State Cooperative Bank, Samay Pur Badli Branch as DW1. DW1 who has brought the summoned record i.e statement of account of Mahesh Sharma i.e Ex.DW1/1. DW1 stated that a cheque bearing no.650948 dated 20.06.2009 for a sum of Rs. 15,750/- was cleared/encashed from SB A/c no.1685 in the account of M/s Aman Services. Report is Ex.DW1/2. DW1 was duly cross examined by the complainant however, nothing material has been come out from his cross examination.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-9", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "20. Accused examined his brother in law i.e. Shri Mahesh Sharma as DW2. In his examination in chief DW2 stated that he had issued the cheque i.e Ex.DW1/2 i.e. cheque bearing no.650948 dated 20.06.2009 for a sum of Rs.15,750/- drawn on The Delhi State Cooperative Bank, Samaypur Badli Branch, Delhi in favour of complainant on the asking of accused. DW2 further stated that the accused has also told him that he had already made the part payment of Rs. 10,000/- out of total due amount of Rs.25,750/- to the employee of complainant namely Ramesh on 27.05.2009. In his cross examination DW2 admitted that he was told by the accused regarding the said due amount in the first week of June 2009. DW2 further explained that he made the said payment in favour of complainant because the accused was CC No.1283/1 page no.6/11 not having sufficient funds to pay the above said liability. DW2 admitted that no other part amount was paid by the accused in his presence. However, all the suggestions put to him by the counsel for complainant were denied by the DW2.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-10", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "21. Accused examined himself as DW3 and stated in his examination in chief that he is proprietor of M/s Rahul Trading Company. Accused stated that he had purchased some electronic goods from M/s Aman Services vide book no. 54, bill no. 2903 dated 28.03.2009 i.e. Ex.DW3/1 for an amount of Rs. 57,500/-. Accused further stated that against the said purchase, most of the amount was paid to the complainant in cash and had issued the cheque in question in favour of complainant for the repayment of remaining amount. Accused further stated that he had made payment of said due amount of Rs. 25,750/- by way of part payment of Rs. 10,000/- in cash to the employee of complainant namely Rajesh on 27.05.2009 as per endorsement on the back of above said original bill and same is Ex.DW3/2. Accused further stated that he paid the remaining amount of Rs. 15,750/- to the complainant to his brother in law Mahesh Sharma i.e DW2 vide cheque bearing no.650948 drawn on Delhi Cooperative State Bank for the sum of Rs. 15,750/- and same was encashed by the complainant. In his cross examination accused stated that he used to purchase electronic goods from the complainant as the complainant is a distributor of electronic goods in his area. Accused further explained that he used to made payment for the purchase of goods from the complainant by cheque as well as in cash through his representative who used to visit his retail outlet which is not disputed by the complainant. Accused further explained that he had been given credit limit of about one month to pay the amount accrued upon invoiced and he used to pay the same within the said period by installments. Accused admitted the receiving of legal notice. However, all the suggestions put to him", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-11", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "installments. Accused admitted the receiving of legal notice. However, all the suggestions put to him by the counsel for complainant were denied by the DW3.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-12", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "22. It is argued by the Ld. counsel for complainant that from evidence on record, the complainant has proved that cheque in question was signed by the accused which was dishonoured vide bank memo and despite the legal notice accused did not make the payment. It is argued that the accused failed to cross examine the complainant, hence, nothing material has come out and the complainant has been able to prove his case. It is further argued that accused has failed to CC No.1283/1 page no.7/11 discharge the burden upon him to rebutt the presumption in favour of the complainant under the Act. \n\n23. Now the question is whether the complainant proved his case, that whether the amount was legally enforceable debt. Offence under Section 138 of the Act is a technical offence and the complainant is only supposed to prove that the cheque issued by the accused was dishonoured, his statement that cheque was issued against liability or debt is sufficient proof of the debt or liability and the onus shifts to the accused to show the circumstances under which the cheque was issued and this could be proved by the accused only by way of cogent evidence.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-13", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "24. Ld. Counsel for accused argued that the cheque in question was given to the complainant for the payment of remaining amount of Rs. 25,750/- for the purchase of electronic goods from him vide invoice Ex.DW3/1. It is further argued that on 27.05.2009 the accused paid part amount of Rs. 10,000/- to his employee namely Rajesh and the remaining amount of Rs. 15,750/- was paid to the accused through cheque Ex.DW1/2 of the DW2. It is further argued that accused has already made the due payment to the complainant and no other amount is legally recoverable from him. It is further argued that there is no legally enforceable liability towards the complainant as alleged in the present case and the cheque in question was misused by the complainant malafidely with intention to harass the accused. \n\n25. Accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence/evidence on preponderance of probabilities to prove that cheque in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, there is no need that the accused should disprove the non existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-14", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "CC No.1283/1 page no.8/11\n 26. From the material on record, it is established that the complainant and accused are known to each other and are having business relations with each other. The signatures on the cheque in question is not disputed by the accused. It is further established on record that the cheque in question issued by the accused got dishonored vide bank memo. It is also established on record that the cheque in question pertains to the account of the accused. The receiving of the legal notice sent by the complainant is admitted by the accused. However, no reply was ever given by the accused to the said legal notice.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-15", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "27. The plea of defence raised by the accused is that he had issued cheque in question to the complainant for the payment of remaining amount for the purchase of electronic goods vide invoice/bill i.e. Ex.DW3/1. Perusal of the document Ex.DW3/1 reveals that electronic goods worth Rs. 57,500/- was purchased by M/s Rahul Trading Company from M/s Aman Services. Accused is the proprietor of the M/s Rahul Trading Company. Complainant is the proprietor of M/s Aman Services. Further defence of the accused is that he had paid the part amount towards the payment of invoice/bill Ex.DW3/1 and amount of Rs. 25,750/- was due upon him. No doubt the accused has not furnished on record any proof regarding the alleged part payments of the due amount of Rs. 57,500/- upon which the liability remains to the extent of Rs. 25,750/-. Further defence of the accused is that he had repaid the outstanding amount of Rs. 25,750/- to the complainant. For the said outstanding amount, accused has proved that he had paid the part payment of Rs.10,000/- to the employee of the complainant namely Rajesh under his signatures on the back side of the Ex.DW3/1. The said receiving of the said part amount of Rs. 10,000/- is Ex. DW3/2.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-16", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "28. Through the testimonies of the DW1 and DW2, the accused intends to establish on record that he had repaid the remaining amount of Rs.15,750/- to the complainant by way of cheque of his brother in law i.e. the cheque no. 650948 dated 20.06.2009 drawn on Delhi State Co-operative Bank Ltd., Samaypur Badli, Delhi from SB A/c No. 1685 of Sh. Mahesh Sharma.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-17", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "29. The testimony of the bank official i.e. DW1 establishes on record that payment of Rs. 15,750/- through the above said cheque has been cleared / encashed CC No.1283/1 page no.9/11 in the account of complainant. The testimony of DW2 i.e. Sh. Mahesh Sharma reveals that he had issued the cheque bearing no. 650948 dated 20.06.2009 drawn on Delhi State Co-operative Bank Ltd., Samaypur Badli, Delhi in favour of the complainant on the asking of accused in lieu of the discharge of the remaining liability of the accused. The complainant has failed to explain the details for which the above said cheque bearing no. 650948 dated 20.06.2009 drawn on Delhi State Co- operative Bank Ltd., Samaypur Badli, Delhi has been encashed in his account. Further the accused has not brought on record any iota of evidence regarding his business dealing or business transaction with accused no.2 at any point of time. Meaning thereby, the clearance / encashment of the payment vide cheque bearing no. 650948 dated 20.06.2009 drawn on Delhi State Co-operative Bank Ltd., Samaypur Badli, Delhi is not regarding any independent transaction but is for the payment of the remaining liability of the accused as per his plea of defence. Therefore, the plea of defence raised by the accused is highly believable. \n\n30. Therefore, I am of the opinion that the alleged issuance of the cheques in question by the accused to the complainant for the alleged transaction is highly improbable and is not acceptable hence, the possibility of misusing of the cheques in question of the accused cannot be ignored. Considering the above said facts of the case, the accused a raises grave doubt on the alleged liability by proving the repayment of the alleged amount of the cheque prior to the dishonor of cheque in question.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-18", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "31. It is well settled law that in a criminal case, prosecution has to stand upon its own legs and it cannot take the advantage of the fact that accused has not led cogent defence evidence or accused is having a weak defence. The defence raised by the accused along with the evidence placed on record are cogent proof in support of the defence version makes it highly probable that the cheque in question was not issued towards the discharge of liability as alleged by the complainant and at the same time it weakens the foundation fabrics of the present complaint case. The suspicious circumstances rising in the present case will certainly give advantage to the accused. Moreover, the complainant has concealed the material facts from the court and had not come to the court with clean hands and his conduct is not of a prudent man. Hence, in the present case, the accused raises a cogent suspicious CC No.1283/1 page no.10/11 circumstances in the version of the complainant which belies the foundation of the present complaint case and same is sufficient to rebutt the presumption that the cheques in question were not for discharging the legal liability. \n\n Conclusion\n\n32. I have gone through the entire material on record carefully and heard the arguments advance by the counsel for parties at length. After analyzing the evidence led by the parties, I am of the opinion that accused has been successful in rebutting the presumptions under NI Act by raising cogent suspicion in the version of complainant and on the scale of preponderance of probabilities that the cheques in question may not be given to the complainant as alleged by him.", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "05371c82f9e9-19", "Titles": "Sh. Aman Vij vs . on 18 February, 2014", "text": "33. The rebuttal does not have to be conclusively established but such evidence must be adduced before the court in support of the defence that Court must either believe the defence to exist or consider its existence to be reasonably probable. In the present case accused has not only been able to raise a probable defence and adduced sufficient evidence to prove his defence but also been able to succeed in shaking the very foundation of the fabrics of the case of the complainant. \n\n34. Once the accused has discharged his initial burden of proving its defence the onus rebutted back on the complainant. However in the present case, complainant has miserably failed to prove the case beyond reasonable doubt. \n\n35. Therefore, from the above discussions, this court is of considered view that in the circumstances appearing from the record of the case, the accused is entitled to the benefit of doubt. Accordingly, the accused is entitled to be acquitted and hereby stands acquitted of the offence under Section 138 of Negotiable Instrument Act. \n\nAnnounced in open court on                       SATVIR SINGH LAMBA\n18th Day of February, 2014                       MM-01(NI.ACT)WEST/DELHI\n\n\n\n\n                                                             CC No.1283/1 page no.11/11", "source": "https://indiankanoon.org/doc/41720030/"}
+{"id": "746d76891461-0", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "IN THE COURT OF SHRI RAVINDER SINGH\u00adII\n                           METROPOLITAN MAGISTRATE\n                           DWARKA COURTS, NEW DELHI\n\nCase No. : 4339/14\nUnique Case ID No. : 0240SR0126322013\n\n\nSmt Pushpa\nW/o Sh. Parveen Kumar\nR/o Flat No\u00ad122, Pocket 13, Phase\u00adI\nDwarka, Near Mangla Puri DDA Office\nNew Delhi\u00ad110045.                    ...................................Complainant\n\n                                         Versus\n\nSmt. Bandana Jha\nW/o Sh. Mihir Kumar Jha\nR/o Flat No\u00ad191, Pocket 13, Phase\u00adI\nDwarka, Near Mangla Puri DDA Office\nNew Delhi\u00ad110045.                                 ....................................Accused\n\n\nDate of Institution:                                                        15.05.2013\nPlea of the accused:                                                     Pleaded Not Guilty\nDate of Reserving Judgment:                                                 03/05/2014\nSentence or final Order:                                                    Convicted\nDate of Judgment:                                                           03/05/2014\n\n\n                                      JUDGMENT\n BRIEF FACTS AND REASONS FOR DECISION OF THE CASE\n\n1. By way of the present judgment, I shall decide the complaint case U/s 138 Negotiable Instrument Act 1881 (hereinafter Said as NI Act) filed by the complainant Smt Pushpa against the accused Smt. Bandana Jha W/o Sh. Mihir Kumar Jha.      \n PROLOGUE (COMPLAINANT'S VERSION)", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-1", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "2. The encapsulated facts as perceptible from the complaint are that the accused being personally known to the complainant had taken personal loan of Rs. 1,20,000/\u00ad from the complainant for her personal Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 1/11 needs and the same was granted to the accused by the complainant on the assurance of the husband of the accused. It is further alleged that the said loan was granted by the complainant to the accused in the presence of commonly known persons. It is further alleged that in order to discharge her liability towards the loan amount the accused issued two post dated cheque bearing no. 239303 & 239305 dated 12.03.2013 &. 14.03.2013 respectively amounting to Rs. 60,000/\u00adeach both drawn on State Bank of Patiala, Defence Colony, Ring Road Branch, in favour of the complainant. It is further alleged that the husband of the accused i.e Mihir Kumar Jha assured the complainant that the said cheques shall be encashed on its presentation without any hindrance. It is further alleged that thereafter complainant presented the aforesaid cheques in question for encashment with its banker Oriental Bank Of Commerce, Palam Branch and the same were dishonoured vide cheque returning memo dated 20.03.2013 both with remarks \"Account Closed\". It is further alleged that thereafter the complainant has given a legal notice of demand dated 03.04.2013 to the accused which was sent to the accused through Speed post and courier thereby calling upon the accused to make the payment of the cheque amount. It is alleged that the accused has failed to pay any sum in response to the legal notice of demand as a result of which the complainant has filed the present complaint for prosecution of the accused U/s 138 of", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-2", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "of which the complainant has filed the present complaint for prosecution of the accused U/s 138 of the NI Act.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-3", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "3. After the complaint was filed, the complainant Smt Pushpa led her pre\u00adsummoning evidence by way of an affidavit and after hearing the counsel for the complainant and considering the entire material and documents on record, summons were issued against the accused by the court vide order dated 16.05.2013 for the offence U/s 138 of NI Act. On appearance of the accused a separate notice U/s 251 of the Criminal Procedure Code, 1973 (hereinafter said as the Code) dated 25.07.2013 was given to the accused to which she pleaded not guilty and claimed trial. Thereafter, the accused moved an application under section 145(2) of the NI Act and the said application of the accused was allowed and the Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 2/11 matter was listed for complainant's evidence.  \n COMPLAINANT'S EVIDENCE\n\n4. The complainant Smt Pushpa got herself examined as CW1 and adopted her pre summoning evidence affidavit Ex. CW1/A. CW\u00ad1 also relied upon documents Ex. CW1/1 to Ex. CW1/7. Ex. CW1/1 & Ex. CW1/2 are the original cheque's in question, Ex. CW1/3 is the cheque returning memo, the legal notice of demand dated 03.04.2013 is Ex. CW1/4 and courier receipt and speed post receipt vide which the aforesaid notice was sent is Ex. CW1/5 & Ex. CW1/6 respectively, Ex. CW1/7 is the speed post tracking report.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-4", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "5. The complainant also examined one Mahender Singh as CW\u00ad2. CW\u00ad2 tendered his evidence by way of affidavit Ex. CW2/A. Both CW\u00ad1 & Ex. CW2 were duly cross examined by Ld. Counsel for the accused. Thereafter, the complainant's evidence was closed at request of the complainant. \n\n STATEMENT OF ACCUSED U/S 313 OF THE CODE", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-5", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "6. Thereafter the statement of accused was recorded U/s 313 of the Code in which all the incriminating evidence along with exhibited documents were put to the accused Bandana Jha. The accused denied that she knows the complainant and also denied that she has taken personal loan from the complainant to the tune of Rs. 1, 20,000/\u00ad from the complainant for her personal need. The accused person denied that the loan was granted to her by the complainant in the presence of Mahender Kumar (CW\u00ad2) in the month of April, 2011. The accused further denied that CW\u00ad2 (Mahender Kumar) also gave an amount of Rs. 15,000/\u00ad to the complainant for advancing her the entire loan amount of Rs. 1,20,000/\u00ad. It is further stated by the accused that the cheque's bears her signatures but she denied the contents of the same. The accused further stated that she has given blank cheques to one Parveen Pal who is Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 3/11 the husband of the complainant as she has stood guarantor for one Sindhu Vikas Sahu who has taken loan from Parveen Pal the husband of the complainant. It is further submitted by the accused that she is not aware about the dishonor of the cheque's in question. The accused further denied the receipt of legal demand notice and stated that the present complaint case is a false case and the complainant has deposed against her falsely. The accused further stated that Sandhu Vikas Sahu has repaid the loan to Parveen Pal who is the husband of the complainant in presence of one Shelly and Vinod. It is also stated by the accused that she was made to sign some blank papers by Parveen Pal the husband of the complainant. It", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-6", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "was made to sign some blank papers by Parveen Pal the husband of the complainant. It is also stated by the accused that when she demanded back her security cheques from Parveen Pal the same were not returned by him and she was told to collect the same later on. It is also submitted by the accused that the cheque's in question were given as security cheques and she owes no liability towards the complainant. Thereafter the case was fixed for defence evidence.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-7", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "DEFENCE EVIDENCE. \n\n7. The accused examined herself as a defence witness DW\u00ad1. The defence witness DW\u00ad1was duly cross examined by Ld. Counsel for the complainant. Thereafter defence evidence was closed at request of the accused and the case was listed for final arguments. \n\n FINAL ARGUMENTS\n\n8. Final arguments were addressed on behalf of both the parties. I have heard Ld. Counsels for both the parties and perused the entire record of the case file Before proceeding further it is imperative for me to go through the relevant provisions of law. \n\n Section 138 of the Negotiable Instruments Act provides that:\n \"Dishonour of cheque for insufficiency, etc, of funds in the account:Where any cheque drawn by a person on an account maintained by him with a banker for payment of Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 4/11 any amount of money to another person from out of that account for the discharge, in while or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-8", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;\n (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and\n\n (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. \n\n Explanation:For the purposes of this section, \"debt or other liability\" means a legally enforceable debt or other liability. \n\nAPPRECIATION OF EVIDENCE IN THE LIGHT OF THE INGREDIENTS OF SECTION 138 OF THE NI ACT AND THE DEFENCE RAISED BY THE ACCUSED", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-9", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "9. It is not disputed by the accused that the Cheque's in Question Ex. CW1/1 & Ex. CW1/2 are drawn on the account maintained by her. Signature's on the cheque's in question has also not been disputed by the accused. Further the presentation, dishonor of the Cheque's in question and the cheque returning memo has also not been challenged by the accused. Therefore in view of the evidence on record it stands proved that the cheque's in question Ex. CW1/1 & Ex. CW1/2 were signed by the accused and the same were drawn on account maintained by her. Further it also stands duly proved that the cheque's in question Ex. CW1/1 & Ex. CW1/2 were dishonored vide cheque returning memo Ex. Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 5/11 CW1/3 dated 20.03.2013 both with the reason \"Account Closed\" \n10. From the perusal of the entire evidence it has come to fore that two fold defence has been taken by the accused. Firstly, that she has not been served with the legal demand notice by the complainant. And secondly that the blank signed cheque's in question Ex. CW1/1 & Ex. CW1/2 has been issued by her to the husband of the complainant Parveen Pal as a security when she stood as a guarantor for Sandhu Vikas Sahu who took loan from the husband of the complainant Parveen Pal and not in discharge of her loan liability as alleged by the complainant.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-10", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "11. Coming to the first line of defence taken by the accused that she has not been served with the legal demand notice from the complainant, it is pertinent to note that the complainant Smt. Pushpa who has examined herself as CW\u00ad1 has specifically stated in her evidence affidavit Ex. CW1/A that she got issued the legal notice of demand dated 03.04.2013 to the accused which is Ex. CW1/4 and it was sent to the accused by speed post and courier on 05.04.2013 and 08.04.2013 respectively, receipts of which are Ex. CW1/6 & Ex. CW1/5 respectively. The complainant has also tendered the speed post tracking report as Ex. CW1/7.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-11", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "12. The accused has denied the receipt of legal demand notice both at the time of framing of Notice U/s 251 of the Code and also in his state\u00ad ment U/s 313 of the Code. I have perused the legal notice of demand. It bears the correct address of the accused and the speed post receipt Ex. CW1/5 issued by the postal authorities in ordinary course is also on record. Further Section 114 Illustration (f ) of Indian Evidence Act, 1872 also raises a rebuttable presumption in favour of the complainant that common course of business has been followed in a particular case, that is to say, when a letter is sent by post by prepaying and properly addressing it, the same is presumed to have been received by the addressee. Further\u00ad more the speed post tracking report Ex. CW1/7 is also on record by the Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 6/11 complainant which shows the status as 'delivered' and the same has not been disputed by the accused in evidence. Except denial no evidence has been lead by the complainant to corroborate her stand. Therefore, mere denial on the part of the accused at the time of framing of Notice U/s 251of the Code and also in her statement U/s 313 of the Code would not be sufficient to dislodge the burden of presumption casted upon her by Section 114 Illustration (f ) of Indian Evidence Act, 1872. Moreover, sum\u00ad mons was served upon the accused at the address mentioned in the com\u00ad pliant and the accused has put his appearance in compliance thereof.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-12", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "13. In C.C. Alavi Hazi Vs. Palapetty Mohd. & Anr. (2007) 6 Supreme Court case 555, it was held that the course open to the drawer where he claims not to have received the notice sent by post but has received copy of the complaint with the summons is that he can within a 15 days of the receipt of summons make payment of the cheque amount and he then cannot contend that there was no proper service of notice. \n\n14. Therefore, considering the evidence on record I find that the accused has not brought any credible evidence to rebut the presumptions provided in Section 114, Illustration (f ) of the Evidence Act, 1872 and further looking at the mandate given by the H'onble Supreme Court in C.C. Alavi Hazi Vs. Palapetty Mohd. & Anr (Supra), I hold that the legal notice of demand Ex. CW1/4 was duly served upon the accused. \n\n15. Now coming to the second line of defence which has been taken by the accused that she has issued the blank signed cheque's in question Ex. CW1/1 & Ex. CW1/2 to the husband of the complainant Parveen Pal as a security when she stood as a guarantor for Sandhu Vikas Sahu who took loan from the husband of the complainant Parveen Pal and not in discharge of her loan liability as alleged by the complainant.  \n16. Before I advert to the second line of the defence taken by the accused it is imperative for me to go through the provisions of Sections Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 7/11 118(a) and 139 of the Act which read as under:\n \"118. Presumptions as to negotiable instruments.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-13", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "--Until the contrary is proved, the following pre\u00ad sumptions shall be made\u00ad\n (a) of consideration.--that every negotiable instru\u00ad ment was made or drawn for consideration, and that every such instrument when it has been ac\u00ad cepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;\" \n\n \"139. Presumption in favour of holder.--It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the na\u00ad ture referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.\" \n\n17. The Division bench of Hon'ble Supreme Court in Krishna Janard\u00ad han Bhat v. Dattatraya G. Hegde, (2008) 4 SCC 54, has held that the ac\u00ad cused can discharge the burden of presumption U/s 118 and U/s 139 of the NI Act by raising a probable defence on the strength of 'preponder\u00ad ance of probabilities'.  \n18. In Rangappa Versus Sri Mohan AIR 2010 SC 1898 the Hon'ble Supreme Court has held that it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the com\u00ad plainant in order to raise such a defence and it is conceivable that in some cases the accused may not even adduce evidence of his/her own.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-14", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "19. From the reading of the above said provisions and the judgments the position of law which emerges is that once execution of the promis\u00ad sory note is admitted, the presumption under Section 118(a) and Section 139 of the NI Act would arise that it is supported by a consideration. Such a presumption is rebuttable in nature. The accused can prove the non\u00ad existence of a consideration by raising a probable defence. If the accused Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 8/11 discharges the initial onus of proof by showing that the existence of con\u00ad sideration was improbable or doubtful or the same was illegal, the onus would shift to the Complainant who will be obliged to prove it as a mat\u00ad ter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the accused of proving the non\u00adexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by ref\u00ad erence to the circumstances upon which he relies. In case, where the ac\u00ad cused fails to discharge the initial onus of proof by showing the non\u00adexis\u00ad tence of the consideration, the complainant would invariably be held en\u00ad titled to the benefit of presumption arising under Section 118(a) and Sec\u00ad tion 139 of the NI Act in his favour.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-15", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "20. Now coming back to the case in hand, in the instant case the complainant has examined herself as CW\u00ad1 and stated that the accused is known to her and the accused has approached her for grant of the loan, and accordingly a loan of Rs 1,20,000/\u00ad was granted to the accused by the complainant and in order to discharge the loan liability the cheque's in question Ex. CW1/1 & Ex. CW1/2 has been issued by the accused. The complainant in support of her claim has also examined one Mahender Singh as CW\u00ad2. CW\u00ad2 Mahender Singh in his evidence supported the stand of the complainant and stated that the entire loan transaction between the complainant and the accused has taken place in his presence. CW\u00ad2 also stated that he has also given Rs. 15,000/\u00ad to the complainant at her request as she needed the same for advancing the loan to the accused. The accused has examined herself as DW\u00ad1 and denied the allegation of the complainant and stated that the blank signed cheque's in question Ex. CW1/1 & Ex. CW1/2 has been issued by her to the husband of the complainant Parveen Pal as a security when she stood as a guarantor for Sandhu Vikas Sahu who took loan from the husband of the complainant Parveen Pal and not in discharge of her outstanding loan liability as alleged by the complainant. Perusal of the entire evidence reveals that except denials and suggestion the accused has not lead any cogent evidence to corroborate her stand and dent the stand of the Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 9/11 complainant. Further it is also surprising to see that the accused has not even examined the said Sandhu Vikas Sahu in her defence for whom she has purportedly issued the cheque's in", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-16", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "Sandhu Vikas Sahu in her defence for whom she has purportedly issued the cheque's in question Ex. CW1/1 & Ex. CW1/2 to the husband of the complainant. It is trite to say that mere denial on the part of the accused and putting suggestions to the complainant's witness and giving explanations without leading any defence to corroborate her stand would not absolve her from any liability. It was for the accused to prove the circumstances under which the cheque's in question Ex. CW1/1 & Ex. CW1/2 were issued by her by leading cogent evidence so as to discharge and rebut the presumption raised against her by the Statute U/s 139 and 118 (a) of the NI Act and mere simplicitor denying the allegations would not be at her advantage. The accused has not brought any material on record and also no cogent explanations or any probable defence which would rebut the shadow of presumption existing in favour of the Complainant. Therefore, this court do not find any force in the arguments advanced by the learned counsel for the accused that she has succeeded in rebutting the presumption under Section 139 of the Act.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-17", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "21. From the materials brought on record and evidence lead by the complainant it is sufficient to hold that the accused has taken loan from the complainant and has issued the cheque's in question Ex. CW1/1 & Ex. CW1/2 in discharge of her liability.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-18", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "22. Now coming to the issue that except signatures other particulars in the cheque's in question Ex. CW1/1 & Ex. CW1/2 has not been filled by the accused, for this defence also except arguments, denials and sugges\u00ad tions accused has not brought any evidence on record to support her stand i.e. except signatures she has not filled the other particulars in the cheque's in question. Furthermore even believing the stand of accused to be correct, still there is also no evidence on record to show that she has not even authorized the complainant to fill the said particulars. More so it is trite to say that by putting the name and date there is no material Case No. : 4339/14 Smt Pushpa Versus Smt. Bandana Jha Page 10/11 alteration on the cheque U/s 87 of the NI Act as there is no rule of banking business that the name of the payee as well as the amount should be written by the drawer himself, as no law provides that in case of cheque the entire body has to be written by the drawer only. Therefore, once the signature on the cheque in question is admitted as has hap\u00ad pened in the case in hand the plea that particulars in the cheque in ques\u00ad tion has not been filled by the drawer is of no consequence unless some cogent evidence has been lead by the accused that he/she has not ex\u00ad pressly or impliedly authorized the payee to fill the particulars therein. (See Ravi Chopra Vs. State and Another, 2008(2) JCC (NI) 169, Delhi, Jaipal Singh Rana Vs. Swaraj Pal 149 (2008) DLT 682,) Therefore, this defence of the accused also holds no ground.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-19", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "23. Considering the evidence on record, It stands duly proved that the accused has miserably failed to rebut the presumptions U/s 118 (a) and section 139 of the NI Act. Furthermore, accused has also failed to prove that she has made payment to the complainant within 15 days from the receipt of the legal demand notice.", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "746d76891461-20", "Titles": "Case No. : 4339/14 Smt Pushpa vs Smt. Bandana Jha Page 1/11 on 3 May, 2014", "text": "24. In view of the aforesaid discussion, I hereby hold that the complainant has proved and substantiated its allegation against the accused and all the ingredients of Section 138 of NI Act also stands proved against the accused. Accordingly, Smt. Bandana Jha W/o Sh. Mihir Kumar Jha is hereby convicted of the offence u/s 138 NI Act. \n\nThis judgment contains 11 pages. Every Page of this judgment has been signed by me Copy of this judgment be given to the convict free of cost. \n\nAnnounced in the open Court                       (RAVINDER SINGH \u00adII)\nDated 03.05.2014                                      MM (NI Act \u00ad07)\n                                                   DWARKA/NEW DELHI.\n\n\n\n\nCase No. : 4339/14             Smt Pushpa Versus Smt. Bandana Jha                       Page 11/11", "source": "https://indiankanoon.org/doc/186294680/"}
+{"id": "0757f20ba549-0", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 1 of  Pages 14\n\n\n      IN THE COURT OF SH. GAJENDER SINGH NAGAR\n METROPOLITAN MAGISTRATE, KKD, EAST, NEW DELHI \n\n Complaint No. 6223/10\n Unique ID No. 02402R0123382010\n PS. Vivek Vihar\n\n M/s SBL (P) Ltd\n through its Authorized Representative \n Sh. D.C. Varshney,\n S/o Late Sh. J.L. Varshney, \n Office at 2 Commercial Complex,\n Shreshtha Vihar, Delhi\u00ad92               ......... Complainant.\n\n                        Versus \n 1. Choudhary Homeso Pharmacy\n 2. Sunil Kumar,\n C\u00ad394 Mohan Gali, Nanak Chand Basti,\n Kotla Mubarakpur\n Delhi\u00ad110003                            .........  Accused.\n\nCOMPLAINT U/s 138 OF THE NEGOTIABLE INSTRUMENTS ACT\n\n Offence complained of                                   :       U/s 138 N.I. Act\n\n Date of commission of offence                           :       09.04.2010\n\n Plea of Accused                                         :       Not guilty\n\n Complaint filed on                                      :       03.05.2010\n\n Final Arguments heard & Concluded on    : 07.12.2013\n\n Date of decision of the case                            :       18.12.2013\n\n Final order                                             :       Acquittal\n     CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 2 of  Pages 14\n\n\nBRIEF FACTS AND REASONS FOR DECISION OF THE CASE", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-1", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "BRIEF FACTS AND REASONS FOR DECISION OF THE CASE\n\n1.  By way of the present judgment, this court shall decide the \n\ncomplaint   case   U/s   138   Negotiable   Instrument   Act   1881   (as \n\namended   up   to   date)   filed   by   the   complainant   SBL   (P)   Ltd \n\nthrough   its   AR   Sh.   D.C.   Varshney,   against   the   accused   M/s \n\nChaudhary Homeo Pharmacy and its proprietor Sunil Kumar.  \n\n2. The prosecution story in brief necessary for the disposal of the \n\npresent case is that,  complainant is a private limited company \n\nincorporated under the Indian Laws and carries on the business \n\ninter alia, of preparation, production, manufacture, supply and \n\nsale of Herbal / Homeopathic Medicines/ goods and the present \n\ncase has been filed by the company through its AR. The accused \n\nhas placed the orders for the purchase of herbal / homeopathic \n\nmedicines / goods from the complainant and in terms of their \n\nbusiness   transaction   as   on   02.03.2010   the   accused   firm   was \n\nliable   to   pay   Rs.82,057.34   to   the   complainant   against   the \n\npurchases. The accused firm was also liable to pay interest on \n\nthe due amount at the rate of 15% per annum from 02.03.2010 \n\nto onwards till the date of realization of the amount with up to \n\ndate interest. To discharge the liability of Rs. 82,057.34 towards \n\nthe   complainant   company   the   accused   issued   a   post   dated", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-2", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "the   complainant   company   the   accused   issued   a   post   dated \n\ncheque bearing no.004661 dated 02.03.2010 for the sum of Rs.\n\n82,057.34   drawn   on  Canara   Bank,  South  Extention  branch  in \n\nfavour of  the complainant but on presentation the said cheque \n\nwas returned back dishonored with the remark \"INSUFFICIENT \n      CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 3 of  Pages 14\n\n\nFUND\"   vide   dishonour   memos   dated   06.03.2010.   Thereafter   a \n\nlegal  notice  was   sent  to  the  accused  on  23.03.2010  by  way  of \n\nregd   AD   and   UPC.   It   is   further   alleged   that   despite   service   of \n\nlegal   notice   accused   has   not   paid   the   cheque   amount   to   the \n\ncomplainant till the filling of the case.\n\n3.        After   the   complaint   was   filed,   summons   were   issued \n\nagainst the accused vide order dated 14.05.2010 for the offence \n\nU/s 138 Negotiable Instrument Act 1881. On appearance of the \n\naccused   notice U/s 251 Cr.P.C. Dated 10.08.2011  was framed \n\nupon  the   accused  to   which  he  pleaded  not  guilty  and   claimed \n\ntrial. \n\n4.        In order to prove the case, the AR of the complainant Sh.", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-3", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "4.        In order to prove the case, the AR of the complainant Sh. \n\nD.C.   Varshney   examined   himself   as  CW\u00ad1  and   reiterated   the \n\ncontents of the complaint on oath before this court and filed an \n\naffidavit in evidence.   He also exhibited the board resolution as \n\nEx. CW1/1, certificate of incorporation as Ex. CW1/2, Copies of \n\nmemorandum and article of association as Ex. CW1/3, Original \n\ninvoice   /   bills   are  Ex.   CW1/4,   Ex.   CW1/5,   Ex.   CW1/6,  Ex. \n\nCW1/7, Ex. CW1/8, Ex. CW1/9, Ex. CW1/10 & Ex. CW1/11, \n\noriginal cheque bearing No. 004661 as Ex. CW1/12, the cheque \n\nreturning   memo   as  Ex.   CW1/13,   the   legal   notice   of   demand \n\ndated   23.03.2010   as  Ex.   CW1/14,  The   original   receipts   of \n\nregistered post as Ex. CW1/15 & U.P.C. as Ex. CW1/16, the net \n\ntracking report as Ex. CW1/17A, Ex. CW1/17B, Ex. CW1/17C \n      CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 4 of  Pages 14\n\n\n& Ex. CW1/17D, Returned AD as Ex. CW1/18A, Ex. CW1/18B,", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-4", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "Ex. CW1/18C & Ex. CW1/18D. During the cross examination of \n\nCW\u00ad1 the witness also exhibited trade policy of the complainant \n\ncompany as  Ex. CW1/25  ( no document has been exhibited at \n\nserial no. Ex. CW1/19 to Ex. CW1/24), copy of minutes of board \n\nmeeting   as  Ex.   CW1/26(OSR).   Thereafter,   the   complainant \n\nevidence was closed at request. \n\n5.    After   that   on   03.11.2012   the   statement   of   accused   was \n\nrecorded U/s 313 Cr.P.C in which all the incriminating evidence \n\nalong with exhibited documents were put to the accused. In his \n\nstatement it is submitted by the accused that he had made bill to \n\nbill   payment   to   the   complainant   company   and   he   does   not \n\nremember   what   was   outstanding   on   him   but   even   that \n\noutstanding   was   covered   by   the   bonus   schemes   and   other \n\nschemes floated by the complainant company, hence, he was not \n\nliable   to   pay   anything   to   the   complainant.   The   cheque   in \n\nquestion was given as security to the complainant company in \n\nblank signed condition. At the time of handing over this cheque \n\nhe had also taken receiving from the official of the complainant \n\ncompany   stating   that   the   cheque   in   question   was   given   as \n\nsecurity along with one another blank signed cheque bearing no. \n\n004662  against  which   a   connected  case   has   been  filed   by  the", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-5", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "same   company  in  the  name   SBL   Industries  (P)  Ltd.  Thereafter \n\nthe case was fixed for Defence evidence. The accused examined \n\nhimself as  DW\u00ad1  and retreated the defence as stated by him in \n       CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 5 of  Pages 14\n\n\nhis statement U/s 313 Cr. PC, and submitted that in the year \n\n2005\u00ad06 MR of the company had asked him to give two blank \n\nsigned security cheques for providing credit facility, that MR had \n\nalso   given   acknowledgment   of   taking   those   cheques   which   is \n\nexhibited as  Ex. DW1/1  (earlier marked as Mark X\u00ad1) (Original \n\nin   CC   no.   6222/10   copy   exhibited   in   CC   No.   6223/10).   It   is \n\nfurther submitted by him that the series from which cheque in \n\nquestion has been issued was utilized by him in the year 2006 \n\nitself. He filed his statement of bank account on record as  Ex. \n\nDW1/2, Ex. DW1/3 & Ex. DW1/4. He had also filed on record \n\nphotocopy of a letter dated 26.12.2009 sent by SBL (P) Ltd to the \n\naccused   which   is   marked   as   Mark   CW1/D1.   Sh.   R.P.   Singh, \n\nofficial   Canara   Bank   examined   as   DW\u00ad2.   Who   exhibited   bank \n\nstatement of the accused as  Ex. DW2/A. No other witness was", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-6", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "statement of the accused as  Ex. DW2/A. No other witness was \n\nexamined and Defence Evidence was closed and the matter was \n\nfixed for final arguments.\n\n6.     I have heard Ld. counsels and perused the entire record of \n\nthe case file and the evidence on record. Both the counsel have \n\nreferred   to   a   number   of   cases,   I   have   discussed   them   at   the \n\nrelevant place. \n\n7.     Before   proceeding   further   let   us   go   through   the   relevant \n\nprovisions of law.   The main ingredient of  Section 138 of the \n\nNegotiable Instruments Act are as follows:\u00ad\n\n     (a) The accused issued a cheque on an account maintained by \n\n        him with a bank.\n       CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 6 of  Pages 14\n\n\n     (b) The said cheque has been issued in discharge of any legal \n\n        debt or other liability.\n\n     (c) The   cheque   has   been   presented   to   the   bank   within   the \n\n        period of six months from the date of the cheque or within \n\n        the period of its validity.\n\n     (d) When the aforesaid cheque was presented for encashment, \n\n        the same was returned unpaid/ dishonoured.\n\n     (e) The Payee of the cheque issued a legal notice of demand \n\n        within 30 days from the receipt of information by him from \n\n        the Bank regarding the return of the  cheque.\n\n     (f) The   Drawer   of   the   cheque   failed   to   make   the   payment", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-7", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "within 15 days of the receipt of the aforesaid legal notice of \n\n        demand.\n\n        If the aforesaid ingredients are satisfied then the drawer of \n\nthe   cheque   shall   be   deemed   to   have   committed   an   offence \n\npunishable u/s 138 Negotiable Instruments Act.\n\n8.      Now let us deal with the each ingredient of the section 138 \n\nof Negotiable Instruments Act to see whether the case against the \n\naccused has been proved or not.\n\nWHETHER THE CHEQUE IN QUESTION HAS BEEN ISSUED IN \n\nDISCHARGE OF ANY LEGAL DEBT OR OTHER LIABILITY:\n\n9.      It is submitted by the CW\u00ad1 that the accused has issued \n\nthe cheque in question to discharge his liability. However, it is \n\nsubmitted by the accused that the cheque was issued as security \n\nwithout   filling   in   the   amount   and   date,   however,   the   name   of \n       CC No.6223/10   SBL (P) Ltd  Vs.  Chaudhary Homeo Pharmacy  Page no. 7 of  Pages 14\n\n\npayee on the cheque is SBL (P) Ltd and signature on the cheque \n\nare admitted by the accused to be his own, hence, prima facie it \n\nis   established   that   cheque   was   issued   in   the   name   of \n\ncomplainant. \n\n10.    At this  stage  let us go  through the  relevant  provisions  of \n\nlaw.   There  is  a  presumption  in   favour  of   the   complainant  u/s \n\n118 (a) Negotiable Instruments Act  that until the contrary is \n\nproved, it will be presumed that every negotiable instrument was", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-8", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "proved, it will be presumed that every negotiable instrument was \n\ndrawn for consideration and every such instrument when it has \n\nbeen accepted, endorsed, negotiated or transferred was accepted, \n\nendorsed, negotiated or transferred for consideration.\n\n11.    Further Section 139 of the Negotiable Instruments Act,  \n\n1881 provides that it shall be presumed until the contrary  \n\nis proved that the holder of the cheque received the cheque  \n\nof the nature referred in the Section 138 for the discharge  \n\nin whole or in part of his debt or liability.\n\n12.    Now it will have to be examined whether the accused has \n\nrebutted   the   presumption   as   contemplated   by   Section   118   (b) \n\nand Section 139 of Negotiable Instruments Act. \n\n13.    It has been observed by the Hon'ble High Court of Delhi in \n\nV.S. Yadav    Vs.   Reena 172(2010) DLT 561  that the offence \n\nu/s 138 NI Act is a technical offence and the complainant is only", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-9", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "u/s 138 NI Act is a technical offence and the complainant is only \n\nsupposed   to   prove   that   the   cheques   issued  by   the   respondent were dishonored, his statement that cheques were issued against liability or debt is sufficient proof of the debt or liability and the CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 8 of Pages 14 onus shifts to the respondent / accused to show the circumstances under which the cheques came to be issued and this could be proved by the respondent only by way of evidence and not by leading no evidence.  \n14. Therefore after the establishment of the fact that the cheque was issued by the accused and specific statement of the complainant as stated above regarding liability of the accused the burden to rebut the presumption shifted to the accused. It is established principle of law that presumption of law as raised Under sections 138 & 118 of the N.I. Act can be rebutted only by cogent evidence. In Kumar Exports V. Sharma Carpets (2009) 2 SCC 513 it was held by Hon'ble Supreme Court that:\n\n To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the non\u00adexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 9 of Pages 14", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-10", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "15. In the present matter the following circumstances shows that the defence of the accused is true one:", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-11", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "i) The accused has submitted that in the year 2005 or 2006 he was made to handover two undated and un\u00adamounted security cheques to the SBL PVT LTD. It is accepted by CW\u00ad1 that there was an employee of the complainant company namely Mr. R. Chandan who was head of the marketing department . It is also accepted by CW\u00ad1 that Mr. R. Chandan was dealing with the accused company. CW\u00ad1 had submitted, \" I do not know that whether Mr. R. Chandan has collected the subject cheques in question from the accused as security\". Thus CW\u00ad1 has not specifically denied that the cheque in question might have been collected by Mr. R. Chandan as security. When a letter dated 31.10.2006 written by Mr. R. Chandan addressed to accused firm was shown to this witness it is submitted by him that he does not identify signatures of Mr. R. Chandan but he accepted that the letter dated October 31, 2006 is on their companies letter head. This document was earlier marked as Mark X1, however, later on the same was exhibited in the examination of the accused as DW1/1. This letter inspire confidence of this Court as a genuine one as the same is admittedly on the letter head of SBL Pvt Ltd addressed to Chaudhary Homeo Pharmacy and has been produced in court by the accused who is proprietor of Chaudhary Homeo Pharmacy i.e. addressee of the letter, signature of Mr. R. Chandan on this letter are apparently similar to his signature printed on the first page of Ex. CW1/25 i.e. the CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 10 of Pages 14 trade policy of SBL PVT LTD. All these things made this letter a reliable", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-12", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "Pages 14 trade policy of SBL PVT LTD. All these things made this letter a reliable document. It is written in the letter, \" we thankfully acknowledge receipt of your letter dated 30.10.2006 wherein you have sent two undated blank cheques no. 004661 & 004662 of Canara Bank South Ext. Branch, Delhi branch as security against default of payment terms against 45 day's credit.\" Thus this document clearly proves that the cheque in question along with another cheque bearing no. 004662 were given by the accused to SBL Pvt Ltd and that too for the purpose of security only in the year 2006.", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-13", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "ii) The accused has deposed U/s 315 Cr. PC that the cheque in question was given by him in the year 2006, however, it is submitted by CW\u00ad1 that the cheque in question was given 2\u00ad3 days prior to the date of the cheque (date of the cheque is 02.03.2010). To prove his point accused has filed on record his statement of bank account which were exhibited as Ex. DW1/2, Ex. DW1/3 & Ex. DW1/4 and to further support his defence he called bank witness with his account statement. Who exhibited his bank account statement as Ex. DW2/A. The bank account statements (account no. GEGA000073419, M/s Chaudhary Homeo Pharmacy, Canara Bank, South Ex. Branch) of the accused exhibited on record show that the cheques of the same series i.e 0046.... were presented in his account as follows, cheque bearing no. 004603 was presented in his account for encashment on 05.10.2006, 004601 & 004611 on 12.10.2006, 004605 on 13.10.2006, 004607 on 16.10.2006, 004651 on CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 11 of Pages 14 17.10.2006, 004628 on 18.10.2006, 004650 on 19.10.2006, 004609 on 26.10.2006, 004658, 004625 & 004610 on 28.10.2006, cheque no. 004660 on 03.11.2006, 004633 on 07.11.2006, 004670 on", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-14", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "004633 on 07.11.2006, 004670 on 08.11.2006, 004631 on 10.11.2006, 004634 on 10.11.2006, 004635 on 11.11.2006, 004655 on 14.11.2006, 004700 on 14.11.2006, 004632 on 15.11.2006, 004616 on 15.11.2006, 004618 on 20.11.2006, 004657 on 22.11.2006, 004619 on 22.11.2006, 004620 on 23.11.2006, 004638 on 23.11.2006, 004636 on 23.11.2006, 004659 on 23.11.2006, 004621 on 24.11.2006, 004669 on 25.11.2006, 004637, 004639 & 004623 on 28.11.2006, 004641, 004666 on 01.12.2006, 004671 on 11.12.2006, 004672 on 12.12.2006, 004673 on 15.12.2006, 004676 & 004677 on 19.12.2006, i.e the cheque of the same series as cheque in question were mainly utilized during the last three months of the year 2006. Further statement of the bank account (account no. 0267261073419, Chaudhary Homeo Pharmacy, Canara Bank South Ex. Branch) of the accused brought by the banker shows that the cheques of the series 0046.... were not utilized / presented in the account of the accused from", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-15", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "of the series 0046.... were not utilized / presented in the account of the accused from 09.04.2007 till 21.01.2010. Thus it is proved that cheque of the series 0046.... were utilized by the accused in the year 2006 only. Hence, the version of the accused that the cheque in question along with cheque bearing no. 004662 was given as security in the year 2006 appears to be more reliable as cheques of the same series were utilized during that period only.", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-16", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 12 of Pages 14", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-17", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "iii) In the decision reported as 2006 (6) SCC 39 M.S. Narayana Menon @ Mani vs. State of Kerala & Anr., it was observed as under:\u00ad \"52. ................ If the defence is acceptable as probable the cheque therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act. \n\n It has also been held by Hon'ble High Court of Delhi in Ravi Kumar D v. State of Delhi and anr. (Manu / DE /1538/2011) that:\n 9. Plain reading of the above provision of law shows that criminal liability under Section 138 NI Act is attracted only if the dishonored cheque was issued for the discharge in whole or in part of any existing debt or liability. The Section does not apply to a cheque issued to meet future liability which may arise on happening of some contingency. Thus, it is clear that a post\u00addated cheque, if issued for discharge of a debt due, in the event of dishonor, would attract section 138 if the NI Act but a cheque issued not for an existing debt / liability but issued by way of security for meeting some future contingency would not attract Section 138 of the NI Act.", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-18", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "16. From the above stated discussion the defence of the CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 13 of Pages 14 accused that the cheque in question was given as security appears to be probable. Though in the present matter accused has admitted that he had received goods vide invoices Ex. CW1/4 to Ex. CW1/10, but that does not permit the complainant to utilize the security cheques of the accused to discharge his liability against those invoices, further even if such cheques were utilized but on their dishonor Section 138 NI Act will not attract (Reliance placed on Ravi Kumar D v. State of Delhi and anr. (Manu / DE /1538/2011). It is established principle of law that the accused has only to create a doubt in the version of the complainant, while the complainant has to prove the guilt of the accused persons beyond reasonable doubt. In Kulvinder Singh v. Kafil Ahmed 2013(1) DCR 417 it was held by Hon'ble High Court:\n \"The basic principle in criminal law is that the guilt of the accused must be proved beyond reasonable doubt and if there is a slightest doubt about the commission of an offence then the benefit has to occurred to him\". \n\n17. Thus from the above stated discussion it is clear that the accused has been able to prove his defence. Considering the entire circumstances and evidence on record, it stands duly proved that the cheque in question was not issued and drawn in discharge of liability or a legally recoverable debt of the accused.", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "0757f20ba549-19", "Titles": "Cc No.6223/10 Sbl (P) Ltd vs . Chaudhary Homeo Pharmacy Page ... on 18 December, 2013", "text": "18. In view of the aforesaid discussion, I am of the considered opinion that the complainant has failed to prove its case against CC No.6223/10 SBL (P) Ltd Vs. Chaudhary Homeo Pharmacy Page no. 14 of Pages 14 the accused while accused has proved his defence. Accordingly, accused Choudhary Homeo Pharmacy and its proprietor Sunil Kumar, C\u00ad394 Mohan Gali, Nanak Chand Basti, Kotla Mubarakpur are stands acquitted of the offence U/s 138 Negotiable Instruments Act.        \nAnnounced in the open court today i.e. 18.12.2013 (GAJENDER SINGH NAGAR) MM:KKD:DELHI:18.12.2013 Containing 14 pages all signed by the presiding officer.          \n\n (GAJENDER SINGH NAGAR) MM:KKD:DELHI:18.12.2013", "source": "https://indiankanoon.org/doc/68381235/"}
+{"id": "4550a6d284bf-0", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "IN THE COURT OF Ms. MANU GOEL KHARB\n     METROPOLITAN MAGISTRATE, DWARKA COURTS, \n                     NEW DELHI \n\n\n                 In Re:                  Case No. : 223/12\n                                         (Old CC no. 2663/1 dated 03.10.07)\n                                   U/s. 138 Negotiable Instrument Act\n1.      CC No.                                        : 223/12\n\n\n2.      Date of Institution                                 : 03.10.2007\n\n3.      Name of the complainant,                            :  The Madhav Co\u00adoperative \n        parentage and residence                                Urban Thrift & Credit \n                                                               Society Ltd.,  E\u00ad17, East \n                                                               Uttam Nagar, Near Pali \n                                                               Factory, Uttam Nagar, \n                                                               New Delhi\u00ad59 (Through \n                                                               Sh. Satish Kumar Garg \n                                                               S/o Sh. Ghanshyam Dass \n                                                               Gupta, President/AR)\n\n\n\n4.        Name of accused                                   :  Sh. Alamgeer \n          his parentage                                        S/o Sh. Rafiq Ahmad \n          and residence                                        R/o B\u00ad254, JJ Colony,\n                                                               Hastsal, Uttam Nagar,\n                                                               New Delhi\u00ad59\n\n\nCase No. 223/12                    Madhav Co\u00adoperative Vs Alamgeer                1 of 20\n                                           \n5.      Date when Judgment                       \n         was reserved                              :  12.02.2014\n\n\n6.      Date when Judgment \n         was pronounced                             : 22.02.2014\n\n\n7.     Offence complained of                   : U/s. 138 NI Act\n\n\n8.     Plea of accused                               : Not guilty\n\n9.     Final Judgment                              : Convicted \n\n                                    \u00ad :: JUDGMENT :: \u00ad\n\n\n                       BRIEF FACTS AND REASONS FOR \n                           DECISION OF THE CASE", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-1", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "BRIEF FACTS AND REASONS FOR \n                           DECISION OF THE CASE\n\n\n1. By way of the present judgment, I shall decide the complaint case U/s 138 Negotiable Instrument Act 1881 (as amended up to date) filed by the complainant The Madhav Co\u00adoperative Urban Thrift and Credit Society Ltd through its President/AR Sh. Satish Kumar Garg against the accused Sh. Alamgeer S/o Sh. Rafiq Ahmad.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-2", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "2. The facts in brief necessary for the disposal of the present case Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 2 of 20 are that as per the allegations in the complaint, on 11.08.04, the accused took a loan of Rs.25,000/\u00ad from the complainant society vide loan account no. 2564 at interest of 18% per annum with the promise that the same shall be returned with interest and the accused executed loan agreement in this regard. The accused was irregular in making the payment of installments and therefore, settled his account upto 18.07.2007 for a sum of Rs.29,200/\u00ad. The accused for discharge of the said liability issued cheque bearing no. 284229 drawn on ICICI Bank, B\u00ad1, Milap Nagar, Najafgarh Road, Uttam Nagar, New Delhi in favour of the complainant. On presentation of the above said cheque the same was returned unpaid with the reasons \"INSUFFICIENT FUNDS\" vide cheque return memo dated 21.07.2007. Thereafter, the complainant served the legal notice of demand dated 13.08.2007 to the accused which was sent by Speed post with AD thereby calling upon the accused to make the payment in lieu of dishonored cheque. It is alleged that accused has failed to pay any sum in response to the legal notice of demand. In consequence thereof the complainant has filed the instant complaint for prosecution of the accused U/s 138 Negotiable Instruments Act.  \n Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 3 of 20", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-3", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "3. After the complaint was filed, the President/Authorized Representative of the complainant society led his pre\u00adsummoning evidence by way of an affidavit and after hearing the AR for the complainant and considering the entire material and documents on record, summons were issued against the accused vide order dated 03.10.2007 for the offence U/s 138 Negotiable Instrument Act 1881. On appearance of the accused, a separate notice U/s 251 Cr.P.C. dated 09.02.2012 was given to the accused to which he pleaded not guilty and claimed trial and the matter was fixed for complainant evidence.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-4", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "4. In order to prove the case, Sh. Satish Kumar Garg, President/AR of the complainant got himself examined as CW\u00ad1 and reiterated the contents of the complaint on oath before this court and tendered his affidavit in evidence which is Ex. CW\u00ad1/X. He got exhibited the original cheque bearing no. 284248 dated 19.07.2007 of Rs.29,200/\u00ad drawon on ICICI Bank, B\u00ad1, Milap Nagar, Najafgarh Road, Uttam Nagar, New Delhi as Ex. CW1/A, Original cheque return memo dated 21.07.2007 as Ex. CW1/B, Copy of notice dated Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 4 of 20 13.08.2007 as Ex. CW1/C, Postal receipt and acknowledgment Card is Ex. CW1/D and Ex. CW1/E. Sh. Satish Kumar Garg was cross\u00ad examined by the ld. Counsel for the accused. Thereafter, the complainant evidence was closed by the Ld. Counsel for the complainant.    \n Thereafter, counsel for the complainant moved an application under section 311 CrPC for calling a bank witness to prove the dishonor of cheque. This application was allowed and Sh. Bikesh Sharma, Customer Service Officer, ICICI Bank Ltd was examined as CW2. He brought statement of account of the accused and exhibited the same as Ex. CW2/X and also identified the original cheque Ex. CW1/A and return memo already Ex. CW1/B. CW2 Bikesh Sharma was cross\u00adexamined by the ld. Counsel for the accused. Thereafter, the complainant evidence was closed by the Ld. Counsel for the complainant and the case was fixed for statement of the accused.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-5", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "5. In his statement recorded U/s 313 Cr.P.C r/w Sec. 281 CrPC, all the incriminating evidence along with exhibited documents Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 5 of 20 were put to the accused Alamgeer in which he stated that he had issued the cheque in question as a blank signed cheque for security purpose and admitted the receipt of legal notice of demand. He further stated that he complainant has mis\u00adused the blank signed cheque given by him to the complainant prior to the disbursement of loan. Thereafter, the case was fixed for defence evidence.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-6", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "6. Ld. counsel for the accused moved an application U/s 315 Cr.PC for allowing the accused to appear in his defence. The aforesaid application was allowed and accused himself deposed as DW1. Accused deposed that he was sanctioned a loan of Rs. 25000/\u00ad by the complainant and the latter also took one blank signed cheque from him at the time of disbursement of loan. He admitted the receipt of legal demand notice. Accused did not tender any document in support of his defence. Accused was cross\u00adexamined by the ld. Counsel for the complainant wherein he admitted that he did not give any reply to the legal notice of demand.    \n In his defence, accused also examined his wife Shama Begum as DW2 who exhibited the payment receipts as Ex. DW2/A(15 pages Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 6 of 20 colly). DW2 deposed that she was present at the time of loan and on complainant's demand, her husband Alamgeer gave them one blank signed cheque for loan. She also deposed that on some occasions no receipt was issued by the complainant. DW2 was cross\u00adexamined by the ld. Counsel for the complainant. No other defence witness was produced on behalf of the accused. Thereafter, defence evidence was closed at request of Ld. counsel for the accused and the case was fixed for final arguments. \n\n7. Final arguments were addressed on behalf of both the parties. \n\n I have heard Ld. counsels for both the parties and perused the entire record of the case file and the evidence on record. In order to bring home the conviction of the accused, the complainant has to show not only unbroken chain of events leading to commission of actual offence on record but also the ingredients of the offence complained of.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-7", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "8. Before proceeding further let us go through the relevant provisions of law. The main ingredient of Section 138 of the Negotiable Instruments Act are as follows:\u00ad Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 7 of 20\n (a) The accused issued a cheque on an account maintained by him with a bank. \n\n (b) The said cheque has been issued in discharge of any legal debt or other liability. \n\n (c) The cheque has been presented to the bank within the period of six months from the date of the cheque or within the period of its validity. \n\n (d) When the aforesaid cheque was presented for encashment, the same was returned unpaid/ dishonoured. \n\n (e) The Payee of the cheque issued a legal notice of demand within 30 days from the receipt of information by him from the Bank regarding the return of the cheque. \n\n (f) The Drawer of the cheque failed to make the payment within 15 days of the receipt of the aforesaid legal notice of demand. \n\n If the aforesaid ingredients are satisfied then the drawer of the cheque shall be deemed to have committed an offence punishable u/s 138 Negotiable Instruments Act. \n\n\n9. Now let us deal with the each ingredient of the section 138 of Negotiable Instruments Act to see whether the case against the Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 8 of 20 accused has been proved or not.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-8", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "10. WHETHER THE CHEQUE WAS ISSUED OR NOT The accused has himself admitted to have signed the cheque in question while answering to the question at the time of framing of notice U/s 251 Cr. PC. Further while answering to the question U/s 313 Cr.PC the accused has admitted to have given the cheque in question to the complainant but he stated that the same was given in blank only after putting his signatures there for purpose of security at the time of taking the loan from complainant. Therefore, so far as signing and delivery of the cheque in question by the accused is concerned the same is not disputed. \n\n Moreover, in Jaipal Singh Rana Vs. Swaraj Pal 149 (2008) DLT 682 it was held by Delhi High Court that \"by putting the amount and the name there is no material alteration on the cheque U/s 87 of the Negotiable Instruments Act. In fact there is no alteration but only adding the amount and the date. \n\n It was further observed in the aforesaid judgment that there is no rule of banking business that the name of the payee as well as the Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 9 of 20 amount should be written by the drawer himself. No law provides that in case of cheques the entire body has to be written by the drawer only.\" \n\n In view of the evidence on record it stands proved that the cheque in question was issued by the accused.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-9", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "11. WHETHER THE CHEQUE WAS PRESENTED WITHIN THE PERIOD OF VALIDITY Perusal of the record reveals that the cheque in question which is Ex. CW\u00ad1/A is dated 19.07.2007 which got dishonored vide cheque returning memo which is Ex. CW\u00ad1/B dated 21.07.2007 which is not disputed by the accused clearly shows that the cheque has been presented within period of its validity i.e. within six months from the date of issuance of the cheque. \n\n\n12. DISHONOUR OF CHEQUE IN QUESTION In the instant case, Satish Kumar Garg who has appeared as complainant's witness has got exhibited the cheque returning memo which is Ex. CW1/B to prove the fact of dishonour of the cheque in Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 10 of 20 question. Complainant also examined bank witness Sh. Bikesh Sharma, to prove the dishonor of the cheque who correctly identified the cheque Ex. CW1/A and return memo Ex. CW1/B and stated that the same was issued by their bank mentioning 'insufficiency of funds' as the reason of dishonor. He produced the statement of account of the accused as Ex. CW2/X and stated that as the balance of the accused was not sufficient, so the entry of dishonor is not reflected in the statement of account. \n\n The dishonor of the cheque in question has not been disputed by the accused nor the cheque returning memo has been challenged by the accused. \n\n Therefore considering the entire evidence on record it stands duly proved that the cheque in question was dishonored vide cheque returning memo dated 21.07.2007 which is Ex. CW1/B with the reason \"Insufficient Funds\".", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-10", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "13. SERVICE OF LEGAL NOTICE OF DEMAND UPON THE ACCUSED In the instant case, Satish Kumar Garg who has appeared as complainant's witness has specifically stated in his examination in Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 11 of 20 chief that the complainant got issued the legal notice of demand dated 13.08.2007 which is Ex. CW1/C and it was sent to the accused vide Spped Post with Regd. AD which are Ex. CW\u00ad1/D and Ex. CW1/E respectively. The accused has also admitted the receipt of legal notice of demand during framing of notice under section 251 CrPC and while answering to the question during his statement U/s 313 r/.w 281 Cr.PC as well as his examination in chief. \n\n In light of the evidence on record and the admission made by the accused, it stands proved that legal notice of demand was properly served upon the accused. \n\n14. WHETHER THE CHEQUE IN QUESTION WAS ISSUED IN DISCHARGE OF ANY LEGAL DEBT OR OTHER LIABILITY In the case in hand, Satish Kumar Garg who has appeared as complainant's witness has specifically stated in his examination in chief by way of affidavit that the accused was irregular in making payments and settled his account with the complainant for a sum of Rs. 29,200/\u00ad and issued the cheque in question in discharge of that Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 12 of 20 liability.          \n The accused has however deposed in his examination in chief that he had issued cheque in question to the complainant before the disbursement of loan as blank signed cheque, by way of security only and the same has been misused by the complainant.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-11", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "Before deciding this issue let us go through the relevant provisions of law. \n Section 46 of the Negotiable Instruments Act speaks of the delivery, it reads as follows:\u00ad \"The making, acceptance or endorsement of a promisory notice, bill of exchange or cheque is completed by delivery, actual or constructive.\" \n Section 118 (b) of the Negotiable Instruments Act provides that until the contrary is proved, the following presumption shall be made. \n\n (b) As to date \u00ad that every Negotiable Instrument bearing a a date was made or drawn on such date. \n\n Moreover, there is a presumption in favour of the complainant Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 13 of 20 u/s 118 (a) Negotiable Instruments Act that until the contrary is proved, it will be presumed that every negotiable instrument was drawn for consideration and every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration. \n\n Further Section 139 of the Negotiable Instruments Act, 1881 provides that it shall be presumed until the contrary is proved that the holder of the cheque received the cheque of the nature referred in the Section 138 for the discharge in whole or in part of his debt or liability. \n\n Now the Court shall examine whether the accused is successful in rebutting the presumption as contemplated by Section 118 (b) and Section 139 of Negotiable Instruments Act.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-12", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "To rebut the presumption of section 139 of NI Act and section 118 (b) of NI Act, the sole ground of defence taken by the Ld counsel for accused is that the cheque in question was given to the complainant as blank signed cheque by way of security prior to the sanctioning of loan and that the cheque in question was issued by the Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 14 of 20 accused in blank with only his signatures.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-13", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "To support this contention, the accused has failed to bring anything on record. DW2 Shama Begum, who is the wife of the accused has also stated in her examination of chief that the accused gave the cheque of ICICI Bank to the complainant for loan. A Security cheque if issued for any debt payable in presenti but such payment has been deferred to a future debt can be subject matter of proceedings under section 138 NI Act. In the present case, even it is presumed that the cheque has been issued for security purpose, it was meant for discharge of debt but the payment of which has been deferred to a future date. In this regard, the Hon'ble High Court of Delhi has observed in its judgment titled as Krish International P. Ltd & Ors Vs. State & Ors. MANU/DE/0302/2013 as :\u00ad \"9. There is no dispute that the proposition of law as laid down in M/s Collage Culture that a cheque issued not for an existing due but issued by way of security would not attract the provisions of Section 138 of the Act. In M/s Collage Culture the learned Single Judge of this Court (Pradeep Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 15 of 20 Nandrajog, J.) drew distinction between a cheque issued for a debt in present but payable in future and second for a debt which may become payable in future upon the occurance of a contingent event. Paras 20 to 24 of the report in M/s Collage Culture are extracted hereunder :\u00ad\n\n 20. A post dated cheque may be issued under 2 circumstances. Under circumstance one, it may be issued for a debt in presenti but payable in future. Under Second circumstance it may be issued for a debt which may become payable in future upon the occurrence of a contingent event.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-14", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "21. The difference in the two kinds of post\u00addated cheques would be that the cheque issued under first circumstance would be for a debt due, only payable being postponed. The latter cheque would be by way of a security. \n\n 22. The word 'due' means 'outstanding at the relevant date'. The debt has to be in existence Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 16 of 20 as a crystallized demand akin to a liquidated damages and not a demand which may or may not come into existence; coming into existence being contingent upon the happening of an event.\" Hence, it is sufficiently proved on record that the cheque in question was not issued by way of security but for payment of the amount received by the accused from the complainant. \n\n Further, even if we assume that the cheque in question was issued by the accused in blank with only his signatures, even then the law has been clearly laid down in this regard by Hon'ble Delhi High Court in M/s Jammu & Kashmir Bank vs. Abhishek Mittal, 2012 CD DCR 189, that :\u00ad \"When a blank cheque is signed and handed over, it means that the person signing it has given the implied authority to the holder of the cheque, to fill up the blanks which he has left. A person issuing a blank cheque is supposed to understand the consequences of Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 17 of 20 doing so. He cannot escape his liability only on the ground that blank cheque has been issued by him.\"", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-15", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "\"Once issuance of the cheque been admitted or stands proved, a presumption arises in favour of the holder of the cheque that he had received the cheque of the nature referred to under Section 138 of the Act for the discharge, in whole or in part of any debt or any other liability. This presumption arises in favour of the holder under Section 139 of the Act which envisages that it shall be presumed unless the contrary is proved that the holder of a cheque received the cheque of the nature referred to under Section 138 of the Act for discharge, in whole or in part of any debt or any other liability. Of course, this presumption is a rebuttable presumption and same can be rebutted only by the person who had drawn the cheque.\"  \n\n Thus, the accused has failed to rebut the presumption under section 118 (b) of Negotiable Instruments Act. Therefore, presumption under section 118 (b) holds good and according to which cheque was issued by the accused in discharge of his legal Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 18 of 20 liability. \n\n\n Therefore, Court is of the considered opinion that the complainant has sufficiently been able to prove its case that the cheque in question was issued by the accused in discharge of his legal debt or liability. \n\n\n15. THE DRAWER OF THE CHEQUE HAS FAILED TO MAKE THE PAYMENT WITHIN 15 DAYS OF THE RECEIPT OF SAID NOTICE In the instant case Sh. Satish Kumar Garg who has appeared as complainant's witness has deposed in his examination in chief by way of affidavit that despite service of legal notice of demand accused has failed to pay the cheque amount. \n Considering the evidence on record it stands proved that the accused has failed to make the payment of the cheque amount within 15 days of the receipt of legal notice of demand.", "source": "https://indiankanoon.org/doc/187477809/"}
+{"id": "4550a6d284bf-16", "Titles": "Case No. 223/12 Madhav ... vs Alamgeer 1 Of 20 on 22 February, 2014", "text": "16.In view of the aforesaid discussion, I am of the considered Case No. 223/12 Madhav Co\u00adoperative Vs Alamgeer 19 of 20 opinion that the complainant has sufficiently proved its case against the accused. All the ingredients of Section 138 of Negotiable Instruments Act have been duly proved on record. Accordingly, accused Alamgeer S/o Sh. Rafiq Ahmed is hereby convicted of the offence u/s 138 Negotiable Instruments Act. Let copy of this judgment be given free of cost to the convict. \n\n\nAnnounced in the open court \ntoday i.e. 22.02.2014                                     (MANU GOEL KHARB)\n                                                METROPOLITAN MAGISTRATE \n                                                 DWARKA COURTS, NEW DELHI \n \n\n\n\n\nCase No. 223/12                    Madhav Co\u00adoperative Vs Alamgeer           20 of 20", "source": "https://indiankanoon.org/doc/187477809/"}